Morgan Stanley China A Share Fund, Inc. (CAF)

All Comments on CAF

  • commenter
    User 246133
    Aug 20 10:09 AM
    China Mobile Speculated to Run 3G Service By 2008 [view article]
    Hi, i live in China.I call to the China Mobile where i’m a VIP customer to ask information about the 3G service.I have a Nokia e71 and my wife Nokia N95. So the point is, to can have the 3G service in China you must apply for a new phone number starting with 157…… and also to buy a mobile (attention) just from China Mobile becouse the other phones (3g Phones like Nokia or others) are not working on the 3G Network from China.So if you want the 3g service you must have a new number and a new phone…
    So forget about it….     Reply
  • commenter
    Qniform
    Aug 18 06:56 PM
    Single Country Emerging Markets ETFs, ETNs and Closed-End Funds [view article]
    They left out the Swiss Helvetica Fund (SWZ, I think) the only single country CEF for Switzerland I know of. Reply
  • commenter
    James V
    Aug 17 11:45 AM
    China's Energy Strategy: Panda or Dragon? [view article]
    China is not a Dragon or a Panda.
    It is 100% a Tiger in every possible respect.

    In terms of energy security, China will go to any length even partnering up with their main competitor the USA.

    China had a special secret deal with USA to back their activites going into Iraq in return for oil. In return they proved very useful especially in using its influence with Pakistan.
    Reply
  • commenter
    daniela
    Aug 15 11:56 AM
    Six Reasons To Buy China Soon [view article]
    Toxxum, great comments. China is not consumer economy. It is based mainly on exports. I would not touch China unless we really know how economic situation really looks like. That means fall of communist regime. It's good that author is buying into regime's happy numbers. Makes their economy go, economy keeps going. lalala-all is well. Reply
  • commenter
    toxxum
    Aug 14 09:16 PM
    Six Reasons To Buy China Soon [view article]
    I was living in China for quite a few years and I wouldn't touch Chinese equities with a broom. Rapidly ageing population (in 2020, there will be more pensioners than people under employment); the environmental damage is estimated to eat up 10% of its GDP; the huge currency reserves are a result of the government printing money and then buying foreign currencies to keep the Yuan low; increasingly civil unrest (51,000 incidents last year alone); banking sector is burdened with huge non-perperforming loans; statistics are notoriously unreliable and mostly fake (how do you collect GDP data from the authorities of 30 provinces which are not fully computerized, yet publish monthly stats on the 2nd day of the following month??); the central government is desperately trying to hold to its powers by spending huge amounts on censorship (ever heard of the "China Great Electronic Wall"?); 70% of the population live on less than USD 1,000 per year etc etc.

    Be careful before you invest. I was running a company with a few hundred people and I can assure you that what you read in your local newspapers does not reflect reality!     Reply
  • commenter
    From India
    Aug 14 08:40 PM
    Six Reasons To Buy China Soon [view article]
    Techy

    For the starters, India calculates Inflation using Wholesale Price Index (WPI): www.rediff.com/money/2....

    I am being shocked at what I see at the retail level, at the Department Stores. On your next visit here, you will be surprised too. :)

    When did we start excluding Housing from Inflation? Housing's share is about 20% worldwide ( or even more, can someone please supply the statistic?). I see no reason in excluding Housing from the basket as you are suggesting. Actually if you look at it, it is even more the reason to consider it seriously at this juncture: All this while, irrespective of the Housing Prices appreciation , the renting costs remained low, with the rents not having gone up noticably (I am no "Elitist" as you were suggesting - only a handful pockets of people were experiencing the housing price increase in the last 5 years, mainly in the technology areas). But now, everyone is starting to see and feel it. My own parents have started seeing people withholding from renting unless they are being rewarded with huge rent increases (around 20%). www.bls.gov/cpi/cpifp0...

    No disrespect but just noticing something: You are being a true techy: Being a non-US investor, you were saying that it doesnt worry you what the underlying Economy's inflation rate is, since you feel currency exchange appreciation takes care of the equation: Please dont invest with out consideration of the fundamentals. That will not bode well for long term returns. In that case may be you should invest in Zimbabwe :) ( Disclaimer: I am just kidding, no serious offense).

    It is true that one doesn't need to worry abt local currency's inflation if we are valuing companies in $. I just happened to start noticing something about one company's market capital and then it stuck me: That the WACC could be extremely high. RIL's market cap is around 3Trillion (local currency - I am not kidding). I dont know what kind of growth rate would support that kind of market cap. May be, all Indian companies should now start loading up on Debt.

    One other thing: India was able to grow fast, as it had enormous amounts of labor available with out companies resorting to wage increases (not a lot other than technology and BPO). I believe they were able to satisfy Aggregate Demand with out major price level increases in the last few years - without resulting in major inflation. I mean with out Aggregate Supply curves shifting that much. The economy was humming and exports were good. Now I believe the times have dawned for major shifts. Anticipated inflation itself is 13% so I dont understand how it cannot feed into major AS curve shifts. In fact, this maynot bode well for Developed economies like US which were fed by cheap exported goods. (I think this is also true of China eventhough the underlying economies have major differences - structural?)

    Even though Indians saved massively earlier, I am not sure the same will continue. Flow of foreign capital was good (even though it may have dried up now - need to locate real figures now), but with a negative real rate of savings, will they keep saving? ( I am suspecting they will not from whatI am seeing - there is a huge splurge). If domestic savings dry up and with Govt competing for foreign Capital, what will be the ramifications?

    Overall, I dont think the times have come to start taking long term positions in India. Wait and you will be rewarded.

    PS: Techy, I am no Elitist. Wagres should increase. But I am worried about unwinding of a spiral - of price level increases. I just happened to read this article and about India and thought I should express some of my concerns. India is long term story, but may be not now. I am passing it.     Reply
  • commenter
    Roger
    Nusbaum
    Aug 14 03:04 PM
    My Website
    Re-Entering China: A Plan Comes Together [view article]
    bad luck on tuesday, some retracement today but one thing is clear a couple months is not enough time to be right or wrong let alone a couple of days. i agree there seems to be no immediate launch pad for trend/momentum folks. Reply
  • commenter
    Pipo
    Aug 14 06:31 AM
    My Website
    Six Reasons To Buy China Soon [view article]
    As Jim Rogers says investing in China in 2008 is like invsting in the United States in 1907.

    The prospects are brilliant for medium to long term players. Visit a good Jim Rogers Blog at jimrogers-investments....     Reply
  • commenter
    fxtrader07
    Aug 14 04:38 AM
    Six Reasons To Buy China Soon [view article]
    www.investorsinsight.c...

    people tend to extrapolate trends and usually do not expect major interruptions or deviations. The business cy<cle is neiter dead nor can it be cheated over longer periods of time. China is going to get a heavy recessionary fallout from the recession that arrives in the usa and europe. the stock market there is signalling it all year.
    in that downturn it will be seen how robust and of what quality china#s growth really is/was. and regarding the forex reserves: they may soon find themselves in a position where they will have to spent billions and billions to rescue once again their own banking system. the us-subprime sector looks like prime when compared to china#s lending standards. watch out below.
    therw ill be a time to buy china with both hands. it hasn't arrived yet. similar with india - though their economy has different problems than the chinese and might overall weather the coming months better     Reply
  • commenter
    James V
    Aug 14 12:30 AM
    Six Reasons To Buy China Soon [view article]
    China is a Tiger - NOT a Dragon.

    In terms of Inflation India is probably nearer 15% - 16%
    It has to be said that 1000% increase in property price also reflects a very worrying statistic. China has seen 500% gains. Anything over that (regardless of fundamentals) really reflects enviroment of extreme inflation.

    I also believe that India and China are two completly different economies. And that analysing the future of one to predict the other is useless. I believe the single most important thing about where China is heading has to do with the huge reserves the government has and the pro-growth/pro-employm... government officials back-pockets policies.

    China just spent 80 billion USD on the Olympic Games to show the rest of ther World its power etc etc.

    They really would not think twice about spending 200-400 billion USD out of the 2+ trillion they have to stimulate demand during the next few years of hardship.

    China's cushion is huge.

    Reply
  • commenter
    techy
    Aug 13 11:32 PM
    Six Reasons To Buy China Soon [view article]
    I am not bullish on india, but i kind of disagree with "From India" on that inflation being 25%.

    i hope he is not including the price of a house...which has gone up 1000% in some locations in the past 4-5 years.

    according to me the biggest cost of of living in india is commodities and energy.

    and if i am not wrong, the cost of commodity and energy is almost same all over the world (+-5%), so if inflation in india is 25%, then it has to be atleast 15% all over the world.

    i am not in india but i have family and friends and if we exclude the housing thing, inflation is definitely not 25%, yes it is more than 7-8%, but that is mostly due to commodities and energy skyrocketing all over the world.

    by the same measure real inflation must more than 6-7% even in usa. (cost of gas itself is more than 30% YoY)

    another thing, if the currency of india is not depreciating against USD, then it does not matter if inflation is 20% or 40%, for a non-indian investor.

    and in the past 2-3 years, indian currency has appreciated against the dollar.

    From India: you sound like an elitist.....when you say wages are rising....what do you expect, inflation is high but wages to stay stagnant??     Reply
  • commenter
    investor88
    Aug 13 10:47 PM
    Six Reasons To Buy China Soon [view article]
    Agree with views of "From India." Recent history suggest China is correlated with India so in the next year or two China like India is unlikely to perform from a equity investment viewpoint, or you have to be cautious and sceptical. Long term everybody agree India and China have a bright future, grow faster than the developed economies. Reply
  • commenter
    From India
    Aug 13 09:23 PM
    Six Reasons To Buy China Soon [view article]
    Anyone who thinks about buying India now is a fool. I live in USA and I am currently vacationing in India. Its true that People are spending like crazy. But look at the prices of everything around here, they are going over the roof. I suspect the real inflation here is around 25%. Wages are increasing, and the demand for everything is way up. Heavy urbanization, extreme pollution and migration of farming people from Rural areas is definitely going to weigh heavily on food prices. Inflation is going to kill this economy and I dont suspect it is going to moderate soon (even though the recent government prediction is that it will moderate by 2009 second quarter to around 8%). People saving in the banks are earning a negative real rate of return when you look at Indian bonds yielding about 10% currently. I dont know how long people will still keep saving their hard earned cash in banks. (As you may have noted, the Real Estate developers are supposed to be scrambling to raise cash for their projects)

    I believe the Risk free rate to be around 16% with inflation around 13% (Govt measure, and also without any regards to current Domestic Bond Yields and a paltry risk premium of 3%). With a COE of around 16% (Without even considering a Country premium) , your risk is not rewarded unless you make more than 16% and I dont think that it is an easy task to find decent valuations.

    If you ask me, even the domestic investors are lame, without any understanding of risk-reward. I will refrain from investing in Indian stocks that are Export oriented at the least. However, the domestic sector may still be a viable option (if the ADRs are available).

    I am negative India. And my advise is to refrain from buying at this time. Wait, they have a lot of scope on downside. The risk reward ratio is totally skewed.     Reply
  • commenter
    TERN
    Aug 13 08:59 PM
    My Website
    Six Reasons To Buy China Soon [view article]
    Repudiation by the Government of China of $260 billion of its sovereign debt and the pending reclassification of the Chinese government’s sovereign credit rating into ‘Selective Default’. --------
    You have to make it clear that this concerns the long-repudiated debt of the old "Republic of China".
    Maybe the court case and the publicity will make the government change its mind and decide to honour these old debts after all.

    That would be hugely positive.     Reply
  • commenter
    johnthebear
    Aug 13 05:30 PM
    Six Reasons To Buy China Soon [view article]
    The following should help shed some light on the question: I agree with Mr. O'Brien's analysis.

    In my view, China may be down a couple of years, just like the rest of the world. Then it would be the time to buy China, but not now.

    China's Negative Economic Outlook

    by: Kevin O'Brien posted on: July 02, 2008 |

    Certain recent developments in conjunction with prevailing global economic trends appear sufficiently serious to warrant a current economic assessment of the People’s Republic of China [PRC] and a review of China’s sovereign credit risk.

    U.S. ECONOMIC TRENDS

    The U.S. economy is experiencing a significant contraction as U.S. consumer spending continues to decline. Housing prices have plummeted as the rate of both residential and commercial mortgage delinquencies continues to increase. At the end of the first quarter of this year, nearly nine million borrowers held mortgages exceeding the value of their homes, and this number is expected to increase significantly. The U.S. economy shed 80,000 jobs in March according to the U.S. Department of Labor, the largest loss in five years. Average U.S. household debt is 85% higher than in 2001, and continues to increase as consumers take on greater levels of debt in response to rising commodity prices, particularly food and energy costs. Delinquency and default rates for credit card debt, automobile loans and student loans continue to rise rapidly, as delinquencies have increased from less than $300 billion in 2005, to $715 billion in 2008; representing an increase of nearly 150% within 36 months. The present economic stress will likely be compounded by an expected record number of bank failures. U.S. consumer spending is predicted to continue to decline as consumers experience increasing commodity price inflation and credit contraction.

    In a report dated May 19th, Oppenheimer analyst Meredith Whitney warned:

    The real harrowing days of the credit crisis are still ahead of us and will prove more widespread in effect than anything yet seen. Just as strained liquidity pushed so many small and mid-sized specialty finance companies to the brink, we believe it will do the same to the U.S. consumer. We believe losses will only accelerate further and far worse than the most draconian estimates.
    Ms. Whitney also estimates about $2 trillion of credit card lines will be removed by 2010, cutting the credit available to U.S. consumers by nearly half.

    CHINA’S ECONOMY DEPENDENT ON U.S. CONSUMER SPENDING

    The significance of the negative short- and mid-term U.S. economic outlook is especially troubling to China’s export sector, which is the primary hard currency earnings producer for the Chinese government. As U.S. consumer spending continues to retreat, the economic effect is anticipated to produce severe structural pressures on China’s export-driven domestic economy due to significantly decreasing external demand.

    PERVASIVE INFLATION IN CHINA’S DOMESTIC MARKET

    China’s economy continues to experience pervasive inflation which is particularly manifest in such consumer sensitive sectors as energy (e.g., petroleum prices which have more than doubled over the past twelve months) and food staples (e.g., the price of food, which increased 23% just during the month of February). Chinese consumers have benefitted from the state control of energy prices, which has also resulted in the loss of over 50% of the value of Sinopec shares within the last six months as the government continues it attempt to control fuel costs for consumers. Such trends are unsustainable for a country with a population in excess of 1.3 billion and which imports approximately 78% of its petroleum. Data published by the U.S. Energy Information Administration indicates that China’s increase in oil demand represents a majority of the total global increase in demand. With increasing demand and relatively flat domestic production since 1986, China’s reliance on petroleum imports is expected to continue, subjecting the government to additional economic stress.

    In its semi-annual Economic Outlook published this month, the Paris-based Organisation for Economic Co-operation and Development [OECD] expressed concern regarding the threat posed by persistent inflationary pressures manifest in China’s domestic market. China’s consumer price index was officially reported at 7.7% in May and 8.5% during April, and remains above its January level of 7.1%. Taking into account China’s industrial consumption of commodities and that China produces very few commodities domestically and is therefore reliant on global sourcing at prevailing prices to procure raw materials for its manufacturing industry, the OECD expects wage and price inflation to erode China's export competitiveness.

    The OECD report states:

    Coupled with ongoing weakness in external demand, exports and the pace of market share gains are projected to slow markedly.
    Such an outcome raises the risk of political instability resulting from increases in urban unemployment and other factors as discussed in this assessment.

    ACTION

    The following trends and events are identified as material to an assessment of China’s near- and mid-term economic outlook:

    The extent of dependency of the Chinese government on hard currency earnings derived from manufactured exports supported largely by U.S. consumer spending.
    The depth of the retreat in U.S. consumer spending and the high probability of a prolonged contraction of the U.S. economy.
    The fundamental dynamics responsible for China’s domestic wage and price inflation and the increased risk of political instability attributable to the rising cost of imported consumer and industrial commodities, reduced demand for export products, and a significant increase in urban unemployment.
    The rate of increase of China’s petroleum consumption and the dependency of China’s export manufacturing sector on petroleum imports.
    China’s ability to maintain the global competitiveness of Chinese manufactured goods in the face of rapidly increasing transportation costs.
    Government debt statistics evidencing an unsustainable overreliance on debt financing, particularly short-term debt, to sustain economic growth.
    Repudiation by the Government of China of $260 billion of its sovereign debt and the pending reclassification of the Chinese government’s sovereign credit rating into ‘Selective Default’.
    Upon an evaluation of the foregoing, Sovereign Advisers issues a Negative Outlook for the domestic economic prospects of the People’s Republic of China and a Negative Outlook for the safety and performance of government bonds issued by the People’s Republic of China.
    Reply
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