Surprised no reaction from BYD owners on this forum

[webfact]

Repeat of China crisis would hurt Thai investors
ERICH PARPART
THE NATION

BANGKOK: -- ANOTHER nosedive in China's stock markets could face-plant its demand for raw materials and that would further affect Thai investors and exporters.

Chinese companies that filed for a trading halt will, one way or another, return to trade one day and no one knows if another panic sale is waiting around the corner.

About 1,400 Chinese companies, or more than half of those listed in Shanghai and Shenzhen, filed for a trading halt on July 7 in an unprecedented attempt to prevent further losses from the latest correction of China's stock markets.

On the Shanghai exchange, 365 companies, or 33 per cent of all stocks, suspended trading. In Shenzhen, 992 companies were halted, or 56 per cent of the total.

China's Shanghai Composite Index surged by 150 per cent from June 2014-June 2015 before plunging 32 per cent by July 7 and rebounding via big gains on July 9 and 10 to close 4.5 per cent up last Friday.

From another perspective, the index went on a roller-coaster ride from 3,350.52 points on January 5, the first day of trading this year, to 5,166.35 on June 12 on a rally fuelled by borrowed money.

June 12 was this year's peak and the day when China's securities regulator announced a new limit on margin lending. Then the index plummeted to 3,507.19 on July 8 and recovered to close at 3,877.80 on Friday.

"The plunge hurts Thais who invested in Chinese stock markets as the trouble on the mainland has affected the Chinese enterprises in Hong Kong's Heng Seng index, where most of the mutual funds that Thai investors invest in are located," Kittikun Tanaratpattanakit, a senior data analyst at Morningstar Research (Thailand), said last week.

"The next key number is 1,400, as around 1,400 companies will return to trade. But we don't know whether those investors who are holding these shares will sell or continue holding them. The market capitalisation of the 1,400 is 40 per cent of the mainland markets and another panic sale will make it suffer again," he said.

"Around 700 companies have requested a trading halt but 700 others have been ordered to stop, so we don't know if all of them will return at once, or all of them are ready, what the communist-led government will do. And these are uncertainties that continue to surround the potential of another tumble in the dragon's markets."

Vallop Vitanakorn, vice chairman of the Thai National Shippers' Council, said another plunge in China's stock markets would begin to eat into real capital and that will lower the country's demand for products, which will hurt not only Thailand but also its largest trading partner, which is Asean.

The other nine Asean countries accounted for 22.7 per cent of Thailand's exports in the first five months of this year, which is more than double China's 10.8 per cent.

"Another plunge means less demand for raw materials and consumer products from China and that will hurt Asean and Thai exports. We maintain that the Thai export sector will contract by 2 per cent this year but our chairman (Nopporn Thepsithar) has mentioned that it could go down to 3 per cent if there is another plunge," he said.

"I believe that the negative 2-per-cent mark is where the sector will contract to if the Commerce Ministry manages to jumpstart our four main exporting industries including automobiles and parts, that is already doing well this year, along with computers and parts, jewellery and plastic beads. If not, then things could get worse," he added.

The top agriculture and industrial products that were shipped from Thailand to China in the first five months were electronic machines such as computers, plastic beads, tapioca, agricultural rubber, chemicals, industrial rubber, electronic appliances such as televisions, raw wood and products, and agriculture products that are used for industrial purpose.

They accounted for 14.9 per cent, 12.3 per cent, 12.0 per cent, 9.2 per cent, 8.2 per cent, 6.6 per cent, 6.0 per cent, 4.6 per cent and 3.9 per cent of the country's exports to China.

Pimonwan Mahujchariyawong, deputy managing director of Kasikorn Research Centre, is more optimistic.

The previous panic sale did not affect China's real sector and economy and the depreciation of baht to about 34 per US dollar should be able to stop any further export contraction than the 1.7 per cent predicted by the research house, she said.

KResearch expects China's economy to expand by 6.9 per cent this year and the potential of a second panic sale will remain to be seen.

"The Chinese government will not allow gross domestic product expansion to drop that much lower than 7 per cent, so demand will continue to be there."

"And if the government can introduce measures that will make investors look at the fundamentals rather than getting panicky, then things should be okay as the indexes' price-to-earnings ratio is at an acceptable level," she said.

Source: http://www.nationmultimedia.com/business/Repeat-of-China-crisis-would-hurt-Thai-investors-30264298.html


-- The Nation 2015-07-13

[NeverSure]

Not mentioned is that many of those stocks had PE ratios of around 100. 15 is more like it. This is the first time that many Chinese people have been able to invest in a stock market and they seem to think that stocks always go up, so why pay attention to fundamentals?

The article didn't of course mention the massive real estate bubble including the empty ghost cities.

The article didn't mention the shadow banking system which is unregulated and may entail as much as 50% of all lending.

I don't know why anyone would invest one baht in China right now.

Cheers

[NongKhaiKid]

Not mentioned is that many of those stocks had PE ratios of around 100. 15 is more like it. This is the first time that many Chinese people have been able to invest in a stock market and they seem to think that stocks always go up, so why pay attention to fundamentals?

The article didn't of course mention the massive real estate bubble including the empty ghost cities.

The article didn't mention the shadow banking system which is unregulated and may entail as much as 50% of all lending.

I don't know why anyone would invest one baht in China right now.

Cheers

I heard an interview with a Chinese stockbroker some time ago and he was less than enthusiastic about the ' Mom and Pop ' investors who he said didn't understand the markets and didn't want to. They didn't listen when told that stocks go down as well as up and as soon as there was the slightest dip in their investment would be on the phone demanding to know why, should they sell and buy something else etc.

[NeverSure]

Many Chinese stocks are available to Chinese only. There seems to be a mistaken idea that there is something special about China in that it can only go up. No economy can do that uninterrupted.

[NeverSure]

"Then the index plummeted to 3,507.19 on July 8 and recovered to close at 3,877.80 on Friday."

It was the Chinese government that halted sales on stocks sold in China and began a large buying of its own. China ordered large investors and brokers not to sell.

Many people and firms are sitting on stock in a down market and not allowed to bail. The only "up" to the market is the lack of selling and the government buying to prop it up. I think it would look a lot worse if the government hadn't frozen it, and the history of freezing says that it just causes pent up selling pressure. The Chinese government can backstop this only for so long.

Cheers.

[BSJ]

I am no expert but it seems like a bumpy road ahead for Chinese investors. Factory owners too!

My business in Australia has enough stock for now, but whenever I do order (August) it's all Chinese made! And I need to order 2 months ahead so I don't run out.

It's a worry when I am thinking about having to place an order in the months to come...will the companies I deal with, will they be there to complete the order???

I put 30% down then wait a month for the product to be made, pay 70% then get it shipped. A lot can go wrong in a month!

[Nick167]

I hope that the Chinese stock market, property market , manufacturing sector and economy as a whole simply collapses. It will be great fun .

[NCC1701A]

china is a communist country.

[Suradit69]

Not mentioned is that many of those stocks had PE ratios of around 100. 15 is more like it. This is the first time that many Chinese people have been able to invest in a stock market and they seem to think that stocks always go up, so why pay attention to fundamentals?

The article didn't of course mention the massive real estate bubble including the empty ghost cities.

The article didn't mention the shadow banking system which is unregulated and may entail as much as 50% of all lending.

I don't know why anyone would invest one baht in China right now.

Cheers

I heard an interview with a Chinese stockbroker some time ago and he was less than enthusiastic about the ' Mom and Pop ' investors who he said didn't understand the markets and didn't want to. They didn't listen when told that stocks go down as well as up and as soon as there was the slightest dip in their investment would be on the phone demanding to know why, should they sell and buy something else etc.

Sort of like a sizable chunk of retail "investors" in the US. When their stock prices go up, they believe they're great fundamental & technical analysts and gifted stock pickers. When prices slide it could only be because the market is rigged, because of a sinister short-attack or manipulation by the "big boys" and they demand the SEC investigate.

And of course it wasn't that long ago that everyone in the US was flipping condos or homes, because real estate prices could only go up. Put up 5% cash, borrow the rest and next month sell it to someone else for 25% more. What could go wrong? SURPRISE.

Despite all the hoopla in the western press, what the Chinese government is doing to prop up the stock market is a drop in the ocean compared to the trillions thrown at the problem by the US Fed and European authorities. The US taxpayer ended up buying major stakes in insurance companies, banks and manufacturers who were deemed too big to fail while the Fed swamped the market with liquidity and has kept interest rates abnormally low. Europe and Japan have used similar measures.

Most Chinese investors who got in awhile ago have ridden the market up 150% before the recent 30% fall. Unless they just bought in when the market peaked, they're ahead.

Remember TARP ... the Toxic Asset Relief Program? Government propping up the financial markets isn't a Chinese invention.

[robblok]

I am no expert but it seems like a bumpy road ahead for Chinese investors. Factory owners too!

My business in Australia has enough stock for now, but whenever I do order (August) it's all Chinese made! And I need to order 2 months ahead so I don't run out.

It's a worry when I am thinking about having to place an order in the months to come...will the companies I deal with, will they be there to complete the order???

I put 30% down then wait a month for the product to be made, pay 70% then get it shipped. A lot can go wrong in a month!

That sucks.. but that is what business is about taking risks and making money. If it was easy everyone would do the same thing. But i agree this makes it extra risky.

Seems like a perfect storm going against the Thai economy, if the Chinese have problems so will the Thais.

[sammygood]

play the stocks with money you can afford to lose and nothing catastrophic will happen

but thais & other like to gamble and greed make people blind & stupid

[Bluespunk]

Personally I'd invest in a long spoon factory to sell to anyone dealing with china.

[NongKhaiKid]

Personally I'd invest in a long spoon factory to sell to anyone dealing with china.

[Bluespunk]

china is a communist country.

No it isn't.

That path was abandoned a long time ago.

[NeverSure]

Sort of like a sizable chunk of retail "investors" in the US. When their stock prices go up, they believe they're great fundamental & technical analysts and gifted stock pickers. When prices slide it could only be because the market is rigged, because of a sinister short-attack or manipulation by the "big boys" and they demand the SEC investigate.

And of course it wasn't that long ago that everyone in the US was flipping condos or homes, because real estate prices could only go up. Put up 5% cash, borrow the rest and next month sell it to someone else for 25% more. What could go wrong? SURPRISE.

Despite all the hoopla in the western press, what the Chinese government is doing to prop up the stock market is a drop in the ocean compared to the trillions thrown at the problem by the US Fed and European authorities. The US taxpayer ended up buying major stakes in insurance companies, banks and manufacturers who were deemed too big to fail while the Fed swamped the market with liquidity and has kept interest rates abnormally low. Europe and Japan have used similar measures.

Most Chinese investors who got in awhile ago have ridden the market up 150% before the recent 30% fall. Unless they just bought in when the market peaked, they're ahead.

Remember TARP ... the Toxic Asset Relief Program? Government propping up the financial markets isn't a Chinese invention.

Geez. I guess I could spend most of my time on here just teaching banking. One day it's someone saying that the Fed "printed money" which the Fed doesn't do and increasing total USD in the world isn't how the Fed "increases the money supply". The next day the US owes China a bunch of money. US doesn't "owe China money" other than the Treasuries that China must hold to have USD to engage in international trade. No one will accept Chinese money for trade. China is broke.

^^^ Now this. ^^^^

CNN Money - "U.S. ends TARP with $15.3 billion PROFIT".

CNNMoney (New York) December 19, 2014: 11:27 AM ET

"Treasury sold its remaining shares Friday in Ally Financial, its last remaining major stake from the $426 billion bailout of banks and the U.S. auto industry."

Eat that. I'm tired of it.

Edited July 13, 2015 by NeverSure

[AYJAYDEE]

Sort of like a sizable chunk of retail "investors" in the US. When their stock prices go up, they believe they're great fundamental & technical analysts and gifted stock pickers. When prices slide it could only be because the market is rigged, because of a sinister short-attack or manipulation by the "big boys" and they demand the SEC investigate.

And of course it wasn't that long ago that everyone in the US was flipping condos or homes, because real estate prices could only go up. Put up 5% cash, borrow the rest and next month sell it to someone else for 25% more. What could go wrong? SURPRISE.

Despite all the hoopla in the western press, what the Chinese government is doing to prop up the stock market is a drop in the ocean compared to the trillions thrown at the problem by the US Fed and European authorities. The US taxpayer ended up buying major stakes in insurance companies, banks and manufacturers who were deemed too big to fail while the Fed swamped the market with liquidity and has kept interest rates abnormally low. Europe and Japan have used similar measures.

Most Chinese investors who got in awhile ago have ridden the market up 150% before the recent 30% fall. Unless they just bought in when the market peaked, they're ahead.

Remember TARP ... the Toxic Asset Relief Program? Government propping up the financial markets isn't a Chinese invention.

Geez. I guess I could spend most of my time on here just teaching banking. One day it's someone saying that the Fed "printed money" which the Fed doesn't do and increasing total USD in the world isn't how the Fed "increases the money supply". The next day the US owes China a bunch of money. US doesn't "owe China money" other than the Treasuries that China must hold to have USD to engage in international trade. No one will accept Chinese money for trade.

^^^ Now this. ^^^^

CNN Money - "U.S. ends TARP with $15.3 billion PROFIT".

CNNMoney (New York) December 19, 2014: 11:27 AM ET

"Treasury sold its remaining shares Friday in Ally Financial, its last remaining major stake from the $426 billion bailout of banks and the U.S. auto industry."

Eat that. I'm tired of it.

china doesnt have to convert us dollars to treasuries but when it buys them it is buying US DEBT!

Edited July 13, 2015 by AYJAYDEE

[NeverSure]

china doesnt have to convert us dollars to treasuries but when it buys them it is buying US DEBT!

That's how all countries hold their foreign reserves as USD including Thailand. They have the USD to back their trades and they draw a little interest on it.

There is only about 1.3 trillion dollars in US currency in circulation - not enough to begin to supply the market with the international unit of trade called the USD.

Yes, Thailand holds US debt so it can engage in international trade. So does China. China is broke and can't really afford it but if it put the treasuries on the open bond market tomorrow it would be out of international business.

End of.

[AYJAYDEE]

china doesnt have to convert us dollars to treasuries but when it buys them it is buying US DEBT!

That's how all countries hold their foreign reserves as USD including Thailand. They have the USD to back their trades and they draw a little interest on it.

There is only about 1.3 trillion dollars in US currency in circulation - not enough to begin to supply the market with the international unit of trade called the USD.

Yes, Thailand holds US debt so it can engage in international trade. So does China. China is broke and can't really afford it but if it put the treasuries on the open bond market tomorrow it would be out of international business.

End of.

china holds US DEBT for more reasons than that and they are far from broke. I suggest more study

[Srikcir]

china is a communist country.

No it isn't.

That path was abandoned a long time ago.

Perhaps you are confusing China with Russia?

Russia after the breakup of the Communist USSR adopted a more democratic government, albeit with heavy oligarchy overtones.

Like its fellow nations of North Korea and Cuba, China is a communist country ruled by the Communist Party.

Oddly, Prayut has likened his Junta's rule like a "chinese politburo."

[AYJAYDEE]

china is a communist country.

No it isn't.

That path was abandoned a long time ago.

Perhaps you are confusing China with Russia?

Russia after the breakup of the Communist USSR adopted a more democratic government, albeit with heavy oligarchy overtones.

Like its fellow nations of North Korea and Cuba, China is a communist country ruled by the Communist Party.

Oddly, Prayut has likened his Junta's rule like a "chinese politburo."

ChinaGovernment.jpg

you can call it what you like but it is nothing more than a political dictatorship with a combination of state and private owned enterprise.

[Bluespunk]

china is a communist country.

No it isn't.

That path was abandoned a long time ago.

Perhaps you are confusing China with Russia?

Russia after the breakup of the Communist USSR adopted a more democratic government, albeit with heavy oligarchy overtones.

Like its fellow nations of North Korea and Cuba, China is a communist country ruled by the Communist Party.

Oddly, Prayut has likened his Junta's rule like a "chinese politburo."

ChinaGovernment.jpg

Communism is a political philosophy which china, no matter what it's structures, propaganda or mouth pieces declare, no longer adheres to.

It is a dictatorial, brutal, authoritarian govt with no interests in anyone's welfare but the ruling elite it has created.

I'm not confused nor am I fooled by BS Chinese state propaganda.

[AYJAYDEE]

china is a communist country.

No it isn't.

That path was abandoned a long time ago.

Perhaps you are confusing China with Russia?

Russia after the breakup of the Communist USSR adopted a more democratic government, albeit with heavy oligarchy overtones.

Like its fellow nations of North Korea and Cuba, China is a communist country ruled by the Communist Party.

Oddly, Prayut has likened his Junta's rule like a "chinese politburo."

ChinaGovernment.jpg

Communism is a political philosophy which china, no matter what it's structures, propaganda or mouth pieces declare, no longer adheres to.

It is a dictatorial, brutal, authoritarian govt with no interests in anyone's welfare but the ruling elite it has created.

I'm not confused nor am I fooled by BS Chinese state propaganda.

to be fair , they have to give SOME thought to the welfare of the masses so they dont turn on them and tear them limb from tree!

[konying]

For some reason Chinese stock market crash which saw $3.2 trillion loss has been rather downplayed all over the world .

Hardly made the news or shake the world .

[AYJAYDEE]

For some reason Chinese stock market crash which saw $3.2 trillion loss has been rather downplayed all over the world .

Hardly made the news or shake the world .

http://www.marketwatch.com/story/why-chinas-stock-plunge-might-not-be-such-a-big-deal-2015-07-12

[NeverSure]

china doesnt have to convert us dollars to treasuries but when it buys them it is buying US DEBT!

That's how all countries hold their foreign reserves as USD including Thailand. They have the USD to back their trades and they draw a little interest on it.

There is only about 1.3 trillion dollars in US currency in circulation - not enough to begin to supply the market with the international unit of trade called the USD.

Yes, Thailand holds US debt so it can engage in international trade. So does China. China is broke and can't really afford it but if it put the treasuries on the open bond market tomorrow it would be out of international business.

End of.

china holds US DEBT for more reasons than that and they are far from broke. I suggest more study

Why don't you go buy some of China's bonds and then China will owe YOU money? China's finances aren't transparent and are intertwined with government banks and shadow banking and ghost cities and... all a mess.

"There were 20.8 trillion yuan ($3.26 trillion) of the securities, which are traded over-the-counter among commercial lenders and other financial companies, outstanding as of the end of June, according to Chinabond. The figure includes debt issued by the central (Chinese) government, banks and companies, and compares with 379.5 billion yuan on the exchange-listed market."

Bloomberg

If China has so much money, why is it offering to borrow money from you by selling you bonds?

Edited July 13, 2015 by NeverSure

[AYJAYDEE]

china doesnt have to convert us dollars to treasuries but when it buys them it is buying US DEBT!

That's how all countries hold their foreign reserves as USD including Thailand. They have the USD to back their trades and they draw a little interest on it.

There is only about 1.3 trillion dollars in US currency in circulation - not enough to begin to supply the market with the international unit of trade called the USD.

Yes, Thailand holds US debt so it can engage in international trade. So does China. China is broke and can't really afford it but if it put the treasuries on the open bond market tomorrow it would be out of international business.

End of.

china holds US DEBT for more reasons than that and they are far from broke. I suggest more study

Why don't you go buy some of China's bonds and then China will owe YOU money? China's finances aren't transparent and are intertwined with government banks and shadow banking and ghost cities and... all a mess.

"There were 20.8 trillion yuan ($3.26 trillion) of the securities, which are traded over-the-counter among commercial lenders and other financial companies, outstanding as of the end of June, according to Chinabond. The figure includes debt issued by the central (Chinese) government, banks and companies, and compares with 379.5 billion yuan on the exchange-listed market."

Bloomberg

I dont want China to owe me money thank you very much. I dont want america to owe me money either. theyre both cowboys

[rametindallas]

Repeat of China crisis would hurt Thai investors everyone on the planet.

There, fixed it for you.

.

[NeverSure]

I dont want China to owe me money thank you very much. I dont want america to owe me money either. theyre both cowboys

You don't belong in this conversation. Your uniformed one-liners are tiresome. Welcome to my ignore list.

Cheers

[AYJAYDEE]

I dont want China to owe me money thank you very much. I dont want america to owe me money either. theyre both cowboys

You don't belong in this conversation. Your uniformed one-liners are tiresome. Welcome to my ignore list.

Cheers

good luck with your studies. come back when you get to chapter 2 of international trade

[Alwyn]

People interested in this post will find this interesting too, an article from the Daily Telegraph. And The General seems to be putting all of his eggs in to the Chinese promise..

http://www.telegraph.co.uk/finance/china-business/11725236/The-really-worrying-financial-crisis-is-happening-in-China-not-Greece.html