Huang Weimin, the hedge fund manager whose Chinese stock-index futures wagers returned more than 6,200 percent last year, has some advice for investors in 2016: Sell your shares now, before it’s too late.
The 45-year-old former worker at a state-owned company, a virtual unknown until last year, has become a star of the Chinese futures market after timely bets on the direction of share prices propelled his Yourong Fund to the top of the country’s performance rankings. He’s carried the winning streak into 2016, returning 35 percent through Jan. 22 after selling stock-index futures just days before the market’s worst-ever start to a year. The Shanghai Composite Index plunged 6.4 percent on Tuesday, bringing losses this year to 22 percent.
Huang, who opened the Yourong Fund in 2014, says China’s benchmark Shanghai Composite Index could drop another 15 percent in the first half as slowing economic growth and a weaker yuan fuel capital outflows. While he’s sticking with bearish futures bets to take advantage of further losses, he says the average Chinese stock investor would be better off shifting into cash.
“I’m not optimistic about this year,” said Huang, a self-taught trader who manages more than 100 million yuan ($15.2 million) in the Yourong Fund and separate client accounts that use similar strategies. “My advice is to hold cash, wait and watch.”