Daily Report 240815 2015-08-24
Stock Index
Last week overall stock index slumped; first level sector all dropped and each concept sectors plunged. The concept as national team rescuing market, state-owned enterprise reform, military industry, anticipation of reduce reserves, big data and other hot concepts in previous cannot form the leadership and, market was lacked of plainly mainstream logic to drive investors’ confidence. On the contrary, economy data continues weakened; market confidence was shattered constantly; risk appetite decreased and, price went low. The crucial reason of prior market rally from low point was buying of CSF and concept of state-owned enterprise reform; after these two concepts drove IF to 4000, market lost sustain momentum and plunged. Which stated the investors bought at bottom had made mistakes based on the two concepts and, they would be the potential shorten momentum in the future. In addition, global investors are experiencing panic currently; there is no upward momentum in the stock market. It is high possibility of market volatile weaken after IF contend at 3500 point, price might down to prior low or even lower.
DCE soybean went weak following overseas market; soybean meal performance as resistant falling. Variation from the supply and demand side of soybean No.1 contract was not huge; spots in northeast slightly retraced out of stabilize. Under the impact of upcoming new grain, hammer on spots further raising was extended in a short time; but decreases range was estimated be limited in short time, the market momentum was still strong.
Soybean spots dropped in most areas in last week, market was dragged from dropped overseas market and shown tightened North inventories, huge inventories in south China and East China; oil plants in north plainly supported price and volume was good, most oil plants were mainly executing prior contracts.  Pig breeding stock started increasing but, under the consumer demand before National holiday, it was hard to form persistence rally trend in breeding stock; meals were likely to continue volatile weaken. We recommend to observing or in shorten as for operation.

Last week PP futures were volatile downward. In upstream, up to Friday night, FOB Korea propylene average price was $886.5/ton. As for device side, current operation ratio was 85.4%, no plainly variation compared to last week. On spots side, since slumped crude oil price and futures in this week, domestic PP futures went downward under hammer. Though petrochemical enterprise was willing to support price, businesses were lacked of confidence and shipped in profit surrendered. Partial petrochemical enterprise decreased EXW closing to the weekend, exacerbated shorten momentum.
For instance of wires, main quoted prices of north, east and south markets are RMB 7900-8000/ton, RMB 8100-8300/ton and RMB 8050-8350/ton, respectively.
On operation side, current five-day moving average system turns in to downward; MACD red column shortens as weak trend; it is possibly continue weaken volatile in the near future.
                                                                                 Dong LV (Investment Certificate NO. TZ008452)