Visit our COVID-19 site for latest information regarding how we can support you. For up to date information about the pandemic visit www.sacoronavirus.co.za.

bs-regular
bs-extra-light
bs-light
bs-light
bs-cond-light-webfont
bs-medium
bs-bold
bs-black

Community


Share knowledge. Ask questions. Find answers.

Online Share Trading

Engage and learn about markets and trading online

Analysts throw some cold water on China's stock-market fever

Reply
mwk
Frequent Contributor
BEIJING - Investment advisers issued warnings of an overheated stock market this week as local markets propelled to new highs and throngs of new Chinese investors flocked to open accounts.

Market mania has gripped China's larger cities. Anonymous text messages urge Beijing mobile phone users to buy stocks and "cherish the dream of overnight wealth," while news accounts tell of distracted workers idling for hours while checking prices.

The Shanghai Composite Index has climbed 50 percent this year. It whipped past the 3,000 barrier in March and, brushing off a chorus of concerns that it is overvalued, hurtled through 4,000 this week to close at 4,021.68 on Friday. The market has tripled in value since early 2006.

More...
http://tinyurl.com/2gpeel
0 Kudos
23 REPLIES 23
barry_1
Super Contributor
This could lead to a sell off of 50% in a couple of weeks in china and then the rest of the world.In those circumstances even BEARS wont be able to profit as i've seen in the past there are literally no buyers Now market participants here don't seem to realise for a share to go consistantly up it has to produce a product at a profit and then increase sales.Derivitaves have turned share trading in to a gaint gambling concern.
0 Kudos
barry_1
Super Contributor
i have no idea when this event might occur,how ever it will eventually happen,the chinese market might still run up and double..who knows?...sell offs like this are usually caused by the well meaning government of the country concerned who over react to events..during the IT bubble in america in 2002,new arrogant traders said the old rules no longer applied and the advance was a "blue sky advance",obviously meaning it would go on ad infinitum!
0 Kudos
barry_1
Super Contributor
We should not feel embarrased by our failings during gaint sell offs.People that are well educated and should know better make utter fools of themselves,such as those concerned with Ned Bank,when they bought (i forget the actual entry point)DDT shares during the boom and almost doubled their money and sought more at around R65 and started climbing into other IT stocks as well,making it the fastest growing bank.,totally ignoring good business principles.When IT dive bombed,the bank almost went under and had to be rescued by Old Mutual!
0 Kudos
Brazen
Super Contributor
Interesting points barry. An aside re Nedbank - they seem to be a changed bank, interested in retail banking again. I've always had a bond with FNB but have been wooed away by Nedbank for my current bond. They fell over themselves service wise and offered me a fantastic rate. When FNB matched the rate Nedbank lowered theirs - that kind of aggressive behaviour might bode well for their future. When I last applied to Nedbank for a home loan, about 10 years ago, they wouldn't give me the time of day and treated me like something upleasant the cat had sicked up.
0 Kudos
barry_1
Super Contributor
Hello Brazen,Glad u read my posts.Yes i've noticed a change as well,all the previous directors retired or fired.Tom Boardman has done a fantastic job and i'm thinking of buying their shares again.I've been a customer for longer than i can remember.Naomi had a similar experience to u and closed her account a couple of years ago.The China thing makes my observations seem very mello- dramatic,how ever people standing on street corners whren they should be working sends a chill down my back! ..i dont get everything done in a day that i should any more but spend long hours in front of the computer sometimes so i'm guilty of the same behaviour !The only thing that can save us from a complete fallout is if the Rand is allowed to weaken,and exchange control abolished
0 Kudos
mwk
Frequent Contributor
Note the last two paragraphs of the article...

"People from all walks of life are entering the stock market, no matter whether they understand it or not. According to some reports, babysitters, street cleaners and even monks have their A-share accounts now," the paper said.

It quoted one unnamed grandmother who dismissed concerns that she could lose her savings in her new trading account: "One can make money with one's eyes closed in this kind of market. How can it be possible to lose money?"

Sounds like what happened just before the USA markets crashed in 1929.
0 Kudos
john_1
Super Contributor
Barry I argee with you completely. The China Boom WILL end in a bust BUT will it have a global fall out. It is really getting me nervous, the question is will it stall global growth if there is a crash in china, I think not but I am no expert but the first to get hit in a crash would be the resourse sector. That said I a have been buying AGL and IMP
0 Kudos
john_1
Super Contributor
ABOUT NEDBANK I am friends with and exco member, they are printing money but the investment team is very nervous and dirrectors are cashing in share opptions at current prices. BUT the turn around is complete and they are making heaps of money. Also because they were busy fixing internal issues they have not exposed themselves to the same kind of " bad" depts as FNB and ABSA durring the housing boom.
0 Kudos
barry_1
Super Contributor
Hi John,i'm still adding to my IMP at the lows.Hopefully my stratergy of buying blue chips around three months before final pay outs will see me through and selling just after LDT dates.The advantage of this is that it does not really matter if a share price is high or has fallen back and trading at a discount like TKG and in a genuine fall its easy to get out.When a fall is likely one has a couple of days usually to decide to withdraw from the market ,as there is a delayed re-action before it hits home.I think it is better to withdraw even if it is only a stutter say in the Chinese market,then all that i shall loose is the trading costs plus a little more.
0 Kudos
john_1
Super Contributor
Tue that barry, An interesting pattern that I have been picking up is that share have been selling off just a couple of weeks/days before the results and then recover PPC is an example, Interesting trend as it will alow you to add to your position at a dicount shortly before results.. check it out.
0 Kudos
barry_1
Super Contributor
thats what one needs post friends for,to point out all the little points that i miss,that can help.Thanks again John.
0 Kudos
john_1
Super Contributor
I know you dont use the charts much but for your stratergy wich I think is great, an ocillator showing realative changes in price would really help you maximize your returns, This is how I have been picking this trend up.
0 Kudos
john_1
Super Contributor
OLd Mutual and Nedbank and DIdta are all examples will keep looking.
0 Kudos
dimitrius
Regular Contributor
John, be careful what you say about who you're friends with and what they've told you. Last thing you want is the FSB knocking on your door.
0 Kudos
barry_1
Super Contributor
Well done MWK,i see that u only joined the forum in march this year.Its not the length of time u been on the chat forum,but the content u bring to the party!............'Once you have been given a gift of great value,u are obligated to share it with others"
0 Kudos
barry_1
Super Contributor
0 Kudos
mwk
Frequent Contributor
0 Kudos
john_1
Super Contributor
0 Kudos
barry_1
Super Contributor
0 Kudos