SHANGHAI: Foreign buying of Chinese stocks was tepid on Thursday as benchmark indexes rose on the last trading day before mainland shares join MSCI’s emerging markets index.
The rebalancing of portfolios by global fund managers, as well as from some active investors, had led to expectations that there could be a jump in foreign investment to China’s capital markets.
The June 1 inclusion will see around 230 Chinese large-cap stocks, known as A shares, added to MSCI’s emerging markets benchmark index with a 2.5 percent partial inclusion factor. The second phase of the inclusion will take place on Sept. 3.
China’s MSCI entry will integrate the world’s second-biggest equity market, with a total stock market capitalization of more than $8 trillion, into the global financial system.
On Wednesday, MSCI tweaked the final list of companies, dropping embattled Chinese telecommunications gear maker ZTE Corp. and four other firms whose shares have been suspended from trading.
Over the past two months, foreign investors have been ramping up investment in Chinese shares, including retailer Wangfujing Group, Shanghai Flyco Electrical Appliance and spirit maker Sichuan Swellfun , despite rising volatility triggered by fears of a Sino-US trade war.
ZTE has been caught in the crossfire of the dispute and trading in its shares has been halted for two weeks.
While fund manager strategies are hard to predict, many analysts have forecast inflows of $10 billion around June 1. Passive fund managers seeking to replicate the index are widely expected to buy some $1 billion of A-shares during the final hour of trading on Thursday.
By the midday trading break, northbound flows into Shanghai and Shenzhen amounted to about 3.85 billion yuan ($601.2 million) — a fraction of the more than 100 billion allowed each day, but still higher than in recent days.
“I expect foreign inflows will pick up toward the end of trading day as passive funds are obliged to buy China stocks ahead of the inclusion,” said Yang Hai, strategist at Kaiyuan Securities.
“To some extent, it would help lift sentiment in a weak market,” he said, noting that foreign demand may have guided some domestic money into banking and consumer stocks.
Although the MSCI-related inflows will initially be small compared to the size of China’s stock market, inclusion in the global index will spawn other funds and boost interest in Chinese companies.
“On a longer-term basis, the opening of China’s capital markets represents a once-in-a-lifetime market event and will be one of the primary ongoing themes in the region for many years to come,” said Will Stephens, Deutsche Bank equity strategist.
More foreign participation in Chinese stocks could help improve investment culture, and press China-listed firms to bolster their corporate governance, said Bin Shi, head of China Equities at UBS Asset Management.
“Index inclusion will bring more long-term institutional investors into the A-shares market...which will change the market structure,” Shi said, noting that the market is currently dominated by retail investors.
“As overseas investors become more active in the market, so listed companies in China will be under tougher scrutiny and they’ll have to bring their disclosure and governance practices into line with international standards.”
Foreign flows into China stocks tepid ahead of MSCI inclusion
Foreign flows into China stocks tepid ahead of MSCI inclusion
- Inclusion in the global index will spawn other funds and boost interest in Chinese companies
- More foreign participation in Chinese stocks could help improve investment culture, and press China-listed firms to bolster their corporate governance
Sit-in protests in solidarity with violence-hit Kurram district enter third day in Karachi
- Demonstrators call protests in Karachi vital to draw attention to ‘overlooked’ crisis in Kurram
- Traffic police urges citizens to avoid traveling unnecessarily in protest areas, exercise patience
KARACHI: Sit-in protests at various locations across Pakistan’s southern port city of Karachi continued for a third consecutive day today, Sunday, with demonstrators showing solidarity with the people in Kurram district, where violence and a lack of medical access have claimed over 130 lives in recent weeks.
Kurram, a northwestern district of around 600,000 people in Khyber Pakhtunkhwa province, has long been a hotspot for tribal and sectarian violence, with authorities struggling to maintain control.
The area’s situation has necessitated travel in convoys escorted by security personnel, yet it failed to prevent an attack on Nov. 21, when gunmen ambushed a convoy, killing 52 people. The attack sparked further violence and road closures, restricting access to medicine, food and fuel in the region.
A grand jirga, or council of political and tribal elders, has attempted to mediate between rival factions, as protests in Parachinar, the main city in Kurram, spread to Karachi on Friday where demonstrators held sit-in protests at 10 different locations in the city.
“Protest demonstrations due to the Parachinar incident in Karachi city are ongoing,” Karachi Traffic Police said in an advisory, urging citizens to avoid traveling unnecessarily in certain locations across the metropolis.
The protests have been called by the Majlis-e-Wahdatul Muslimeen (MWM), a Shia organization, with demonstrators blocking main thoroughfares, including Shahrah-e-Faisal, which connects the airport to the city’s Red Zone, home to sensitive government installations, and major hotels.
Another area that has been choked is Numaish, a vital junction linking the city’s central district to its commercial hubs.
“Passengers are requested to exercise patience and refrain from going to locations where the demonstrations are taking place,” the traffic police said.
MWM’s Karachi spokesperson, Syed Ahmad Naqvi, told Arab News on Saturday that the protests would continue as long as the Parachinar protests persist.
“Large-scale protests in Karachi highlight the situation in Kurram, where many precious lives have been lost in recent weeks but have received no attention,” he said.
Meanwhile, Karachi Mayor Murtaza Wahab criticized demonstrators for disrupting daily life in the city.
“If the aim of a protest is to inconvenience people, disrupt a city’s system, prevent ambulances and fire brigades from operating, or hinder police and administrative vehicles, then I believe this is inappropriate,” Wahab told Arab News on Saturday.
Impeached South Korean president Yoon Suk Yeol defies summons third time in a row
- Yoon Suk Yeol also failed to attend a hearing he was summoned to last Wednesday, giving no explanation for his absence
- The conservative leader was stripped of his duties by parliament on December 14, following a short-lived martial law declaration
SEOUL: South Korea’s suspended President Yoon Suk Yeol refused a summons to appear for questioning on Sunday, the third time he has defied investigators’ demands in two weeks.
Investigators probing Yoon had ordered him to appear for questioning at 10 am (GMT 0100) on Sunday, a demand he rejected.
Yoon, a former prosecutor, also failed to attend a hearing he was summoned to last Wednesday, giving no explanation for his absence.
The conservative leader was stripped of his duties by parliament on December 14, following a short-lived martial law declaration that plunged the country into its worst political crisis in decades.
Yoon faces impeachment and criminal charges of insurrection, which could result in life imprisonment or even the death penalty, in a drama that has shocked democratic South Korea’s allies around the world.
“President Yoon Suk Yeol did not appear at the Corruption Investigation Office for High-ranking Officials (CIO) at 10 am today,” said the office in a statement.
“The Joint Investigation Headquarters will review and decide on future measures,” it added.
The CIO is expected to decide in the coming days whether to issue a fourth summons or ask a court to grant an arrest warrant to compel Yoon to appear for questioning.
He is being investigated by prosecutors as well as a joint team comprising police, defense ministry, and anti-corruption officials, while the Constitutional Court deliberates on the impeachment motion passed by parliament.
If upheld by the court, which is required to deliver its ruling within six months of the impeachment, a by-election must be held within 60 days of the court’s decision.
Former president Park Geun-hye was impeached under similar circumstances, but she was investigated only after the Constitutional Court removed her from power.
A 10-page prosecutors’ report seen by AFP stated that Yoon Suk Yeol authorized the military to fire their weapons if needed to enter parliament during his failed bid to impose martial law.
Russia will abandon moratorium on deployment of short and medium range missiles, Lavrov tells RIA
- Washington withdrew from the Intermediate-Range Nuclear Forces treaty in 2019
MOSCOW: Russia will scrap a proposed moratorium on the deployment of short- and medium-range missiles as the United States started to deploy such weapons, Russian Foreign Minister Sergei Lavrov said in an interview with RIA news agency published on Sunday.
“We are assessing the situation on the basis of an analysis of the destabilising actions of the United States and NATO in the strategic sphere and, accordingly, the evolution of the threats that arise from them,” Lavrov said.
“Today it is clear that, for example, our moratorium on the deployment of short- and medium-range missiles is no longer practically viable and will have to be abandoned. The US has arrogantly ignored the warnings of Russia and China and in practice has moved on to the deployment of weapons of this class in various regions of the world.”
Washington withdrew from the Intermediate-Range Nuclear Forces treaty in 2019. Russia has since said it will not deploy such weapons provided that Washington does not.
ICC shortlists Pakistani batter Saim Ayub for Emerging Cricketer of the Year award
- Saim Ayub scored two centuries in recently concluded ODI series against South Africa
- He has been nominated alongside Kamindu Mendis, Shamar Joseph and Gus Atkinson
ISLAMABAD: The International Cricket Council (ICC) this week shortlisted Pakistan’s new batting sensation Saim Ayub for the Men’s Emerging Cricketer of the Year award for his match-winning performances against South Africa and Zimbabwe this month.
Ayub has played six Test matches for Pakistan, scoring 323 runs at an average of 26.91 and scored three half-centuries. He has played nine ODIs, scoring 515 runs at an average of 64.37 with three centuries and a fifty already under his belt.
The aggressive opening batter’s two centuries against South Africa in the recently concluded ODI series has earned him critical acclaim and comparisons with former Pakistan batting legend Saeed Anwar.
“With nine categories in total, cricket fans around the world have the opportunity to cast their votes and help decide the winners of the ICC Awards 2024,” the ICC wrote on Saturday.
Ayub has been nominated for the award with Sri Lanka’s Kamindu Mendis, West Indies’ bowler Shamar Joseph and England’s Gus Atkinson.
Pakistan are currently playing the first of their two-Test match series against South Africa in Centurion. The hosts have handed the Proteas a 148-run target, as South Africa struggle at 27/3 to chase the target.
Belgium will ban sales of disposable e-cigarettes in a first for the EU
- The inexpensive e-cigarettes had turned into a health threat since they are an easy way for teenagers to be drawn into smoking and get hooked on nicotine
BRUSSELS: Belgium will ban the sale of disposable electronic cigarettes as of Jan. 1 on health and environmental grounds in a groundbreaking move for European Union nations.
Health minister Frank Vandenbroucke said the inexpensive e-cigarettes had turned into a health threat since they are an easy way for teenagers to be drawn into smoking and get hooked on nicotine.
“Disposable e-cigarettes is a new product simply designed to attract new consumers,” he said in an interview.
“E-cigarettes often contain nicotine. Nicotine makes you addicted to nicotine. Nicotine is bad for your health. These are fact,” Vandenbroucke added.
Because they are disposable, the plastic, battery and circuits are a burden on the environment. On top of that, “they create hazardous waste chemicals still present in what people throw away,” Vandenbroucke said.
The health minister said he also targeted the disposable e-cigarettes because reusable ones could be a tool to help people quit smoking if they cannot find another way.
Australia outlawed the sale of ” vapes” outside pharmacies earlier this year in some of the world’s toughest restrictions on electronic cigarettes. Now Belgium is leading the EU drive.
“We are the first country in Europe to do so,” Vandenbroucke said.
He wants tougher tobacco measures in the 27-nation bloc.
“We are really calling on the European Commission to come forward now with new initiatives to update, to modernize, the tobacco legislation,” he said.
There is understanding about Belgium’s decision, even in some shops selling electronic cigarettes, and especially on the environmental issue.
Once the cigarette is empty, “the battery is still working. That’s what is terrible, is that you could recharge it, but you have no way of recharging it,” said Steven Pomeranc, owner of the Brussels Vapotheque shop. “So you can imagine the level of pollution it creates.”
A ban usually means a financial loss to the industry, but Pomeranc said he thinks it will not hurt too much.
“We have a lot of alternative solutions which are also very easy to use,” he said. “Like this pod system, which are pre-filled with liquid, which can just be clipped into the rechargeable e-cigarette. So we will simply have a shift of clients toward this new system.”
