Share Name Share Symbol Market Type Share ISIN Share Description
Jpmorgan Chinese Investment Trust Plc LSE:JMC London Ordinary Share GB0003435012 ORD 25P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 351.50 347.00 356.00 - 0.00 01:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Equity Investment Instruments 0.0 2.0 2.5 142.9 264

Jpmorgan Chinese Investm... Share Discussion Threads

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China could surpass the United States as the world's largest economy this year, sooner than widely expected, the Financial Times reported Wednesday citing the world's leading statistical agencies. The US, which has been the global leader since overtaking the UK in 1872, remained the world's largest economy in 2011 but was closely followed by China, according to figures compiled by the World Bank's International Comparison Program. Most economists previously thought China would overtake the US as early as in 2019. "With the IMF expecting China's economy to have grown 24 percent between 2011 and 2014 while the US is expected to expand only 7.6 percent, China is likely to overtake the US this year," the report says. The figures "revolutionize the picture of the world's economic landscape, boosting the importance of large middle-income countries." India is the third-largest economy, followed by Japan and Germany. Russia, which accounts for more than 70 percent of the CIS, comes sixth and Brazil, which makes up to 56 percent of Latin America, is ranked seventh, the report said, citing the ICP survey.
China looks fragile: UK investors in the Shanghai Composite would have tracked the index 2.4% lower this week as the yuan slipped against the pound. The index has fallen 7% in sterling terms this year and is showing up red in all time periods in our table as fears over the country's slowing growth rate increase. Lots of fund managers we speak to though think China's economy is fundamentally sound although it is going through a difficult period.
I used to invest monthly in both JMC and JII (JP Morgan Indian Investment Trust). As I wasn't so happy with India I decided to stop my invesment in both JMC and JII and invest the whole monthly amount in JAI (JP Morgan Asian Investment Trust) which means I still keep my 50% investing in China, Hong Kong and Taiwan, vastly reducing my exposure to India to around 10% while giving me exposure to Korea, Thailand, Singapore, Indonesia and Malaysia.
By Ed Bowsher China's future may be brighter than anyone expects – it's time to buy lot of people are negative on China these days. The bears worry that China relies too much on investment, and not enough on consumer spending. If it wants to continue to grow sustainably, consumers need to pick up the slack. Otherwise there could be an almighty crash. But research from a couple of Chinese academics suggests that Chinese consumers are in fact spending significantly more than official figures suggest. If they're right, it means that the Chinese economy is less likely to 'hit the wall' in the next few years. That means, investing in China is less risky than many people think. And that leaves the Chinese stock market looking pretty cheap... Why over-investment can lead to crashes: If you're wondering why too much investment might lead to a crash, it's because you get diminishing returns if you invest too much. If you build roads and railways that no one ever uses for example, then they won't generate any revenue. So you've spent a load of money on a project that will never cover its costs, let alone generate a return. If this continues, there will come a time when businesses realise it's pointless, because they're not getting any return on their latest investments. When that happens, workers in construction and heavy industry will get laid off. That means rising unemployment and recession. There's also the risk to the banking system if all of these dud projects have been funded with borrowed money. If you look at China, it's not hard to find signs of over-investment. The country is famously dotted with 'ghost cities'. There are also some plain weird follies, like this giant copper-plated puffer fish. So the question is: can China achieve a relatively smooth and pain-free transition from an investment-led economy to one based more on consumption? Could the future be brighter for Chinese consumers? Well, if you believe the official Chinese government figures, it's a massive challenge. Household consumption comprises just 34% of China's GDP, according to official figures. That's way lower than the UK, on 65%, and the US on 70%. The sort of dramatic shift in economic focus needed to get the Chinese consumption figure up from 34% to, say, 50%, could easily end in tears. However, an article in yesterday's FT gives grounds for optimism. It cites research from two Chinese academics, Jun Zhang and Tjan Zhu, which suggests that Chinese consumption has been under-reported for some time. Indeed, Zhang and Zhu believe that a more accurate figure for household consumption would be around 45% of GDP. How do they get to this figure? Well, arguably it's by taking a more realistic view of corruption in the country. High earners prefer to hide the true extent of their consumption from government bureaucrats. Some even avoid being surveyed altogether. This strikes me as a very plausible argument. And if it's true, it suggests that the chances of a big Chinese crash are lower than many people realise. Granted, even a 45% figure for household consumption isn't really sustainable in the long-term. But it's a much better place to begin a transition from, than the 34% official figure. China looks cheap: Don't get me wrong, there's still a real risk that China could crash. But the point I'm making is that the risk is lower than widely thought. And that matters, because right now, Chinese share prices look very cheap on many measures. That means they are pricing in a lot of potential drama. For example, look at the table below, which compares the value of a country's stock market to its GDP. CountryGDP ($ trillion)Total market/GDP ratio.Historic minimum.Historic maximum USA......16.66................110.30%................35%..............149% UK........2.42................132%...................47%..............205% Brazil....2.38.................50%...................26%..............108% China.....8.16.................48%...................45%..............662% Italy.....2.06.................14%....................9%...............45% Just to explain – the total market/GDP ratio is just the value of the country's stock market expressed as a percentage of the economy. As you can see, the US is currently on the high side compared to history (the total value of the stock market is a little bit higher than the value of the economy, compared to a historic maximum of 149%). The UK is somewhere in the middle of its historic range, and Brazil is on the low side. But China – with a stock market valued at half of GDP - is only just above its historic low. (As is Italy, another market we've viewed as cheap for some time). I have to say, this table certainly increased my own interest in investing in China. What's more, Pictet Asset Management says that we're now seeing early signs of improved corporate governance in the country. How to profit from a Chinese rebound: So what's the best way to profit from a smooth transition to a consumption-based economy in China? Well, the lowest risk approach is to invest in Western companies that do a lot of business in China. I'm thinking of consumer goods giants such as Diageo (LSE: DGE) or Unilever (LSE: ULVR). Or you could take a bet on growth in Chinese tourism. The number of visitors to Thailand has doubled over the last year, according to the China Market Research Group. And I'm sure that we'll see many more Chinese tourists here in Britain in the future. InterContinental Hotels Group (LSE: IHG) looks well placed to benefit as it has a decent estate of hotels in China, plus many more in other major tourist destinations. If you have an appetite for taking more risk – and have more of an eye for a potential bargain – you could buy shares in Chinese companies themselves. The danger here is you may not trust the Chinese government to treat overseas shareholders fairly – and you'd be right to be cautious. Still, I quite like the JP Morgan Chinese Investment Trust (LSE: JMC). It's been running since 1993 and has managed to avoid some of the riskiest Chinese shares. Moreover, 45% of the fund is invested in shares listed in either Hong Kong or Taiwan where the governance should be better and the risk lower. It's also trading on a 13% discount, so in effect you're getting £1 of assets for 87p. If sentiment changes towards China, not only could the underlying shares rise, but the discount will probably close too – boosting your returns.
Its over 30p behind its net asset value now. Certainly a good buying opportuntity
Here we go again, discount close to an all-time high, at 15% for JMC and 6.5% for FCSS. Discount gap between the two trusts has never been so large, topping up in JMC today.
So JPM IT Chinese (157.5p) and Fidelity SS China are both trading again towards the bottom of their respective discount-to-NAV ranges. China's currency reserves have been balooning again; I wouldn't be surprised if the peg moves slightly upwards, with positive implication for these two £-priced investment trusts. :-)
Moving forward.
Can anybody please explain why people are paying 11.5p for warrants that entitle them to buy JMC for 168, when that is the current price already? Are they just completely convinced that the price will be at least 200p by May?
Kingsize, Well, at the time it was, but it has shoot-up since. Now at 6.5% on the mid if we take Morningstar's forward data, which is still a bit behind the finger-in-the-air 5% historic discount. Pleased though.
Currently on a 4% discount to NAV. I don't regard that as "well behind" at all. If it keeps on going at this rate we may even see an incentive to convert the subscription shares.
Couple of interesting articles
Yes your right, this is on a good run but still well behind its net assets value.
Why on earth did the stock trade back at 11% discount?
China-Russia trade grew 11.2 percent in 2012 from the previous year to $88.16 billion, the Chinese General Customs Administration reported on Thursday. Trade with the European Union, China's largest trading partner, declined by 3.7 percent last year to $546.04 billion while trade with the United States, China's second-largest trading partner, grew by 8.5 percent to $484.68 billion. China's trade with the Association of Southeast Asian Nations (ASEAN) grew by 10.2 percent to $400.09 billion. Japan ranked only fifth in trade with China in 2012, ceding its fourth place to Hong Kong. China-Japan trade fell 3.9 percent to $329.45 billion. China's foreign trade increased by 6.2 percent in 2012 to $3.87 trillion, with exports growing by 7.9 percent to $2.05 trillion and imports rising 4.3 percent to $1.82 trillion.
It was all talk about reblancing the economy towards domestic consumption, it looks like that the industrials and even property developpers are bouncing back whilst consummer staple stocks are taking the Shangai Composite Index down. Good indus PMI numbers this WE. We'll have to wait longer for a stimulus - if any. Meanwhile, the rest of Asia China's trading partners see their market indices flying off on the back of these numbers.
Took small profit in FCSS at 79p from 75p (the trust trades at 2% discount now) and switched to JPM China at 133.5p, whose discount to nav increased slightly over the last three weeks whilst FCSS's shrunk. Increased the overall exposure to China. Good numbers this am on inflation, industrial production and retail sales, if the official Chinese data are to be believed.
China economy shows unexpected signs of weakness - China's economy stuttered unexpectedly in April with lower-than-expected output data, softening retail sales and easing prices suggesting economic headwinds might be stiffer than thought, requiring more robust policy responses to counter them. Industrial output expanded at its slowest annual pace in April in nearly three years, while fixed asset investment growth dipped to its lowest in almost a decade. The weak growth in fixed asset investment signalled that the impact of a prolonged credit crunch in China's real estate sector, and of flagging demand from export markets, was more severe than first thought. In fact, new loans in April were well below what most market observers had expected, helping to explain continued tight conditions for businesses and developers despite the gentle easing espoused by Beijing. "The data suggests further deceleration of the economy at the start of Q2, with all segments of private demand weak," Dariusz Kowalczyk, economist at Credit Agricole-CIB in Hong Kong, said. "This increases the pressure for policy stimulus, both fiscal and monetary. In particular given lower inflation, we believe that there is room for, and need for, such policy easing."
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