Meanwhile, the Shanghai Composite Index closed at a new low on June 30. In the first half of this year, it has slumped by nearly 48%, the Shenzhen Component Index has shed 47%, and A-share market capitalization has fallen by 18.18 trillion yuan.
But Rogers, attending an investment forum in Shenzhen recently, made what might seem a counterintuitive point. "It’s not wise to sell Chinese stocks in 2008. I’ll say it again. China’s stock market will reach 10,000 points one day," he said.
Rogers said he held many Chinese shares, and had sold none of his holdings. "I bought my first Chinese shares in 1999, and I still have them. I own many Chinese shares, some in Singapore, some in Hong Kong, some in America. I bought them in many places."
He thinks panic selling may be the reason why the Chinese stock market has become the worst market in the world so far 2008. "I don’t know where the bottom is going to be. I’m not that smart."
But he says investment chances are appearing. "I have faith in A-shares. I bought some H-shares in April. If the Chinese stock market continues falling, I’ll probably continue buying in July and August this year."
Shenyin & Wanguo Securities�investment strategy report for the second half of the year maintained that the stock market in the next six months would fluctuate at low points first, and in the fourth quarter might see a bigger rebound.
Assuming 998 points as the starting point of the latest bullish market, the slump since the fourth quarter of last year from its peak has consumed 70% of the increase since 2005. Many analysts believe that such drastic fall has relieved a considerable amount of systemic risks. In the future, single stocks will still face risks, but the index is unlikely to drop sharply from its current position.
Rogers admonished Chinese investors that they should be responsible for their investment. "Some investors call the fund company, call the government, or call the media when they see losses. But it’s not the government’s fault, not my fault. It’s your own fault. You invest in the company when you don’t even know the company. It’s not so easy to make money."
"The Market went up a lot, and now it’s down, it’s correcting. Remember in 2005, three years ago, the market is 1000. So it’s up nearly 300%, then why should people complain? In three years you made 300% on your money. If you bought it last year, you’re losing money. But the key issue for a successful investor is to buy low, and sell high."
"Only 7% of Chinese own shares. So even if all 7% lost all their money, this is not going to be the end of the story for China," said Rogers.
He also urged the Chinese government not to panic. "These things happen all the time. They happen in our history. It’s not the end of the world. Let some people go bankrupt. The best thing China can do is let the market hit its bottom, and then it will start over again."
"If the government does something, they’ll make it worse. You should let the government stay out of it. They can hold it up for a while, but it would get worse later on. The Japanese in the 1990s tried that. They tried to propel it forward. So it took 13 years for the market to make its bottom. Let the government stay out of it, or it might take 13 years."
He is still bullish on grain, infrastructure and sewage treatment, but does not have faith in financial shares. "I don’t know their asset liability sheets. They lent a lot, and the subprime crisis has affected many countries. Financial institutions in China, America and Europe have many problems."
The market value of financial shares, accounting for the highest proportion of the total market value, has experienced the highest decrease at 5.96 trillion yuan, with a remaining market value of 7.33 trillion yuan. Although the non-ferrous industry has seen the most drastic fall, of 51%, its accumulative market value decrease totals only 0.71 trillion yuan.