Comments on: Chinese Focused ETFs Back on Fire?

By: Tom Lydon

Tom Lydon — Wed, 23 May 2007 20:16:57 +0000

Thanks Mike for the additional information on the Chinese markets. It will be interesting to see what happens with the Chinese market structure.
Tom

By: Michael Burnick

Michael Burnick — Mon, 21 May 2007 19:49:37 +0000

The disconnect in performance between China’s domestic A-share markets and US based ETFs is certainly due to the two-tier market structure in China. None of the US based ETFs (including the new GXC) are invested in A-shares. Instead, they hold a combination of H-shares, and or US based ADRs (which track the H-shares). As you correctly point out, the H-share market is up only about 5% so far this year, compared to huge gains in mainland stocks. But this may be about to change. In fact, attached is a link to a recent article I wrote on this subject: http://burnickblog.sovereignsociety.com/2007/05/china_finally_m.html Mike Burnick

By: Tom Lydon

Tom Lydon — Mon, 14 May 2007 22:12:28 +0000

Thanks for the questions George. Our follow up post on this story (on May 12th) should help explain your first question. Regarding future prices, the development in China continues to be flourishing compared to the U.S. economy – we are not in the business of predicting future prices, however the trend is still in tact for China.

By: George

George — Sat, 12 May 2007 00:16:56 +0000

Would today’s jump in Barkley’s FXI, that is listed on Honk Kong exchange, be caused by China allowing overseas investment?

I know that the same stocks listed on both exchanges differ greatly in price, Shanghai being more expensive.
Would you anticipate that in the future this prices will level?

By: Lance

Lance — Thu, 10 May 2007 21:20:50 +0000

Tom, something I have started to notice and since you brought up the Chinese markets I will ask you…

As you mention the Chinese stock markets have been on fire… the Shanghai up 50% this year and the Shenzen up 100%. The US traded Chinese ETFs on the other hand are barely up, if up at all. Given the ETFs are probably very much large cap and multinational companies, but still the differential is huge. Have you noticed this and have you any other explanations? Thanks for any help you can offer.