Comments from Timothy Moe, chief Asia-Pacific strategist at Goldman Sachs on Chinese stock markets:
- Shanghai Composite's rebound is a positive sign
But, on all the suspensions of shares ....
"That's really the key issue
With a number of stocks suspended-we've had 32 percent of the market cap being suspended-we haven't really had a clearing of price that's fully taken place and the deleveraging which has been going on hasn't yet fully purged
That's really what we're looking for for a sign of a market bottom."
On margin balances outstanding (around 1.6 trillion yuan as of Wednesday night)
"We think the rough equilibrium level would probably be about a trillion
- That would be where the margin balance relative to free float market cap would be commensurate with the level that we've got here in the U.S."
- Said another 30% reduction in margin balances could happen in the next five days to two weeks
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Note: No, this isn't the same guy looking for a 27% rally
