I asked FIO veteran Ailun Zhan for some input on where he feels the Chinese Market is heading. Based out of Shanghai China himself, this is what he had to say:
“Long term fundamentals:
1) Bull market has only been in action for 1 year
2) Margin trading has been allowed
3) Around 10-15 million Chinese trade stocks. That’s 1% of the total population. Over time, more people will invest
4)QFII, aka Qualified Foreign Institutional Investors, i.e. foreign institutions with over $10billion in asssets were formerly the only foreigners allowed to invest in Chinese A shares(Jim Rogers bought B shares, denominated in USD, when he visited China around 2000) However, now anyone can invest in them. Now, most people around the world know about Chinese growth, but don’t invest in Chinese stocks directly, so I predict a Nikkei-like exponential soaring in the Chinese index
Short term technicals:
Double bottom, Asian markets are potentially bottoming, i.e. Nikkei 225, and today was a follow through day.
It doesn’t hurt that markets gapped down 2% last monday only to close in the positive after an interest rate hike at critical support, after 2-3 weeks of around 10% correction, so the bull is likely to continue
http://img74.imageshack.us/img74/7201/shanghai5up9.gif”
If you would like to contact Ailun you can do so through his FIO Profile.
Have a great day,
-Blain
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Related Posts:
- After the New Year
- Chinese Markets
- After the hike in the Far East
- Ailun Zhan Quick Comment on China and Oil
- Quick Explanation of Yesterday’s Market Woes
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