Why I'm BUYING These Chinese Stocks After 370 Billion Yuan Injection!

[@peggyren7609]

Currently China people mostly have no intention to buy property. It's like a dead market, also difficult to sell for those holding property investment, due to the dropping price. Hope the situation can be better after all the efforts from government.

[@AlexLim-u8v]

perhaps, one should consider that Chinese investors have lost faith in their equity markets for a prolonged period and many have lost their jobs, and unlikely to have much disposable income for daily amenities let alone putting money into capital markets? moreover, the people are also prevented or facing difficulties from withdrawing their deposits, with this news being circulated for a long time. Also, many have lost money (to the tone of 40-60%) in their real estate properties, which removes much of the amount they can pledged to banks for loans.... will also add that CH/HK equity market has been stuck in a value trap for years.

[@nextleveltribe]

I do not disagree. I was in Beijing University some years back and the finance professors there did mention that the people in china do not have similiar behavior fundamentally towards their own china market

[@Fr.VeniceLAI]

@@nextleveltribe those Professors were all dead wrong ..just look at the PRChina's current state of economic deterioration. Should revisit the Beijing University and discuss with these Professors quietly (also individually), if they are still there, alive and not arrested or have had fled the PRChina ??.

[@Xuan-s6r]

Really cringe. Stock repurchase does not increase valuation of the stock if you know your fundamentals. Way too many youtubers are "teaching" a topic they barely have an understanding of.

[@robin-thp]

no one is talking about valuation, professor xuan.

[@nextleveltribe]

Sincerely, maybe i have made some mistakes. Could you kindly please enlighten me the logic as why stock repurchase does not increase the value of each remaining outstanding shares?

[@Xuan-s6r]

@@nextleveltribe Because the company has spent it's own cash to do the share buyback. It should not, in theory have any impact on the valuation of the stock. In layman's term, you are simply getting a bigger share of a smaller pie and the total volume of the pie you are getting is the same as before.

[@nextleveltribe]

​@@Xuan-s6r Thanks for sharing. Just sharing my understanding as well for discussion, I hope you don't take it wrongly that I am trying to be defensive. I love these discussions and even a little fun arguments. The portion you pointed out will be the difference is our theory. "you are simply getting a bigger share of a smaller pie" We in get a bigger share of a pie that is the same size. (Not smaller. The pie doesnt shrink. E.g if Berkshire buys back their share, their market cap doesnt change. and if their market cap remains the same, with lesser outstanding share, each share becomes more valuable then.)

[@Xuan-s6r]

​@@nextleveltribe At any point in time the market cap of a company is the valuation of the company. This valuation includes the assets the company is carrying on its balance sheet. When a company buys back their share, they are spending cash to do so and hence reduces their market cap, ceteris paribus, accordingly. The premise of "if their market cap remains the same" is a statement that can never be true when viewing share buyback in isolation.

[@andyng191]

my understanding of stimulus measures: a taste of sweetness gaining investor confidence in their own stock market after all those bitterest yrs downside of china property market. 😂

[@peggyren7609]

Can have a view and analyse PDD Holding? low PE but no dividend. Thanks

[@kyau81]

thanks for sharing . will look into china hong kong stock to park my money.

[@bbq1441]

Hai ya, now than FOMO.