14 March 2024: Will this time be different?
Chinese stocks have staged a recovery around early to mid Feb till now so far after experiencing the most rapid crash that saw Shanghai index, Shenzhen index, see50, chinext, hang Seng index and hang Seng tech index breaking all lows...
If you think the market is back, I have to be blunt with you that despite the recovery, Chinese markets are still down significantly from all time peak.. Economic bubbles may be bad at the wrong time and space but certainly at this time and space, china needs some exuberance to get its pessimistic economic engine back.
I do see a slight edge by top leadership to steer towards a more open economy as compared to the last three years. However, this may not be able to assure global companies and investors to put long term capital in if there will be a flip flop of market friendly policies..
There is also much talk about china plus one manufacturing which takes production out of China.. this will then create a space and gap in employment which china certainly has to fill up the void...
Back to the main topic of will this time be different? I have been disappointed so many times that my base case is this time will be the same as others where hang Seng tech index will likely hover between 4000 to 5000 points, which is less than half of its all time high of 11000. I certainly hope I am wrong and hope it can exceed all time high like Nasdaq 100!
What can China do to make this time different? Wait... Will they be keen to make it different this time round?
As always, this should not be construed as any investment or trading advice.
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