{"id":531693,"date":"2021-02-25T02:42:02","date_gmt":"2021-02-25T02:42:02","guid":{"rendered":"https:\/\/www.abnewswire.com\/pressreleases\/?p=531693"},"modified":"2021-02-25T02:42:02","modified_gmt":"2021-02-25T02:42:02","slug":"chinas-stock-market-reacts-to-moutais-78-billion-rout","status":"publish","type":"post","link":"https:\/\/www.abnewswire.com\/pressreleases\/chinas-stock-market-reacts-to-moutais-78-billion-rout_531693.html","title":{"rendered":"China\u2019s Stock Market Reacts To Moutai\u2019s $78 Billion Rout"},"content":{"rendered":"
\"China’s<\/a><\/div>\n

Investors of Kweichow Moutai Co. have been selling their shares faster than any other time in over two years, sending a warning to a market that relies heavily on a handful of large caps. The biggest stock listed in mainland China has lost about $78 billion since the opening of onshore markets after the Lunar New Year holiday. The latest 4.6% drop takes the five-day decline to 15%, the biggest depreciation rate for such a period since October 2018, with Moutai rallying 30% this year through its February 10 record close.<\/p>\n

Momentum trades seem to be cracking after the CSI 300 Index briefly broke its 2007 closing peak. Traders in China were worried about were a lack of market breadth before the holiday and extreme valuations for some of the most-loved stocks. About 10 companies accounted for 50% of the returns on the benchmark, including Moutai, as foreign investors and domestic mutual funds compound the problem with the purchase of the most liquid megacaps.<\/p>\n

“This is the beginning of the end for baijiu’s outrageous valuations and the mark of a massive shift to value stocks<\/em>,” said Dong Baozhen, fund manager at Beijing Lingtongshengtai Asset Management. The big baijiu gains the past year “have become a prisoner’s dilemma – whoever sells first wins.”<\/p>\n

Triggers for the reversal include signals on tighter monetary policy from the apex bank. The People’s Bank of China is withdrawing liquidity from the system, with local media running a front-page editorial stating that China’s economic recovery is creating the conditions for the central bank to “normalize” monetary policy.<\/p>\n

The CSI 300 was 2.1% lower as of Wednesday’s lunch break, as the consumer staples sector that includes baijiu lost 4.1%. Health care, which had also been among the market’s best performers until the holiday, also lost 3.2%.<\/p>\n

Other makers of baijiu, a popular liquor in China, were among the top losers on the CSI 300 in the past five days, with Shanxi Xinghuacun Fen Wine Factory Co. dropping 23% and LuzhouLaojiao Co. losing 21%. The Securities Times newspaper have also listed some concerns around the baijiu trade. The worries include record-high valuations, overly heavy positioning by institutional investors, and the demise in popularity of the spirit among the younger generation.<\/p>\n

Zhang Kun, one of the leading funds managed by a star manager, also suspended new orders in the baijiu sector. The industry accounted for about 40% of the fund’s holdings, according to a fourth-quarter filing, with Moutai among the top positions.<\/p>\n

Media Contact<\/span>
Company Name:<\/strong> Sapporo Capital Ltd.<\/a>
Contact Person:<\/strong> Media Relations
Email:<\/strong> Send Email<\/a>
Phone:<\/strong> +815032050850
Address:<\/strong>M-507 Shinjuku Maynds Tower 2-1-1 Yoyogi
City:<\/strong> Shibuya-ku
State:<\/strong> Tokyo
Country:<\/strong> Japan
Website:<\/strong> https:\/\/sapporocapital.com<\/a><\/p>\n

<\/object>\"\"<\/p>\n","protected":false},"excerpt":{"rendered":"

Investors of Kweichow Moutai Co. have been selling their shares faster than any other time in over two years, sending a warning to a market that relies heavily on a handful of large caps. The biggest stock listed in mainland … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[401,425,426,419,412],"tags":[],"class_list":["post-531693","post","type-post","status-publish","format-standard","hentry","category-Business","category-Finance","category-Financial-Market","category-Media-Communications","category-News-Current-Affairs"],"_links":{"self":[{"href":"https:\/\/www.abnewswire.com\/pressreleases\/wp-json\/wp\/v2\/posts\/531693","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.abnewswire.com\/pressreleases\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.abnewswire.com\/pressreleases\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.abnewswire.com\/pressreleases\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.abnewswire.com\/pressreleases\/wp-json\/wp\/v2\/comments?post=531693"}],"version-history":[{"count":0,"href":"https:\/\/www.abnewswire.com\/pressreleases\/wp-json\/wp\/v2\/posts\/531693\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.abnewswire.com\/pressreleases\/wp-json\/wp\/v2\/media?parent=531693"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.abnewswire.com\/pressreleases\/wp-json\/wp\/v2\/categories?post=531693"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.abnewswire.com\/pressreleases\/wp-json\/wp\/v2\/tags?post=531693"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}