The PowerShares China A-Share Portfolio (Fund) is an actively managed exchange-traded fund (ETF) that seeks to achieve its investment objective by providing exposure to the China A-Share market. The Fund seeks to provide long-term capital appreciation using a quantitative, rules-based investment strategy designed to provide returns that correspond to the performance of the FTSE China A50 Index. The Index is a real-time index that provides exposure to the largest 50 A-Share companies on a market-cap-weighted basis.
See more details on sponsor's website
Chinese and Hong Kong stocks lead an Asian rally following sharp Fed-inspired losses in the region yesterday.
The Shanghai Composite Index jumps 2.7% amid speculation that the Chinese government will ease the ability of banks and property developers to raise money as part of an attempt to boost the stuttering economy, further evidence for which was provided in China's "Beige Book." One financing idea being bandied about is letting lenders sell preferred shares.
The yuan is steady following further sharp losses for the renminbi this week, with the USD-CNY -0.1% at 6.229 yuan.
The Chinese yuan has fallen for the sixth day in a row and hit its lowest level in a year, with currency analyst Kenix Lai believing that the People's Bank of China has been engineering the fall, possibly to "change the perception of the one-way bet on yuan gains."
Lai says the PBOC may also be "introducing two-way volatility as it prepares the renminbi for a wider trading band." The PBOC said last week that it plans to expand the range in an "orderly" manner.
The yuan's direction has generally been upwards, but since touching a record high against the dollar in mid-January, the currency has dropped over 1%.
Today, the PBOC set the renminbi's daily reference rate at 6.1184 to the dollar. The yuan is allowed to trade 1% either side of the rate.
Asian shares have mostly fallen as investors have seemed to grow more fearful about the significance of poor Chinese manufacturing PMI data yesterday.
Investors have sought safe havens such as the yen - the USD-JPY is -0.3% at ¥103 - helping to send the Nikkei -1.9%.
"A correction could occur," says investment strategist Shane Oliver. "We have to expect more volatility. Shares are no longer dirt cheap, meaning the easy gains are behind us."
The once place where the PMI data didn't seem to to have an effect today was China, whose Shanghai Composite rose 0.6%. Stocks were partly boosted by money market rates falling again following a $42B+ injection of cash this week from the central bank ahead of the Lunar New Year. The seven-day repo rate dropped 77 bps to 4.61%.
Asian equities are mixed after preliminary data from HSBC showed that Chinese manufacturing activity contracted for the first time in six months.
"The weak flash PMI will inevitably inflame China slowdown worries, but this is only one data point," says strategist Linus Yip. "If more data start to also show a deeper slowdown, Beijing may be forced to stimulate in order to maintain a stable basis for growth that they need to execute reforms."
However, it was the Hang Seng that seemed to take the brunt of the losses, falling 1.4%, while Australia's S&P/ASX 200 dropped 1.1%.
The Shanghai composite closed -0.5%, with the negative mood perhaps offset by the People's Bank of China conducting 120B yuan ($19.8B) of 21-day reverse-repurchase agreements as it seeks to further defend against a credit crunch.
Elsewhere in Asia, Japan's Nikkei closed -0.8% and India's Sensex is +0.15%.
Chinese shares led Asian shares higher, with the Shanghai Composite rising 2.2% as stocks built on yesterday's gains following the injection of liquidity into money markets by the People's Bank of China in order to avert a cash crunch. The PBOC is expected to add more funds in operations tomorrow.
"The cyclicals and the blue chips are leading the rebound today, which usually points at policy relief," says analyst Cao Xuefeng. "It's more a relief rally at this point."
In Japan, the Nikkei rose 0.2% after the BOJ again maintained its ultra-loose monetary policy as is.
Having surged 153 bps yesterday, China's seven-day repurchase rate fell 88 bps to 5.44% today after the People's Bank of China injected over 255B yuan ($42B) into the financial system and expanded a loan facility in order to meet demand for cash ahead of the Lunar New Year.
The PBOC's action helped the Shanghai Composite rise 0.9% and the Hang Seng 0.5%.
Meanwhile, the shares of eight small companies jumped on their trading debuts today, prompting the Shenzhen Stock Exchange to warn about "blindly" speculating in IPOs. The stock moves highlight the demand for new listings following the end of a year-long moratorium on IPOs.
Asian shares are mainly lower as disappointing earnings results out the U.S. hurt sentiment.
China's Shanghai Composite closes -0.9% for its third weekly loss. Investors stayed cautious ahead of GDP and other economic next week, while a surge of 43% in the shares of debutant Neway Valve served to highlight concerns that an upcoming wave of offerings will divert money from other stocks. The industrial valve manufacturer is the first company to hold an IPO following the end of a year-long moratorium on new listings.
Elsewhere in Asia, Japan's Nikkei -0.1%, Hong Kong's Hang Seng +0.6% and India's Sensex is -1%.
Asian and European stocks mostly fall following Wall Street's sharp losses yesterday, while U.S. stock futures are flat-to-higher.
Earnings warnings in the U.S. are among the factors weighing on sentiment.
However, Chinese equities bucked the tape in Asia, rising 0.9% following four days of losses and after the Shanghai Composite traded at 10.1 times reported earnings yesterday, the lowest since at least 2007. The re-opening of the IPO market has been hurting the mood lately..
The Nikkei plummeted 3.2% during the first session of the week amid a strengthening of the yen over the long weekend. Elsewhere in Asia, Hong Kong -0.4%, India -0.5%.
EU Stoxx 50 -0.45%, London -0.4%, Paris -0.5%, Frankfurt -0.6%, Madrid -0.3%, Milan -0.35%.
U.S. stock futures: Dow flat. S&P +0.1%. Nasdaq flat.
Following an uncertain beginning, the Shanghai Composite has closed up 0.2% and ended a run of nine consecutive sessions of losses, its longest losing streak since 1994. The Hang Seng finished +0.6%.
Chinese shares rose despite another spike in short-term interest rates, which had hurt stocks last week. Even though the People's Bank of China provided a further emergency injection of money on Friday, the seven-day repurchase rate was 73 bps higher at 8.94% as of the midafternoon after touching 9.8% at one stage. That's the highest level since the liquidity crunch in June.
However, market watchers say that the increase in money market rates is due to seasonal factors, which might help account for the small recovery in stocks today.
Prior to its emergency provisions of liquidity, the PBOC had refrained from injecting money into the system as it looked - and still does - to rein in soaring debt in China. This has been highlighted by a state think tank that estimates that local-government loans have almost doubled to 19.9T yuan ($3.28T) in 2010-2012. Total central and local government debt was almost 28T yuan at the end of 2012, representing 53% of GDP.
Chinese stocks have closed down for the ninth consecutive session, the worst run since 1994, amid increasing fears of another cash crunch in the short-term money markets.
The seven-day repurchase rate soared 100 bps to a six-month high of 7.6%, representing a jump of 328 bps this week.
The spike came as borrowing remained difficult despite the People's Bank of China making an emergency cash injection in the financial system yesterday after being inactive for over two weeks. The PBOC didn't provide too many details, although the amount was reported to be 200B yuan ($32.9B).
"Market participants have to be able to see it and know the quantity and tenor of liquidity assistance in order to be reassured," says HSBC's Pin Ru Tan. "If they do not, it is natural to remain cautious.
The Shanghai composite fell 2% and the Hang Seng -0.2%.
Asian shares mostly rise following the release of China's economic reform plan on Friday, with Hong Kong-listed Chinese shares jumping 5.7%, the Shanghai Composite 2.9%, and the Hang Seng 2.7%.
Analysts at ANZ called the program "the biggest freeing up of China's economic policy since the 1990s." If implemented successfully, it would "substantially reduce the downside risks to China's economy."
Elsewhere in Asia, Japan flat after surging 7.7% last week, and India +2.2%.