Chinese markets rose on Thursday, bringing relief from the frenzied selling that had characterised markets over the past few days and hope that the authorities increasingly heavy-handed measures to stop the rout had finally begun to work.
The continuing fall in China’s stock market puts the country’s entire financial system and structural reform agenda at risk, according to Axa Investment Managers and Schroders.
The ‘Westernisation’ of Chinese banks will see them directly competing with their US and European counterparts, says Ashmore’s Jan Dehn.
The Nikkei 225 ended the first half of 2015 at an 18-year high, and after 20 years of deflation there are hopes that the Japanese market is finally taking off.
The index excludes state-owned enterprises, providing an alternative to popular China indices, which are typically made up of 70% or more SOEs.
With Chinese stocks having officially entered bear territory earlier this week, industry experts are divided on which neck of the woods the market will end up in.
In the old Road Runner cartoons, Wile E. Coyote spent a lot of time running on air. Having run off a bridge or a cliff, he would remain remarkably buoyant for a while. Then he would look down and, of course, plummet to the floor.
The Ashmore All Chinese Equity Fund launched today, Ashmore said on Monday.
Investors should not be surprised by Chinese shares dropping 7% in a day say industry experts, but is it a cause for concern?
China’s inclusion in the MSCI emerging market indices is a matter of when, not if, and the resulting capital inflows will have substantial impact on Hong Kong’s market, said Helen Zhu, Blackrock’s head of China equities.
Some segments are trading at 80-100 times price-to-earnings and there are “signs of exuberance” in the domestic market, said Andrew Swan, BlackRock’s head of Asian equities.
Sandra Crowl, member of Carmignac Gestion’s investment strategy committee, examines how structural reforms and liberalisation of the financial markets will keep the limelight on China in 2015.
