Email of the day
“Please pass on my thanks to Eoin for a stimulating and fun two days at the recent Chart Seminar. I will (and have) sincerely recommended TCS to my friends.
“As you have mentioned in comment of the day and your audio's, the China A shares has turned north and is showing some strength following the first politburo meeting. I predominantly trade the futures markets through IG and wondered how (if) you gain exposure to this market through their service? I can only find a futures contract for a China A50 contract. However this appears to be a Singapore listed index as opposed to Shanghai.
“Your response, as well as your continued health and comments, will be gratefully received.”
“It was nice listening to your audio today, thanks a lot. You emphaised a lot about C hina today. Could you please eloberate a little on how you would recommend to take advantage of a future bull market for those of us who feel very positive about C hina in the "long run". ( and who is interested in long term investments rather than trading)
"As always thanks to both of you the excellent service"
Eoin Treacy's view Thank you both for these questions which are sure to be of interest to the Collective. David and I have been discussing this issue and it is likely to be a major topic of conversation over the coming months as the potential for outperformance by China related markets increases.
As mentioned in the first email above IG Index makes a market in the FTSE/Xinhua A50 Index. To the best of my knowledge the constituents of this index are Chinese companies listed in Hong Kong . The iShares fund which attempts to track it is listed in Hong Kong . The index has tracked the performance of the A-Share market reasonably well and has outperformed somewhat of late. It is now testing the October peak and while somewhat overbought in the very short-term a clear downward dynamic would be required to check potential for additional upside.
The US listed Morgan Stanley China A-Share Fund rallied back above the 200-day MA last week and a sustained move below $20 would be required to question medium-term scope for additional upside. The Global X China Financials ETF is also worthy of mention. It broke out to new four-month highs this week and sustained move below the 200-day MA, currently near $11.50 would be required to check medium-term scope for additional upside.
The UK listed JP Morgan China Investment Trust is currently trading at a discount to NAV of 8.7% and hit a new 12-month high today. A sustained move below the 200-day MA, currently near 130p, would be required to question medium-term scope for additional upside.
The Australian listed AMP Capital China Growth Fund trades at a discount to NAV of over 18%. It posted a higher reaction low three weeks ago and pushed back above the 200-day MA this week. A sustained move below 60 ¢ would be needed to question medium-term scope for additional upside.