China equities

By Christina Ma of Goldman Sachs

China is about to set another milestone in its long journey of financial market liberalisation. The Shanghai-Hong Kong Stock Connect, to be launched on November 17, will for the first time allow international investors to trade shares directly in China’s stock market without applying for an individual quota.

Although the programme will initially cover select stocks listed on the Shanghai exchange, its implications are significant. By providing direct access to the Chinese market, it essentially knocks a hole in the Great Wall that has historically separated shares for domestic investors and shares made available to international investors. More importantly, Stock Connect paves the way for China’s stock market to debut on the stage of international relevance, something that has eluded it despite its massive $4.8tn market capitalisation. Read more

It’s that time of the year again where visitors to China are deafened by firecrackers, mobbed by mass ranks of red-capped tourists, and overcharged for, well, everything. The year of the slippery snake is drawing to a close, the year of the galloping (and in 2014, wooden) horse is upon us.

But it’s also when CLSA gets one of its analysts to use their feng shui compass to figure whether this year’s qi will be good or bad news for investors. Read more

China’s IPO season has officially reopened. Five companies said on Tuesday they had received approval from the China Securities Regulatory Commission to issue new shares, bringing China’s longest ever IPO drought to an end. Read more

The week in emerging markets, including our most read, five things we have learned and some long reads for the weekend. Plus the week in a chart: the Shanghai Composite. Read more

Markets rallied on China’s latest reform proposals. But Robin Wigglesworth, capital markets correspondent, warns that while the country’s potential may be enhanced, stock markets will not be and growth could slip below 7 per cent.

Initial reactions to the statement that came out of China’s third plenum can be summed up in three simple words: ‘was that it?’ Investors bemoaned the lack of details, and sent Chinese shares lower by 2 per cent on the day following the release of the document.

Fast forward to Friday, and Chinese equities are spiking. So have minds changed? Read more

It is getting hard to find bargains in developed markets. China has plenty of cheap stocks – but James Mackintosh warns that they may be a bet on the scale of reforms likely to follow this weekend’s Communist party meeting.

Death may not just be a “delightful hiding place for weary men”, as Herodotus once said. It may also offer shelter for Asian investors who have grown tired of looking at battered banks and boring oil producers.

Fu Shou Yuan, a chain of Chinese graveyards, is seeking to list on the Hong Kong stock exchange later this year, in a deal that could raise up to $200m. Read more

By Sammy Suzuki of AllianceBernstein

China has been an incredible engine of manufactured exports over the past decade and the central player of the Brics era. But mounting competition from other countries is gradually pulling production away from China. How should investors proceed? Read more

The week in emerging markets, with: our most read stories, five things we have learned, our favourite long reads, image of the week, and the week in a chart – this week: the Hang Seng and Shanghai Composite.
 Read more

After all the furore this month after Lou Jiwei, China’s finance minister, suggested the country’s growth target was 7 per cent – and not the official 7.5 per cent – Premier Li Keqiang has weighed in.

Li was reported by Xinhua news agency as saying growth would only be tolerated above… 7 per cent. Given that China’s growth targets in recent years have been more of a bar to surpass than a bullseye to hit, this sounds suspiciously similar to Lou. Never mind – stocks rallied at the news. Read more

China stocks ended the week with a bit of a flourish on Friday, with the Shanghai Composite up 1.5 per cent at 1,979.20. Overall, it meant that the index finished the week around 2.5 per cent down, far better than it had looked earlier on Tuesday and Wednesday amid fears of a China credit crunch.

So after the PBoC’s credit policy U-turn, is everything ok? Perhaps not. Read more

Top of the world…no more

In the far-off days before the global crisis, there were as many as five Chinese companies in the world’s top ten by market valuation. Now there are none.

Even though the Chinese economy is about 75 per cent larger than it was at the end of 2007, the poor performance of the country’s stock market has held back its companies’ advance in the world rankings. Meanwhile, the surge in US equities has propelled American companies back to global dominance. Despite the continuing emergence of emerging markets, all 10 of the top 10 are American. Read more

China’s markets stabilised on Wednesday, with interest rates easing in the crucial interbank market and stocks slipping slightly in uneventful trading.

But along with the stability, there is gloom. Equity investors are increasingly worried that slower growth and tighter credit is bad news for stocks: they’ve now fallen to their lowest since January 2009 and the depths of the global financial crisis. Read more

Central Huijin Investment, a Chinese state-owned investment company, has bought stakes in six of the country’s largest financial groups in a bid to deliver a confidence boost to the tumbling domestic stock market in a slowing economy with interbank liquidity problems.

But whether it will succeed is doubtful. Read more