The March Madness, This Gotta End

The Russia-Ukraine War's impact on Chinese equities

Let’s begin with the global market performance since the Russian invasion of Ukraine (February 24 to March 18):

• US (S&P 500) +4.1%

• Europe (Euronext 100) +2.2%

• Japan (Nikkei 225) +3.3%

• India (Sensex) +6.1%

• Hong Kong (Hang Seng) -6.5%

• China A-share (CSI 300) -5.8%

Actually this is not the worst. At the recent trough (March 15), Hong Kong had a year-to-date drawdown of nearly 36% and China A-share dropped as much as 24%. A large number of Chinese stocks lost over 50% its value in less than a month. “It feels like the Russian missiles did not hit Kiev but went directly for the Chinese stock market”, said a local investor in his Wechat post.

This is outrageous…and ridiculous.