China PMI

gg thanks for updating this thread as i have been a little busy

Are the markets confused or am i confused, the pmi is still contracting, albeit at a slower rate. So market should be stable instead of up. isn't a number below 50 still considered a contraction?

No worries mate,

Global mkts are awashed with liquidity so any less "bad" news are consider as good news.

Don't you think that staying vested in right stocks have been very rewarding recently and its not limited to big caps, even small / micro caps are getting recognition...

Maintain my view that global mkts transitioning into the penultimate phase and be very wary of the penultimate phase boliling in 2017

GG

(22-05-2014, 10:21 PM)BlueKelah Wrote: gg thanks for updating this thread as i have been a little busy

Are the markets confused or am i confused, the pmi is still contracting, albeit at a slower rate. So market should be stable instead of up. isn't a number below 50 still considered a contraction?

China data emboldens bulls, bears

Vesna Poljak
776 words
24 May 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Shock Experts are unable to rule out a hard landing for the Chinese economy

Mixed signals out of China have created more confusion around the outlook for the world's second-biggest economy as economists wrestle with a spike in ­factory output and persistent fears around the property sector that could spark regional contagion.

For Australia, the risks of a hard landing are especially high given the reliance of the economy on ­China-bound exports. Credit agency Standard & Poor's has asserted that a quick downturn in the terms of trade is one of the three big external shocks Australia faces which could derail its fiscal position.

HSBC's closely-watched flash ­purchasing managers index for ­manufacturers came in at a five-month high on Thursday, unleashing a fresh wave of optimism and pushing up the Australian dollar.

It was a volatile week for the ­currency, having sunk below US93¢ when the iron ore price fell below $US100 a tonne for the first time this year. The Australian dollar was fetching US92.37¢ on Friday but speculative positioning indicates traders still think it will rise further in the short-term.

There is seemingly no avoiding China property bears.

On May 21, Moody's downgraded its view of China's property sector to a ­negative outlook from stable. The credit ratings agency blamed expectations for a "significant" slowdown in residential property sales growth, high inventory levels and weaker liquidity.

China's residential property sector accounts for roughly one-quarter of steel consumption, the material derived from iron ore.Barclays warning

And Barclays warned earlier this month that the risks of a "disorderly adjustment" within the Chinese housing sector are rising and the downturn as it is will continue through next year. Since then, policymakers have come up with a plan to make mortgages cheaper and quicker to process for borrowers.

UBS Global Asset Management head of investment strategy, Tracey McNaughton, said the risks of a hard landing could not be discounted but she does not see a collapse coming.

"Our view is that China is not going to experience a hard landing. The fear of a hard landing is certainly ­understandable given China is going through momentous change and also particularly given no other economy in the world has gone through the kinds of changes China is going through ­without some missteps along the way."

But there was good reason to accept China's progress at face value too.

"For now the authorities still maintain a high degree of control over the economy and that provides some comfort that will ensure a stable ride. They're slowly injecting market forces into the economy and they're not letting go just yet, if something goes wrong," Ms McNaughton said. She doesn't advocate Australian equities chiefly because they look expensive.

State Street head of portfolio management for its Asia Pacific investment solutions group, Mark Wills, thinks China's transitionary plan has already started, as is the pain that comes with it.Two risks

He rates the chance of what the market would view as a China hard landing as being "a pretty good probability" and to that effect, says the two biggest risks for the typical Australian investor with a balanced portfolio are the Australian dollar and BHP Billiton.

Mr Wills pointed to the blueprint set out for China in the third plenum last year and its emphasis on addressing pollution, housing market deregulation and interest rate liberalisation.

Pollution represents an enormous priority for the Communist Party because Chinese are signalling their resistance to dirty air.

"Basically their economy is built on coal usage. The reason why you've had so much of this pollution is it's kind of a metaphor for the misallocation of resources that's occurred in China over the last couple of decades," he said.

This will be resolved by shutting inefficient old plants, coinciding with the plenum's urging of state owned enterprises to be independently profitable.

Evidence of this happening can be found in the slowing trend revealed in the PMI data. The clean-up is occurring in the sprawling trust products market too. "They've been signalling to investors they want them to bear pain, they will let one of these trust products go broke," but the People's Bank of China would equally be wanting to avoid ­contagion at all costs, Mr Wills said.

"If you're investing hoping that China's going to be the engine of global growth that it has been, we're pretty much in the camp that you're going to be disappointed."


Fairfax Media Management Pty Limited

Document AFNR000020140523ea5o00023

http://www.cnbc.com/id/101716683

China May official PMI rises to 50.8

Reuters

Activity in China's factory sector picked up in May, a government survey showed, adding to signs of stabilization in the world's second-largest economy.

China's official Purchasing Managers' Index rose to 50.8 in May from April's 50.4, the National Bureau of Statistics said on Sunday.

Economists had expected the reading to rise to 50.6 in May, climbing further above the 50-point threshold that separates growth from contraction.

Signs of recovery in Chinese economy
WILLIAM KAZER THE WALL STREET JOURNAL JUNE 04, 2014 12:00AM

TWO more measures of China’s economic health showed improvement last month, adding to signs that the economy is stabilising after its sluggish start this year and suggesting that government support policies may be starting to show results.

The government’s index of ­activity in the non-manufacturing sector in May hit its highest level since November last year, according to data released yesterday, while a private sector gauge of factory activity showed gains for the month as well.

Added to a stronger reading in May for the official manufacturing Purchasing Managers’ Index, released on Monday, the overall economic picture appeared somewhat brighter following moves to accelerate spending on railways, offer business tax breaks and make more financing available to smaller companies.

“These are good signs,” said Citigroup economist Ding Shuang. “But real economic activity may not rebound that quickly,” he cautioned.

The official non-manufacturing Purchasing Managers’ Index rose to 55.5 in May, from 54.8 in April, according to the China Federation of Logistics and Purchasing, which releases the data along with the statistics bureau. The non-manufacturing PMI covers services, including retail, aviation and software, as well as real estate and construction. The upturn was largely a result of the important services sector, a key source of employment, while construction was less robust as a result of weaker property prices. A reading above 50 means expansion from the previous month. Anything below that shows contraction.

Meanwhile, the HSBC China Manufacturing Purchasing Managers’ Index, a gauge of nationwide factory activity, rose to a final reading of 49.4 in May, from 48.1 in April, HSBC said yesterday. The reading still remained below 50, where it has been every month this year, showing contraction from the previous month but at a slower pace. “The final (manufacturing) PMI reading for May confirmed that the economy is stabilising, but it is too early to say that it has bottomed out, particularly in light of a weaker property sector,” said Qu Hongbin, HSBC’s chief economist for China.

China posted economic growth of 7.4 per cent year on year in the first quarter, down from 7.7 per cent in the final quarter of last year.

The nation’s once buoyant property market has been showing fresh signs of stress. China’s housing prices fell in May for the first time in nearly two years, according to a private survey that showed more cities with price declines and weaker sales. Average new home prices on a month-to-month basis fell 0.3 per cent in May from April, the first decline since June 2012, data provider China Real Estate Index System said on Friday.

Also on Friday, the government unveiled fresh measures to boost the economy, announcing it would expand a program that allows banks to lend more to agricultural areas or small business.

China PMI Index Hits New Heights

6/30/2014

China’s Purchasing Managers Index, or PMI hit a six month high on Tuesday to close the month of June at 51. It as 50.8 in May. The rise shows continued momentum in the Chinese economy.

On Monday, China’s President Xi Jinping warned the Communist Party not to be complacent with the reform agenda now that the economy is heading in the right direction. Investors have been watching for signs of progress as China slowly opens its economy to foreign investment and shifts gears from an export driven economy to a more domestic consumer focused one.

Later this month, Beijing and Washington officials led by Secretary of State John Kerry and Treasury Secretary Jacob Lew will discuss the sixth annual Strategic and Economic Dialogue. Carving out an Asian-Pacific defense power structure as well as creating a bilateral investment treaty are top agenda items.

As China gradually opens its economy, foreign corporations are expected to pump billions into the Chinese market in an effort to serve a growing middle class Chinese consumer base.

On Sunday, Chinese Foreign Minister Wang Yi met with U.S. Ambassador to China Max Baucus ahead of the July meeting.

“The PMI reading continued to improve in June, indicating that the economy has basically stabilized,” Zhang Liqun, a researcher at the Development Research Center said in a statement. “Various measures to stabilize the economy have become effective,” Zhang said.

http://www.forbes.com/sites/kenrapoza/20...w-heights/

China manufacturing PMI hits 18-month high
FERGUS RYAN BUSINESS SPECTATOR JULY 24, 2014 12:09PM

ACTIVITY in China’s manufacturing sector beat expectations in July to hit an 18-month high, according to a private survey.

The HSBC flash China manufacturing purchasing managers’ index (PMI) rose to 52, a jump from 50.7 in June and well above Bloomberg analysts’ expectations of 51.

A reading above 50 on the survey points to expansion, while a reading below 50 indicates contraction.

HSBC chief China economist Hongbin Qu said both new orders and new export orders expanded at a faster pace than in June.

“The employment and prices sub-indices also improved. Meanwhile, stocks of finished goods contracted at a slower pace.”

Mr Qu said economic activity had continued to improve in July, which suggests the cumulative impact of the country’s mini-stimulus was still filtering through.

“We expect policy makers to maintain their accommodative stance over the next few months to consolidate the recovery,” he said.

China’s stimulus policies working
GRACE ZHU AND RICHARD SILK THE WALL STREET JOURNAL JULY 25, 2014 12:00AM

A PRELIMINARY gauge of Chinese manufacturing activity reached an 18-month high this month, in a sign Beijing’s efforts to stimulate the economy are ­having an effect.

The HSBC preliminary, or flash, manufacturing Purchasing Managers Index rose to 52 in July from 50.7 a month earlier, according to data released by HSBC and data firm Markit. It marked the second consecutive month the index topped the 50 mark, which separates expansion from contraction compared with the previous month.

Economists said the reading was surprisingly strong, and credited the government’s ­efforts to ease monetary policy and speed up infrastructure ­investment. “The strong flash PMI points to the robust growth momentum in the world’s ­second largest economy due to the government’s stimulus measures,” said Lu Ting, an economist at Bank of America Merrill Lynch.

The reading cheered markets in Asia. Hong Kong stocks rose modestly to hit their highest level in more than three years. The Shanghai market was moderately higher in morning trading after the data was released.

The improving data followed government stimulus policies tailored to support China’s cooling economy, which expanded by 7.5 per cent in the second quarter after 7.4 per cent growth in the first. By comparison, the economy was growing by 7.7 per cent at the end of last year.

Beijing has set a target of about 7.5 per cent growth for the full year, but Premier Li Keqiang signalled recently the government could accept growth slightly higher or lower than 7.5 per cent as long as employment ­remained at healthy levels.

China has refrained from using huge stimulus measures, as it did during the global financial crisis. Instead, it has rolled out small stimulus policies, including cutting the amount of cash banks must hold in reserve to encourage more lending, stepping up spending on railways and offering tax breaks to small firms.

Economists said the government’s recent policies appeared to have lifted small firms, as the HSBC PMI was weighted ­towards smaller and private ­enterprises.

This month, HSBC’s subindexes for new orders as well as output were higher, though employment remained weak.

“Economic activity continues to improve in July, suggesting that the cumulative impact of mini-stimulus measures introduced earlier is still filtering through,” HSBC economist Qu Hongbin said in a statement.

Better demand for Chinese goods from abroad as the US and European economies strengthen also may be helping to lift the economy.

Zhang Fan, an economist with CIMB Securities, said the Chinese government needed to step up its supportive policies if it wanted the rebound to last.

The Wall Street Journal

http://www.businesstimes.com.sg/premium/...e-20140802

PUBLISHED AUGUST 02, 2014
China PMI rises sharply, exceeds estimate
July manufacturing data signals economy is gaining momentum, driven by govt infrastructure investment including railways, subways

China PMI 02082014
CHINA's manufacturing expanded in July at the fastest pace in more than two years, signalling a pick-up in economic growth is strengthening amid government support policies - PHOTO: REUTERS
Beijing
CHINA's manufacturing expanded in July at the fastest pace in more than two years, signalling a pick-up in economic growth is strengthening amid government support policies.
The Purchasing Managers' Index (PMI) was at 51.7, the National Bureau of Statistics and China Federation of Logistics and Purchasing said on Thursday in Beijing, exceeding the median 51.4 estimate in a Bloomberg News survey and up from 51.0 in June. A separate PMI from HSBC Holdings plc and Markit Economics rose to an 18-month high of 51.7. Readings above 50 indicate expansion.
The data signal the world's two largest economies are gaining momentum, after the US this week reported a 4 per cent pace of expansion in the second quarter.

China services PMI hits low point
FERGUS RYAN BUSINESS SPECTATOR AUGUST 05, 2014 1:37PM

THE HSBC China Services Business Activity Index dropped to its lowest point since the series began in July.

The index printed at 50 in the month, a sharp drop from a 15-month high of 53.1 in June.

A reading above 50 indicates expansion, while a reading below signals contraction.

Chief economist, China and co-head of Asian economic research at HSBC, Hongbin Qu, said the result for July was the lowest such reading since the series began in November 2005.

“The weakness in the headline number likely reflects the impact of the ongoing property slowdown in many cities as property related activity, such as agencies and residential services, see less business,” he said.

“Meanwhile, the employment and business sentiment indices remain stable. In the coming months, we think the service sector may get some support from the recovery in investment.”

Mr Qu said today’s data shows the need for continued policy support to “offset the drag from the property correction and consolidate the economic recovery”.