Email of the day
Comment of the Day

April 21 2010

Commentary by Eoin Treacy

Email of the day

on prices adjusted for corporate actions
"There seems to be an error in the charting library. When I plot a 3 year daily chart of CAF (Morgan Stanley China A-Share Fund) the closing price shown is $42.84 on Sept 28, 2007. However, when I plot the same 3-year daily chart on CBS Marketwatch (for example) the closing price is around $70 on the same day (Sept 28, 2007). Can you please explain the massive difference in the price charts from $42 to $70? What chart is correct? Even if I compare a 1-year daily chart of CAF, today's price is the same but the past prices are definitely not the same. Fullermoney has the high in early May 2009 at around $34 whereas CBS Marketwatch has it around $39?"

Eoin Treacy's view Thank you for these detailed questions, which address an issue that crops up from time to time. In a sense both charts are correct. Fullermoney's Chart Library adjusted prices for corporate actions, I suspect CBS Marketwatch does not. Since 2007, CAF has had a 5 for 1 rights issue and there have been a number of distributions which affected the corporate action adjusted price displayed in the Chart Library. Our policy of adjusting prices for corporate actions is line with the industry norm and is the only way of avoiding large gaps appearing in equity and fund price charts.

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