Friday the 13th

Movie buffs all over the World will be familiar with the eponymous American horror franchise which now consists of twelve slasher films (and I can’t wait for the 13th 13th). As you know, the majority of the characters in these films are not what you would call fortunate and in Western superstition today is also deemed to be an unlucky day. In the Gregorian calendar, Friday the 13th occurs at least once, but at most three times a year and if any month begins on a Sunday, its 13th day will be a Friday.

Today was neither lucky nor unlucky in Shanghai (the Composite rose by around 1%) and closed the week (-1.9%) in marginally negative territory (but this was not bad considering Wall Street fell 2.5% in a single day on Wednesday). For me those wise folk at West China Securities summed it up: “the economy is really cooling but expectations are growing that there will be counter-measures from the Government to stem the drop in growth. It’s a game between investors and the Government. The market will be range-bound until there’s a clear sign which side will gain the upper hand”. For its part, too, the China Real Estate Association has called for Central Government restraint, while Credit Suisse raised its forecast for export growth this year (24.6%) but almost halved it to 9% for 2011. In other news, the Yuan saw its biggest weekly drop (-0.3%) for 21 months when I (and Tim Geithner) thought it should be going the other way.

On a brighter note, consumer confidence ticked up in Q2 and Blackstone’s fabulously named Byron Wien (who I used to work with at Morgan Stanley) still loves China – calling it the engine of global growth. Meantime, real estate companies maybe able to tap the bond market for funding. Similarly, Credit Suisse (again) says that the Chinese populace hide $1.4 trillion of income annually, which is one explanation for the surge of spending on luxury goods.

And finally, spare a thought for Hong Kong’s unlucky stockbrokers who face the prospect of having their lunch break cut from two to one hour and are complaining bitterly about it. Perhaps they need a reality check with Jason at Camp Crystal Lake?

Shanghai Composite:
Today: +1.21% at 2,606.70 at close
This week: -1.9%
YTD: -20.5%

Hang Seng:
Today: -0.16% at 21,071.57 at close
This week: -2.8%
YTD: -3.7%

Oil:
$76.31
Gold:
$1219.10
Euro/$:
1.2858

Headlines

• Yuan sees largest weekly drop since December 2008
• China Q2 consumer confidence index rises, says Nielsen
• China is the top global growth engine, says Blackstone's Wien
• Credit Suisse raises China export growth forecast for 2010; but cuts 2011
• Real estate industry ask Government for restraint
• Shanghai mortgages collapse more than 90% in July
• China bank clampdown may trigger a “flood” of bond sales by property firms
• China's rich have $1.4 trillion in hidden income
• China to spend $220 billion in Guangxi on infrastructure
• China imported more than 55% of oil needs in H1; which puts July’s 15% dip in perspective
• Hong Kong brokers balk at prospect of losing their long lunch
• Torrential rain hampers relief work in mudslides