China Enters Futures Trading Market.
Sunday, April 4th, 2010The positive response to the announcement could signal China moving towards a full-on futures marketplace.
On March 26th’s breaking news from Shanghai Chinese blue chip shares hit their 8 week highs.
The Yuan is up to 6.8263 to the U.S. dollar, above than Friday’s close 6.8273.
Shanghai Composite Index closed at 3,124 which is up over 2% from the close on Friday.
The Shenzhen Composite Index went up to 1,201 1 percent increase.
According to analysts the 3,100 point level is an important psychological benchmark for the market. The benchmark being met with higher trading volume is a definite plus.
Ping An, Securities analyst Li Xianming of Shenzhen said, “With the introduction of the stock futures, investors refocused on blue chip shares, as their previous performance has lagged behind the market.”
Chinese lenders, auto manufacturers, and brokerages are among the big gainers.
Better-than-expected annual earnings last week were reported by China’s three largest banks.
Bank of China Ltd. rose 3.1 percent to 4.36 Yuan Industrial & Commercial Bank of China Ltd. rose 2.5 percent to 5.02 Yuan China Construction Bank Ltd. rose 2.3 percent to 5.71 Yuan
The two largest brokerages were gainers as well. Haitong Securities Co. gained 2.8% to 17.07 Yuan Citic Securities Co. rose 3.5% to 28.36 Yuan
The auto makers surge as well. Zhejiang Geely Holding Group signed a deal Sunday to buy Ford Motor Co.’s Volvo Cars. SAIC Motor Co. Volkswagen AG (VGC), the local partner of General Motors Co. at 20.45 Yuan climbed 3.7% Ford Motor Company partner, Chongqing Changan Automobile Co. at 6.97 Yuan increased 1.2%
With the announcement and China’s Blue Chips increasing on it looks like capitalist principals are taking deeper root. It is highly unlikely that the surge in the sectors of auto manufacture, lending, and brokerages is mere coincidence.
James Horne has been a securities analyst for over 10 years. He is CEO of Pure Reason LLC, the home of Shadowtraders. His voice has been heard by hundreds of students learning to trade the Futures Market with Shadowtraders online day trading strategies. Before you buy any trading software, make sure you attend Shadowtraders Monday Night Webinar, and hosted by Barbara Cohen