Daily Report 220616 2016-06-22
Stock Index
Last day stock index rushed high and rolled back. Non-ferrous section plunged before close. Securities and sub-new stock section rushed high and rolled back. News side: Prime Minister visits the Central Bank and China Construction:” Continue to adhere to prudent monetary policy; strengthen the coordination with the proactive fiscal policy. Implement differentiated financial policies; support structural reforms, especially the supply-side structural reforms.” In the case of the RMB seems controllable which is reflected by May foreign exchange, domestic factors are the main focus. . The whole market is still a construction one. Now the stress and bolster are mainly from: Firstly, reduce holding is increasing. Strict governance increased the difficulty of cash at high point rely on stories, which increases the willingness of reduce holding share. Secondly, from the core reform side, government changes from demand government to supply reform and innovation. It has a positive influence in the long term, but a success reform is limited by many actual factors. Authorities got rid of economy’s V and U shape tendency, and it won’t be optimistic. Thirdly, private investment decreased to 3.9%, indicates that the entity economy and expectation is worse. Social financing is much lower than expectation. Although newly increased credit is high, but social contribution is limited. M2 is 11.8%, which is lowest since June 2015. Entity economy is weak. The good news is now the index is low, and several sections have long-term attraction. We recommend short line in fluctuation tendency.

Tuesday copper price increased after drop. LME closed up 1.36%. From the dominant factor, the British retreat Europe referendum uncertainty caused investors’ risk demand increase is the main support factor. Tomorrow the UK will hold the referendum. Polls show the current retreat support rate raised from 18th June 42% to 44%. Back to copper market, LME spot goods discount increased 0.5 dollars to discount 11.25 dollars. Storage continued reduced 1850 tons to 192000 tons. Data from the Customs Bureau shows that May refined copper import increased 15.93% to 319000 tons, and increase speed is significantly slowed down compared with February and March. Technically, copper price still fluctuated at low point. Technically, we focus on $4700 of LME and RMB36000/300 domestically.

Yesterday PP futures opened high and increased; opened at 7210 and closed at 7290. Trading volume increased 226000 lots to 691000 lots. Holding volume increased 18238 lots to 683000 lots. Spot goods side, yesterday domestic PP market continued increase, and price increased about RMB 100/ton. Producer price of petrochemical middle, east, south and northeast regions increase, raises the bolster for costs. Traders sell following the increasing price. Intraday main quoted prices for wires of north China, east China and south China markets are RMB 7150-7250/ton, RMB7350-7500/ton and RMB7250-7350/ton, respectively. As for operation, current moving average system arranges in long. MACD red column lengthen, which is strong tendency.
                                                                                                Dong LV (Investment Certificate NO. TZ008452)