Jpmorgan Chinese Investm... Share Discussion Threads

[hectorp] 05/12/2007 10:41

The chart is at an important spot. If it can consolidate here it loses the downturn of recent weeks. We need a few days of Market Stability.

[hectorp] 04/12/2007 16:53

, todays date Tuesday

Ten Largest Investments

JPMorgan Chinese Investment Trust
China Mobile 9.9
JF China Pioneer 'A' Share Fund 6.9
China Life Insurance 4.8
Cheung Kong 4.5
Hong Kong Exchanges and Clearing 3.8
China Construction Bank 3.7
CNOOC 3.3
China Merchants Bank 3.1
China Shenhua Energy 2.9
Hon Hai Precision 2.6
45.5

[apetley] 04/12/2007 03:23

Pasted from the advfn news earlier.
Nice figures and reason to keep something in JMC I think.

China 2007 GDP growth seen at 11.6 pct, CPI at 4.5 - think tank

BEIJING (XFN-ASIA) - China's gross domestic product is expected to rise by
11.6 pct in 2007, while consumer price index growth is projected at about 4.5
pct, according to the Chinese Academy of Social Sciences (CASS), a
ministry-level research agency.
CASS said in its annual blue book on the economy that overall fixed-asset
investment in 2007 is seen rising 21.6 pct year-on-year, while real retail sales
are expected to rise by 12.2 pct.
The trade surplus is forecast at 260 bln usd in 2007, with exports rising
25.1 pct to 1.212 trln usd.
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[knowing] 02/12/2007 23:27

China Nov PMI rebounds to 55.4 on strong investment - CFLP




BEIJING (XFN-ASIA) - The China manufacturing purchasing manager's index
(PMI) rebounded to 55.4 in November after dipping the previous month as strong
investment activity pushed up raw materials prices, the China Federation of
Logistics and Purchasing (CFLP) and National Bureau of Statistics said.
The headline index rebounded to 55.4 last month from 53.2 in October. The
index stood at 56.1 in September.
A reading above 50 indicates expansion in manufacturing activity while a
reading below 50 represents a contraction.
The results compare with the latest Xinhua Finance/MNI China Business
Sentiment Survey, released on Friday, which showed conditions deteriorating
across the board even if most indexes remained in positive territory.
The CFLP said in a statement that the input prices index hit a two-year high
at 70.1 in November, climbing for a fourth straight month and reflecting strong
upwards pressure on raw materials prices.
China's producer price index growth rebounded to 3.2 pct in October from
September's 2.7 pct, according to the government data released last month.
"China's investment growth picked up in October, especially property
investment. That resulted in accelerating price growth for steel, cement and
building materials," said Zhang Liqun, a researcher with the Development and
Research Center, a think tank under China's State Council, in an accompanying
statement.
The production index rebounded to 60.1 in November from October's 54.9 on
the back of rising demand.
The new order index also rose, climbing to 59.4 in November from October's
56.4 while the index measuring export orders stood at 53.8, edging up slightly
over October's 53.6.
The raw materials inventory index rose to 50.4 in November from October's
48.5.
China first reported PMI data in June 2005. The indicators are jointly
compiled by the National Bureau of Statistics and the CFLP.

[hectorp] 02/12/2007 12:48

Yes I agree very strongly with that view. And AMerican Invstors and Fundds should be buying China like there is no tomorrow with the expectation of a rise in China Interst rates to 4.5% in coming months.
Also the Yen , or Remnimbi? being more valuable means higher ANV's for CHinese shares . This has to be balanced byt a possible lower growth rate ( to 9% maybe instead of 11?)
What is good is China is getting to grips with Inflation and thus stabilising the monolithic growth machine .
Lets hope she succeeds. The cost of new plant and mining development for example rose 10% in 2007.

[nerja] 02/12/2007 11:44

BEIJING (XFN-ASIA) - The upper limit of inflation that China's economy can tolerate is 4 pct, according to Yu Yongding, a former member of the monetary policy committee of the People's Bank of China, in a report carried by the the official Shanghai Securities News

"Four pct inflation is already the upper limit China's economy can bear... and if it is above that level, (the economy) is sending a clear signal to the central bank to adopt contractionary policies and bring down inflation," Yu told a financial forum in Beijing.

Yu said China's highest priority in setting macroeconomic policy should be to control inflation, which he considers more important than exchange rate stability.

China's consumer price index (CPI) rose by a decade-high 6.5 pct year-on-year in October. It rose 4.4 pct in the 10 months to October.

"China has to take measures to keep inflation under control," Yu said.

Yu proposed that China's central bank increase interest rates to effectively check the inflationary trend, rather than be overly concerned with the China-US interest rate differential.

He projects the interest rate differential between the two countries to narrow over the long run and even disappear within a certain, unspecified period.

China traditionally keeps a 3-percentage-point interest rate gap with the US to prevent speculative capital inflows from growing too massive.

Yu said the central bank should make frequent smal interest hikes to drive the nominal interest rate to positive territory as soon as possible, and continue to increase reserve ratios for commercial banks and issue more central bank bills to mop up liquidity.

The People's Bank of China has raised its benchmark one-year deposit rate five times this year to 3.87 pct, and also raised the bank reserve requirement eight times so far this year.

He also proposed that the central bank refrain from interfering in the forex market and allow the yuan to appreciate more rapidly and by larger margins, while taking tougher measures against cross-border capital movements.

Yu said the government should not give up the option to "directly intervene in the stock market" during highly volatile situations, without elaborating.

He also said China should not make the yuan freely convertible before market-based mechanisms are fully ready, adding that he does not expect the yuan to be freely convertible "within five years."

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Currency play again.

[hectorp] 30/11/2007 19:09

Very intersting rodgerbridge.
Clearly the Chinese are not helping the US to easily create yet more value in their debased paper. Millions of American investors will also be wise to investing in a Yan-based market. Hedge Funds could be big buyers of our fund when its again very clear this is also a currency play.

[rogerbridge] 30/11/2007 18:49

Bought some of these earlier in the week after banking profits a month ago.
We import some goods from China, we had two quotes in today for goods, one priced in Euros and one in GBP £. Over the past 3 years all quotations have been in $.

[hectorp] 30/11/2007 17:19

Six pence increase in NAV almost 4% in a day - very good work JMC.

Lets see the US closing Blue tonight. We have needed these 3 days to get out of the nervous falling market phase again. A Blue closse today would really settle the weekend press and help us start well on Sunday night.

[mart] 30/11/2007 12:49

Nice increase in NAV.

[mart] 30/11/2007 09:02

Added some more

[hectorp] 29/11/2007 18:13

I admit that Hong Kong ( about 30% exposure to our fund) was a main reason for investing.
There will increasingly be a currency play favouring these Yuan based investments. I agree the dollar will fall against the Yuan ( 5% revaluation at least soon) not sure how the sterling will work out. When growth slows in a neconomy due to its starting to show maturity, eg in china, slowing a bit in 08, their currencies appreciate in the short term.
I believe our dilema here is whether we will gain 15, 20, or 30% in 2008.

[nerja] 29/11/2007 11:50

This part is interesting,

HSBC is predicting that interest rates will fall far lower than the market expects, from 5.75 per cent at present to 4.5 per cent by the start of 2009, while sterling is tipped to tumble against the dollar to below $1.80.

If that happens then the yaun and china shares could have a double effect on JMC shares.

[nerja] 29/11/2007 11:32

Hectorp,

If thats right sorry mate for my 100%,but it then points to the recent drop being well over done, even todays rise does not go as far up as the indices, it will be interesting to see the nav spread tomorrow, its got to be getting larger.

[hectorp] 29/11/2007 11:20

I'm afraid it is, the max gearing is +10%. So much for our 100%. However in such markets with their volatility you can see 100% gearing could be disastrous.
- THe Main Markets - we need the US not to stall again now, we had a good two days, and we dont want to go back down now.

[nerja] 29/11/2007 11:17

aklasoa,

I cant find out anything at JPmorgan, i dont know, i am having trouble getting onto trustnet they seem to have more info than anyone. Jpmorgan state they can go to 110% on the gearing, there is nothing from results to work out what loans they have, this is interesting and maybe you are correct and my interpretation of the gearing is wrong. I cant for the life of me get on www.trustnet.com which should give more info.

[aldasoa] 29/11/2007 10:46

nerja, you mention that gearing is 100%, but the definitions of gearing differ slightly but crucially. I would be very surprised if this fund were borrowing funds equal to its own assets to give the factor of 2 that you refer to. More likely, the fund is borrowing 2% of its assets, i.e. the 102% you quote less 100.

[hectorp] 29/11/2007 08:23

Well, however the Trusts work, and I've been investing in them for 23 years or more, I'll 'let' the market dictate the underlying nav which is I think what Douggy is saying.
Great bounce up last night, I can now appreciate the 102% gearing factor.. so a return to even 'old' highs should see 30-40P back on the shares..

[nerja] 28/11/2007 19:43

Douggy B,

The other major factor is GEARING, which on this at the moment is 102% which means double movements to the indices, which as the latest drop has proved, goes both ways. Hopefully tomorrow we may see 130p again if there is follow through in asia.

[douggy b] 28/11/2007 18:31

Hectorp

You don't seem to know how Investment Trusts work.

The NAV is the net asset value and is based upon the investments held. The investments held are valued at their market price. As the investments held by JMC are entirely listed on the chinese / HK/ Taiwanese exchanges the NAV moves up and down with the value of the underlying investments and will largely mirror the movement on these exchanges (difference relates to composition of portfolio / index & currency movements).

The discount to the NAV changes as a result of the demand for the IT shares, perception of risk of market invested etc.
PE for IT are irrelevent.

'Weakness' as much as it exists in an IT is reflected in the discount or premium to NAV.
JMC will not go up (or down) without a movement in the value of it's portfolio of investments.


You can't trade ITs on short term 'weaknesses' in share price.
The time to buy IT is when the discount is widening (or relatively high) and the underlying market is rising. Or if you believe the underlying market will rise.
The time to avoid buying ITs is when the price is at a premium to NAV.

[hectorp] 28/11/2007 08:53

Apparently China still expects 10% growth in 2008!
NAV however, is not fixed and can always be downgraded if risk to the underlying assets is perceived to be higher . For example a sector on a P/E of 20, can become a sector with a P/E of 10 ( eg BAnking issues). YOu dont want your trust to be full of Banks at the moment. I think its well spread however.
But it pays to have a cynical eye on markets just now.

I bought in a few days ago with a view to adding on weakness .. which I further expect. But if not, I'll be very happy to sit on the ones I have.

[apetley] 28/11/2007 08:41

I would be very surprised to see any major further falls but who knows in the post sub-prime world.
A 25% fall does seem overdone to me as evidenced by the still substancial discount to NAV so I think unless the markets go into meltdown again we are more likely to see some modest gains in the near future.
I would be very surprised to see any spectacular movement northwards like we had earlier this year but who knows? We can live in hope.
The Chinese gvnt do seem to be trying to put a slight brake on their economy too so theres another sign we may have to put up with slower returns.

[umitw] 28/11/2007 08:20

down 25% already, do you think it will go further?