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Sinomania! the truth about china
China SEARCH Engine
Volume II, Episode 50
March 5, 2008
Markets Plunge - Sovereign Wealth Fund - IPOs - National People's Congress 2008

February 21, 2008

Private Equity Buys Chinese - Macro Update - Sovereign Wealth Fund IPOs - more!

February 13, 2008

General Motors Turns Chinese - New China Funds - Coal Boom?

February 6, 2008

Macro Effects of Winter Storms - IPOs - Happy Year of the Rat! - more

January 29, 2008

Chinese Stocks: Correction or Bear? Davos 2008 - IPOs!

January 20, 2008

Four predictions for where Chinese stocks will be in 2008 - plus more!

December 31, 2007

A brief look back at some of the images of 2007

December 20, 2007

Markets Sag - Chevron Gas Deal - Aging Time Bomb? - Property ETF - IPOs - more!

December 10, 2007

US-China Summits in Beijing - QFII Up to $30 Billion (US) - IPOs losing steam?

November 27, 2007

Chinese Stock Prices Melt - Sarkozy Up to Beijing - IPO Updates - Will Trent Lott Lobby for Taiwan?

November 20, 2007

Currency Crisis! Dollars Drained by China, OPEC Continue Down - Inflation

November 14, 2007

Time to Short China's Yo-Yo Market? - Mining In or Out? IPOs - more

November 2, 2007

Oil Shock! Price Problems At the Chinese Pump - Stocks: Where's the Correction?

October 24, 2007

SPECIAL REPORT: 17th Party Congress - Shanghai Bubbles? - Market Numbers

October 15, 2007

China Bull Run Gets New Highs - PetroChina - IPOs - Money - more

October 9, 2007

Chinese Stocks Up & Up - IPOs - Iron & Steel - Pacific Pipeline - more

October 4, 2007

Hong Kong Booms - Commodities, Inflation, Oil at $100 a barrel? - more

September 25, 2007

UAW Tells GM No Jobs For China - Markets Hit 5,500 - China's Auto Industry - IPOs

September 19, 2007

New IPOs Rock Shanghai! But is Resistance Building? A Big Push for Private Equity…

September 10, 2007

Report on APEC 2007 - Energy Security - Markets Update - IPOs in Hong Kong

August 30, 2007

Chinese Stocks Stay Up - Big Bond Sale - IPOs - Upcoming Party Congress

August 22, 2007

China Stock Markets Get Higher But For How Much Longer? - Surprise Rate Hike - IPO Update

August 14, 2007

China Toy Recall - Markets & IPOs - Western Banks Catch Asian Flu?

August 6, 2007

Shanghai Composite Busts Past 4,600 - Beijing Bets on Banks - Chinese IPOs in Japan

July 31, 2007

China Stocks Up Again & Again! - Pussyfooting Around Currency? - Democracy in Japan?!

July 25, 2007

Will Barclay's Turn Chinese? 2Q/H1 Macro Report + IPOs!

July 19, 2007

Food Fight! China-USA sling hash / Peak Oil? / Markets Flat Line...

July 10, 2007

Chinese markets confused? Big IPOs - Chery+Chrysler

June 27, 2007

COSCO - China Mobile - IPOs - Telecom Mergers & Acquisitions

June 21, 2007

New Record Highs in Hong Kong, Shanghai: Will Beijing Put On the Squeeze? - IPOs & more

June 15, 2007

Fundamental Misalignment: US-China currency war - stock markets up & IPOs

June 7, 2007

China Stock Pop - Hot News items - climate change, tainted food...

May 31, 2007

Chinese stock markets hiccup - IPOs - USA-China Trade Gap

May 25, 2007

Report on the 2nd USA/China Strategic Economic Dialogue: Win-Win or When-When? - Market numbers - New IPOs

May 18, 2007

New life for Hong Kong? IPO Update - USA/China summit

May 11, 2007

Will Shanghai end up like NASDAQ or Nikkei? - IPOs

April 30, 2007

Tulips to Dotcom - is Sino Mania the next big bubble?

April 20, 2007

The Heat is on! - IPO Report - Air Pollution in China

April 15, 2007

China markets, IPO update, Beijing Ready for Olympics?

March 30, 2007

China markets up, up, up! Sinomania! goes to China

March 23, 2007

Focus on National People's Congress... Hi-Tech, IPOs

March 17, 2007

China's new investment strategy, IPOs, the Wrap...

March 7, 2007

China syndrome or hong bao bounce? New IPOs... more!

February 27, 2007

China Stock Market Yo-yo, new IPO issues, the wrap

February 17, 2007

Chinese New Year edition! Will China buy Chrysler & more!

February 9, 2007

The USA-China WTO trade dispute and New IPOs

February 1, 2007

IPOs: New Red Chip — Bubble Burst? — USA-China

January 26, 2007

BUBBLE TROUBLE? — IPOs on NASDAQ — Renminbi Yuan

January 20, 2007

IPOs in 3 hot sectors — BAOSteel — Macro Report

HKEX Hang Seng Shanghai
SSE Shanghai Hong Kong
SZEX Shenzhen Beijing
MUSIC in China: Listen!

TRANSCRIPT: Chinese markets plunge, Shanghai Composite down almost 1/3 value since 2007 high, fears of oversupply of shares concern investors, Buffet and Greenspan comment on sovereign wealth funds, Hong Kong and Shanghai IPOs, and the National People's Congress opens its annual session...
Sinomania! Volume II Webisode 50, March 5, 2008

Chinese Stocks Plunge!
With More Shares Coming;
This Week’s Alpha Bet,
And China’s Parliament Convenes…


Chinese markets have plunged to their lowest levels since last July. The Shanghai Composite Index closed March 5 at 4292.654 down 18% since the start of the year and has lost almost a third of its value from last year’s high. The CSI 300 Index sank below 5,000 since our last show and is now officially bearish having declined 21% in the past six weeks. Shanghai B shares appear stuck around 300 and ShenZhen Bs around 600.

Word is hedge fund managers in Hong Kong and elsewhere believe Chinese domestic shares are unsustainable and investors are worried about oversupply of shares particularly with new issues planned by firms already listed on the Shanghai exchange. Octogenarian Peking University Professor Li Yining, known as the father of China’s modern stock market, says he believes Chinese shares have finished their readjustment and expects no bear market this year. But Chinese securities regulators are concerned about secondary share issues and say they will strictly examine any new applications.

Signals are mixed as today in his opening address at the National People’s Congress Wen Jiabao said China will introduce a new stock market for “growth enterprises” sometime in the near future. The market envisioned is a NASDAQ type board for small start-ups particularly high-tech companies to raise funds.

And Chinese equity investors will have additional outlets soon: China’s banking regulators have given the green light for the Qualified Domestic Institutional Investor program to invest in Tokyo stocks and mutual funds with plans to allow Chinese investors to buy stocks in the USA and Germany coming. Also Wen Jiabao called today for ramping up China’s bond and futures markets.


Two prominent investor voices weighed in on the growing controversy around sovereign wealth funds, the China Investment Corporation in particular.

In last week’s shareholder letter Warren Buffet said “Why should we complain when [foreign governments] choose [USA] stocks over bonds?” "Our country’s weakening currency,” Buffet said, “is not the fault of OPEC, China, etc. In defending a sensible trade policy, the U.S. should not single out countries to punish or industries to protect.”

At an investment conference in Abu Dhabi, Alan Greenspan came out in favor of global sovereign wealth funds saying they have done a “good job, on balance” and that restrictions on them would be a “very bad idea.”


This week’s Alpha Bet starts with 0941.HK, China Mobile, one of the hottest Red Chips on the Hong Kong exchange. The long awaited domestic A share listing in Shanghai is moving forward but CEO Wang Jianzhou told the South China Morning Post the “size of the offering won’t be very big.” Investor demand for the shares however is expected to be very strong.

Next is 3968.HK and 600036.SS, China Railway Construction, which raised billions in Hong Kong and Shanghai, the share offering was oversubscribed 250 times in Hong Kong and was the fourth most popular IPO in Shanghai.

On the horizon, China Merchants Bank wants to buy a stake of the planned gigantic IPO of Visa although United States regulations limit that stake to only 20%. China Merchants, traded in Hong Kong under symbol 0133.HK, is the top credit card issuer in China. A stake in Visa would greatly enhance its services via the Visa network.

Taiwan based Want Want China, a top maker of snack foods and beverages will IPO on Hong Kong at the end of the month and hopes to raise up to one and a half billion US dollars, the bulk of which will be used to build plants in China to increase its production there. The company’s parent, Want Want Holdings is already listed on the Singapore exchange under symbol W08.

Finally, China Pacific Insurance Group received approval to IPO in Hong Kong. Pacific is the third largest insurance business in China and hopes to sell up to 900 million new shares. I have no details on pricing at this time.

NPC 2008

China’s National People’s Congress convened today in Beijing. It is easy for foreign observers, particularly American media, to dismiss the Chinese Congress as a rubber stamp farce. But as I’ve pointed out before, you ignore the work of the NPC at your peril. The Congress affirms the direction China is going and gives law to Beijing’s policies. The NPC is in session until March 19. I’ll have much more to say about this year’s session in the next episode.

I’ll see you next time!


© Sinomania! 2008 All Rights Reserved.

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