[Moving2HK]

Hello!

Any idea how to be short in the Chinese market as a private investor? Does HSBC offer any shorting?

I can't be too far from a crash.

Thanks!

[Moving2HK]

Basically I just want to make money when the market crashes. I am aware of the multiple choices one normally has, i.e. warrants, futures, short stocks etc. But I don't know what retail investors in Hong Kong can actually do.

[siumai]

Not easy to go short on Chinese A-Shares to my knowledge, short selling does not even seem to be possible in Shenzhen/Shanghai exchanges.

It is interesting to see where those Chinese savings start to flow and where they are allowed to flow, as there are only bad investment options on the domestic market: negative real interest rates (and near zero nominal rates) for deposits are not going to be too attractive to the retail investors.

[freeier]

don't think you can short. but if you have a million or 2 USD worth of investment you can find a private banker and ask him/her to short for you. it can be done.

alternatively, just short the HSCEI index. its not going to be as spectacular as A shares if the correction starts (a somewhat uncertain 'if')... but its going to be correlated.

[Lammarite]

Originally Posted by Moving2HK

I can't be too far from a crash.

The rumours do seem to have an edge to them this time round.

[Meerkat]

hehe.. this is very timely.. I was about to post the exact same question. What convinced me it was about time was the recent article in the SCMP concerning the retail investors in China " I know nothing about investing but my daughter convinced me to take my life savings and open a trading account" ..."380,000 private trading accounts opened on one day" "..the government won't let the market go down at least until the Olympics"

Me thinks it is going to go pop in a big way... so any news at all on going short, prefarably through options would be very helpful

[KnowItAll]

"I know nothing about investing, but these posters on GeoExpat.Com convinced me to start shorting the China market."

Which one of the two quotes ... the one from China or mine, seems like a safer bet?

[Boris]

Originally Posted by Meerkat

hehe.. this is very timely.. I was about to post the exact same question. What convinced me it was about time was the recent article in the SCMP concerning the retail investors in China " I know nothing about investing but my daughter convinced me to take my life savings and open a trading account" ..."380,000 private trading accounts opened on one day" "..the government won't let the market go down at least until the Olympics"

Me thinks it is going to go pop in a big way... so any news at all on going short, prefarably through options would be very helpful

The guy from Diawa in an interview on Bloomberg this early AM obviously didn't read the SCMP. When asked the self same questions about the A share market his response was very leaning towards " the Chinese investor is making experianced calculated decisions ". I didn't need my usual double expresso shot after that, it woke me up all on its own.
Why are brokerages instantly turned to diplomats on TV?

On the question of " the big drop " it has to be said that it would be hugely damaging for the party for this to happen and they appear to be trying to juggle as many balls as possible to soften the inevitable ( or is it ???? ). We all know that when the going is good the mainlanders think they are eternal. When something goes bad they blame evryone except themselves and especially " father ". Hence " father " is doing everything he can , in a Chinese way, of stopping it. There is no real experiance of a Big Bad Bear market for normal Chinese and in " fathers " eyes he must protect his family from it and inevitably blame foreigners for it as always.

Maybe this is the reason for brokers comments but for the likes of HSBC who can't wait to get into Shanghai. They should hope they have a spare copy of 1 Queens Road, they may need to get out quick !!

[Crocodile]

Originally Posted by KnowItAll

"I know nothing about investing, but these posters on GeoExpat.Com convinced me to start shorting the China market."

Which one of the two quotes ... the one from China or mine, seems like a safer bet?

Have a read of this article, ( http://www.chinadaily.com.cn/china/2...ent_800886.htm ) it makes for some good reading, including these two paragraphs:

"Legend has it that Joseph Kennedy, father of former U.S. President John F. Kennedy, avoided Wall Street's 1929 crash thanks to a shoeshine boy. Just before the market collapsed, Kennedy received unsolicited stock advice from a young man polishing his loafers. Kennedy, the story goes, got out of the market the next day, figuring stock enthusiasm had run wild.

In the late 1990s, similar omens came from New York taxi drivers and Miami bartenders offering stock tips or bragging about their day-trading gains. One hears such conversations in major Chinese cities these days."

... and the very last sentence....

"Chinese stocks may one day be a stellar investment. At the moment, they seem more like the casinos that Chinese law forbids."

Happy investing!

[Katanga]

This is the fundamental problem with the Chinese Stock Market. You cannot short sell and neither are there any index futures. With interest rates where they are, the makret is one big casino - people hear the good old stories of someone or another making double the money in a fortnight and you start having the herd effect.

The makrtes there are defying gravity with the average stock at about 45-50 times earnings when the average stock in any other makret would be more like 20 times earnings.

Here are some other shocking stats: Over 12million new retail accounts have been opened up to the end of April. This compares to 20% of what was the entire number of retail accounts that exisited at the end of 2006. If this is not a frenzy, no one knows what is.

How can the same stock in HK be worth a lot less than the equivalent A share in China.

The CSRC is in a real conondrum : allows short selling and every punter is going to go for it. Start the futures mkt and people will start selling the index. Make the Yuan convertible and the law of EMH (Efficient Market Hypothesis ) sets in and people will arb the quivalent H shares listed in HK.

This is all going to have only one ending and its going to be ugly.....anyway the govt has enough money to start bailing out people just as it bailed out the banks a few years ago.

Me thinks that the govt cannot allow the collapse until after the Olympics.