Huang Weimin, the hedge fund manager whose Chinese stock-index futures wagers returned more than 6,200% last year, has some advice for investors in 2016: Sell your shares now, before it’s too late.
The 45-year-old former worker at a state-owned company, a virtual unknown until last year, has become a star of the Chinese futures market after a slew of timely bets on the direction of share prices propelled his Yourong Fund to the top of the country’s performance rankings. He’s carried the winning streak into 2016, returning 35% through Jan. 22 after selling stock-index futures just days before the market’s worst-ever start to a year.
Huang, who opened the Yourong Fund in 2014, says China’s benchmark Shanghai Composite Index could drop another 15% in the first half as slowing economic growth and a weaker yuan fuel capital outflows. While he’s sticking with bearish futures bets to take advantage of further losses, he says the average Chinese stock investor would be better off shifting into cash.
“I’m not optimistic about this year,” said Huang, a self-taught trader who manages more than 100 million yuan ($21.8 million) in the Yourong Fund and separate client accounts that use similar strategies. “My advice is to hold cash, wait and watch.”
Many of China’s 99 million investors appear to be doing just that. Volumes in the nation’s US$5.6 trillion cash equities market slumped to the lowest level in three months last week, while trading of stock-index futures has dropped about 99% since June. A bungled government attempt to introduce market circuit breakers in the first week of 2016 deepened investor pessimism after the mechanisms sparked panic instead of restoring calm.
Huang’s ability to profit from the turbulence has made him a standout in China’s hedge-fund industry, which has struggled to cope with price swings that reached the most extreme levels since 1997 last year. More than 700 funds were forced to liquidate prematurely in 2015, and this year’s 18% slump in the Shanghai Composite has left many more on the brink of shutting down.
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The 45-year-old former worker at a state-owned company, a virtual unknown until last year, has become a star of the Chinese futures market after a slew of timely bets on the direction of share prices propelled his Yourong Fund to the top of the country’s performance rankings. He’s carried the winning streak into 2016, returning 35% through Jan. 22 after selling stock-index futures just days before the market’s worst-ever start to a year.
Huang, who opened the Yourong Fund in 2014, says China’s benchmark Shanghai Composite Index could drop another 15% in the first half as slowing economic growth and a weaker yuan fuel capital outflows. While he’s sticking with bearish futures bets to take advantage of further losses, he says the average Chinese stock investor would be better off shifting into cash.
“I’m not optimistic about this year,” said Huang, a self-taught trader who manages more than 100 million yuan ($21.8 million) in the Yourong Fund and separate client accounts that use similar strategies. “My advice is to hold cash, wait and watch.”
Many of China’s 99 million investors appear to be doing just that. Volumes in the nation’s US$5.6 trillion cash equities market slumped to the lowest level in three months last week, while trading of stock-index futures has dropped about 99% since June. A bungled government attempt to introduce market circuit breakers in the first week of 2016 deepened investor pessimism after the mechanisms sparked panic instead of restoring calm.
Huang’s ability to profit from the turbulence has made him a standout in China’s hedge-fund industry, which has struggled to cope with price swings that reached the most extreme levels since 1997 last year. More than 700 funds were forced to liquidate prematurely in 2015, and this year’s 18% slump in the Shanghai Composite has left many more on the brink of shutting down.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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