Chinese Private Equity Giant’s Assessment of A-shares: Sharp Rise is Bound to Lead to Sharp Fall, Trapped Investors Cannot Break Free

During the surge of A-shares, prominent Chinese private equity investor Dan Bin has found himself caught in a whirlwind of public opinion due to his multiple comments on the stock market. Dan Bin believes that the current rise in A-shares is not indicative of a bull market but merely a rebound. He warns that such a rapid surge will inevitably be followed by a sharp decline, and if investors get trapped again this time, getting out of the situation will be a distant prospect.

On the evening of October 4th, Dan Bin, Chairman of Eastern Harbor and fund manager, posted on Weibo, “A major Maotai dealer primarily engaged in old liquor business called me on WeChat, saying that these past 2 years have been particularly difficult, and they are almost at their breaking point. Seeing some improvement in the stock market in recent days, they asked me for my opinion.”

“I said, if it were a major bull market, your business would be saved. You should pay attention to the market changes, reaching 4000, 5000 points. Of course, if a historical high of 6124 points can be achieved, you probably wouldn’t have to worry. However, I still see it as a rebound…” Dan Bin stated.

Moreover, on October 2nd, Dan Bin bluntly commented on the rising trend of A-shares, saying, “Such a rapid surge will be followed by a sharp decline. If investors get trapped again this time, all the necessary measures will have been taken… Getting out of the trap will be a distant prospect.”

These remarks have sparked criticism from some netizens.

Some investors believe that Dan Bin, who heavily invested in U.S. stocks, has turned sour, stating that “After such a long decline in the (Chinese stock market), singing bearish tunes after just a few days of gains is inappropriate”, and “It’s only allowed for Nvidia to rise, not for A and H-shares to shine.”

In response, Dan Bin stated, “If I am wrong, then I can only say that my skills are lacking. Wouldn’t I just be falling into the trap as some people say?” He pointed out that he accurately predicted that stock market crash back in 2015.

Securities firms in China have issued a statement, emphasizing that, amidst the wealth effects brought by the epic surge in A-shares and Hong Kong stocks, investors need to maintain rationality. Based on historical data, many investors not only failed to make profits during a bull market but also incurred heavy losses. Therefore, it is crucial for investors to stay away from leverage, not let the rising market cloud their judgment, invest rationally, and avoid chasing high and selling low, as constantly switching positions in a volatile market can lead to rapid losses.

Current affairs commentator Qin Peng stated in his self-media program “Qin Peng Observation” that “Many people are comparing this bull market with 2015, but there are significant differences between the two: From a political perspective, the stock market frenzy of 2015 was due to the Jiang Zemin faction at that time facing Xi Jinping, who had been in power for three years and was continuously using anti-corruption measures to cleanse the ranks of the Jiang faction. They attempted to counterattack, initiating an economic coup. As a result, the China Securities Regulatory Commission, the media, securities firms, and funds jointly promoted the stock market, only to aggressively crash it in the end, plundering the wealth of millions of stock market investors. Whereas this time, it is Xi Jinping himself dealing with GDP decline and persistent deflation, actively implementing aggressive measures, even having the People’s Bank of China replace commercial banks for securities firms and funds for stock speculation refinancing.”

“I personally believe that this crazy bull market will probably only last for over three months. Because, on one hand, many data will be revealed early next year, exposing the true nature of CPC policies, without the need to wait for the annual session; on the other hand, both domestic and foreign capital and a sizable proportion of stock investors currently have a speculative mindset, aiming to make quick profits and leave, so as soon as there is a slight movement, they will flee for the hills, and it won’t last long.” Qin Peng remarked.