Thursday, November 05, 2015

FTSE China A50: CWs are the Tickets for the Recovery Play

Chinese equity is staging a recovery. From the chart below, we can see that China A50 broke above its medium-term downtrend line in October. Then it went into a sideways move for the following 4 weeks. Finally, it has begun to rise sharply today. This is the beginning of the next upleg, which may be a cautious one given the last 4 months of bloodbath.


Chart: FTSE China A50's daily chart as at 5 Nov 2015_11.00am (Source:uk.investing.com)
 
As mentioned before, the way to play this recovery is to buy CWs. My preferred CWs for this play are China50-CB & China50-CE. See the valuation table below.


Table: China50's valuation as at Nov 5, 2015_11.00am

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, any of the derivatives linked to FTSE China A50.
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4 comments:

  1. laiThursday, November 05, 2015 3:41:00 PM

    Hi Alex,

    Between mrcb, wct and gadang, which one you would put your bet on.

    Thanks

    ReplyDelete
  2. IvanThursday, November 05, 2015 11:13:00 PM

    Good selection due to low premium.

    Pls check the volume and holding % in these cw before trading.

    Happy sharing.

    ReplyDelete
  3. steveFriday, November 06, 2015 2:26:00 PM

    biggest problem is lacking of liquidity, and lacking of traders who know how to play (do the calculation on fair value) these warrants. If bursa's data feed provides a premium number so that all platforms could displayed that "most essential number" to traders, it could help on liquidity. I remember few years back, local traders even treated the H warrant same as Call warrants following mother share's exact direction. Haha!

    ReplyDelete
  4. Alex LuWednesday, November 11, 2015 4:35:00 PM

    Hi lai

    Despite recent recovery, both mrcb and wct are still off their high. gadang is near its recent high. based on this, I think I would like to look at mrcb or wct. And, between these 2 stocks, I prefer mrcb because I believe it could turn out to be a time.com in the making. By that, I meant the group is being managed by an entrepreneur who has money at stake in the success of the enterprise.

    ReplyDelete