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Posts Tagged ‘MSCI’

Yellow peril horde avoided

In China, Emerging markets, ETFs, Financial competency, Financial planning, Uncategorized on 18/06/2015 at 3:37 pm

These charts from FT tell in charts what the NYT Dealbook describes in words below:

 

 

CHINA MOVES CLOSER TO INCLUSION IN MSCI INDEX Though MSCI decided on Tuesday that it would hold off on adding Chinese domestic shares to its emerging market index, China is moving closer to joining the global benchmark, Neil Gough writes in DealBook. In its decision, the index company cited concerns over China’s cumbersome investment quotas, restrictions on money flows, and questions over the legal status of foreign shareholders. But MSCI said that in the coming months it would work with China’s main securities regulator to address the company’s concerns and that it may make a special decision to include Chinese stocks, also known as A-shares, in its benchmarks before the next scheduled annual review, which takes place a year from now. “It is clear from MSCI’s announcement today that it is only a matter of time before A-shares are added to global indexes,” Louis Lu, a portfolio manager at CSOP Asset Management, which invests in mainland shares, said in an email.

“The decision – and the waiting period – reflects the changing face of China’s financial system,” Mr. Gough writes. Over the last two years, the country has embarked on a series of overhauls to the financial system, but foreigners remain wary because they continue to face challenges in gaining access to the Chinese markets. Mr. Lu said that the delay by MSCI is likely to motivate the Chinese government to “accelerate the opening of its capital markets and provide greater accessibility to international investors in the near term to increase the chance of inclusion as soon as possible.” If China can assuage MSCI’s concerns, analysts estimate that the country is likely to see several billion dollars of new investment pour in initially, with that figure rising to more than $200 billion over time.

STI ETFs — Are there values there?

In ETFs on 06/04/2010 at 5:30 am

The Straits Times Index (STI) is traditionally taken as the barometer of the S’pore stock market and the two ETFs that track it are the most liquid of the ETFs.

But should the STI and the two ETFs be as popular as they should be?

The reason is the presence of the Jardine Matheson, Jardine Strategic and Hongkong Land in the STI, which do not reflect the S’pore economy although apologists point to the operations of Cycle & Carriage Cold Storage, Guardian and Giant embedded within JM. While not peanuts, they are tiny in the Jardines scheme of things.  And, to boot,  they are illiquid and tightly held via cross holdings.

In theory, this means that the STI can be manipulated by judicious buying or selling of these counters. I stress “in theory” because there is no evidence that the STI has been manipulated by the trading  of these three counters.

Sometime back, BT wrote,”The STI’s guardians last week defended Jardine’s inclusion using reasoning that went something like this: ‘we have a set of criteria for index inclusion that Jardine meets, so they’re included’.”

BT went on to to say, “Conveniently omitted is what those criteria are; more interesting is the question of why it is that Jardine Matheson, Jardine Strategic and Hongkong Land, which are in the STI, are not in the more widely-followed MSCI Singapore Free Index*?”. Add to that the FT S’pore Index.

*Widely followed by the pros but not the retail punters. The ETF based on this is illiquid, as it is expensive in dollar terms.

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