Jpmorgan Chinese Investm... Share Discussion Threads

[markth] 22/7/2005 11:15

Largest holdings - 31-May-05 Holding (%) Rank Prev Holding (%) Rank Prev CHINA MOBILE(HONG KONG) 6.0 1 (1) HUTCHISON WHAMPOA 3.0 6 (5) TAIWAN SEMICONDUCTOR CO 6.0 2 (2) PETROCHINA CO 2.9 7 (7) CHEUNG KONG(HLDGS) 3.7 3 (3) CHINA RESOURCES ENTERPRISE 2.5 8 (8) MEDIA TEK INC 3.1 4 - HYSAN DEVELOPMENT 2.5 9 (9) CHINA TELECOM CORP 3.0 5 (6) HON HAI PRECISION INDUSTRY 2.4 10 -   Regional weightings - 31-May-05 Region (%) Prev   China 37.2 (1) Hong Kong 29.7 (2) Taiwan 27.3 (3) Cash 5.4 (4) Singapore 0.4 (5) Total 100.0     Sector weightings - 31-May-05 Sector (%) Prev   Information Technology 27.1 (1) Industrials 16.9 (2) Financial 14.4 (3) Telecommunications Utilities 12.4 (4) Consumer Discretionary 11.9 (5) Energy 6.3 (6) Cash 5.4 (8) Materials 3.2 (7) Utilities 1.8 (9) Health Care 0.3 - Total 99.7    

[temelco] 22/7/2005 10:51

Estate Agents? Lacking credibility? Surely not. They have said all along the market is at " core value" - whatever than means. I agree with markth though - the overal China stockmarket situation has improved dramatically and the revaluation will provide an ongoing support.

[markth] 22/7/2005 10:48

To my mind chartists are right up there with gypsy fortune tellers, Old Moore's Almanac, Nostradamus and Estate Agents in terms of their credibility. They seem to be virtuosos at saying "see, the chart predcited that was going to happen" after the event.

In my view there are three things that drive stock price :

1) Sentiment
2) Liquidity and Supply/Demand Factors
3) Fundamentals

I believe the recent upwards move in JMC is down to 3), and, to a certain extent, an improvement in 1). When dealing with an investment trust whose NAV is very transparent, you can attribute changes in discount/premium to 1) and changes in NAV to 3) so life becomes a lot easier!!!

[temelco] 22/7/2005 10:28

I don't pretend to understand charts, but if you draw a line along the top points and along the bottom points since the lowest low, the present price is ABOVE the upper line. This ( I belive implies that either it will fall back within the tramlines still on an upward course OR the tramlines are in fact not parallel which implies a breakout. At the moment, with the heavy buying ( relatively) we have seen in the recent past this latter looks the more likely scenario. Certainly the basic fundamentals ( whatever you care to understand by them) all appear to be moving in the right direction

[markth] 21/7/2005 15:34

Yes I agree. 11p on a 70p share is a nice return if you can get it.

Could be more if more of the portfolio is invested into China. Could be much more if the pound devalues against the dollar AND the yuan gets revalued against the dollar while the dollar is appreciating.

[temelco] 21/7/2005 15:05

40% Yuan revaluation = 11p a share ( or thereby). Longer term trend I would say.

[markth] 21/7/2005 14:21

The 2% we are seeing today is IMO the start of a longer term trend for the yuan to appreciate. Some economists believe it to be undervalued against the dollar by as much as 40%.

If dollar interest rates keep going up, the yuan will track the dollar's rise. Any increase in the value of the dollar against sterling (where the bias is to cut rates) will be magnified and this should give a further boost to JMC's NAV.

Surely the fund managers will increase the exposure to China from the current ~40%. In effect they are buying the yuan forward, and its value is set to appreciate against the dollar and sterling. Also, I'm convinced Chinese markets have bottomed and that this is the turning point. With currency and investment upside to come this fund looks to have a lot more legs in it.

The only cloud on the horizon is this, does a revalued yuan hurt the profits of China's exporters and cause this to be a zero sum game......I guess the managers are smart enough to hedge this away by investing in companies who are not overdependent on foreign earnings.

[temelco] 21/7/2005 14:00

Hm, not a lot, the difference to JMC is only about half a p. All helps though, especially if it strengthens overall.

[p234567] 20/7/2005 11:08

temelco...I have been putting money into the fund monthly since Oct 2003, and had been in the red most of the time. Finaly went positive at the end of Feb this year and am now sitting on about 18% gain. Looking at the breakout above 70p (on the above chart), we should be in for some more gains. Fingers crossed.

[markth] 20/7/2005 10:52

China's currency is about to get revalued - upwards.

see

If it does, then the NAV of this fund will go up in tandem. I think this may account (in part) for the reduction in discount. Mind you the talk of a revaluation of up to 40% is overblown. 5% is more likely. Too many bad loans/paper floating around there.

5% upwards on 40% of the fund (the amount in China) is only about 2%. SP's up by 12.5% since the start of the month. NAV only went up 5% in same period. With little change in volume over that period, there's at least 5% speculation in the current share price I reckon.

[temelco] 20/7/2005 10:37

Last time it went to a premium they issued more shares - very good for the overall size of the fund, technically adds to NAV. From local reports it seems the China B markets either have bottomed or are at least in an up phase at the moment. As a matter of interest, if you had been putting money in monthly over the last 2 years you would just about be getting your money back now.

[rabain] 20/7/2005 08:43

Gone from discount to premium in double quick time!

[rabain] 19/7/2005 17:17

Interesting article on Timesonline

suggesting that there is little correlation between high growth emerging economies and the share prices of their companies who are too busy raising cash for expansion to allow any to filter back to shareholders.
On China specifically
"China's economy is growing at more than 9% a year, but last week its stock market hit an eight-year low. It might be the fastest-growing economy in the world, but over the past year the market has dropped 26%. "
Against that JMC seem to be getting things about right at the moment.

[jabberstocky] 19/7/2005 15:29

An improvement, but I don't know Rabain about the reasons. It used to be that this fund was extremely averse to mainland stocks, but that seems to have changed if you look at the RNS's on Geog from 4.5% in 03 to 32% in the PRC, and there may generally be some bargain hunting going on, but I D/K what prices were paid for current holdings so DYOR.

[p234567] 18/7/2005 15:29

Great performance today so far. Surging over 70p!!

[rabain] 13/7/2005 15:48

temelco
I have been impressed with JMC's performance while the China B shares index has plummented. It seems that the Hang Seng is the driver behind JMC. As ever with China its all about getting the correct exposure. I feel the changes in personnel are beginning to have an effect and the investment mix is delivering the goods at last

[quidnunc] 11/7/2005 15:42

Anyone know why today's little leap?
Quiddy

[temelco] 07/7/2005 13:07

Yes it appears to be doing better. But don't forget China as a whole has been well down over a period and is only now bottoming out.

[rabain] 05/7/2005 23:16

Is this trust at last starting to perform a bit better or am I being lulled into a false sense of security?!

[markth] 25/11/2004 13:40

Compare the share price performance of this fund against Chinese indices and methinks you will have the answer about whether we need a new fund manager. For example, go to then choose the one year time period.

Having said that the manager doesn't have a free hand about what "Chinese" stocks he can invest in. As of the end of October, the fund was invested :

China 38.1%
Hong Kong 36.2%
Taiwan 17.4%
Cash 7.7%
Singapore 0.6%

So one should not really read across too much from what's happening in China. I'm still long on it but am down 20% and thinking of taking my punishment. There is something of a case to be made for tracking Chinese economic development by investing in a clutch of mining shares instead. Check out the correlation between Chinese indices and the FTSE Mining sector. BLT is a particularly good example.

[archambos] 18/11/2004 08:41

Good news on the dividend front,will be paying 1p in December, all we need now is the discount to narrow and the share price should bounce back .

[ukek] 04/11/2004 21:39

Ill tellyou whats going on.
Two hundred years of the same kidology.

[guru11] 07/10/2004 22:08

Do we need a new fund manager?
Looking at the share price over the last year it is lower now than a year ago,
and we are talking about China Investments
although the JII fund could prove much better investment.

[igoe104] 07/10/2004 14:41

i can see this one creeping back upto the 68p mark,
happy to hold these on a long term basis