Tag Archives: China

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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China’s Stocks Enter Bear Market as Rate Cut Fails to Stop Rout

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“Chinese stocks tumbled, sending the benchmark index into a bear market, as signs of an exodus by leveraged investors overshadowed the central bank’s effort to revive confidence with an interest-rate cut.  The retreat marks an end to the nation’s longest-ever bull market, a rally that’s lured record numbers of individual investors and convinced traders to bet an unprecedented amount of borrowed money on further gains.  Zhang Gang, a strategist at Central China Securities strategist in Shanghai, called Monday’s losses ‘panic selling’ that will likely continue as margin investors are forced to liquidate their holdings and the recent selloff spurs more mutual fund redemptions.”

http://www.bloomberg.com/news/articles/2015-06-29/china-stock-futures-jump-in-singapore-after-rate-cut-yuan-drops

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Money laundering investigation stymied by China, Italy says

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“In April, China launched a new initiative, ‘Skynet,’ to trace fugitives and their overseas money and released a list of its 100 most wanted economic criminals. Forty of them are thought to be in the U.S, according to the party’s Central Commission for Discipline Inspection. Many of the transfers, fractioned into small sums to avoid scrutiny, were a way for Chinese immigrants to avoid paying taxes, according to hundreds of pages of court documents reviewed by The Associated Press. Other migrants were caught with heaps of counterfeit purses and shoes. Police also traced money to men running Chinese prostitution rings.”

http://news.yahoo.com/money-laundering-investigation-stymied-china-italy-says-050440484–finance.html

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NSA conducts mass surveillance of the US internet to find cyberattacks

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“According to the new documents, the scanning is enabled by broad legal powers, granted by the Department of Justice and FISA court in 2012. An initial Justice Department order (interpreting Section 702 of the FISA Amendments Act) authorized the NSA to target data based on specific IP addresses or threat signatures that were linked to foreign nations. In addition to its surveillance operations, the NSA is tasked with defending official US networks from digital intrusions, a task that’s grown increasingly difficult as states like China have grown more sophisticated.  But according to the documents, limiting the scans to foreign states was too restrictive for the NSA.”

http://www.theverge.com/2015/6/4/8729155/snowden-nsa-internet-cyber-surveillance-cyberattack

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Millions of US government workers hit by data breach

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“Chinese hackers are suspected of carrying out a ‘massive breach’ affecting the data of millions of US government workers, officials said.  The Office of Personnel Management (OPM) confirmed on Thursday that almost four million current and past employees have been affected.  The breach could potentially affect every federal agency, officials said.  Susan Collins, a member of the Senate Intelligence Committee, said the attack was thought to originate in China.  OPM serves as the human resource department for the federal government.  The agency issues security clearances and compiles records of all federal government employees.”

http://www.bbc.com/news/world-us-canada-33017310

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China’s new $16bn gold fund at centre of new ‘Silk Road’

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“Gold prices could be boosted by China’s plan to establish a $16bn (£10bn) fund to stockpile the precious metal as part of a scheme known as the ‘Silk Road’ initiative aimed at boosting trade. State endorsed media in China has reported that the new fund Shandong Gold Group and Shaanxi Gold Group will each take stakes of 35pc and 25pc respectively in the new fund alongside other investors. The new entity, which may include an exchange traded fund for gold and investments in miners of the precious metal, aims to raise the $16bn in three tranches, according to the report. China is the largest gold producer and consumer of the precious metal.”

http://www.telegraph.co.uk/finance/personalfinance/investing/gold/11630690/Chinas-new-16bn-gold-fund-at-centre-of-new-Silk-Road.html

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