Interestingly, China market has a sharp drop of roughly 7.2% in the past one month as measured by Shanghai Composite Index. It dropped from its peak of 3,288.97 points at 11th April 2017 to the lowest point of 3052.78 in 10th May 2017. But no one pays any attention to its drastic drop. The rest of the world markets ignore its down turn and continue their north bound journey.
China market has been doomed to have hard landing last year. Every time when China market dropped, the rest of the world trembles, particularly true among Asian markets. But this round, it is not the same, even the nearest market such as Hong Kong’s Hang Seng market index continued moving with the world rather than with China.
The main reason is because the world knows that China market corrects itself for good. It posted for a long term healthy growth. China financial authority has been cracking down some illegalities during this period of time.
There is another interesting observation. Those investing through mutual funds focusing on China market has also not been affected at all but even rather grew substantially in the past one month, like RHB Big Cap China Fund (see picture insert above). Mainly because those mutual funds invest China via Hang Seng market in Hong Kong.
Recently China has been taking advantage over the reversal economic policy of Trump administration. It has proposed global economic expansion plan of “One Belt, One Road”. China is seemed to be taking an upper hand of the global economy from the US from now on.
When China market index has such a substantial drop now, could it be that it is posting like a “Crouching Tiger” and “Hidden Dragon”. When you consider all these factors, can you hold back and not considering invest into China market now at this moment?
Disclaimer: The author expresses his view based on his own learning experience for reference only. Readers are advised to use individual assessment to do investment.
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