Rule #1 of the Chinese stockmarket
“Fidelity Investments, which oversees the largest China funds outside of the mainland, is joining Goldman Sachs Group Inc. in saying that Chinese stocks are a buy following the worst selloff in two decades.” (Bloomberg) Our view? There have been some big short positions in China’s stock markets, including from some US hedge funds. Needless to say, Chinese officials love to squeeze shorts, particularly when they are held by foreigners in their markets. Rule # 1 in China’s managed stock markets: Do not fight Chinese officials when they are actively in the market.
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