Lai See

Was it a leak or a plant that moved the Shanghai Index?

PUBLISHED : Tuesday, 26 February, 2013, 12:00am
UPDATED : Tuesday, 26 February, 2013, 5:27am

Those of you who read the column by my colleague George Chen yesterday will have learnt of the conversation that occurred between Cheng Dinghua, an award-winning strategist at Essence Securities, and Xu Xiang, a fund manager at Zexi Investment, which ended up on the internet.

Investors were apparently shocked to learn that their private views differed markedly from what they were saying in public. Privately the two felt the Shanghai stock market would decline, whereas in public they were saying that Xi Jinping's new leadership was a buying opportunity and stocks would rise.

This conversation was supposedly leaked by a salesman, and the Shanghai stock exchange, which is largely driven by retail investors, has slipped back.

There is nothing new in this sort of thing. Internal e-mails from US investment banks several years ago described subprime mortgages as "crap", but they were nevertheless sold to clients with a more elegant description.

But the Shanghai conversation has attracted considerable online chatter. Some of this has been rather cynical and suggested that the conversation was not so much a leak as a plant, to enable those that did not get into the market earlier, to have another go.

What an absurd suggestion.


Census censors

Aside from the interesting detail on women, the Civic Exchange's press conference last week to unveil the massive survey on Hong Kong's women also produced insight into the strange behaviour of the Hong Kong's Census and Statistics Department.

It is common practice in most developed countries for those bodies that conduct the census to provide a data sample of 1 or 2 per cent in an anonymised state to academics and researchers for them to slice and dice at will. But not so in Hong Kong.

Professor Michael DeGolyer of the Hong Kong Baptist University points out that a good statistician can see whether or not the data is faked. "That's maybe why the government won't give us a sample," he said, referring to the embarrassing recent revelation that some of the government's statistical data had been fabricated.

He says the government's control of the census data is unhealthy, since coming up with anything other than the government's version of events requires a huge amount of extra effort. DeGolyer says he has asked on several occasions and always gets the answer: "We'll look into it."


Gold cross

Gold bulls will require some testicular fortitude if the metal continues in its current trajectory. It lost about 2 per cent last week and is at a seven-month low in a fall that has taken it through the dreaded "death cross" and below US$1,600 an ounce.

Money managers apparently have a record number of bets that it will go lower, according to data released last week by the Commodities Futures Trading Commission. The decline has been attributed to improved investor sentiment in the US and speculation that the Federal Reserve will seek to rein in monetary policy. However, according to Dow Jones data, money managers still held more bets that prices would rise than bets they would fall, though by the lowest margin in more than four years.


Fear of not flying

We have been directed to a fine example of airport rage, which is now available on YouTube ( The deputy chairman of Yunnan Mining Corp, Yan Linkun, smashed two computers at Kunming Changshui International Airport after he and his family were told they could not board their flight when they turned up after the flight had been closed on two consecutive days.

His wife even got in on the rage by smashing what looked like a mouse. However, since this has been widely viewed online, his company has suspended him, and he also faces punishment as a member of Shizong County's political advisory body in Yunnan's Qujing City.

Yan said he had been angry because he was in a hurry to get his sons to school, according to In a rather understated observation, Yan said: "I failed to be a qualified political adviser as well as a good father." Police are determining whether he should be charged.