Chinese stock markets falls overcook yesterday's ASX sell-off, futures recover 10 points despite falls in the US

The Shanghai/Shenzen stock index (CSI 300) finished 6.09% lower yesterday and ruined the party for Aussie stocks, which got off to an otherwise healthy start after the gap in uncertainty over big bank capital funding continued to narrow following CBA's first (and highly satisfactory) day of trading on Monday, post its $5 billion raising and $2.22 dividend. The ASX 200 hit a high of 5,388 yesterday morning despite Commonwealth Bank of Australia (CBA) going ex dividend, but then failed to hold after China's poor late morning (Sydney time) opening. Chinese stocks continued to sell off throughout the session and pushed the ASX 200 to a very bearish close, seeing the market gap from 5,320 at the 4pm close to its 4:10pm closing auction level of 5,303, the low of the day and 85 points from its session high. Australian investors should be aware that the range of buying support at this level is quite broad, and is characterised by the November 2014 to January 2015 period that has been circled in today's first chart.

We're experiencing a bit of regional weakness at present due to an already-tentative domestic environment--vis-a-vis our big four banks (dilutionary) capital raisings--transposed upon a landscape of emerging Asian economies that are struggling against the effect of a strengthening US dollar, starving them of investment inflows as risk money is repatriated back to the US based on the prospect of more unpredictable currency movements to come. As China devalues its yuan, other Asian trading partners may have to follow suit so they do not fall victim to relatively more expensive exports. It's a complicated situation and for those of you who are keen to get an insight into how this might affect another major Australian trading partner (Japan), please click here to view the article posted this morning by Alex Chen, "A better-than-expected second quarter GDP result warrants a closer look at the Japanese yen." 

A note to all those interested in the Future Generation Global Investment Company (FGG) offer: Rivkin's offer ends this Friday, so get in touch now if you wish to apply. Instructions at the bottom of this article. If you're not familiar with the offer, get to know it by clicking here.


Source: Rivkin, Saxo Bank

To view the Rivkin economic calendar and Global Markets matrix, members can click here.

How to apply for the FGG IPO

As was the case with Future Generation Investment Company (FGX), Rivkin will be working with its broking partner CMC Markets in donating the broker stamping fees to charities associated with the investment company’s cause – in this case, youth mental health and homelessness.

With this in mind, we strongly urge you to follow the following steps accurately so Rivkin can add to the philanthropic nature of this IPO.

  1. Visit http://www.futuregeninvest.com.au/Global/prospectus.pdf to download and read the prospectus
  2. IMPORTANT: complete the Broker Firm Application Form on page 87 of the prospectus, this way we can donate the stamping fees
  3. Ensure you have sufficient funds in your Rivkin Securities stockbroking account to pay for the stock
  4. Enter the Broker Code 02662
  5. Enter the Adviser Code 0001
  6. Email your application to customerservice@rivkin.com.au or post it to:

Rivkin Securities FGG Offer
Po Box 1524
Double Bay 1360

Don’t have a Rivkin Securities stockbroking account? Open one now by emailing customerservice@rivkin.com.au (your Relationship Manager will call you back and pre-fill forms etc.) or phoning 1300 748 546. Our online brokerage is $11.00 or 0.11%, $9.90 or 0.11% for SMSFs that use Rivkin Super. PLUS we go the extra mile and donate non-core earnings like broking fees from this IPO to charity. You’re doing yourselves a favour and doing those in need a favour by getting involved.

This article was written by Scott Schuberg, CEO of Rivkin Securities Pty Ltd. Enquiries can be made via info@rivkin.com.au or by phoning +612 8302 3600.

Complex product warning

This article contains information about foreign exchange contracts, which are considered complex financial products. Please click here to read ASIC's foreign exchange trading article before considering an investment in foreign exchange contracts. 

This article contains information about CFDs, which are considered complex financial products. Please click here to read ASIC's "Thinking of trading contracts for difference?" document before considering an investment in CFDs.
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