Daily Report 250615 2015-06-25
Macro Economy
National bureau of statistics stated in the end of May the commercial housing for sale acreage decreased 150,000square meters to 656.66million square meters, the lasting for 3-years upward commercial housing inventory situation changed for the first time; This Jan-May, commercial housing sales acreage decreasing range turned narrow, including residence sales acreage stopped on year to year base. Downstream sales continue improving boomed the real estate market price; existing housing inventory decreased had increasing the possibility of additional investment from real estate industry. In addition, yesterday the State Council executive meeting passed People's Republic of China Commercial Bank Law Amendment (Draft), removed the stipulation that ratio of loan balance and deposit balance cannot exceed 75%, turned loan-to-deposit ratio from statutory supervision index to liquidity monitoring index. Cancel the loan-to-deposit ratio will relieve bank from high interest rate solicit depositors, which will conducive to decrease financing costs and increase efficiency of funds, but due to bank still limited from capital adequacy ratio and  loan volume, this policy may have limited effect to increase credit.
 
 
Stock Index
Yesterday stock index volatile, late-day points rallied. This retracement of stock index was caused of overvaluation; major shareholders reduced shares; overseas-listed China Index returned to market; IPO prediction, spot check on off-site capital and etcetera factors. But substantially the reason was visions were too beautiful which reality cannot follow. The main logic in this bull market cycle is reforming, transformation and upgrading. After these days slumping, the government introduced policy again to increasing stabilized, bank reform and internet plus will operate further, the four major newspapers showed the attitude as well to comfort publics.  Thus if continues dropping, the bolster will be strong. But the rally will not be too high since previous top react a temporary foam, there is no way all enterprises turn to booming, the market require a repeatedly choosing process of continuously pumping bubble in and out. We recommend operation in a short period fluctuant, pressure position of CSI 500 is 10400; IH pressure position is 3150.


Soybean
Soybean No.1 contract interim rallied then went low, spots in northeast area began to drop; temperature rising, enterprises lower the purchasing price and South lacking of demands made short-period tendency in the adjustment, we predict the weaken moving tendency may continue for a while. Soybean No.1 contract operation method remain shorten near warehouse receipt area and strategically long holdings when deep retracement.
Soybean meal increased after stagnation, overall spots price soared at RMB40-80/ton, trading volume highly increased, oil plant operation rate increased. Moreover recent U.S. soybean continues rally; import costs raise; oil plants raise the price to reduce the losses from crush margins; we recommend remain the method of meals increasing gradually. As for operation, may take long holdings of soybean meal appropriately.
 
 
PP
Yesterday PP futures opened up with volatile, opened at 8615 and ended up at 8631, trading volume increased 28,058 lots to 408,000 lots, and holdings increased 19,586 lots to 405,000lots. In upstream side, PP price remain flat. In spots perspective, yesterday domestic PP market continue weaken downturn, most price slipped RMB50-100/ton. Sinopec Central China and South China, Petro China South China and Northwest reduced the ex-factory price, which weaken the bolster to supply costs and pressured the companies’ confidence, later session continues shorten. Downstream plant firm offers focus on satisfying basic production and stocks up in cautious, market overall investing and trading stalemated.
For instance of wires, main quoted prices of north, east and south markets are RMB 8450-8550ton, RMB 8700-8900/ton and RMB 8750-9000/ton, respectively.
For operation strategy: moving average system continues mixing, no obvious change on MACD red column, recent market tends to stalemate, lacks of momentum for further increasing and decreasing, we recommend keep on waiting.
 
 
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