Mr. Shangkong | Landmark shift in 'one child' rule brings market bubbles
Investors should cash out 'policy dividends' as the bull run in thebaby milk producers and piano makers makes little sense
Last week, institutional and individual investors poured money into so-called "second child" concept stocks, which can be baby milk producers or even piano makers as long as they are more or less related to how to grow a child on the mainland in the short or long-term.
Investors who made some quick profits from the sharp rises in those baby-related stocks should really thank President Xi Jinping for easing the long controversial "one child" policy.
But I guess the "second child" initial impact on the mainland's stock markets - even before it hits the social and education systems - may be beyond Xi's expectations.
I know some hedge fund managers did not really enjoy the past week as they had short positions mainly because they found the Communist Party's new blueprint for the next chapter of economic development lacked concrete measures. So some of them decided to stay away from the market for a while.
[Investors] should cash out to make a quick profit from the so-called ‘policy dividends’
I am not sure if their views about the economic outlook may be too pessimistic, but they were clearly proved wrong for selling rather than buying equities in the past week. The "second child" stocks were just some examples, while blue chips such as mainland brokerages also saw some surprising gains.
Two Shenzhen-listed piano makers that grabbed my attention were Pearl River Piano - whose company website says it has won high praise from top leaders such as former state head Jiang Zemin in the past few decades - and its smaller rival Hailun Pianos.