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Chinese investors under a chance?
source : author : time:2015年6月27日

Over the past five years, the value of global investment has increasingly been come under recognition. So, Chinese investors under a chance?

U.S. debt would be short sellers of choice. Treasury collapse for a greater role in the global financial, but relatively low probability, experts are predicting for many years the us bond market collapse, but the prediction has not come true.

Since the early 1980 s the debt markets will continue to improve, but the recent financial situation reversed, sparked renewed discussion "is coming to an end an era".

Over the past 35 years, the market widely held U.S. debt, to yield a record low, parties always argue about the reasons. But one of the most influential explanation was simple: save too much and too little investment. People in favor of "global savings glut" hypothesis, the most of the blame on enjoys a trade surplus countries such as China.

Said a country enjoys a large trade surplus, which refers to the money more than spending, resulting in excessive savings. These funds are deposited in the bank, or to invest in bonds.

On the other hand, in the population aging of the population in developed countries, structural economic growth is slowing, thin investment activities, local investors often turned to investment in China.

No matter the reason why bond yields low, the result is cheap money tends to be put in the financial assets, such as stocks, bonds of property and high risk.

Strategist at citibank credit products Matt gold (Matt King) in the past in the study, said: "money is no longer with inflation/nominal gross domestic product (GDP), but that is associated with asset price inflation."

The latest from the President of the central Banks curse: cheap money stimulation is a bubble, rather than growth. Many experts say, this way is not workable.

This year the probability of the federal reserve to raise interest rates are high, it will bring great impact on global interest rate market, so in the second half of the global bond market will continue to volatile situation.

Afternoon about the us Treasury, the fed chairman yellen said in May, the U.S. economic recovery in line with her expectations if years, so there will be unexpected move. She warned that raising interest rates or prompted Treasury prices soaring.

"Data may just confirms yellen, suggested the Treasury bond market before or more serious." The federal credit union chief investment officer Christopher Sullivan said.

Bloomberg points out that the Treasury market may face the biggest losses, according to bloomberg, according to data compiled for the 10-year Treasury yield rose to 3% by the end of the year, investors will suffer a 3.6% loss rate.

Orient securities chief economist Shao Yu believe global bond market fluctuations in the future, the key lies in the extent of the fed to raise interest rates and duration.

"Increases in interest rates is a little different as before, this time is not so strong, may need to be in two to three years to rise to normal levels. This means that the rate of time interval is long, the fed would do with some calm markets move, but it can bring great influence to the market, you may be hungry or preemptive action, this will pose a risk to the market." He said.

And emerging markets, the federal reserve to raise interest rates expected to strengthen, the investors are beginning to lose interest in emerging market assets.

The world bank, according to a research prospects for the fed to raise interest rates in emerging markets will have a huge impact, research is expected, the federal reserve to raise interest rates may make 80% less inflows into emerging markets.

The report also pointed out that emerging markets about debt accumulation and for highly dependent on foreign investment, as this will cause great vulnerability.

Expectations the fed will raise policy rates this year, reflecting the us economy is steady, and overcame the deflation. When yields rise, the value of their bonds will fall. As the market is widely held expensive U.S. debt, U.S. debt value once fell, market even if they don't panic, also could be big hit.

Jun the bill gross of asset management, said recently: "the stock of debt for 35 years in the bull market will end soon." But he also added that the German bond market bubble is the most unbearable, and global bond yields rise, the final will be a good thing.

China's stock will be short sellers option. Since the beginning of the year, the Shanghai composite index has gained 60%, the highest in the world's major stock indices.

A large number of individual investors to participate in, and the large leveraged funds helped this bull market, the weak economy increased investors for the government in anticipation of a bigger stimulus and reform measures to further promote the rise of the stock market.

As the index along the line, a-share market capitalization is also growing fast. In dollar statistics, as of June 12, close, a-share market capitalisation topped $10 trillion, to $11.58 trillion. Rose by $5.59 trillion from the end of last year, the new value part of the total value has surpassed Japan's stock market. A-shares also secure the global capital market in the second, after the us $25 trillion.

A lot of foreign institutions begin to express concerns. , they say, A shares surged on is A big surprise, the market will eventually return to rational, bubble is only A matter of time.

Morgan Stanley Asia, chief strategist at Jonathan Garner cut China's stock market investment rating for the first time in seven years, the reason is that corporate earnings to the weakest since 2009, "recommended investors part knot."

Morgan Stanley points out, from the middle of January to May 2014, more than 225 shares of landing a-share market IPO, the stock rose 418% on average, came to 92 times earnings.

Chief economist at mizuho securities Asia shen jianguang, it seems, China's stock market boom over the past year is a "big surprise", because a boom before, it is one of the world's most cheap stocks.

Credit suisse said in a recent report, 25% of China's stock valuations more than fundamentals, and after a year after the rally, prone to volatility.

Now China is facing the situation, economic growth is slowing, excess production capacity has become a universal recognition problems, car sales growth is slowing, also from the central government to local governments at all levels are committed to clean up bad loans.

Admittedly, China's stock market continue to improve, because market expectations of the Chinese government urgently needs to spur growth catalyst ─ ─ aggressively expanding brokerage industry, for example, to acquiesce in a bull market.

In any case, as growth slows, the people's bank of China will continue to cut interest rates to spur growth. As conditions experienced by the oecd, cheap money is no guarantee that can promote growth, but almost certainly will make the more financial bubble bilges.

Carlson, founder of the muddy water Block (Carson Block) in a CNBC interview, China's stock market rose sharply as part of the reason for this is that liquidity is "be shoehorned into the financial system". Therefore, buying stocks losing money seems to be impossible.

In brock's view, this has brought Fried "in the history of the largest high selling (pump - and - dump)", is the share price under the control of insider higher - over the past years, a lot of the company's stock price has been scrambled up 500%.

Chinese stock market on the one hand, has attracted many international investors together, on the other hand is to inspire the international short fight.

Bond king gross said A shares will be the next short of the goal, and this is the short lifetime opportunity, slowing economic growth and export growth is difficult to support the high prices.

For investors, through a fund to short stocks safe-haven arbitrage opportunities may be coming. The SFC website shows that there are more than three empty rating fund report for examination and approval, such funds in the existing classification can only do more, on the basis of introducing the shorting mechanism. Due to the low threshold, is referred to as the first industry in the face of the people of the "popular" short hedge investment tools.

The latest fund raising application issued by the China securities regulatory commission, according to central Europe and China cathay three companies has formally submitted the short of funds, the three are in Shanghai and shenzhen 300 index for tracking target.

"In fact short fund not only what we see now the examination and approval of the three funds, there are also some fund, although there is no written" long-short "2 words, but also belong to the same type product." Huatai united securities funds research center general manager Mr Wang is expected, such products in the future will be more "fire".

Industry insiders speculated that, the product model will continue after the long-short lever classification of products introduced brokerage routines. For example gf before launching a callable bull/bear contracts treasure special asset management plan, the plan to link up with stock index futures, belong to product of short, now also is in approval process.

Wide hair negotiable securities investment consultant should HaoJieShao, such products are divided into the mother share and share. Mother holding the product's share of the customer does not assume the risk of stock market volatility, and will receive a 2% annualized revenue of deposit. Products child share is divided into shares bullish and bearish share, its net value change linked to changes in the csi 300 index, the index changes in line with the expectations are expected to get 2 times the lever of investment returns.

Should have exposure that securities market after the introduction of shorting mechanism, to smooth market volatility. There are "more" and "empty" two forces, form a dynamic balance between them, to benign and healthy development of the market.

"Retail investors also want to follow in the footsteps of private started into the era of the hedge." Analysts say a securities company, private fund in fact, as early as last year to start shorting to hedge, last year the top private invariably adopted by means of short hedge, hedge era has come, it has become an inevitable trend.

"Fund companies to create more empty tool, means more space than before operation, the investors will be able to grasp the more profitable opportunities." Mr Wang said, but the risks and benefits is equal, the higher the income, the greater the risk.

Analysts believe that more empty rating fund was born, is not only a prophet an attempt in fund industry, at the same time also let retail investors have the opportunity to enter the hedge field ahead of time. Many people believe that in the near future, long-short grading foundation to become an indispensable tool in the operation of retail expert.

"Long-short grading only 100 yuan fund in the secondary market transactions, makes the small and medium-sized investors can participate in short hedge." Guosen securities analyst ling thinks, long-short rating fund's advantage lies in: provide investors with a new short tools, to participate in the threshold is low, the transaction cost is low.

Mr Wang also reminded investors, "play" is the premise of new products according to the features of the product to operate. Read the short product characteristics, is also not far from the money.

For the Chinese stock market and bond market in the United States, the outside world views are similar: both market valuation is too high, as long as a fuse, the result will be a panic. So, Chinese investors next opportunity is bet money on things you will crash.

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