After the New Year
The Chinese stock markets will be closed for a week due to the Chinese New Year. My last post covering the Chinese markets were thus: http://falkininvesting.com/blog/2007/02/07/bounce-in-the-orient
The Shanghai index closed at near 3000 on Friday breaking above the last 2994 record, which appears to be a bullish signal. P/Es are still high, but there is a good amount of money pouring into the market through new accounts being opened, which if the numbers I have are correct, would amount to around 1 million a month. Sentiment is high however domestically, which contrasts with the “bubble” sentiment on Wall St. And because it’s Wall St telling you its a bubble(which it is), means it might persist for a while. I’m betting bull till the end of the 2008 Olympics. That does not mean the road will not be sparkled by corrections however. The most recent one(from 2994 to 2600) has just ended with a new high in the indices. I also feel that FXI is undervalued, as it has been flat, while the Chinese and Hong Kong(Hang Seng Index being the major blue chip index there) stock markets are soaring.
A chart below, of the Shanghai index.
