File this away for posterity, because we might be referring to it later on down the road.
That’s what we said exactly a week ago about the ChiNext, which last Monday fell nearly 2% on jitters about more IPO approvals and valuations that are, on average, hovering around 40X.
The malaise continued throughout the week, as did our coverage.
Well, guess what? The ChiNext just closed down more than 5%.
And – surprise, surprise – everyone who didn’t mention this last week is going to pretend like they were are all over it.
But they weren’t – all over it, that is. Simply put: there are a lot of Johnny-come-latelies to this story this morning so when you hear people say things like “for those who missed it,” just remember that those people are for all intents and purposes talking about themselves.
So yeah, this was easy to see coming and indeed we flagged the ongoing rout on Sunday evening (stateside) when it became clear that the latest Chinese econ data (which beat across the board) wasn’t going to be enough to arrest the slide in equities which fell right out of the gate.
As Bloomberg notes, the ChiNext has fallen more 14% this year, and closed at its lowest level January 2015. Weighing on the index Monday were investor concerns about authorities ramping up their deleveraging campaign
.“Regulators’ weekend meeting reflects that China may further tighten the financial market, which has worried investors,” Zhang Gang, a Shanghai-based strategist said. “People are rushing to cut risks.”
“Many China small cap shares have been driven higher by market liquidity in the absence of strong earnings or fundamentals,” Ronald Wan, chief executive at Partners Capital International Ltd. in Hong Kong, added. “If liquidity dries up, the market will be affected.”
At it wasn’t just the ChiNext:
