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
  4.00 1.25% 325.00 323.00 327.00 327.00 327.00 327.00 52,480 16:35:29
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Equity Investment Instruments 0.0 3.5 4.3 75.2 244

Jpmorgan Chinese Investm... Share Discussion Threads

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Some fascinating stuff there, loganair : many thanks for posting it.
China beyond the exports boom By Graham Smith: For China, the year ahead looks set to be one of reform. With the government no longer pulling out all the stops to achieve the highest possible growth rate, there should be a bit more room for an overhaul of state-owned enterprises and the financial system. Will higher quality, but slower growth bring with it better opportunities for investors? That China missed its 7.5% growth target last year, albeit, by just 0.1%, is encouraging in one sense at least – it gives more credence to the government’s official position that it’s targeting the quality of growth over growth itself. That means less credit-fuelled government spending and investment and a stronger consumer economy - something President Xi Jinping describes as China’s “new normal”. The question for investors is whether China’s new growth model - higher quality, but less of it - will nurture better opportunities. China’s stock market might appear to reflect some confidence in that direction. While there has been a marked increase in volatility since November, it has performed strongly since last summer. Part of that may have been down to expectations that a growth slowdown would lead to lower interest rates. The People’s Bank of China cut rates last November and reduced bank reserve ratio requirements earlier this month (the amount of cash banks have to hold to set against the loans they’ve made) to help put a floor under growth. Steps towards improving the operating efficiency of state-owned enterprises (SOEs) have been welcomed too. In the past, SOEs have been at the centre of the debate about the inefficient use of financial capital, an increasingly sore point in a slower growth economy. Not that all of China is slowing. Far from it, in fact: domestic consumption has continued to outpace the economy as a whole, with total retail sales growing by 12% last year4. That reflects deep shifts underway in society, in terms of changes in lifestyle, higher disposable incomes and government-led urbanisation. One of the things in China’s favour, in the realm of technology especially, is “latecomer advantage”. Technologies from the west can be replicated without the need for years of trial and error – they can “leapfrog̶1; the costly, but necessary stages weathered by innovators and early adopters. This could mean, for example, a consumer jumping straight to a smartphone, without ever having had to be tied to a home-based PC. For retailers, that removes an important obstacle to their holy grail – consumers that can shop anytime, anywhere. That seems to be happening in China, with online sales rocketing by almost 50% last year. Unsurprisingly, China’s largest online retailer, Alibaba, which achieved the world’s largest ever share sale in 2014, broke online records on Singles Day last November. That’s not to say consumer-related companies are enjoying universal success. Unilever, for example, reported a 20% fall in Chinese quarterly sales last month, blaming trade destocking of its personal care and homecare products. Then China’s automotive industry association said that car sales fell by 1.1% in January, despite another record month of production. Numerous risks to investing in China in the midst of a broad slowdown remain and that’s reflected in valuations. Even after the stock market’s surge latterly last year, the MSCI China Index trades on a multiple of just 10.5 times the amount earned by Chinese companies over the past 12 months7. That represents a substantial discount to the rating applied to world equities, which have to operate in a much slower growth environment. One risk is that the central bank may find it difficult to cut interest rates much further, even if economic conditions demand it. The prospect of higher rates and a strengthening US dollar threatens a shift of international funds westwards out of China. There’s also the risk that a weak property market could start to have a bigger impact on consumer spending. In the longer run though, and with the benefit of hindsight, today’s valuations could look to have been excessively conservative. If today’s growth slowdown urges the government to push through reforms that, ultimately, galvanise consumption and household incomes, it may yet turn out to have been a critical step in the development of a broader and deeper consumer economy.
Profit from this previously off-limits superpower: Now, unlike the other three survival actions, this one is fairly high-risk. But by the same token it could also land you some major rewards. Right now, we're very bullish on China, which probably seems strange to a lot of mainstream investors. After all, China's economy is slowing. During 2014, China's GDP grew at its slowest pace since 1990 – 7.4%. So why are we recommending you invest in a slowing economy? Well, broadly speaking the Chinese economy is actually doing better than most people expected. China is keen to change the focus of its economy. It has been too dependent on building as much stuff as possible, and keeping unprofitable factories afloat. Now it wants to move towards being an economy that's driven by demand from domestic consumers, rather than overseas buyers or huge road-building projects. And the progress on this front is promising. And there are two, highly compelling, reasons we're backing China right now. Two reasons to invest in China: #1. Chinese stocks are cheap – massively cheaper than they were when they last peaked in 2007. And one good way to make money in markets is by buying things when they are cheap, and selling when they get expensive. (That's why we think it's such a bad idea to hold US stocks right now.) As analysts at ETF Securities recently put it, it's: "not often that the stock market of one of the world's largest and fastest growing economies is trading at one of the world's lowest valuations." #2. The Shanghai-Hong Kong Stock Connect. Essentially, this is a way for foreign investors to get more access than ever before to mainland Chinese stocks (known as A-shares), via Hong Kong. This 'connect' has now opened. And that means a lot more money is pouring into Chinese stocks – because a lot of people want to be positioned to benefit. It makes now look like a sensible time to get some exposure to China for yourself.
China – new order aims for slower and better growth with the closure of inefficient state-owned enterprises It is an old saying with the Chinese, look at what they do and not what they say Beijing calls for addiction to growth driven by industrial exports, infrastructure and real estate to stop. Job creation needs to be led by private enterprise and even foreign enterprise. This may lead to the privatization or part sale of state owned businesses. Corruption is being routed out, though it may also serve to consolidate President Xi Jinping’s power. We still expect to see China investing in huge infrastructure projects around the world as part of their effort to win new political allies with a new $50bn canal to cross Nicaragua to rival the Panama Canal. China to extend subsidies on electric vehicles up to $8,800 per vehicle up to 2020. The move is aimed at reducing pollution and reducing China’s oil imports.
Apart from the two monster, US$725 billion gas deals - Power of Siberia and Altai pipeline - and a recent New Silk Road-related offensive in Eastern Europe, virtually no one in the West remembers that in September Chinese Prime Minister Li Keiqiang signed no fewer than 38 trade deals with the Russians, including a swap deal and a fiscal deal, which imply total economic interplay. A case can be made that the geopolitical shift towards Russia-China integration is arguably the greatest strategic maneuver of the last 100 years. Xi's ultimate master plan is unambiguous: a Russia-China-Germany trade/commerce alliance. German business/industry wants it badly, although German politicians still haven't got the message. Xi - and Putin - are building a new economic reality on the Eurasian ground, crammed with crucial political, economic and strategic ramifications.
By Selin Bucak - Capital Economics - Calls for 2015: China will avoid a crash 'China to slow a little further, but avoid a 'hard landing'. GDP growth will continue to slow, rather than rebound - as some expect. In particular, the property sector has not yet bottomed out. Nonetheless, policy makers still have plenty of tools to prevent a crash, and reforms are proceeding well.'
By James Carthew director at Marten & Co on Dec 22, 2014 I started off 2014 by saying I found it hard to forecast what was going to happen to markets over the course of the year. For China, worries grew over the scale of credit growth within the economy and some suggested the country’s property bubble would burst and its shadow banking system implode in 2014, with a major adverse effect on the economy. GDP growth rates slowed too. Forecasts were for about 7.5% growth at the start of the year and many commentators revised this downwards as the year progressed. Ignore the headlines: Dale Nicholls, manager of FCSS, is more sanguine however. He thinks it is easy to get fixated about headline GDP numbers and falling property prices and thereby miss the big changes that are going on in China’s underlying economy. He says that even if growth is slower than in previous years, it is still growth and much faster growth than is prevalent in most of the rest of the world. Within this context, well managed companies have ample room to grow. He thinks those serving the needs of China’s burgeoning consumer market are particularly well placed. Nicholls is enthused about the potential impact of social reforms in China. He believes changes to the hukou system of household registration (which effectively governs where you are allowed to live within the country) have the potential to dramatically improve the lives of around 100 million workers. These people, who have been encouraged to migrate to cities in search of work, will now get access to social welfare and healthcare benefits currently denied them. Robertson thinks these people will save less and spend more, boosting consumer demand. Then there is the relatively low rating of Chinese companies compared to their developed market peers. At the end of October, the price to earnings ratio on the MSCI China index was just 9.5 compared to a multiple of 18 for the S&P 500 in the US. In the long run it seems nonsensical that this disparity will persist. Deregulating who can invest in the domestic Chinese stock market (alongside allowing Chinese people access to international markets), could help narrow the gap. So maybe things in China aren’t as bad as feared. Its stock market has made decent gains year to date – the MSCI China is up 13.3%, which is quite respectable and ahead of the wider Asian region. FCSS though has outperformed the index by some margin – how did it manage this? One big winner this year has been its holding in Alibaba. FCSS took a stake in this while it was still unquoted and reaped the rewards when Alibaba (BABA.N) floated in September – the largest initial public offer (IPO) ever. Pre-IPO investments have fallen in and out with shareholders of investment companies over the years. The thing is they are great when they work but a nightmare when they don’t. The sector is littered with examples of funds that took stakes in something that was about to float but never made it and ended up being a time consuming and hard to explain drag on returns for years after. When they work, however, they can work very well. At the opening value of Alibaba, FCSS was sitting on a stake worth 4.6 times its initial investment. Robertson has taken some profits but Alibaba was still the second largest holding in the portfolio at the end of October. Alibaba is just one of a number of internet-related consumer stocks that feature heavily in FCSS’s portfolio. The largest holding is Tencent (0700.HK) (messaging, social networking, e-commerce and gaming) but BitAuto (BITA.N), an online marketplace for cars; and Netease (NTES.OQ), search engine and online gaming company, both also figure in the top 10. IT is the largest sector exposure, 27.5% of the portfolio at the end of October – double the weighting in FCSS’s benchmark. The largest overweight is to consumer discretionary stocks (23.5% against the index’s 5.3%). The corresponding underweight is to financials, where Robertson is worried about holding banks given the potential for non-performing loans, and telecoms, where he doesn’t hold China Mobile (0941.HK), the second largest stock in the index after Tencent. I suppose the big question is whether this good run of performance is sustainable? Some of the larger holdings trade at quite high P/E multiples and they will need to keep delivering growth to maintain these ratings. While there could easily be some major wobbles in the Chinese stock market over 2015 – especially if deleveraging the economy proves less easy than the authorities hope – the long-term picture still looks rosy. The scale of the opportunity for successful Chinese companies is as vast as it has always been. Above all, I think FCSS’s discount is too wide. This might reflect general investor nervousness about the state of equity markets but it seems overdone to me. FCSS has been quite good at buying in stock in the past and, if investors aren’t yet persuaded of the merits of the fund, perhaps they should pick up the pace of these again.
China slowdown: time for investors to climb on board? China's economy is slowing. The latest figures confirm it. During the quarter just gone, China grew at its slowest pace since 2009. And it looks like annual growth will be the weakest since 1990. It's hardly as if this is unexpected. People have been predicting a slowdown for China at regular intervals over the past decade. But although it doesn't sound like it, this slowdown could be good news for China – and investors in the country… China's gross domestic product (GDP) grew by 7.3% in the third quarter of 2014. That was the slowest performance since the aftermath of the financial crisis in 2008, and roughly in line with what analysts had expected. The main thing holding back growth is the bursting property bubble. In the first nine months of the year, sales fell by 10.8% compared with the same period in 2013. Property prices are falling, and while investment in real estate is still growing, it's at a much slower pace. China's slowdown is one of the main reasons behind the slide in commodity prices and might have some way to go yet, partly because many of those commodity stockpiles were being used as collateral for loans, rather than to actually build anything. It's also bad news for resource-dependent Australia. The Australian dollar has dropped a long way off its perch since the days it was running neck and neck with the US dollar. But I wouldn't be surprised to see it fall further from here in the longer term. That said, broadly speaking the economy is doing better than most people had expected. China is keen to change the focus of its economy. It has been too dependent on building as much stuff as possible, and keeping unprofitable factories afloat. Now the desire is to move more towards an economy that's driven by demand from domestic consumers, rather than overseas buyers or huge road-building projects. And the progress on this front is promising. As Julian Evans-Pritchard of Capital Economics points out, wages are rising faster than GDP growth, which means "that the average household is enjoying an increasing share of the dividends from growth". That means "consumption is holding up relatively well". In other words, even though "growth has slowed, it reflects a welcome rebalancing away from excess investment in certain sectors… and is not cause for significant concern". No money-printing and slowing growth – but China's still a buy Clearly, there's also the hope that if growth slows too much, China will feel the need to do the equivalent of quantitative easing (QE). It'll pump a load more credit around the system to get things moving again. I'm not as convinced that this will happen. China needs to change, and the trouble with things like QE is that they hinder change. QE in the US and UK has turned into a way to keep a broken model running beyond its sell-by date. That's the last thing that China wants if it's at all serious about moving towards being a more consumer-oriented economy. I imagine that instead, China's leaders would rather do just enough to prevent a major social or economic meltdown. That may still mean a lot of stimulus getting done, but I wouldn't be betting on a 2008-style stimulus package. As Capital Economics puts it: "with policymakers now prioritising employment and economic rebalancing over growth, we don't think they will feel the need to act aggressively to shore up the economy in response to today's data". A slowing economy? With no money printing on the horizon? It doesn't sound like a promising scenario for investors. However, there are reasons to get excited about Chinese stocks. For a start, they're cheap. And one good way to make money in markets is by buying stuff when it's cheap, and selling when it gets expensive. There's a more specific reason why investors are getting excited about China just now – it's what's known as the 'Shanghai-Hong Kong Stock Connect'. Essentially, this is going to be a way for foreign investors to get more access than ever before to mainland Chinese stocks, via Hong Kong. Frustratingly for the brokers and regulators concerned, the government keeps pushing back the deadline for the connect to start – it had originally been expected by the end of this month. But it still seems likely to start soon. The end result is that a lot more money will be going into Chinese stocks, and a lot of people want to be positioned for when that happens. It makes now look like a sensible time to get some exposure to China for yourself.
Moving up nicely and still lots of catching up to be done. JPMORGAN CHINESE INVESTMENT TRUST PLC: 195.36
This fund has lots of catching up to do, I can see it passing the £2 mark later this year.
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?
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