Time frozen is intriguing. Not the kind that would require literal magic—though that would be cool. But the concept of looking at a space not touched in years, and left like the occupant was coming back tomorrow. You can get a glimpse of this by looking through windows of some office buildings in NYC. On the FDR Drive, south of the Brooklyn Bridge, you can peer into offices that are still there from before the pandemic. And from my own office seat, I can see an office kitchen with supplies, a water cooler, tables and chairs, and a bookshelf, but I’ve never seen a single person. It makes me think of the Will Smith movie, I Am Legend, where his character is the only human non-zombie alive in NYC.

You can find parts of the global market like this too—seemingly forgotten markets. One I’ve been recently thinking about in this context is the Chinese stock market. The Shanghai Composite has been sideways to down for many years—as if time forgot it was there: 

With the exception of the 2014 to 2015 period, when investors took on quite a bit of margin debt to invest, the stock market has struggled to do much. In particular, while Covid began ending for the US and Europe in 2021, shutdowns lasted longer in China, hindering growth. Add in an overhang from political differences with the US, and a local property market that seems to be going from bad to worse, and the market has not been a place to invest (except maybe to short). 

However, zooming in to the above chart, since the beginning of February, shows it might have seen a near-term bottom. And it’s been on higher volume as well. 

Besides the technical aspect, there have been some other recent positive signs for the Chinese market and economy:

• Tightened rules on the lending of shares for short selling

• China’s central bank recently reduced the amount of cash banks must hold in reserve

• The government is reported to be considering a market rescue package of about 2 trillion yuan ($280 billion) to buy shares in the market

These developments are starting to make it interesting. However, it’s fair to note the risks that took the Chinese stock market down the last few years are still there, and the longer term chart shows previous bounces have been fleeting. In addition, there are a host of ESG-oriented reasons that might make China un-investable for some. But for a shorter term investment, and the right risk tolerance, it could be a place to watch. 

Like peering into an office window while at a traffic light.