Dim Sum Set Jan.27th-29th

Cultural Tea:

This Pepsi commercial has earned millions of hits in China just yesterday. Coupling with the incident that Monkey Sun’s impersonator was not in the CCTV Spring Festival Night Gala, people were nostalgic about the past, and they were…somewhat angry. While good old days never come back, this is an interesting video to show the psyche of Chinese ordinary citizens nowadays:

Market Appetizer:

  1. A-shares saw its worst month since 2008, but rebounded 3% from lows today (http://www.bloomberg.com/news/articles/2016-01-29/china-s-stocks-head-for-steepest-monthly-loss-in-two-decades)


Commentary: Though it’s hard to say whether the market is cheap enough for investors to buy, clearly there is a sentiment of a temporary recovery or even a rebound from the lows. The question here is it too little, too late?

2. Yu: “the PBOC should reinforce the Chinese government’s market-oriented reform plans and allow the renminbi to float” (http://www.todayszaman.com/op-ed_a-floor-for-the-renminbi_410851.html)


Commentary: The rather conflicted, uncertain views on RMB has been put to a stop since Liu He’s call to Treasury Secretary Lew (http://www.scmp.com/news/china/policies-politics/article/1902725/china-presidential-top-aides-phone-call-us-treasury).  The RMB rout has been put to a rest, but what next? Are reform items on capital account being stalled? Will we see a wider exchange trading band? I tend to believe that PBoC has put brakes on the market reform at least temporarily for some breathing room.

3. BOJ negative interest rate move triggers stock rally (http://www.wsj.com/articles/stocks-rally-on-boj-surprise-cut-1454058269)

Commentary: So as long as it is helping the market, it’s not market manipulation, right? I somehow doubt that such a move can help Japan out of deflation, but at least long-only investors are smiling today…

Policy Bun:

  1. Premier Li says “shorting the Chinese economy is ‘absurd'” (http://www.scmp.com/news/china/policies-politics/article/1902725/china-presidential-top-aides-phone-call-us-treasury)

Commentary“China is still a developing country, and it will remain at the initial stage of socialism for a long period of time. Those who allege that China has caused international market turmoil really over-estimate China”. Modesty is always appreciated in China, not in the west. The short side is still blowing strong against China.

2. State Council approves no.1 document on agriculture, which stresses on technology and better corporate governance for rural enterprises (http://www.ecns.cn/business/2016/01-28/197340.shtml)

Commentary: Focusing on supply-side reform, China is eager to modernize the agriculture industry to free up more labor towards urbanization. That said, the fiscal tools is necessary to encourage more changes in the industry.

Corporate Dessert:

  1. Alibaba beats street estimates but stock still down 3% (http://www.cnbc.com/2016/01/28/alibaba-reports-q3-earnings.html; http://seekingalpha.com/article/3846356-alibaba-disappoints-dull-results-meituan-sale)

Commentary“Even with the better-than-expected numbers, people may not want to make an aggressive bet on China right now,” I believe the selloff is due to sluggish market sentimentI do think, however, that selling meituan shares is good for the group, at least it already got O2O exposure in eleme.

2. Alibaba will sell its stake in Meituan for 900 million USD (http://techcrunch.com/2016/01/28/alibaba-will-reportedly-sell-its-meituan-dianping-stake-for-900m/?ncid=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+techcrunch%2Ffundings-exits+TechCrunch+%C2%BB+Fundings+%26+Exits)

Commentary:The koubei-meituan incident might be the trigger for this sale. Maybe Jack Ma is not that strong of a believer in O2O after all…





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