Salient to Investors: John-Paul Smith at Deutsche Bank said stocks in the major developing markets will again lag global equities in 2013 – China has focused on increasing the pool of buyers for Chinese assets, rather than boosting the role of free markets and privately run companies in the broader economy. Smith prefers cash to BRIC
READ MORE... →Salient to Investors: Michael Hartnett at Bank of America Merrill Lynch said emerging-market stocks are poised to fall after weekly emerging-market fund inflows were the biggest in 10 months and triggered a Sell signal – that 4-week inflows totaling at least 1.5 percent of assets under management precede market declines. Hartnett said the most overbought are the most
READ MORE... →Salient to Investors: Dai Ming at Hengsheng Hongding Asset Mgmt said it appears institutional investors are increasing stock positions in order not to miss the boat as the economy has stabilized. The Shanghai Composite trades at 11.9 times reported earnings. Accounts containing funds to trade stocks dropped last week to the lowest level since November 2010.
READ MORE... →Salient to Investors: Carson Block at Muddy Waters said he stopped betting against Chinese companies this year after government agents hindered his analysts and harassed workers at his storage company in Shanghai. Block says China is protecting frauds by making it difficult to research short sale candidates, and has used intelligence and police agencies to deter
READ MORE... →Salient to Investors: Mao Sheng at Huaxi Securities said investors see a clearer direction and roadmap for government reforms. The OECD said as many as 300 million people will move from the countryside to the cities by 2030. The proportion of China’s population in cities rose to 51 percent by the
READ MORE... →Salient to Investors: Ted Farris at Dorsey & Whitney said more US-listed Chinese companies are under threat of going private or being delisted after US regulators accused accounting firms’ affiliates of blocking probes into potential fraud. The Bloomberg Chinese Reverse Mergers Index has lost 60 percent over the past two years.
READ MORE... →Salient to Investors: Jeffrey Gundlach at DoubleLine Capital says: The first phase of the coming debacle was the 27-year buildup of corporate, personal and sovereign debt to 2008. The third phase will be deeply indebted countries and companies defaulting sometime after 2013. Buy gemstones, art and commercial real estate and other hard assets. Chinese
READ MORE... →Salient to Investors: Wang Zheng at Jingxi Investment Mgmt said investors have no confidence in long-term growth prospects and the government is doing little to reverse the situation. The Shanghai Composite trades at 9.5 times estimated earnings for 2012, versus the 17.7 average multiple since 2006. Chongkyu Juhn at Samsung Securities said China’s stocks
READ MORE... →Salient to Investors: Deng Wenyuan at Soochow Securities said the economy may only show real improvement from Q2 or Q3 2013. The Shanghai Composite trades at 9.6 times estimated profit for 2012 versus the 17.8 average since 2006. Hao Hong at Bank of Communications said stocks are due for a technical bounce but the
READ MORE... →Salient to Investors: Victoria Mio at Robeco Hong Kong said China’s leadership change removes the biggest overhang for the nation’s equities as the new government is determined to carry out reforms. Mio said implications on the economy are neutral near term as China is expected to maintain the current monetary and fiscal policies. Barclays
READ MORE... →