Andrew Sachais • Oct. 23, 2014
Why Investors Are Warming Up To Hong Kong EquitiesAndrew Sachais • Oct. 23, 2014
- The Hong Kong ETF has risen close to 7.5% over the past few weeks.
- Stronger than expected economic growth and industrial production have helped improve sentiment surrounding the index.
- While protesters in the region remain an issue, possible concessions made by the central government could further improve sentiment surrounding Hong Kong stocks.
Hong Kong Equities Hold Value After Fall On ProtestsAndrew Sachais • Oct. 14, 2014
- Investor sentiment for Hong Kong equities is rising even as tensions remain in the region.
- Strong trade data signals that the central bank may hold off on more easing.
- Comments by the IMF and Chinese officials show that they still believe in the long term growth of the Chinese economy.
Chasing Your Tail: An Alpha-Seeking Tail Risk Hedge For The Current Market
- The 2008 Global Financial Crisis and the general prevalence of event-driven waterfall declines over the past 15-20 years have sparked an interest in "tail risk" insurance among institutional investors.
- Most tail risk protection strategies use a passive approach, have high costs and are not widely available to retail investors who in any event have limited awareness of the concept.
- Long-dated, deep out-of-the-money put options on the EWH are a timely example of a low-cost, alpha-oriented tail risk hedge that is available to retail investors.
iShares Hong Kong ETF Steady Despite Currency Peg TalkTom Lydon • Sep. 19, 2011
Hong Kong ETF Post Gains On Currency Peg SpeculationTom Lydon • Sep. 15, 2011
Hong Kong's Scathing Criticism of U.S. Monetary Policy
There are no Transcripts on EWH.
Apr. 10, 2014, 2:04 AM
- Chinese exports tumbled 6.6% on year in March, which represented an improvement from an 18.1% plunge in February, although consensus was for growth of 4%.
- Imports slumped 11.3% after climbing 10.1% and missed expectations of +2.4%, with the decline partly due to falling commodity prices.
- The trade balance swung to a surplus of $7.71B from a deficit of $22.98B and easily topped forecasts for a surplus of $900M.
- Economist Hu Yifan says that "investors don't have to be worried" about the trade numbers, as the declines were partly due to artificially high export data a year earlier and the severe winter in the U.S.
- Still, the figures follow other numbers which show that the economy is slowing, although Premier Li Keqiang ruled out more stimulus to add to measures that were announced recently. China "won’t adopt short-term and strong stimulus policies in response to temporary fluctuations in the economy," Li said. "Instead, we will focus more on healthy growth in the medium-to-long term and will make efforts to achieve sustainable and healthy development."
- The Shanghai Composite +0.2% and the Hang Seng is +0.65%, aided by the dovish FOMC minutes yesterday.
- ETFs: FXI, EWH, PGJ, GXC, FXP, YINN, KWEB, CYB, HAO, CNY, ASHR, CHIQ, DSUM, TAO, CHIX, YANG, CQQQ, MCHI, QQQC, PEK, XPP, YAO, CHXX, YXI, FXCH, CHXF, CHII, ECNS, CHIM, CHIE, EWHS, FCHI, KFYP, FCA, TCHI, CHLC, CHNA, FHK, KBA
Mar. 27, 2014, 4:53 AM
- Asian shares have traded mixed in a choppy session in which the Nikkei recovered to close up 1% after falling earlier in the day. Market players pointed to reinvestment by a public pension fund and short-covering as reasons for the reversal.
- The Shanghai Composite fell 0.8% and the Hang Seng 0.2% as tech stocks took a beating following a bad debut on Wall Street for "Candy Crush" developer King Digital.
- Elsewhere in Asia, India -0.7%.
- ETFs: DXJ, EWJ, DFJ, NKY, DBJP, EZJ, EWV, SCJ, JPNL, DXJS, JSC, ITF, JPP, JPNS, HEWJ, FJP, EWH, EWHS, FCHI, FHK, FXI, PGJ, GXC, FXP, YINN, KWEB, YANG, CQQQ, MCHI, QQQC, XPP, YAO, YXI, CHXF, FCA, TCHI
Mar. 14, 2014, 3:10 AM
- The Nikkei leads Asian stocks lower following more weak Chinese economic data yesterday and amid increased tension in Ukraine, with the Japanese index slumping 3.3%. A sharp rise in the yen overnight didn't help matters.
- "Japan stocks often take the first hit on bad Asian news, then when the U.S. markets fall later, they react to that as well, resulting in a 'double whammy' effect," says hedge-fund manager Ed Rogers.
- Hong Kong shares are also suffering as the Hang Seng drops 0.9% and heads for its worst week since May 2012.
- Elsewhere in Asia, China -0.8% and Indian -0.9%.
- Meanwhile, Japanese industrial production rose 3.8% on month vs a prior estimate of +4%.
- On year, output +10.3% vs +10.6%.
- Capacity utilization +5.9% vs +2.2%.
- ETFs: DXJ, EWJ, FXY, YCS, JGBS, JGBD, JYN, NKY, DBJP, EZJ, EWV, YCL, JPNL, ITF, JGBL, JPP, JGBT, JPNS, JGBB, HEWJ, FJP, EWH, EWHS, FCHI, FHK
Jan. 25, 2014, 10:50 AM
- As gloom and doomish as he's ever been at the Barron's Roundtable, Marc Faber does, however, lean against Felix Zulauf's recommendation to short the Hong Kong ETF (EWH) as a play on a credit bust in China. Property companies are a big component of the Hong Kong stock market, says Faber, and may have already priced in an implosion as they're selling for just 40-50% of asset values. "I would rather buy Hong Kong shares and short the Nasdaq," says Faber.
- It goes without saying that Faber is bullish on gold, but he's a bigger fan of the miners (GDX), noting the fast pace of insider buying in the industry. A member of the board at Sprott, Faber says Eric Sprott has been selling company stock to buy shares in small miners (GDXJ). "If the gold price goes up 30%, Sprott's shares might double, but mining stocks could go up four times."
- Gold mining ETFs: GDX, GDXJ, NUGT, DUST, GLDX, RING, JNUG, GGGG, PSAU, JDST
- Making a decent run after a horrid 3-year stretch, the GDX is up 12% YTD; GDXJ up16.8%.
Jan. 23, 2014, 4:46 AM
- 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 ($19.8B) of 21-day reverse-repurchase agreements as it seeks to further defend against a credit crunch.
- Elsewhere in Asia, Japan's Nikkei closed -0.8% and India's Sensex is +0.15%.
- ETFs: FXI, EWA, EWH, PGJ, GXC, FXP, HAO, YINN, TAO, CHIQ, ASHR, CHIX, YANG, MCHI, PEK, KWEB, CQQQ, QQQC, XPP, AUSE, YAO, CHXX, CHII, CHXF, ECNS, CHIE, YXI, CHIM, EWHS, FCHI, KFYP, FCA, TCHI, CHNA, FHK, FAUS
Jan. 22, 2014, 2:58 PM
- So says the country's Beige Book - a quarterly survey of Chinese businesses and banks. Banks have money to lend, but "fewer and fewer firms are doing any borrowing ... credit is largely being siphoned off by a privileged elite." As the pointed remark might indicate, this Beige Book is not a creature of Beijing, but instead a private effort.
- "Bankers and the government may insist the credit spigot remains open, but it is not open for most and liquidity is not financing genuinely new economic activity.”
- China-related ETFs: FXI, PGJ, GXC, FXP, CYB, HAO, YINN, CNY, TAO, CHIQ, CHIX, ASHR, YANG, MCHI, PEK, DSUM, KWEB, CQQQ, QQQC, XPP, YAO, CHXX, CHII, FXCH, CHXF, ECNS, CHIE, YXI, CHIM, KFYP, FCA, TCHI, CHLC, CHNA, EWH
Jan. 18, 2014, 9:25 AM
- Many have predicted the demise of the China boom and were early, says Felix Zulauf at the Barron's Roundtable, but now it's more obvious "it's in a terminal stage." He's playing it by shorting the iShares MSCI Hong Kong ETF (EWH). The Hong Kong banking system is heavily exposed to mainland China, so when China goes, there could be a banking crisis in Hong Kong. The HK$ is pegged to the greenback, so the HKMA will defend it by hiking rates, smacking the heavily rate-sensitive economy there.
- It's been nearly a decade since Zulauf recommended gold miners, but now's the time the buy the GDX, he says. Gold (GLD) is "washed out ... those who wanted to sell gold have sold it ... Western investors, asset-allocators, ETF players have all sold their gold. The buyers? "Physical gold moved from Western to Eastern hands."
- After 30 years of declining yields, Zulauf isn't a secular bull on U.S. Treasurys, but sees mis-pricing in government paper, noting French 10-year notes yield 50 bps less than comparable U.S. ones. The 10-year Treasury yield could easily fall 75-100 bps and he's a buyer of TLT.
- China-related ETFs: FXI, PGJ, GXC, FXP, HAO, YINN, CYB, CNY, TAO, CHIQ, CHIX, ASHR, YANG, MCHI, PEK, CQQQ, KWEB, DSUM, QQQC, XPP, YAO, CHXX, FXCH, CHII, CHXF, ECNS, YXI, CHIE, CHIM, KFYP, FCA, TCHI, CHLC, CHNA
- Gold and gold miner ETFs: GLD, GDX, GDXJ, NUGT, IAU, PHYS, DUST, SGOL, UGL, DGP, GLL, GLDX, DZZ, UGLD, DGL, DGZ, AGOL, DGLD, GLDI, RING, GGGG, JNUG, PSAU, TBAR, JDST, UBG
- Long-dated Treasury ETFs: TBT, TLT, TMV, TBF, EDV, TTT, TMF, TLH, SBND, ZROZ, DLBS, VGLT, UBT, TLO, LBND, TYBS, TENZ, DLBL
Dec. 31, 2013, 2:11 AM
- China's government has given its approval to five companies to list on mainland stock exchanges, thereby ending an IPO freeze of over a year.
- Over 760 firms are waiting to offer stock to the public, a backlog that could drag down shares of listed companies as funds flow to the new entrants.
- Authorities suspended IPOs in October last year as part of a plan to crack down on fraud, reform the system and restore confidence.
- Separately, Hong Kong and China could soon sign a "mutual recognition" agreement that will allow retail investors on either side of the border to buy into funds that are based in both markets. The deal could facilitate billions of dollars of cross-border investments in shares and bonds.
- ETFs: FXI, EWH, PGJ, GXC, FXP, HAO, CYB, YINN, CNY, TAO, CHIQ, CHIX, MCHI, YANG, ASHR, PEK, CQQQ, XPP, DSUM, QQQC, YAO, KWEB, CHXX, CHII, FXCH, CHXF, ECNS, CHIE, YXI, CHIM, EWHS, FCHI, KFYP, FCA, TCHI, CHLC, FHK, CHNA
Oct. 27, 2013, 12:06 AM| Comment!
Oct. 3, 2013, 3:27 AM
- The reading of 55.4 represents a six-month high and contrasts with lower-than-expected manufacturing PMI surveys.
- The gauges for new orders, retail spending and the logistics industry index grew, while tourist numbers for this week's Chinese holiday increased as well.
- "The rising service PMI suggests that the recovery in Q313 was quite broad based," says Bank of America's Lu Ting. The "robust" service sector indicates that the chances of a hard landing are low. (previous)
- The services PMI has helped boost sentiment in Hong Kong (EWH), where the Hang Seng is +0.8%.
- China ETFs - Stocks: FXI, GXC, PGJ, YAO, FCHI, PEK, CAF, YXI, XPP, FXP, MCHI, YINN, YANG, TCHI, CHXF, KFYP, HAO, ECNS. Bonds: DSUM, CHLC. Currency: CNY, CYB, FXCH
Sep. 27, 2013, 4:06 AM
- The combined profits of large Chinese industrial firms jumped 24.2% on year in August to 483.17B yuan ($78.94B) as growth accelerated from 11.6% in July.
- In January-August, earnings climbed 12.8% to 3.5T yuan.
- Private companies led the way as income increased 16.2%, while that of state-owned firms rose 8%.
- The profit growth adds to other data indicating that China's economy is improving, although not everybody's convinced.
- Shares: China +0.2%, Hong Kong +0.3%.
- ETFs - Stocks: FXI, GXC, PGJ, YAO, FCHI, PEK, CAF, YXI, XPP, FXP, MCHI, YINN, YANG, TCHI, CHXF, KFYP, HAO, ECNS, EWH, EWHS, FHK. Bonds: DSUM, CHLC. Currency: CNY, CYB, FXCH.
Sep. 16, 2013, 7:14 AM
- Emerging markets power ahead to a 3-month high amid a global rally on the Summers withdrawal news. The MSCI Emerging Markets ETF (EEM) is up 1.1% premarket.
- Particularly notable moves include sharply lower Indonesian and Turkish bond yields, and the South Korean won strengthening to a 6-month high,
- Indonesia gained 3.4% overnight, Turkey +3%, and the Kospi rose 1%.
- The Hang Seng (EWH) jumped as well, +1.5%, though Shanghai closed moderately lower.
- Others: The Philippines and Thailand each gained 2.8%.
- Emerging market ETFs: AGEM, EEM, ADRE, SCHE, GMM, VWO, DEM, EWEM, PXH, PIE, EWX, DGS, EMLB, EDC, EET, EMSA, EDZ, EEV, EUM, TLTE, HILO, EELV, EEMA, EMFT, DVYE, FEMS, EVAL, EGRW, EMCR, IEMG, EMDR, EEME.
- Indonesia: EIDO, IDX, IDXJ.
- Turkey: TUR.
- South Korea: EWY, FKO, KORU, KORZ.
- The Philippines: EPHE.
- Thailand: THD, TTF, TF.
Sep. 9, 2013, 7:42 AM
- Shanghai surges 3.4% after a fast export report (grew 7.2% in August vs. 5.5% expected) cooled growth concerns for the moment.
- In an FT essay today, Premier Li Keqiang says the economy will maintain growth near the lower limit of 7.5% (apparently Beijing can make that number happen no matter what the economy is doing).
- FXI +1.3% premarket.
- Other China ETFs: GXC, PGJ, YAO, FCHI, PEK, CAF, YXI, XPP, FXP, MCHI, YINN, YANG, TCHI, CHXF, KFYP, DSUM, CHLC, EWH.
Sep. 2, 2013, 7:57 AM
- S&P 500 (SPY) futures +1%, with the Nasdaq 100 (QQQ) +1.2% and the Dow (DIA) +0.8% after the President leaves a decision on Syrian military intervention up to a Congress skeptical of any such action. The President again reminded any strike - should it take place - would be limited in nature.
- Europe is ahead by nearly 2% as it also gets encouragement from the continent-wide PMI rising to more than a 2-year high.
- Asia was mostly higher, led by a 2% gain in Hong Kong (EWH, EWHS, FHK) after China's PMI returned to growth territory.
- Nothing comes for free though, and the rebound in equities has 10-year Treasury futures lower by 0.4%. A move like that in futures is equivalent to about a 5 basis point increase in the yield, which would put the 10-year at 2.84% were it trading this morning.
- Index ETFs: IVV, SPY, VOO, RWL, SFLA, SSO, UPRO, SDS, SPXU, SH, EPS, RSP, BXUB, BXUC, BXDB, QQQ, QQEW, TQQQ, QID, SQQQ, PSQ, QLD, QQQE, DIA, DDM, UDOW, DXD, SDOW, DOG.
- Treasury ETFs: TLH, TLT, IEF, DTYL, DLBL, ILTB, TENZ, ITE, TLO, EDV, VGIT, VGLT, TMF, TYD, LBND, UBT, UST, TMV, TYO, DSTJ, DSXJ, SBND, PST, TBT, DTYS, DLBS, TBF, TTT, TYNS, TYBS, TBX.
Aug. 16, 2013, 11:46 AM
- Hong Kong's government ups the bottom range of its FY13 growth forecast after Q2 GDP came in a positive +0.8%, ahead of estimates for 0.5%. The new outlook calls for GDP growth of 2.5-3.5% from 1.5-3.5% guessed at in May.
- The risk remains with the "external environment" says Credit Agrciole's Frances Cheung, noting the state's dependence on not just China, but the U.S. as well.
- The stock market (EWH) was closed by the time the data was released, but fell marginally overnight following the big decline in the U.S.
Aug. 14, 2013, 3:40 AM| Comment!
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