Jpmorgan Chinese Investm... Share Discussion Threads

[markth] 23/9/2005 13:47

More devaluation of the yuan likely, will improve NAV by about 1% I reckon.

From the BBC :

China gives more freedom to yuan

China's central bank has announced further exchange rate changes, two months after it revalued the yuan for the first time in a decade.
The bank said the yuan would now be allowed to fluctuate more widely against non-dollar currencies.

However, the yuan would still have to keep within a narrow 0.3% trading band against the US currency, it said.

Since July, the yuan is no longer tied to the dollar, but floats to a limited extent against a basket of currencies.

As well as the dollar, these include the euro, the Japanese yen, the South Korean won, the UK pound, the Thai baht and the Russian rouble.

Technical adjustment

The latest reform means that the yuan will now be allowed to gain or lose up to 3% of its value against these currencies during a single day's trading. Until now, the limit had been 1.5%.

The move was described by analysts as a mere technical adjustment to the central bank's existing policy, rather than a change to the policy.

China revalued its currency by 2.1% in July, but has only allowed a small daily fluctuation in the exchange rate since then.

It is allowed to appreciate against the dollar, mollifying critics who say a cheap yuan has helped Chinese exports. However, it has done so by less than 0.3% since it was decoupled from the US currency.

[markth] 22/9/2005 17:18

Well you know how it is with these politicos. Starting the ball rolling (and taking the flak for it) is the hardest part.

Like, if the Tories introduce an unpopular tax while in power, Labour vilifies them. But you don't see them handing it back once they're in power....

[temelco] 22/9/2005 16:31

But he only has a year or so to do it. He has to step down as leader of the party at the end of his second term. I daresay they could always change the constitution...

[markth] 22/9/2005 16:09

Always happy to sell 100p of NAV for 102.5p....even happier when I buy the same 100p back for 95p ;0)

It may consolidate here for a while and then bounce due to the autumnal effect...a lot of retail money will come in to the market and every savvy investor is up to speed about China's potential.

I just can't help feeling though that JFJ and Japan is a surer thing over the next few months though. Really impressed by that guy Koizumi, who now has a mandate to tackle some of the issues that have held Japan back.

[temelco] 22/9/2005 16:08

We are, BTW, back in the upward channel, which I am glad to see.Its riskgrade is 66 - Footsie 100 is 54

[temelco] 22/9/2005 15:47

Markth - well your logic cannot be faulted - sell when at a premium - buy back when at a discount.

[markth] 20/9/2005 10:36

@RoyalT

Most of the recent spike was down to a reduction in discount as opposed to an increase in the underlying NAV. While it was trading at a premium recently, JPM issued a few more tranches of stock which put a ha'penny or so on to NAV. But since then the discount has widened again.

If you look at the performance of the underlying stocks/markets in which this is invested you will see a little underperformance. But given the geographic spread of the fund (it's not just China) it's hard to make a solid comparison.

For the longer term, China is sure to be a good bet though. I would like to see the managers move more of the funds money into mainland China.

I have no position at present, having sold out at 73p. But if it goes down to under 65p I will probably jump back in.

[royalt] 20/9/2005 10:08

whats going on with this at the moment guys? Whats the story? Seems like a buying opportunity at the moment to me. Seems to be bottoming out.

[markth] 02/9/2005 14:19

I don't doubt that there are many more Indian restaurants than Chinese. But ~10 to 1 ratio surprises me.

[temelco] 02/9/2005 12:59

Completely off topic, Boris Johnson in the Telegraph yesterday was saying that the total take for Chinese restaurants in UK is £285m pa, whilst for Indian it is £2b. Anyone know if that's true??

[temelco] 02/9/2005 12:58

From what Mr. Muh was saying, India is perhaps a bit further down Capitalism Street than China - but the Chinese are clearly very quick learners. Whereas China is sticking to producing goods, natural resources etc, India is going much more to the electronics/general IT and the like. Should be an interesting journey. The other point they were making was about pensions. If you have a final pension pot of about £125,000, on average you will only get back £115,000 including the 25% tax free upfront, but after tax on the payout of the annuity, you are looking at about £98,000 in your hand.That said, with tax relief, even the basic rate taxpayer will only pay about the same amount in. Of course, if you last longer than the average you will do better, but in general terms insurance companies bank on this NOT happening. The immediate likelihood is that annuity rates will fall again. So Isas, where you can keep the money and pay no tax on the payouts, are effectively as tax efficient, even if you have to jiggle them a bit to get the same total income on an annual basis.

[markth] 02/9/2005 12:28

Don't know if anyone here is also invested in JP Morgan India; which has been a stellar performer of late.

Anyway one of the drivers for India's stock market growth has been inflow of foreign capital. The effect has been to make the beta on their indices (and the trust) explode.

China has not (I think) seen the same inflows. But if more managers are setting up shop over there, and awareness builds, this could change quite quickly.

[temelco] 02/9/2005 12:17

Not that its really connected, but I was at a seminar by Alliance Trust the other day and met Anthony Muh who is their man in Hong Kong. Alliance have set up an office there to increase their overall weighting in the region. Their whole presentation was based on the changes that China and India were undergoing and what that was going to do to US, Europe and UK businesses. One of the REALLY interesting points was that eg WalMart, which has been an outstanding stock performer for some years, is ( clearly) an American company, but its profits and sales have been driven by using China and the far east to source product. So the message was, yes we intend to invest more in the region, but the stock market opportunities presented are not restricted to it. MOST interesting.

[temelco] 18/8/2005 11:54

More equity and a block listing of 2.5m - that's getting to be money. This is growing apace and they bare keeping the premium low - now only about 4%

[temelco] 15/8/2005 11:38

More equity again _ 100,000 at 77.5p.
NAV 72.08 ie premium only approx 7%.
Looks to me as if they are trying to keep it round about this figure as a maximum.

[temelco] 12/8/2005 11:55

More equity again - only 50,000 though

[temelco] 10/8/2005 12:43

More equity issued yesterday. What is interesting about this is that the Directors are clearly determined to grow the overall size of the fund, not let the premium get too big, and to keep upping the NAV. I like it.I hope the price levels out a bit to catch up with itself as it were.

[markth] 10/8/2005 08:17

One of JMC's investments....

China Mobile sees earnings soar (from the BBC)

China Mobile, the world's top mobile phone firm by subscribers, has unveiled a 28% jump in half-year profits.
The state-run operator saw its net profits rise to 24bn yuan ($2.97bn; £1.66bn), from 18.83bn yuan in the previous year.

Group earnings were lifted by strong subscriber growth, China Mobile said.

The Hong Kong-based company recently overtook Japanese operator NTT DoCoMo as Asia's most valuable telecoms carrier, with a market value of $81bn.

New networks

China Mobile controls about two-thirds of China's booming cellular market, which with 363 million users is the world's biggest.

Its half-year results included for the first time 10 provincial networks - mostly located in China's less affluent western regions - which the company acquired last year.

China Mobile has been gaining market share at the expense of its main rival China Unicom, despite charging higher tariffs.

However, the company said its average revenue per user (ARPU) dropped to 90 yuan per month during the first half, from 93 yuan last year.

Before the results were announced, shares in China Mobile closed up more than 1% on Hong Kong's Hang Seng index, at HK$32.45.

[markth] 08/8/2005 08:29

It looks like high tide now.....once the spread settles later today I may sell.

[temelco] 02/8/2005 16:56

At a very rough guess,JMC CNOOC holding is about £100k better off tonight after they gave up on Unocal.

[markth] 02/8/2005 15:25

You might buy on momentum, but that would be risky given the momentum is on the discount/premium rather than the true measure of value (NAV).

This for me is a "hold". If it should fall 5p or so from here I shall sell/wait.

[temelco] 02/8/2005 14:59

Just as a matter of interest ( and I know nobody believes in chartism) the first "Buy" signal was round about last year end and the signal continues to be "Buy"

[markth] 02/8/2005 13:54

I only know about China Telecom, China Mobile, and the Telecoms part of Hutchison. The mainland China service providers have got good monopoly positions. As more of the population is reached by phone service, so their revenues will grow strongly. Hutchison have a good position in H-K, where they 'own' the signalling, voice and data gateways into China. Elsewhere they have a ptachwork of investment holdings in various markets/telcos. Of the markets in which their telecoms business operates, they only have a leadership position in maybe half a dozen. So as a telecoms investment there are better alternatives; however HW is a conglomerate with many different lines of business, so it is well diversified. It is regarded as well-run.

[temelco] 02/8/2005 13:33

Anyone got anything to say about the top 10 investments??