Monthly Archives: July 2015

MSCI backs itself into corner on China share inclusion into global index

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“MSCI’s decision to defer including Chinese shares in its emerging market benchmark share indexes for a second time may have trapped the index provider into making promises it can’t keep, both to Beijing and to its investor constituents.  MSCI’s clients want Beijing to open its capital accounts so they can reliably move their money in and out of China’s markets, but the economy is facing its slowest growth in decades, which has led to capital flowing out of the country.  For China, inclusion in the index could over time bring an estimated $400-billion into its stock markets and would help in its drive to internationalize the yuan currency.”

http://www.theglobeandmail.com/globe-investor/investment-ideas/msci-backs-itself-into-corner-on-china-share-inclusion/article24917914/

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Hong Kong-Shenzhen connect start date not finalised yet

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“Global funds and investors had expected regulators to announce a launch date since May for the Shenzhen trading link, which will complement a scheme connecting Hong Kong with Shanghai.  A delay beyond August risks pushing the Shenzhen project into 2016 and would cause a setback to Chinese regulators who have been gunning for a 2015 start.  It would also potentially delay the inclusion of China’s ‘A-shares’ into global benchmark indices such as the MSCI Emerging Markets Index, as one of the key criteria for inclusion is greater access to China’s stock markets.”

http://www.reuters.com/article/2015/06/16/hongkong-shenzhen-connect-idUSL3N0Z22CE20150616

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Shenzhen’s Properties Soar As Foreigners Rush In

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“China’s property market is seeing tentative signs of revival.  Primary residential property prices in the 70 major cities posted a month-to-month increase of 0.06%, the first time in the past 13 months to record positive change, data provided by The National Bureau of Statistics show.  But Shenzhen is stealing the show. New home prices there jumped by 6.7%. By comparison, the other three tier-one cities, Shanghai, Beijing and Guangzhou, recorded only 2.6%, 1.4% and 1.4% rise. Shenzhen is home to the vibrant technology industry. Tencent Holdings, for instance, is headquartered there. Shenzhen’s ChiNext board, which hosts New Economy stocks, has more than doubled this year.”

http://blogs.barrons.com/asiastocks/2015/06/18/move-over-shanghai-shenzhens-properties-soar-as-foreigners-rush-in/

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China’s bear market won’t last – these two economies show why

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“There are reasons for the correction. They range from disappointment that index provider MSCI decided against including the market in its global benchmark index – as yet – earlier this month. There have also been cutbacks on margin lending (the ability to buy stocks with borrowed money).  You don’t see indices double in a year (the Shanghai Composite had in fact more than doubled) and expect smooth running from then on in. As Capital Economics put it: ‘Turnover on the Shanghai and Shenzhen exchanges was up 400% year-on-year in the second quarter. That rate of growth is clearly unsustainable.’  And it’s probably healthy if it corrects a bit further. But this doesn’t mark an end to the good times.”

http://moneyweek.com/chinese-stocks-bear-market-wont-last/

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Chinese Trading Suspensions Freeze $1.4 Trillion of Shares Amid Rout

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“Chinese companies have found a guaranteed way to prevent investors from selling their shares: suspend trading.  Almost 200 stocks halted trading after the close on Monday, bringing the total number of suspensions to 745, or 26 percent of listed firms on mainland exchanges. Most of the halts are by companies listed in Shenzhen, which is dominated by smaller businesses.  The suspensions have locked up $1.4 trillion of shares, or 21% of China’s market capitalization, and are becoming increasingly popular as equity prices tumble. The rout in Chinese shares has erased at least $3.2 trillion in value, or twice the size of India’s entire stock market.”

http://www.bloomberg.com/news/articles/2015-07-07/chinese-trading-halts-freeze-1-4-trillion-of-shares-amid-rout

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Bitcoin Payment Service Helps Greek Businesses Avoid Capital Controls

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“With the banking system locked down, capital controls prevent Greek citizens from accessing cash and this disrupts the economy. The Irish company Spartan Route has come to the rescue of Greek businesses with an innovative service proposal: They will invoice their Greek clients’ foreign customers in euro, collect the payment, and send bitcoin back to Greece.  Their proposal to Greek businesses is simple and crystal clear: 1. Invoice Spartan Route for your exports, 2. Deliver your goods as normal to your customer through your current supply chains; 3. Spartan Route pays you with bitcoin; 4. Spartan Route invoices your customer for euro.”

https://bitcoinmagazine.com/21104/spartan-route-offers-invoicing-bitcoin-payment-service-greek-businesses/

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Greek bank official dismisses ‘haircut’ report as “baseless”

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“Greek leaders have repeatedly dismissed the possibility they will have to ‘bail-in’ depositors to prevent the collapse of the banking system.  But citing bankers and businesspeople with knowledge of the measures, the Financial Times reported: ‘The plans, which call for a ‘haircut’ of at least 30 percent on deposits above 8,000 euros, sketch out an increasingly likely scenario for at least one bank.’  The report quoted a source as saying: ‘It (the haircut) would take place in the context of an overall restructuring of the bank sector once Greece is back in a bailout programme.’ The head of Greece’s Bank Association dismissed the report as ‘completely baseless’.”

http://www.cnbc.com/id/102809199

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Call Them Hippies, But the Grateful Dead Were Tech Pioneers

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“The Grateful Dead remains one of the most innovative and tech-savvy bands in pop history. Long before it became necessary (or cool) to do so, the band embraced a DIY ethos in everything from manufacturing its own gear to publishing its own music to fostering a decentralized music distribution system. The Dead’s obsession with technology was almost inseparable from the band’s psychedelic ambition and artistic independence.  More genuinely progressive than most prog rock, the Grateful Dead and its legion of fans embraced a spirit of innovation that could be called entrepreneurial if the pursuit of profit didn’t so often seem secondary.”

http://www.wired.com/2015/07/grateful-dead-fare-thee-well-tech-pioneers/

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Silicon Valley meets Bob Marley

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“Men in suits swarmed everywhere, but not one spliff or bong could be seen.  PhDs and Harvard MBAs networked with investment bankers and hedge-fund managers to raise money for businesses covering every aspect of marijuana commerce, from consumer guides to insurance. Some eager punters discussed the secrets of emerging brands, such as those associated with those two legendary singers and weed experts, Willie Nelson (who announced he is launching his own brand) and Bob Marley. Others debated how to make use of hemp, a crop closely related to weed but, unlike it, indisputably legal to buy and sell, and marvelled at all the jobs being created by the new industry.”

http://www.economist.com/news/united-states/21656726-rise-cannabis-capitalism-silicon-valley-meets-bob-marley

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Icahn warns market is ‘extremely overheated’

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“Activist investor Carl Icahn took to Twitter and CNBC Wednesday to issue a stark warning to investors: ‘I think the public is walking into a trap again as they did in 2007,’ Icahn told CNBC.  Specifically, the 79-year-old investor warned of a bubble in high-yield debt. The prominent investor joins a chorus of voices pointing at frothiness in the so-called junk-bond market, including DoubleLine Capital founder Jeff Gundlach.  In two tweets published on Wednesday, Icahn cautioned against listening to so-called permabulls, saying the 2008 crisis might have been avoided if more investors had warned about the risk of a bubble in 2007, as he is attempting to do now.”

http://www.marketwatch.com/story/icahn-warns-market-is-extremely-overheated-2015-06-24

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