# Shanghai Composite Index



## nelsenryan82 (1 Jun 2007)

I've been told a limited number of foreigners can invest on the Shanghai and Shenzhen stock exchanges. How if there is any possible way does Joe Public going about doing this. (I do live in China)
Anyone heard of anyother mechanisms of doing so, getting a Chinese national to invest for you?

I've heard the Beijing government changed the rules and regulations on investing in property over there. Again any loopholes?
Cheers


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## longarrow (2 Jun 2007)

Why at this moment choose Chinese stock market to do your investment? Recently, the government has raised the taxation on transaction, which indicates negatively to prevent the market from overheating. I personally predict the bubble will not last for so long.


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## extopia (2 Jun 2007)

Everyone and his mother in China has been borrowing money and raiding the piggybanks to invest in shares. You'd be mad to get into this vastly overheated market.


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## nelsenryan82 (2 Jun 2007)

What about long-term in certain companies? Anything labour-intensive
Or buying IPO - since it increases on average 170% on the first day of trading.
Transaction costs? - What about AIB charging me €6 per €100 I invest in, not to mention 20/23% DIRT


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## Calico (3 Jun 2007)

I think if you want to invest in China, it is one of the few places where buying the index is not to be reccomended. Go for a fund with good management (if one exists) or invest in something that derives a large portion of it's revenue or expected revenue from China. Japan is another avenue...


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## matrix1 (3 Jun 2007)

Calico said:


> I think if you want to invest in China, it is one of the few places where buying the index is not to be reccomended. Go for a fund with good management (if one exists) or invest in something that derives a large portion of it's revenue or expected revenue from China. Japan is another avenue...



Do you have any opinion on the Robeco Chinese Equities fund? "Investments in equities of such companies will represent at least two thirds of the assets of the fund" - see [broken link removed]
I have a small holding in this. The fund manager says "Chinese stocks are valued at a premium as compared to other emerging markets (17 times 2007 earnings), but earnings revision trends are stronger than average. The fund manager is still positive about Chinese equities" - see [broken link removed]
It will be interesting to see what happens if there is a major correction in China.

The Merrill Lynch IIF Japan Opportunities Fund is having a rough time at the moment [broken link removed]


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## nelsenryan82 (3 Jun 2007)

surely the Chinese govt, wont have a major correction or rock the boat before the Olympics


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## RainyDay (3 Jun 2007)

nelsenryan82 said:


> surely the Chinese govt, wont have a major correction or rock the boat before the Olympics



What makes you think that any Govt controls their stock markets?


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## z108 (3 Jun 2007)

I doubt any of the athletes will be put off their steroids if the Chinese stock market crashes or even if it disappeared. Life and the Olympics would go on as ever.


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## room305 (3 Jun 2007)

nelsenryan82 said:


> surely the Chinese govt, wont have a major correction or rock the boat before the Olympics



This is one of the fallacies underpinning the bubble in the Shanghai index. It would be an act of outright lunacy to invest there having done even the most cursory of basic research.

How exactly do you propose the Chinese government will prevent a crash? They can only do so by preventing people from selling. Do you really want to have your money tied up in a stock market where the government will prevent you from selling your shares? Would you put money in a bank account that paid an absurdly high rate of interest but from which you could never withdraw any money?


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## matrix1 (3 Jun 2007)

room305 said:


> This is one of the fallacies underpinning the bubble in the Shanghai index. It would be an act of outright lunacy to invest there having done even the most cursory of basic research.



What do you think of putting 10% of a Quinn monthly premium (not much - maybe 700 Eur monthly total [currently filling in form]) into China, 10% into Japan, and 10% into emerging markets? The Quinn 'China Freeway' is "designed to track ... the FTSE/XINHUA China 25 Index", and described as offering "excellent growth prospects over the long term".

Do you think China will follow the Nasdaq behaviour and take years (if ever) to recover?


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## room305 (3 Jun 2007)

matrix1 said:


> What do you think of putting 10% of a Quinn monthly premium (not much - maybe 700 Eur monthly total [currently filling in form]) into China, 10% into Japan, and 10% into emerging markets? The Quinn 'China Freeway' is "designed to track ... the FTSE/XINHUA China 25 Index", and described as offering "excellent growth prospects over the long term".
> 
> Do you think China will follow the Nasdaq behaviour and take years (if ever) to recover?



All you can do is invest in a manner suited to your risk adversity. The FTSE/XINHUA China 25 Index won't have enjoyed anything like the mad bubble-like explosion in the Shanghai Composite (where companies regularly trade at a 100% premium to their international listings). That doesn't tell you whether or not it is overvalued or undervalued though.

I personally like exposure to Japanese assets - property and stocks - because I think the currency situation is favourable for Euro investors if nothing else.

If you buy the China story by all means invest there. The fact that you're dollar cost averaging into the fund will help reduce the volatility of your investment in any case.


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## matrix1 (3 Jun 2007)

room305 said:


> All you can do is invest in a manner suited to your risk adversity. The FTSE/XINHUA China 25 Index won't have enjoyed anything like the mad bubble-like explosion in the Shanghai Composite (where companies regularly trade at a 100% premium to their international listings). That doesn't tell you whether or not it is overvalued or undervalued though.
> 
> I personally like exposure to Japanese assets - property and stocks - because I think the currency situation is favourable for Euro investors if nothing else.
> 
> If you buy the China story by all means invest there. The fact that you're dollar cost averaging into the fund will help reduce the volatility of your investment in any case.



Hmmm - I hear ya. China is not small though, and I'd like to keep some interest in it. I am also interested in the tech and biotech funds (although I see these are not pure Nasdaq 100 and Biotech trackers) so I would not be risk adverse.

By the way, apologies to the original poster for not referring directly to the Shanghai Composite Index. 

The Wall Street Journal is not upbeat about China stocks: http://online.wsj.com/article/SB118081537557222745.html?mod=googlenews_wsj


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## extopia (3 Jun 2007)

nelsenryan82 said:


> surely the Chinese govt, wont have a major correction or rock the boat before the Olympics



What do you think? Many Chinese people seem to believe this - it's one of the reasons the crash hasn't happened yet. Of course it's total bullsh*t.


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## therave (4 Jun 2007)

market is/was down 8% at close according to this article.
http://www.forbes.com/2007/06/04/china-bayer-palm-markets-cx_jal_0606video1.html?partner=yahootix


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## room305 (4 Jun 2007)

therave said:


> market is/was down 8% at close according to this article.
> http://www.forbes.com/2007/06/04/china-bayer-palm-markets-cx_jal_0606video1.html?partner=yahootix



Note also that the Hang Seng and other Asian indices closed up last night.


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## z108 (4 Jun 2007)

I put some money into Quinn Life about 2 months ago and spread it around. Overall since then I ve made about 8.7 %   but the Xinhua 25 while performing well  hasnt performed as well as the Eurostoxx (for me over the 2 months).
 Generally the whole world is doing well with the exception of Biotech. I wouldnt assume the only opportunities are in China. China will always be there to invest in after we see what happens to the alleged bubble the same way the Nasdaq is still here. 
The only reason to invest in China right now appears to be because it is rising but that was the only reason also to invest in the Nasdaq in 2000 and calling the timing of when it all changes direction  is nearly impossible.


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