Jpmorgan China Growth & ... Share Discussion Threads

[loganair] 20/3/2024 17:33

The UK now holds only $44.2bln less US Treasuries than China, 4 months ago the difference was $76.3bln and 18 months was $293.1bln.

It seems to me reasonable to say in only a few short months the UK will become the second largest foreign holder of U.S. Treasury's having increased their holdings by 15% over the past year.

In the past year Canada has increased its US Treasury holdings by 34% to $339.8bln while Luxembourg have increased by 19% to $376.5bln and Ireland increased by 26% to $319.7bln.

France have increased their holdings by a massive 47% to $267.5bln.

Over the past year, apart from China only Switzerland and Belgium have reduced their holdings of US Treasuries.

[shano2] 13/3/2024 17:25

looks like the downtrend may be over with a breakout of the downward channel.

[loganair] 13/3/2024 10:54

Country Garden misses coupon payment:

China's stocks slipped again on Wednesday - dragged down by ailing property developers as Country Garden missed a coupon payment on its debt. The yuan also fell back sharply.

[dennisbergkamp] 06/3/2024 19:05

That’s mad - as someone who works with SWIFT
D

[loganair] 06/3/2024 15:28

Just think, it was only half way through last year that the Yuan over took Sterling to become the 3rd most used currency on SWIFT and now it has over taken the Euro to become the 2nd most used currency on the SWIFT payment system.

[loganair] 04/3/2024 07:57

Investors await National People's Congress:

The annual National People's Congress in Beijing opens on Tuesday and what is laid out by parliament could go a long way to determining the 2024 path for assets in China. And beyond.

Premier Li Qiang will lay out Beijing's annual growth and other economic targets, and - crucially - a plan for achieving them.

Li is expected to set a growth target of around 5% for 2024 - the same as last year - to keep China on a path toward President Xi Jinping's goal of roughly doubling the economy by 2035.

Chinese leaders are under pressure to take more radical steps to shore up the property sector, ward off deflation and revive growth. But capital outflows have weakened the exchange rate, and large-scale fiscal easing could exacerbate that outflow-declining currency doom loop. To be sure, some of the recent numbers have been encouraging.

The Caixin manufacturing PMI last week was enough to lift China's overall economic surprises index to its highest level since mid-December.

Expectations have been lowered considerably in recent weeks as the data has underwhelmed, so it's not clear that this reflects particularly strong economic activity per se. But positive surprises are preferable to negative surprises.

Either way, Chinese equities have regained their footing and are up around 10% from the lows and are now in the green year to date.

[neilyb675] 19/2/2024 14:58

204.00 - 213.00 (GBX) at 14:55:47
on Market (LSE)

[loganair] 09/2/2024 09:44

I am still holding off investing in JCGI...

S&P equal weight is down 4% in 2023 and hasn't risen so far in 2024.

In the united States, 11th March the Bank Funding lapses, the U.S. banks have to repurchase all the treasuries they sold at Par + interest = withdrawing USD liquidity from the market.

Some time in April the Repo market is drained = no more input of USD liquidity into the market.

Also the U.S. January jobs report was not a blow out increase, in reality it was minus 32,000 and hourly pay actually went down by 3/10% and didn't rise as was reported..

Therefore there is highly likely to be much more down side in the near future.

[loganair] 09/2/2024 08:33

MoneyWeek - Will China roar for investors as it enters Year of the Dragon?

It’s been a volatile few years for investors in China, but is now the time to buy as it marks the Chinese New Year? We look if you should invest in China:


China is set to enter the Year of the Dragon, but will its economy finally start roaring for investors?

There will be plenty of celebrations for the Chinese New Year this weekend but there hasn’t been much to cheer about for investors on its financial markets in recent months.

China has delivered poor returns for investors as the country recovers from its strict pandemic policies and wider political and financial concerns.

It has failed to live up to post-pandemic hopes of a recovery boom, with retail sales down, a declining population and a deepening property downturn that has been made worse by the recent collapse of property developer Evergrande.

The country posted GDP figures of 5.2% in 2023, described as sluggish by analysts.

Its latest inflation figures suggest China is stuck in a deflationary period, with its consumer price index down 0.8% annually for January.

It was the fourth consecutive month of decline and the largest since September 2009.

“This bad news could actually be good news,” says Josh Gilbert, market analyst at eToro.

“The result is further evidence that the economy needs support. There needs to be a big lift in demand in order to see China lift out of deflationary territory, and that needs to come in the form of a more aggressive policy stance.

“There is a risk is that we may not see that, which would further dent confidence, hold back spending and ultimately mean the rout in Chinese equities ensues.”

China has already been an absolute shocker of a market to invest in over the past few years, dragged down by property woes and concerns about the financial sector,” says Ben Yearsley, investment director at Fairview Investing.

“It was the value play last year. and just continued to get cheaper.”

SHOULD YOU INVEST IN CHINA?

It has been a tough time to invest in the emerging market.

The Shanghai Composite Index is down 12% over the past 12 months and has declined by 4% since the start of the year.

One of the main risks of investing in China is its ageing society and falling birth rates.

But Vikas Pershad, portfolio manager, Asian equities for M&G Investments, suggests this may provide investment opportunities.

“Counterbalancing the heavy impacts of an aging society will require more than novel gadgets, products and services,” says Pershad.

“It will take better policies on immigration and taxes, more investment in physical infrastructure and changes in mindsets about what an aging citizenry looks like and is capable of accomplishing. It is worth remembering that, under the right conditions, the embers of old age can be reignited.

“That takes inspiration, a little time and some fire. Seems like a job for a dragon.”

Even the top-performing China funds have suffered recently though, due to a number of economic and geopolitical concerns denting investor sentiment, says Darius McDermott, managing director at FundCalibre

The majority of the funds in the sector are down more than 45% over the past three years, according to FE Analytics data.

"Investors are not only concerned about rising authoritarianism in Asia’s powerhouse, but also a whole host of risks looming over China's economy ranging from a prolonged property downturn to deflation risk and slowing economic growth,” adds McDermott.

“Indeed, in November, outflows of foreign direct investment in China exceeded inflows for the first time since tensions with the US escalated.

“The market fluctuations we have seen in Chinese equities just underscores how investors should view China as a long-term play.”

The Year of the Dragon is meant to be typically associated with good luck and fortitude and McDermott suggests now could be a good entry point.

"In 2023, China's domestic consumer and manufacturing confidence stabilised as pent-up demand for goods and services finally began to filter through to the economy,” he adds.

"This process has allowed the Chinese economy to normalise. While some sectors such as real estate continue to face stiff structural headwinds, targeted government stimulus is helping to revive the ailing economy.”

“We are likely to see the key drivers for the economy start firing in the Year of the Dragon. This will include a broadening of services consumption and the continued uptick in tourism.

"China remains a high-risk area, but there is potential for rich rewards for those with a long-term mindset.”

It remains an economic and political powerhouse and there are hopes that Beijing officials will step in to stimulate the economy such as with interest rate cuts, which could provide a boost for the stock market and investors.

“The contrarian in me says it’s a buy,” adds Yearsley

“There's only so long Beijing will put up with market lows and the knock on effect to consumer confidence. It is still the world's second largest economy and a huge stock market. The big issue is what will knock it from the bottom?”

CHINA FUNDS TO CONSIDER:

Yearsley suggests getting close to the Chinese consumer rather than state-backed enterprises.

He highlights the Matthews China Small Companies Fund, which is up 12.81% over five years compared with a 19.27% drop in the Greater China sector.

Its three-year performance is less impressive, down 50.39% compared with a sector drop of 50.85%

While recent performance for many funds has been poor, McDermott highlights that some funds have impressive 10-year returns.

“The fund concentrates on the stocks of companies that are incorporated in China and that are listed as A-shares on the stock exchanges of Shanghai or Shenzhen,” he says.

“The Chinese A-share market is priced in Yuan and was originally restricted to domestic investors, so has a large retail investor base. The market’s size and inefficiencies present great opportunities for active funds like this one.”

Similarly, the Fidelity China Special Situations Fund has returned 120.91% over 10 years.

“Due to its bias towards smaller and medium-sized companies in a developing market, this trust is not for the faint-hearted and investors should be prepared for large fluctuations in the value of their investment,” adds McDermott.

“But those willing to take the risk could be handsomely rewarded over the long term.”

[loganair] 08/2/2024 17:24

China's consumer prices fell at their steepest pace in more than 14 years in January while producer prices also dropped, ramping up pressure on policymakers to do more to revive an economy low on confidence and facing deflationary risks.

The consumer price index fell 0.8% in the year through January after a 0.3% drop in December and more than the 0.5% forecast by economists.

What's more, Hong Kong's Hang Seng relapsed - losing 1.3% and dragged down by a 6.1% decline in Alibaba after the internet giant missed quarterly revenue estimates.

[loganair] 08/2/2024 07:59

In Beijing's biggest wholesale food market the butcher blocks are quiet. The lead up to the Lunar New Year should be the busiest season, but pensive consumers are holding back. Thursday's China price data reflects their reticence.

Food prices were the major drag pushing consumer prices down 0.8% on an annual basis for January, the biggest decline since 2009.

Weak Pockets:

The butchers of Beijing were downcast and well may be investors -- if consumers are cutting back on something as age old as pork over the festivities, what are they substituting? What else are they cutting back on?

China's stock markets went into the week-long break with a whimper, though at least off five-year lows broached earlier in the week.

[shano2] 07/2/2024 14:05

Turnaround time for China - Here's how to invest. (JCGI mentioned)

[loganair] 07/2/2024 10:31

Failed measures:


Regulators have announced further curbs on short selling and state investors said they were expanding their stock buying plans. Then again, threatening to jail malicious short sellers may not be the best way to win investor hearts and minds.

The common refrain from analysts is that investors have little faith in the authorities after months of failed measures, and the stock market won't be fixed until the economy is.

So far on Wednesday, China's blue chip index is up a restrained 0.4%, while Shanghai has added 0.9%. Note that Beijing likes to spring new steps on markets late in their trading day, so there's still time for a surprise.

[loganair] 06/2/2024 08:32

China shores up stocks:

In China, moves from authorities to shore up battered Chinese stocks seemed to have put a floor under its markets, at least for now.

The country's state fund Central Huijin Investment said on Tuesday it has expanded its scope of investment in exchange-traded funds (ETFs), according to a statement on its website.

The so-called "national team" of Chinese state-backed investors poured $17 billion into index-tracking funds last month and were piling in on Friday and Monday as markets fell, analysts said, although investors doubt that will offer sustained support.

Also on Tuesday, China's securities regulator said it will guide institutional investors to raise stock investments and encouraged listed companies to increase share buybacks.

China's blue-chip index rose more than 1.5% on Tuesday, while the Shanghai Composite Index rose nearly 1%, rebounding from Monday's five-year low.

[loganair] 04/2/2024 11:42

Even though just coming up to the Chinese New Year when food prices normally rise, they are actually falling.

They're are not only falling, the demand, the amount of food being sold is also falling which strongly shows how little money the Chinese consumer now has to spend.

I still solidly stand by my forecast that JCGI will continue to fall to between 100p and 150p which is good for the long term investor who will be able to pick up stock on the cheap when nobody loves Chinese shares as they are out of fashion to own.

[loganair] 26/1/2024 09:59

My thoughts are this trust could drop to 100p/150p some time during in 2024 then with in 10 years see the share price back up to 500p/600p which over the long run share holders could see gain of 50% per year if able to buy in anywhere near the bottom.

[loganair] 26/1/2024 09:50

Hugh Hendry said in and interview the other day that he predicts the Chinese Yuan to fall from 7.3 to the USD to 9 in the next couple of years which will lead China to being the epicentre of the next crises.

The final stage will be the Japanese so desperate for the USD that the Yen could easily fall from the current 150 to the USD to 300.

[dennisbergkamp] 25/1/2024 10:08

Or maybe you won’t see £1 and we’re about to move on up

Let’s hope!

D

[loganair] 24/1/2024 11:59

U.S.-based Yardeni Research believes China is at the start of a "major debt crisis." It notes Chinese bank loans have soared eightfold by $28 trillion since December 2008 to $33.4 trillion last month. In contrast, U.S. bank loans have doubled to $12.3 trillion over the same period, it says.

[loganair] 24/1/2024 11:57

ROCK-BOTTOM SENTIMENT:

China stocks started off the day with a bang but enthusiasm soon fizzled out, leaving the blue-chip index still rooted near five-year lows and the Shanghai Composite languishing near its lowest since 2020.

Hong Kong's Hang Seng Index was the outlier and gained 1%, boosted by Alibaba on reports that Jack Ma has been scooping up the e-commerce giant's battered shares.

Sentiment on China remains rock-bottom and the collective shrug by investors to the report of a mooted $278 billion rescue package underscores the challenge ahead for Chinese authorities.

[loganair] 23/1/2024 22:28

The performance of Chinese stocks on Tuesday was not particularly strong - Hong Kong stocks rallied much harder - but any rebound has to start somewhere.

Authorities and China bulls will be hoping this has legs. And it might if policymakers can mobilize about 2 trillion yuan ($278 billion), mainly from offshore accounts of state-owned enterprises, as part of a stabilization fund to buy shares onshore through the Hong Kong exchange link.

By some measures, these markets are attractive. Valuations are cheap, indexes are the lowest in years, and if authorities can put a floor in, then a fair bit of the capital that has fled China and Honk Kong lately could be tempted back.

The CSI 300 index's rise of 0.4% and the Shanghai Composite's rise of 0.5% on Tuesday were not big by most measures. But they were the biggest rise in almost a month, and enough to lift the indexes up from five- and four-year troughs, respectively.

In Hong Kong, the benchmark Hang Seng and Hang Seng tech index jumped 2.7% and 3.7%, respectively, for their best days in two months, but they too are coming from low bases.

The Hang Seng is flirting with levels it was at when Hong Kong returned to China from Britain in 1997. Before Tuesday's spike, Hong Kong tech stocks were down 20% this month.

Investor sentiment towards China has picked up following a report that Beijing is considering a hefty package to support its ailing markets, and Wednesday's trading activity will give some insight into whether it will be fleeting or something more lasting.