Daily Report 080715 2015-07-08
Stock Index
Yesterday CSI300 slumped in late-day, overseas-listed Chinese shares in night section dropped, domestic commodities all fell to limitation. Currently, market transformed from prior believing in successfully reform and transferred to suspicion economy prospect, which means suspicious of efficacy on reforming and transforming, stabilized growing, attitude changed. Nation continuously took actions to rescue market a few days ago but still cannot be stabilized, instead giving the feeling that out of solutions, market confidence shattered. Since the continuously good news, the holdup operators did not thoroughly switch the shares with hesitation, people who is deeply holdup was growing larger, equivalent to short holdings accumulated power during dropping. As to high PE ratio firms, it is symbolic that major shareholders increasing shares, bubble is huge and most normal firms in growing stock have not reach value lowland. Currently there are near half firms halted trading which means listed company all in bearish, there is no confidence in the market. Stock market is facing the collapse condition. Judging from the present status, there is downward scope of SCI300 and SCI500, cannot see the hope.

Tuesday domestic and overseas copper price dove, LME once dropped to 5.5%, all fell to limitation in domestic market, but copper price ultimately broke away from the low point. From analyst, China and Greece is still the main risk in market, Greek issues did not solve in Tuesday, market hedging demand was increasing due to high possibility of Grexit, along with the Chinese issue, and panic was caused. But there is variety in market such as Greece, each finance minister in Euro zone countries will hold conference meeting in Wednesday to discuss the requirement of Greece acquiring stabilized medium-term loan, there may a possibility of compromising negotiation before Sunday. In addition, there is thousands of listed firms halt trading in China, government rescuing is continuing. There is variety about China and Greece issue in this week, market need to be clear after slumping.
As for copper market, yesterday LME discounted $11.5, inventory soared 7675tons, domestic copper spot still premium at RMB 180-230, the import profit continue growing; no improvement on copper spot trading; middleman and downstream rarely entered the market and lacked of trading. Besides, there is news as member of Chili ports workers association is preparing an indefinitely strike, if it happens may lead to the shipping cathode copper postpone. The newest yield in Chili reduced from 596,000tons to 588,000tons.
Overall, current market is focusing on macro side, whether economy will come into another recession will determine copper price low point be $5300 or decreased to $4500. Corresponding domestic price was RMB 39,000 and RMB 32,000. Copper price bolster at low point in beginning of the year, we recommend operate in short positions and wait for clearly situation.
Yesterday night session commodities drop to the limitation and soybean commodity is part of it; soybean No.1 contract and soybean meal all hit the downward limitation in operation. Domestic soybeans get rid of the effect from fundamental; soybean meal operate price was lower than spot price, though current domestic soybean spot tendency was weak and lacked of demand, the futures price was overreacting, futures price started discounting, hence as the fundamental perspective, it was not recommend to long or short. Soybean meal spots in most areas were stabilized, oil plant in coastal operation ratio was high but, there was lots of non-execution contract previously, in short period partial oil plant mainly focus on executing contracts, spots price was strong; meals dragged from yesterday strong commodity panic dropping, operating cautiously in short period. As for operation, we recommend soybean meal to close long positions.
Yesterday PP futures went low with volatile, opened at 8270 and ended at 8169, trading volume increased 21,326 lots to 600,000 lots, and holdings decreased 21,378 lots to 331,000 lots. In upstream, FOB Korea propylene dropped $6, average price was $899.5/ton. As for spot side, yesterday domestic PP price slightly fells. Partial major areas of petrifaction reduced ex-work price which weaken the bolster to market costs. PP futures price in a low point hammered the market mindset. Merchant shipped vigorously, enlarged profit surrendering scope to accelerate trading; downstream plants observing in cautious, demand of receiving had plainly decreasing compare to previous period; the market observing atmosphere was thick and trading was thin.
Current main quotation of wires, north market was RMB 8300-8500/ton, east market was RMB 8400-8700/ton and south market was RMB 8450-8700/ton.
As for operation, yesterday price mighty fell through moving average system, downward trend was opened, recently may consider shortened positions when high points, previous short positions can further holding.

                                                                   Dong LV (Investment Certificate NO. TZ008452)