Daily Report 030615 2015-06-10
Macro Economy
People’s Bank of China will allow banks to issue certificate of deposit to individual and non-financial enterprise; advance the interest rate marketization, starting point of subscription from individual and institution investor should be no less than RMB 300,000 and RMB10,million. In addition, Central Bank announced that in this year, will keep using PSL as developing finance to bolster shanty-area innovation, supply the long-term stable and appropriate costs of financial Sourcing. At the end of May, balance of PSL was RMB 645.9 billion among increased RMB 262.8 billion from Jan to May.
Currently in China, there’s only one step left to complete interest rate marketization, which is to release the deposit interest rates, and this is likely to be realized by the end of this year according to current reforming progress.

 
Stock Index
The intraday stock index continues soaring, all sectors are in the upward trend, concept stock keeps booming up, stock as internet plus, intelligence, industry 4.0 continues upward trend. As for the long period, reform bull is still the crucial; asset allocation will cooperate with the reform, innovation and transition bull.
Currently, the edges from risky asset overvaluation did not stop, after enterprises gained high valuation they tend to financing, consolidate industry foundation and lay the foundation for future growth. In this situation, soaring of stock seems to be not only virtual bubble but going to drive more investments and innovative services. In the meantime, stabilizing growth investment and effective investment from Nation will also build a favorable environment for innovation.
On the whole, the bullish market is not going to end but, in the short term the violent soaring may lead to adjustment. Currently, the three major indexes sharply rebound after slumped on 28 May, among CSI500 soared to record level. In this bullish market which composed by reform, innovation and new pattern, CSI500 seems to be stronger than SSI50. Determinacy from relative strength index might be higher than unilateral which also lead to a lower risk.
 
 
Soybean
Soybean No.1 Contract regain the previous trading concentrated area, fluctuant rang of Contract 1509 is RMB 4300-4470/ton, the upward trend still hammers from warehouse receipt cost and, the spot bolsters downward trend; previous empty form is recommended to be held.
Soybean meal spots continue dropping, mainstream price is RMB 2500-2600/ton; grease soars recently which hammer soybean meal price again, under the supply pressure, short term rebounding of soybean meal is hard to change the weak trend from medium term; short term fluctuant range of futures price is RMB 2500-2600/ton.
As for operation, we suggest investors who hold soybean meal short when the price rally, previous short holdings is recommended to be held further.
 
 
Natural Rubber
Yesterday Shanghai rubber price volatile in a high position, forward contract keeps a strong trend, spreads of No. 9-1 Contract keeps expanding, no plainly fluctuant in USD spot market: domestic spot price is RMB 1650-1660 (-10); domestic cargo price is RMB1620-1630 (-10); quotation and bargain of domestic USD compounded rubber is low, price is $1700-1710 (0) with no plainly fluctuant; ¥ compounded rubber is ¥12300-12400 (0); Singapore cargo price is RMB1650-1670 (-20).
The above factors indicated: Currently, there’s no plainly variation micro-policy and natural rubber industrial compared with previous terms but, on Monday market expressed that China compounded rubber standard seminar might convened again. 
As for operation, it is likely a fluctuant in high position of main price; forward contracts remain bullish trend, spreads of No. 9-1 Contract may expand over RMB1500.
 
 
PP
Yesterday PP futures opened up low at RMB 8320, market closed at RMB 8365 which going upward under driving from crude oil, trading volume increased 61,410 lots to 415,000 lots and positions increased 8,120 lots to 474,000 lots. From the upstream perspective, propylene prices leveled off. As for the spot market, yesterday domestic PP price slumped to ¥200/ton. Futures opened low and went low which hammered the market, factory price of petrifaction decreased ¥100-200/ton, bolster to supply costs has been weaken, merchant followed downward trend to lighten positions. Downstream factory had slightly reaction of price reduction, the purchase of actual quotation remains weak, the investing and trading among the market is thin, volume mainly based on rigid demand.
Main quoted wires prices of north, east and south markets are RMB 8600-8750/ton, RMB 8750-9100/ton and RMB 9000-9200/ton, respectively. Fundamentals remain a weak trend.
For operation strategy: currently price is hammered by moving average system, lack of momentum for further increasing; it was expected weak volatile would remain in a near term.
 
 
                                                                                   Dong LV (Investment Certificate NO. TZ008452)