AGAIN FROM BOOM FINANCE

CHINA STOCKS ROAR UPWARDS IN VALUE EXPLOSION

BOOM has pointed out to readers for some time now that the Chinese stock markets have become very under valued in long term downtrends and that this simply could not continue. BOOM also showed readers the rather dramatic divergence in price action that has occurred between the markets of Shanghai and Hong Kong since early August.

On the 18th February, BOOM wrote —

“China’s government is communist. However, they must now encourage all of their citizens to become buyers of shares in Chinese companies. If they don’t, the Chinese stock markets will be at risk of progressive slow melt down with no end. And if that were to happen, the ownership of corporate China will become locked into fewer and fewer hands, creating an elite class of citizens who own the productive assets of China. This elite class would become the robber barons of China by default, capable of exerting great influence. China’s communist ideals could then become corrupted by the financial power of an organised group of oligarchs.

None of that is compatible with communist ideology. Therefore, the best way forward is for the central government of China to encourage its citizens to start buying shares as soon as possible.”

“BOOM is expecting such a direction from the Chinese government soon. It is actually inevitable because the consequences of not doing this are too great to ignore.”

Last week, both the Shanghai and Hong Kong stock markets exploded upwards, just as BOOM has been expecting. The Shanghai Composite Index finished the week up by 12.81 %. The chart is rather dramatic. The Hang Seng stock index in Hong Kong finished the week up by 14.44 %. Its chart is even more striking.

CHARTS FOR CHINA STOCKS

Shanghai Composite Daily