China Economic News

[wsreader]

.....There is a shortage of face masks  in London  shops reported by my friend (  who has been trying to buy some to take back to Hong Kong next week. )

Is wearing mask still ban in HK? I did not come across any news report that the ban was lifted.

[soros]

Everyone outside their home now wears a mask to protect against contact with the coronavirus droplets . The virus jumps from human to human and the news reports say 3 HK victims have not been into China.

The HK Government bill on banning the mask (worn by street protesters ) was withdrawn last year.

Latest figures from China are 636 dead and 31.161 infected . ( from aljazeera TV).

Also 2 cruise ships with 6000 persons on board are placed under quarantine order in Hong Kong and Japan.

[specuvestor]

Looking at the anecdotal evidence WuFlu is infectious but with low mortality, which as usual will be even 10X lesser in % because the denominator for such pandemic is underaccounted, while the numerator ie death is fairly accurate. Frankly I won't be surprised if 1/2 of Wuhan is infected. Flu season is an annual event like Hurricane season, so the fact the official name is 2019-nCoV tells you that there will be say 2025. It's a more potent strain cause it jumped from animal, hence coronavirus.

Many still don't believe the China numbers, but we can look at the other countries to get a proxy. I think it looks more transparent than say SARS (which I think is nonsense with 350 dead in China vs 300 in HK), with high numbers in Wuhan because I think the place is overwhelmed and virus keeps multiplying within the quarantine area). So any statistical comparison to SARS is meaningless but for those of us who gone through SARS remember SARS as being much more potent: even young healthy adults died which meant immunity was irrelevant.

So being an investor who look through the numbers and not just the numbers face value, I think the rate of deaths or infection (delta) in China probably peak this week with the 14 days incubation, which SG and HK probably next week or week after. The markets are already accounting for this but the 2nd order impact on the economy will hit fairly soon for the 1Q numbers

I think this is a good site that I monitor daily: https://ncov.dxy.cn/ncovh5/view/pneumonia (It's now black and white in mourning for Doctor Li) The one scary thing I learnt from this is how social-media can influence the psyche of a whole population, from face masks to toilet rolls.

[Behappyalways]

China says will not release trade data for January, will combine with February
https://www.google.com/amp/s/business.fi...bruary/amp


Woman uses remote control car to buy steamed buns amid coronavirus outbreak in China
https://m.youtube.com/watch?v=fLgB8S3CUpg

[soros]

Reported by cnn.

Three more cases of coronavirus in Singapore have been confirmed by the country's Ministry of Health, bringing its total to 33.

" Only Japan has more cases than this outside mainland China -- with 25 infections on land, and 61 aboard a cruise ship anchored and quarantined near Tokyo.

All three cases in Singapore are national citizens with no links or travel history to China, said authorities. The three patients -- a 53-year-old male, a 42-year-old female and a 39-year-old female -- are currently being treated in isolation.

The ministry also said that of the 33 confirmed cases, two have been discharged and two still remain in critical condition in the intensive care unit.

High alert: Following the growing number of local transmission cases in Singapore, the ministry announced on Thursday that the Disease Outbreak Response System Condition alert level will be raised to orange -- the second highest -- which requires the cancellation of large-scale events and inter-school activities, and introduce daily health checks at workplaces.

The ministry has also urged the public to wear government-issued face masks in order to stop the spread of the virus."


Question: Does the SG government issued face mask give you 100 % protection against becoming infected by the virus ?

[BlueKelah]

Looking at the anecdotal evidence WuFlu is infectious but with low mortality, which as usual will be even 10X lesser in % because the denominator for such pandemic is underaccounted, while the numerator ie death is fairly accurate. Frankly I won't be surprised if 1/2 of Wuhan is infected. Flu season is an annual event like Hurricane season, so the fact the official name is 2019-nCoV tells you that there will be say 2025. It's a more potent strain cause it jumped from animal, hence coronavirus.

Many still don't believe the China numbers, but we can look at the other countries to get a proxy. I think it looks more transparent than say SARS (which I think is nonsense with 350 dead in China vs 300 in HK), with high numbers in Wuhan because I think the place is overwhelmed and virus keeps multiplying within the quarantine area). So any statistical comparison to SARS is meaningless but for those of us who gone through SARS remember SARS as being much more potent: even young healthy adults died which meant immunity was irrelevant.

So being an investor who look through the numbers and not just the numbers face value,  I think the rate of deaths or infection (delta) in China probably peak this week with the 14 days incubation, which SG and HK probably next week or week after. The markets are already accounting for this but the 2nd order impact on the economy will hit fairly soon for the 1Q numbers

I think this is a good site that I monitor daily: https://ncov.dxy.cn/ncovh5/view/pneumonia (It's now black and white in mourning for Doctor Li) The one scary thing I learnt from this is how social-media can influence the psyche of a whole population, from face masks to toilet rolls.

I am willing to bet you are wrong on this  its probably only peaked infection in Wuhan (11 million pop) Hubei 58.5million still lots more to go. And new clusters in Shanghai Beijing and other first tier cities will take a couple months for the virus to go through the population. And the more they try to lock down, the longer it will take for the infection to work its way through the population. 

As it spreads like flu (infective even without symptoms for a week during incubation), rather than SARs (infective only when mild symptoms start, despite being coronavirus family). Containment is actually futile and impossible once you get it in your country, as we can see in SG.. (this is historically proven , even in military setting, flu virus cannot be contained. Everyone is thinking its like SARs just a few months get contained. No big deal lol

Indonesia also just had a plane load of evacuees they are not even testing for the virus. Add in Bali tons of tourist, its going to be another epicenter soon, just as Thailand will be. Another major economy to be might be Japan, especially with their aging population, they will have much higher death rate.

Mortality of 2%+ now from chinese fake figures is also an estimate. If you read the account of the recently deceased doctor(by the way he was 34yo) and other accounts, doctors in Wuhan were told to classify deaths from nCoV as death from whatever other illness patient had. So the "numerator" as you put it is questionable as well. Plus we now have cases in china and overseas of otherwise healthy adults in the late 30s to 50s range that have succumb to the disease or secondary infection after they been weakened by it. To put some perspective, even if its 1% mortality, china has 1.35 billion, if 10% gets it(which i think is conservative given its a new virus) , we will have 135 million infected and 13.5million DEAD in a space of a few months. Thats just china, what about when it eventually and inevitably becomes widespread in USA/Indo/India/South America/Europe??

My take is this is a black swan event that will tip China into recession and start the next GFC. Once the asset bubbles burst and sentiment goes negative, not much central banks can do. In this case, China cant even boost things with infrastructure spending. All the roads and buildings are already empty.

Investments into Gold related sector stocks/etf/physical gold is probably the way to go. But that may be the last thing u need to worry about if you havent stock up on food supplies yet!

[karlmarx]

There has been many 'negative' events just in the past 10 years. Each time, the stock market reacted adversely, and people think it will crash severely. Each time, people believe they may be seeing another 2008 kind of event; property prices falling by a third, stock indices falling by half. But such an ordeal, or opportunity, never came.

Is a 2008 kind of event going to happen now?

I don't know. But I think the probability is low. I think a popping of the s&p/dow bubble is a greater risk.

In any case, i do think that there are certain segments of stocks which range from mildly to severely overvalued. In the event of a panic, I'm pretty sure these stocks will be most vulnerable to devaluations.

On the other hand, there are also stocks which range from mildly to severely undervalued.

I don't know how the situation will develop. But I will do what I've always done; look for durable companies/businesses, wait for opportunities to buy them cheap, and buy when they're cheap.

If one is very focused on buying only when there is value, one need not worry about impending crashes. Because it will be unlikely that you have bought at high(est) valuations.

[Behappyalways]

Global consumers reel from China’s coronavirus containment as stop-work orders disrupt supplies of iPhones, Hyundai cars and toilet paper

https://www.scmp.com/business/companies/...-stop-work

[MOV]

This sort of things go hot and cold, and right now it's hot. It will be resolved soon.

If any, the extra stimulus steps taken by China and others soon to be taken (not another cut from FED please!), means bargains for Asian markets battered.

https://www.schwab.com/resource-center/i...-breakdown

[dreamybear]

I don't know how the situation will develop. But I will do what I've always done; look for durable companies/businesses, wait for opportunities to buy them cheap, and buy when they're cheap.

If one is very focused on buying only when there is value, one need not worry about impending crashes. Because it will be unlikely that you have bought at high(est) valuations.

I subscribe to this approach too.  

However, the differences wld probably lie in the companies and valuation methods each individual investor looks at. I am inclined to think  that the more knowledgeable one is abt all the listed companies(& industries they are operating in), the more advantage one has to succeed. For me, I find it near impossible to understand a company as thoroughly as I ideally wld like to, e.g. know the mgmt personally, work in the company for a short period with job-rotation, talk to the company's suppliers / customers directly etc. As a result, there is always some risk involved even when buying undervalued(by most metrics) companies and I hv to be prepared that some of my investments may not work as well as I anticipated. Unfortunately, even though it is a case of "the more diligent I am, the higher chance of me succeeding", my performance will probably lose to a luckier person.     

Separately, I noticed there are a number of online websites mentioning about Benjamin Graham writing about  “the interval required for a substantial undervaluation to correct itself averages approximately 1.5 to 2.5 years". While I do not have empirical/theoretical knowledge on CFA related subjects, i think based on this  approach, if we were to spread out and buy a number of undervalued companies during each pocket of opportunity(e.g. an economic downturn) and wait, it cld be a profitable way of investing albeit we may not be able to find gd multi-baggers(5x or more).