28.07.2014 - Chinese corporate profits rose strongly

Profits of major Chinese corporations increased significantly in June, which contributed to strong growth of Chinese indexes in the first trading session of the week. So, the statistics published on Sunday showed that the profit for the year of major Chinese corporations increased by 17.9%, the same rate in May was 8.9%. Analysts point out that such a result was possible due to the low base of comparison of the previous year and the intensification of government programs.

Despite the positive data on production and sales growth, analysts note rising inventories of companies and reduced efficiency, which may adversely affect the growth of the overall economy. We expect that the stock markets at the moment are overvalued and expect a significant correction by 10-15% in the medium term. Opening long positions on futures on Chinese stocks at the moment is risky and we recommend buying them after correction.

RISK WARNING: Trading of complex financial products, such as Stocks, Futures, Foreign Exchange ("Forex"), Contracts for Difference ("CFDs"), Indices, Options, or other financial derivatives, on "margin" carries a high level of risk, and may not be suitable for all investors. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading these markets, and seek advice from an independent financial advisor if you have any questions or doubts. Please carefully read our full "Risk Disclosure" and "Risk Disclosures for Financial Instruments & Investment Services". FXFINPRO Capital is the trading name of PFX Financial Professionals Limited, a limited liability company formed under the laws of Cyprus, registered with the Registrar of Companies in Nicosia, Cyprus, under nr. HE 237840 and regulated by the Cyprus Securities and Exchange Commission with license number 193/13.