This is going to be a very short update. Life has been very busy lately, moving country and a new role at work. I expect to start writing more frequently again. I’m currently in Shanghai on business trip and the latest on the ground data point is that regulators are putting in place very strict capital controls. Most of the controls has been through as it is called “window guidance”, where they tell banks that they need to change their procedures for controls of capital flow. Not good and many call this turning back the clock 10 years in terms of capital opening, something that needs to watched closely. I don’t think this has got enough attention in media and markets take it a bit too calmly – but maybe it’s just me that is wrong.
Hong Kong stocks are lagging, perhaps because of the above mentioned reasons, but it feels rather like more short term worries over US Gov rates and new scares that the Chinese property market is wobbling. Even so I find the significant pullback in some stocks unwarranted. In particular Coslight, I will write a longer update shortly, but if anything the business case for Coslight is even stronger. I think the stock is easy to manipulate with fairly thin volumes and it is now oversold, I’m using the cash I have left to make it a high conviction position again. More portfolio changes will follow soon.