Daily Report 080915 2015-09-08
Macro Economy
China foreign reserve was $3.56 trillion at the end of August; $93.9 billion decreased from end of July and created the largest down scope in single month. We hold opinion that China central bank dumped dollars in favor of RMB exchange rate in last month was the crucial reason of this width reserves fallen. In this instance, August capital outflow might set a new record. In addition, General Administration of Customs would release August trade data on 10 AM intraday, market estimation was 6.6% export decrease and 7.9% import decrease on yearly basis; balance of trade was estimated to be surplus $48 billion, and we recommend be glued to this data.


Stock Index
Yesterday stock index fell after soaring, holdings sharply decreased; Prior slumped IC was in strong tendency and up to the limit in the mid market, yet stock market was lacked of confidence and dropped in the end. Market jumped under the impact from bank sector in afternoon, lacked of confidence. Most good news in present was, down range had already large; finance amount had decreased and there was no new panic market. But there was no bullish news and new anticipation. Concept of state-owned enterprises reform had lasted long and would not impact a lot on market. Concerns as foreign exchange reserve, exchange rate and economy data still existed in market. We estimated that market will be in fluctuation for a while. Investors shall be patient waiting for high point in volatile and operate in fluctuation mindset.
 
 
Copper
Monday domestic and oversea copper price fell after soaring. News about Glencore Xstrata subordinated Africa Katanga and Mopani would stop operation for 18 months and about 400,000 tons output would be influenced had bolstered copper price. The influenced output from May had already over 150,000 tons, the newest influence from Glencore Xstrata operation stopped was 80,000 tons in this year and 260,000 tons in next year, which would further varying fundamental side. From the first half year data perspective, global main copper output increase scope was in negative value; the other bolster copper output in the past as well be influenced without any increasing; reduction of output from Glencore Xstrata undoubtedly hammered global copper output increase range; tightened copper supply limited copper output and became a firm bolster to copper price. Yet the most uncertainty within market was on copper consumption and macro economy. China's national development and reform commission approved another six highway projects in Monday about RMB 80 billion; in addition, China Railway Corporation issued guidance for joint venture railway, encouraging private-owned capital to invest building railway; there was RMB 800 billion in this railway investment project and, planned to start 60 new projects within this year; coupled with another 27 water conservancy projects, these projects were already completed prequalification on land and was about to implement. Technically, there was bolstering on copper price but, to open the scope, still need to rise through crucial resistance point at $5340. We recommend continuing waiting for bottom forming as for operation. Resistance in domestic was RMB 40000.
 
 
                                                                             Dong LV (Investment Certificate NO. TZ008452)