Just look at the foolishness of the last statement here, folks! I have highlighted it in bold for you. The idiot who poses as an investor opines that "there's plenty of time" to exit a market once prices start to go down!!! HAHAHA!! Tha is, of course, if the market has not bankrupted you in the first place, YOU PATHETIC MORON!
In Virus-Hit China, Markets Brace for a Fall as Authorities Urge Calm
China’s markets have been closed since Jan. 23, but are scheduled to open Monday
China extended its Lunar New Year holiday market closure until Monday.PHOTO: KEVIN FRAYER/GETTY IMAGES
By
Stella Yifan Xie and
Steven Russolillo
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Stocks in China are primed for a steep fall Monday when markets in Shanghai and Shenzhen reopen after a week-long closure, even as Chinese authorities try to calm frayed nerves over the fast-spreading Wuhan coronavirus.
The last time mainland-listed Chinese stocks traded was Jan. 23, two days before the start of the Lunar New Year, and the benchmark Shanghai Composite had fallen 4.5% since mid-January at that point.
The markets were originally scheduled to reopen on Friday, but that was pushed to Monday when China extended its national holiday in an attempt to slow the spread of the new coronavirus that was first identified in the crowded central city of Wuhan in December.
Instead, the number of confirmed infections across China has jumped sharply—from 830 cases on Jan. 23 to 11,791 as of Friday—while the death toll has climbed to 259 from 25 over that period. The World Health Organization on Thursday declared coronavirus’s worsening spread a public-health emergency of international concern, after earlier opting not to escalate its status.
While China’s markets were closed, Hong Kong’s stock market fell 5.9%, and the Hang Seng China Enterprises Index—which tracks large Chinese companies listed in Hong Kong—fell a steeper 6.7%. Both suffered their worst weekly drops in two years.
Some exchange-traded funds that hold mainland-listed stocks fell 8% in the week that ended Friday, foreshadowing declines in Shanghai and Shenzhen in the coming week.
“This could put a lot of pressure on Chinese shares when they open,” said Olivier D’Assier, head of applied research for Asia-Pacific at Qontigo, a financial analytics firm.
Wei Yingfei, a partner at Shanghai-based private-fund manager DayWin Asset Management, said he is prepared to sell at least a fifth of the stocks his firm holds when China’s stock market reopens on Monday, because it might be more prudent to sit on more cash.
“No one can tell how long the contagion will last,” said Mr. Wei, who oversees about 5 billion yuan ($720 million) in assets. He said he expects the Chinese economy to “suffer a big blow” as the virus keeps spreading, and thinks China may call upon its “national team”—a group of state-backed funds—to buy domestic stocks next week to cushion any major market declines.
The main concern among global investors is that the virus could turn into a pandemic that cripples transportation and tourism, crimping global growth. In China’s case, the pneumonia-causing virus could further weigh on the country’s already slowing economy.
Already, multiple airlines have canceled flights in and out of China, domestic travel and business activity levels have dropped, and the fear of infection is keeping many people home.
This past week, some economists cut their forecasts for first-quarter Chinese growth by several percentage points. “The situation has escalated rapidly,” Ting Lu, chief China economist at Nomura said in a note. “In our view, the worst is yet to come.”
Chinese authorities have been trying to convey messages to market participants, advising them not to panic. The country’s top securities regulator earlier this week released a statement urging investors to look at the coronavirus “rationally and objectively.” It also said market participants should “adhere to the concept of long-term investment and value investment.”
China’s central bank separately said it plans to add liquidity to the financial system next week to help support markets.
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Challenges for travel and leisure stocks, slower economic growth and a weaker Chinese yuan are among the new market implications investors are dealing with as the new coronavirus spreads rapidly. Photo: Bloomberg/Qilai Shen
The market is being forced to “price in fear of the unknown,” said Weiqi Zhu, a managing director at Gao Zheng Asset Management, which invests in Chinese stocks listed on both the mainland and in Hong Kong.
He said his fund has cut its holdings of tourism, property, consumer and Macau gaming stocks, as these are sectors that would be hurt the most by the viral outbreak, and may increase its holdings of technology stocks that are less vulnerable. The firm has $120 million under management.
Back in 2003, when China was hit by the outbreak of severe acute respiratory syndrome, or SARS, its stock-market regulator formed an emergency committee to monitor the impact on the securities industry. That pandemic slowed down the pace of domestic initial public offerings in China, partly because regulatory officials couldn’t travel to Beijing to review and green light deals for a period.
The Shanghai Composite Index fell as much as 9% between mid-April and mid-May in 2003, a period when the SARS outbreak was most severe and markets were closed for a little over a week. It later recovered some of those losses in the summer of that year, when the crisis was considered to be over.
Richard Bernstein, head of the New York investment firm Richard Bernstein Advisors, which counts Chinese stocks among its holdings, said he expects the Chinese government will respond with more monetary and fiscal stimulus as a way to combat what is expected to be further slowing in Chinese economic growth and corporate profits in the short term.
“There is always a temptation to sell stocks when potential disasters strike with the good intention of buying when the situation clears,” said Mr. Bernstein, a former chief investment strategist at Merrill Lynch.
He said his firm, which has more than $9 billion under management and invests in Chinese companies through exchange-traded funds, hasn’t shifted trading strategies due to the coronavirus. Such knee-jerk moves in the short term rarely work as it is hard to time the market swings, he said.
“If the coronavirus impact on corporate profits and overall economic growth is not transient, then there will be plenty of time to alter portfolios,” Mr. Bernstein said. [Small wonder he is "a FORMER chief investment strategist! Thank God he is not practising any longer! Haha!]
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