Tag Archives: Index

Chinese Shanghai Composite index falls 5.3% on Monday

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Recent actions by the Chinese regulators to curb lending has further unnerved investors already unsettled by recent comments from Ben Bernanke. The interest rates Chinese banks charge each other surged last week to record highs before falling back.  And following a recent statement by the People’s Bank of China, the Shanghai Composite Index fell 5.3% Monday night.

 

Adrian Lowcock, Senior Investment Manager, at Hargreaves Lansdown;-  

 

“China’s new leadership is addressing some of the risks that have been building up in the banking system, inevitably this could result in some short term pain, possibly impacting on growth but it should benefit China in the longer run.  Chinese stock markets do look cheap at present,  based on 20 years of information.   In addition it is important to remember that China is a state-controlled economy and therefore it is very difficult to make a clear judgement on the accuracy of the information being provided.   There are some concerns China’s shadow banking system will spiral out of control, however it seems unlikely the People’s Bank of China will let the system fail.“

 

“In line with their 5 year plan China is undergoing a change from an export driven manufacturer to a consumer focused economy. This transition is not going to be smooth and there will be some bumps along the way.  China continues to grow, at around 6 to 7% per annum, but like all emerging markets this does not lead to a smooth rise in the equity market.

 

In 2007 investing in China was very popular and as a result valuations rose to very high levels. The market has underperformed both developed and emerging markets since. There are clearly issues in China’s financial system and authorities are now taking action to deal with these. For long term investors that want to have exposure to China this setback could be providing an opportunity to invest. Company earnings are rising and valuations are looking much more attractive. Most investors can get sufficient exposure through a well-diversified emerging markets fund such as First State Asia Pacific Leaders which has 23.9% in the region or Aberdeen Asia Pacific which has 18.47% in the area.   For investors wishing to take a more adventurous approach and are able to tolerate a higher level of risk then Jupiter China, managed by Philip Ehrmann, provides exposure.”

 

HMV’s slow digital response to blame for demise – Musicmetric chief

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HMV’s slow digital response was its undoing, says leading digital music expert

HMV confirmed the end of its three-year nose-dive into administration last night with the appointment of accountancy giant Deloitte. But its fate was sealed long ago by its slow response to the digital revolution, according to a leading digital expert.

The firm, which employs more than 4,000 people, ceased trading shares and issued a statement which said: “The board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection, and in the circumstances therefore intends to file notice to appoint administrators to the company and certain of its subsidiaries with immediate effect. The directors of the company understand that it is the intention of the administrators, once appointed, to continue to trade whilst they seek a purchaser for the business.”

Gregory Mead, CEO of Musicmetric, the global music analysts, said:

“It’s a sad but inevitable fate for a much-loved stalwart of the music industry. But where retailers like John Lewis have embraced the internet – building customers through its Click and Collect service – HMV simply failed to adapt to the changing tastes of music fans and the seismic shift we’ve seen as everything has gone digital.

“While figures from the 2012 Digital Music Index showed file-sharing to be rife right across the UK, the upshot of this is that there are millions of fans accessing music each day. The challenge for retailers like HMV has been to find ways to tap into this – but you’d be hard pressed to be able to walk into an HMV store and buy songs directly on to your iPod.

“The changing face of music, and that digital technology has overhauled the way we interact with records, means that artists can engage directly with fans, meaning physical retailers have needed to evolve as well. While previously it was all about CD releases and the Sunday chart show, now the most important thing is knowing where your fanbase is and what drives them so you can market to them directly and maximise revenues from a myriad of sources.”