GS 高盛-中国每日报告 07.18

China-Daily-Insights 07.18 10页

Today’s focus
Pan-Asia Alpha: CATscan: Feeling the heat
Shanghai Industrial (0363.HK): Share placement; preparing for future acquisitions
Hunan Nonferrous Metals (2626.HK): First-take: Visibility of asset injection pipeline further improving
China: Metals & Mining: Limited impact from ore resources tax levy
Foxconn Int'l Holdings (2038.HK) Buy: FIH investor feedback and Q&As
Headline news
Investors start to shun stock market amid volatility (China Daily)
Central bank steps up anti-graft drive (China Daily)
China launches first state venture capital fund for techonology-based SMEs (Xinhua)
Corn won't be used for bio-fuel in 5 yrs (People’s Daily)
Pan-Asia Alpha: CATscan: Feeling the heat, Christopher Eoyang
• Feeling the heat: After yet another good month, Asia ex Japan is now trading at 15.8X 12M EPS, and investors are understandably worried about a short-term risk reduction, especially as Chinese GDP growth appears unstoppable without more drastic measures. We introduce a China Mid Caps "Hedge" CAT, aimed at investors who find the major Chinese indexes do not match their portfolio exposures particularly well.
• Heat makes things expand: The hot Asian markets have continued their upward moves, and valuations have expanded to levels not seen in nearly a decade. The current focus is on the markets in North Asia, which have tended to lag ASEAN so far this year.
• Investors looking to manage risks: Although most investors are