[Today's Guide]
○Market still “emphasizes good news while ignores bad news”
○Funds in Shanghai optimistic about local SOEs reform
○Online cross-border commerce along Silk Road gets popular
○Big data application of top three operators to speed up
[XFA View]
Market still “emphasizes good news while ignores bad news”
------
Recently, the securities regulatory authorities adjust and optimize the supervision on leveraged capital from aspects like margin trading and short selling, OTC financing, etc. It can be seen from the response on we-media like Weibo, WeChat, etc. during weekend that public opinions are quite excited about good news like allowing extension of margin trading and short selling, but show little reaction to bad news like the restatement that securities companies are forbidden to provide clients with convenience in OTC financing. It shows that under joint impact of emotion, inheritance and policy expectation, the market might be still in excited period of “emphasizing good news while ignoring bad news”.
As unveiled by this column on June 10, a healthy “leveraged bullish market” meets the interest of all market participants. The restatement that securities companies and non-securities companies cannot participate in unlawful securities activities does not just aim at limiting the leverage of capital, but aim to prevent regional and systematic risks and to maintain a fair, legal and compliant market. From this perspective, the optimistic public opinions in the weekend are reasonable since it shows that investors understand the purpose behind policies to some extent.
However, as stock indexes surge continuously, the market enters a self-circulation of “expectation pushes surging, surging strengthens expectation”. Investors subconsciously seek all stimulants that can be interpreted into good news and selectively read policies and information to meet their mental demand of expectation on surging. Though “emphasizing good news while ignoring bad news” is an important characteristic of the excited period of a bullish market and the bad news are not powerful enough to reverse the market trend, they indeed aggravate fluctuation.
For investors still hunting for profit amid high fluctuations of the market, it will be wiser to appropriately decrease leverage and positions. Thus, it would be easier for investors to participate in the probably increasing fierce fight between long position and short position in the future. Moreover, as for selection of stocks, state-owned enterprises (SOEs) reform, which was highly expected since the beginning of this round of bullish market, is under actual implementation. Investors shall not just limit their visions to the merger of a few large-scale central enterprises, but can seek for investment subjects along the thread of vitalization of state-owned assets by local governments.
[Institutions' Movement]
Funds in Shanghai optimistic about local SOEs mixed ownership reform
------
Latest survey among multi publicly-offered funds and privately-offered funds in Shanghai by XFA shows that the agreed trend by surveyed institutions is that the market will surge with sharp fluctuation and differentiation, besides leading growth stocks represented by “Internet Plus”, SOEs reform sector seeing intensive launch of supportive policies, especially those local SOEs subjects with clear thought in reform or under the course of reform, is also favored.
In addition, they believe that the recent surging of the bank sector shall be explained by economy bottoming in the third quarter and expectation on mixed-ownership reform. Neither current macro-economic situation nor the profit of the bank industry itself can support the industry to reverse the trend and drive the main board to surge.
Two factors push insurance companies to snatch real estate stocks
------
It is learnt that multi middle- and large-scale asset management companies under insurance companies in Beijing and Shanghai cover real estate stocks into their stock pools. Reasons are that first of all, insurance companies believe that the surge of the real estate sector in the early stage is mainly resulted by easing monetary policies and does not fully reflect the picking up factors of the industry itself including increasing sales, real estate’s enthusiasm in purchasing land, etc.; secondly, due to the demand of planning old-age care real estate and searching for cooperation partners, insurance companies need great support of real estate enterprises in land purchasing, development, operation, etc.
[Hotspot Investigation]
Online cross-border commerce along Silk Road gets popular
------
Besides infrastructure and industrial parks, “online Silk Road”, resorting to Internet, is also getting popular. As surveyed, multi cities including Free Trade Zones are sparing great efforts in constructing online Silk Road by centering on cross-border commerce.
◆Cross-border commerce of Yangtze River Delta expands from consumer goods to bulk commodity
After launching several consumer goods platforms, Shanghai and Zhejiang are accelerating the promotion of cross-border commerce of bulk commodity. It is learnt that Shanghai Petroleum and Gas Trading Center plans to launch trail operation of spot trading of pipeline gas and liquefied natural gas on July 1. The iron ore bulk commodity trading platform led by Baosteel Group is planned to be set up in middle-2015.
Zhejiang has regarded cross-border e-commerce as a new window of its opening up. As one of the cities firstly piloting cross-border commerce in China, Ningbo plans to build an e-commerce platform for cross-border commerce of bulk commodity and has developed strategic cooperation with Alibaba Group.
◆Pearl River Delta develops cross-border commerce “Internet Plus” in combination with its own advantages
1. Zhuhai cooperates with Singapore to build Zhuhai Port Comprehensive E-logistics Platform and plans to build the platform into a “one-stop” system with port logistics; 2. Fuzhou City of Fujian Province introduces e-commerce into its foreign fishery cooperation. China-ASEAN (Association of Southeast Asian Nations) Marine Products Bourse has been put into operation. It plans to develop 260 domestic members and 100 member in ASEAN for the first phase; 3. Pingtan Strait cross-border e-commerce industrial park has been established to explore innovative mode and plans to set up Zhongfu Huijin Company to provide cross-border e-commerce with third-party payment service.
[XFA Viewpoint]
Initial success of flow operation achieved, application of big data to speed up
------
As “increasing Internet speed and decreasing Internet fees”, “flow operation”, and etc. see gradual implementation, developing the application of big data has become an efficient means for China Telecom Corp. Ltd., China Mobile Communications Corporation and China Unicom (top three telecom operators in China) to improve value. Data from the Ministry of Industry and Information Technology shows that the top three operators’ income from mobile data and Internet business in the first quarter of this year records 70.10 billion yuan, indicating a year-on-year growth of 41.7 percent. Industry experts predict that the growth speed of mobile Internet flow might exceed 100 percent. By relying on timely data searching ability and huge mobile user base, operators are trying hard to materialize the value of mobile user data itself. Operators’ change in operation thought will also bring more business to companies of the industry.
Bright Oceans Inter-Telecom Co., Ltd. (600289.SH) is the main supplier of the OSS (Operation Support System) system of the top three operators. It is actively transforming towards intelligent city and big data business in recent years. The company has made planning in multi cities with some important cities along “One Belt and One Road” included. The Internet big data operation center of the company has provided comprehensive services in governmental affairs, living, commerce, education, etc. and provides personalized dedicated service.
Dingli Communications Corp., Ltd. (300050.SZ) is a leading domestic enterprise in network optimization business. The company actively expands its new business including vocational education, cloud computing of operators, signaling big data, etc. while strengthens traditional principal business at the same time, forming a structure with double principal business “communications +education”. The company recently launched Dingli big data treatment platform. By adopting brand-new scheduling framework, the company provides enterprises with end-to-end business services under the context of multi users.
○Market still “emphasizes good news while ignores bad news”
○Funds in Shanghai optimistic about local SOEs reform
○Online cross-border commerce along Silk Road gets popular
○Big data application of top three operators to speed up
[XFA View]
Market still “emphasizes good news while ignores bad news”
------
Recently, the securities regulatory authorities adjust and optimize the supervision on leveraged capital from aspects like margin trading and short selling, OTC financing, etc. It can be seen from the response on we-media like Weibo, WeChat, etc. during weekend that public opinions are quite excited about good news like allowing extension of margin trading and short selling, but show little reaction to bad news like the restatement that securities companies are forbidden to provide clients with convenience in OTC financing. It shows that under joint impact of emotion, inheritance and policy expectation, the market might be still in excited period of “emphasizing good news while ignoring bad news”.
As unveiled by this column on June 10, a healthy “leveraged bullish market” meets the interest of all market participants. The restatement that securities companies and non-securities companies cannot participate in unlawful securities activities does not just aim at limiting the leverage of capital, but aim to prevent regional and systematic risks and to maintain a fair, legal and compliant market. From this perspective, the optimistic public opinions in the weekend are reasonable since it shows that investors understand the purpose behind policies to some extent.
However, as stock indexes surge continuously, the market enters a self-circulation of “expectation pushes surging, surging strengthens expectation”. Investors subconsciously seek all stimulants that can be interpreted into good news and selectively read policies and information to meet their mental demand of expectation on surging. Though “emphasizing good news while ignoring bad news” is an important characteristic of the excited period of a bullish market and the bad news are not powerful enough to reverse the market trend, they indeed aggravate fluctuation.
For investors still hunting for profit amid high fluctuations of the market, it will be wiser to appropriately decrease leverage and positions. Thus, it would be easier for investors to participate in the probably increasing fierce fight between long position and short position in the future. Moreover, as for selection of stocks, state-owned enterprises (SOEs) reform, which was highly expected since the beginning of this round of bullish market, is under actual implementation. Investors shall not just limit their visions to the merger of a few large-scale central enterprises, but can seek for investment subjects along the thread of vitalization of state-owned assets by local governments.
[Institutions' Movement]
Funds in Shanghai optimistic about local SOEs mixed ownership reform
------
Latest survey among multi publicly-offered funds and privately-offered funds in Shanghai by XFA shows that the agreed trend by surveyed institutions is that the market will surge with sharp fluctuation and differentiation, besides leading growth stocks represented by “Internet Plus”, SOEs reform sector seeing intensive launch of supportive policies, especially those local SOEs subjects with clear thought in reform or under the course of reform, is also favored.
In addition, they believe that the recent surging of the bank sector shall be explained by economy bottoming in the third quarter and expectation on mixed-ownership reform. Neither current macro-economic situation nor the profit of the bank industry itself can support the industry to reverse the trend and drive the main board to surge.
Two factors push insurance companies to snatch real estate stocks
------
It is learnt that multi middle- and large-scale asset management companies under insurance companies in Beijing and Shanghai cover real estate stocks into their stock pools. Reasons are that first of all, insurance companies believe that the surge of the real estate sector in the early stage is mainly resulted by easing monetary policies and does not fully reflect the picking up factors of the industry itself including increasing sales, real estate’s enthusiasm in purchasing land, etc.; secondly, due to the demand of planning old-age care real estate and searching for cooperation partners, insurance companies need great support of real estate enterprises in land purchasing, development, operation, etc.
[Hotspot Investigation]
Online cross-border commerce along Silk Road gets popular
------
Besides infrastructure and industrial parks, “online Silk Road”, resorting to Internet, is also getting popular. As surveyed, multi cities including Free Trade Zones are sparing great efforts in constructing online Silk Road by centering on cross-border commerce.
◆Cross-border commerce of Yangtze River Delta expands from consumer goods to bulk commodity
After launching several consumer goods platforms, Shanghai and Zhejiang are accelerating the promotion of cross-border commerce of bulk commodity. It is learnt that Shanghai Petroleum and Gas Trading Center plans to launch trail operation of spot trading of pipeline gas and liquefied natural gas on July 1. The iron ore bulk commodity trading platform led by Baosteel Group is planned to be set up in middle-2015.
Zhejiang has regarded cross-border e-commerce as a new window of its opening up. As one of the cities firstly piloting cross-border commerce in China, Ningbo plans to build an e-commerce platform for cross-border commerce of bulk commodity and has developed strategic cooperation with Alibaba Group.
◆Pearl River Delta develops cross-border commerce “Internet Plus” in combination with its own advantages
1. Zhuhai cooperates with Singapore to build Zhuhai Port Comprehensive E-logistics Platform and plans to build the platform into a “one-stop” system with port logistics; 2. Fuzhou City of Fujian Province introduces e-commerce into its foreign fishery cooperation. China-ASEAN (Association of Southeast Asian Nations) Marine Products Bourse has been put into operation. It plans to develop 260 domestic members and 100 member in ASEAN for the first phase; 3. Pingtan Strait cross-border e-commerce industrial park has been established to explore innovative mode and plans to set up Zhongfu Huijin Company to provide cross-border e-commerce with third-party payment service.
[XFA Viewpoint]
Initial success of flow operation achieved, application of big data to speed up
------
As “increasing Internet speed and decreasing Internet fees”, “flow operation”, and etc. see gradual implementation, developing the application of big data has become an efficient means for China Telecom Corp. Ltd., China Mobile Communications Corporation and China Unicom (top three telecom operators in China) to improve value. Data from the Ministry of Industry and Information Technology shows that the top three operators’ income from mobile data and Internet business in the first quarter of this year records 70.10 billion yuan, indicating a year-on-year growth of 41.7 percent. Industry experts predict that the growth speed of mobile Internet flow might exceed 100 percent. By relying on timely data searching ability and huge mobile user base, operators are trying hard to materialize the value of mobile user data itself. Operators’ change in operation thought will also bring more business to companies of the industry.
Bright Oceans Inter-Telecom Co., Ltd. (600289.SH) is the main supplier of the OSS (Operation Support System) system of the top three operators. It is actively transforming towards intelligent city and big data business in recent years. The company has made planning in multi cities with some important cities along “One Belt and One Road” included. The Internet big data operation center of the company has provided comprehensive services in governmental affairs, living, commerce, education, etc. and provides personalized dedicated service.
Dingli Communications Corp., Ltd. (300050.SZ) is a leading domestic enterprise in network optimization business. The company actively expands its new business including vocational education, cloud computing of operators, signaling big data, etc. while strengthens traditional principal business at the same time, forming a structure with double principal business “communications +education”. The company recently launched Dingli big data treatment platform. By adopting brand-new scheduling framework, the company provides enterprises with end-to-end business services under the context of multi users.
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