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April 13, 2007


Shanghai Composite Index — Taking the Long View

Here’s a monthly chart of the Shanghai Composite Index since 1995 — puts things in perspective. I still think the recent parabolic move is going to end badly, but picking a top is a fool’s game (that I can’t help playing again and again — human nature is a terrible thing to waste).

Here’s the daily data for the Shanghai Composite Index if you’d like to download it:

DATA: Jan. 4, 1995 - Apr. 12, 2007 Shanghai Composite Index (.xls format)

SHCOMP

This entry was posted on Friday, April 13th, 2007 at 9:10 am (utc+8) and is filed under China, Trading and Investing.

9 Responses to “Shanghai Composite Index — Taking the Long View”

  1. manuel said:
    April 13th, 2007 at 10:21 am

    So much for the Shanghai Composite Index chart. I still lost money on GCH, and no I did NOT trade myself into losses. GCH does not follow the Shanghai Composite Index close enough. More than picking a top; investing in China stocks is a fool’s game. :)

  2. C. Maoxian said:
    April 13th, 2007 at 10:32 am

    manuel: I’d stay away from something like GCH just because of the fees (1.25%) alone. Morgan Stanley’s A-Share Fund has a 1.9% management fee, which I’d obviously never pay. The FXI is better at 0.75% (?) but I’ve gotten so used to paying 15-30 bps at Vanguard that I can’t accept anything richer, even for emerging markets.

  3. manuel said:
    April 13th, 2007 at 12:30 pm

    Agreed. However, the tracking error between these China funds and the indexes seems to be quite large.

    Do you have charts for the A share and B share Indexes, so the audience can see what we are referring to?

  4. C. Maoxian said:
    April 13th, 2007 at 12:33 pm

    manuel: That’s the risk of paying some monkey to pick stocks instead of just throwing up your hands and buying the whole market. I do have A-share and B-share index charts, but not on me at the moment. Folks can look at them at Yahoo! anyway if they’re interested.

  5. brian said:
    April 15th, 2007 at 4:36 pm

    manuel: The CAF is the only China fund I’m aware of that tries to track the A-share index. Others generally track the H-share index in Hong Kong. Unless QFII quotas are increased and exchange controls are loosened in China, there wouldn’t be much opportunity for foreign non-instituiional investors to participate in the A-share market.

    C. Maoxian: What do you think of the valuation gap between shares listed on the H-share vs A-share markets?

  6. C. Maoxian said:
    April 15th, 2007 at 7:35 pm

    brian: I think more hairdressers in Hong Kong need to pile into the H-shares with “lucky names” — that should narrow the gap with the hairdresser-sponsored Mainland issues.

  7. David Schere said:
    May 2nd, 2007 at 9:09 pm

    Thanks brian,

    CAF looks awesome. It to over extended to buy right here. But something for me to consider for the next correction.

    Great comments guys !

  8. Sam said:
    May 10th, 2007 at 11:06 pm

    Are there put/call options available on the Shanghai index?

  9. C. Maoxian said:
    May 10th, 2007 at 11:11 pm

    Sam: No. (Not that I know of anyway — god forbid the manicurists get their hands on derivatives.)

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