Round Trip Ahead...29 Apr 2020 10:49
China manager who sold everything before rout says there's worse to come....
The current stability in Chinese stocks isn’t luring Pan Yue, who is waiting for the Shanghai equity benchmark to fall a further 25% before she’d consider stepping back in.
Pan, a fund manager at Winbro Asset Management Co. in Beijing, is holding 80% cash and 20% bonds in two equity-focused funds that she oversees. She sold all her stock positions before the Lunar New Year holidays began in late January amid concern the spreading coronavirus outbreak would weigh on the market. The Shanghai Composite Index has dropped by about 5% since the holidays started.
One of the funds Pan managed last year at her previous employer -- Beijing Jinghong Investment Co. -- returned 90% for investors between January and November when she changed firms, according to Simuwang.com, a Chinese financial-data provider. The Shanghai Composite Index rose 18% in the same period. The two Winbro funds she now manages, which target a select group of clients, both returned around 7% this year as of Monday, according to an internal document seen by Bloomberg.
“Those who at this point still expect a V-shaped recovery would be displaying optimism fueled by ignorance,” said Pan of markets and the wider economy, from her home in the Beijing suburbs where she has stayed since the virus outbreak. She manages about 200 million yuan ($28 million).
Fund manager says China's stock benchmark could return to 2014 level
“I don’t think a drop of 10% from this year’s peak is enough for some to be calling a bottom,” she said. The Shanghai Composite Index should be “reaching approximately the 2,100 level before I’m willing to call a bottom and start buying.” Making bets now could yield a 10% upside, but the chances of a drop are much higher, she said.
A decline back to 2,100 would take the index to a level last seen in 2014. The gauge, which hasn’t fallen into a bear market unlike benchmarks in other major global equity exchanges, has risen 2.6% this month as of Wednesday, on pace for its first monthly gain for the year.
“I don’t think a drop of 10% from this year’s peak is enough for some to be calling a bottom,” she said. The Shanghai Composite Index should be “reaching approximately the 2,100 level before I’m willing to call a bottom and start buying.” Making bets now could yield a 10% upside, but the chances of a drop are much higher, she said.
A decline back to 2,100 would take the index to a level last seen in 2014. The gauge, which hasn’t fallen into a bear market unlike benchmarks in other major global equity exchanges, has risen 2.6% this month as of Wednesday, on pace for its first monthly gain for the year.“I don’t think a drop of 10% from this year’s peak is enough for some to be calling a bottom,” she said. The Shanghai Composite Index should be “reaching approximately the 2,100 level before I’m willing to call a bottom and start buying.” https://twitter.com/markets/status/1255416747043192833
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