Reuters Insider - Asia Insight: China shares gain on FTSE Russell entry hopes, potential MSCI weighting raise
26/09/2018 15:01
Click the following link to watch video: https://share.insider.thomsonreuters.com/link?entryId=1_0a2budrl&referenceId=1_0a2budrl&pageId=ReutersNews Source: Reuters Insider Description: China stocks closed higher on Wednesday as global index provider MSCI said it will consider quadrupling the weighting of Chinese big-caps in its global benchmarks and as FTSE Russell is expected to include Chinese shares in its benchmark this week. Short Link: https://reut.rs/2N5nqkh Video Transcript: Hello and welcome to your Asia Insight. I'm Angeline Ong. Our top story this Wednesday, Asian shares pulled ahead as Chinese markets extended their recovery to hit 8-week highs. Fears about the trade war are receding and there are hopes China's weighting in the global benchmark will be increased. Global index provider MSCI says it will consider quadrupling the weighting of Chinese big caps in its global benchmarks. Well, later this week, FTSE Russell is also expected to admit Chinese shares into its major benchmark. Stocks outside Japan rose by around 0.2% point and Shanghai CSI300 closed more than 1% higher on rising expectations of a stimulus package to offset damage caused by the trade dispute. Japan's Nikkei climbed more than 0.3%, touching its highest since late-January. Now the worsening trade war has battered Chinese stocks and currency this year but that hasn't stopped foreign investors rushing into the country's capital markets. If anything, the sell-off has had a bargain hunting among investors such as Fidelity, UBS, and JP Morgan. They believe the long-term growth potential of the world's second biggest economy outweighs the more immediate hit from trade disputes. The governor of the Bank of Japan says it's time to consider more seriously the downsides to its massive stimulus program. Haruhiko Kuroda says near-zero rates won't be maintained indefinitely especially if inflation starts to tick higher. In the minutes of the BoJ's July meeting released on Tuesday, some policy makers warned that the Central Bank needs to pay more attention to the potential dangers of ultra easy policy such as damage to the banking system. Singapore's manufacturing output fell in August. Production was 2% lower than in July because of declining output of electronics and pharmaceuticals. Despite the slowdown, analysts say that Singapore is weathering the deterioration in Sino-US trading ties reasonably well. The Singapore Dollar has held up well in comparison with some of its neighbors such as the Malaysian Ringgit and the Indonesian Rupiah. Well, let's take a look at some companies in the news and the Chinese hot pot chain Haidilao shares jumped as much as10% on its debut in Hong Kong. This gives it a valuation of about $13 billion. The company priced its IPO at the top of an indicative range, underscoring investor optimism about its growth prospects. A steelmaker, China BaoWu Steel is in talks to take over rival Magang Group. That's according to three sources close to the discussions. The marriage would sharply narrow BaoWu's gap with the world's top ranked producer ArcelorMittal. BaoWu and Magang's combined steel output last year surpassed total US production. The Indian hotel chain OYO will try to raise $1 billion from existing investors to grow its business in its home market in China. In the latest funding round which could value OYO at about $5 billion, it has already raised $800 million from investors led by SoftBank's Vision Fund, the world's biggest private tech investor. Now Chinese brokerage Huatai Securities says it plans to list in London. If it goes ahead, it would be the first Chinese company to sell shares under the long awaited Shanghai-London Stock Connect scheme. Huatai aims to raise at least $500 million to boost working capital for domestic and overseas expansion. And President Trump says he's working on a new summit with North Korea's Kim Jong-un. The two met early in the summer in Singapore for the first time. The US is pressing on the North denuclearization and the dismantling of its missile testing sites. No decision has yet been taken as to the venue. The announcement comes as Trump and South Korean President Moon Jae-in signed a free trade agreement in New York. br/ br/ We have an agreement to work out another summit and we look forward to doing that. I'm going to be meeting with Chairman Kim in the not-too-distant future. The location is being worked on, the time is being worked on and we'll be announcing it. And that's it from your Asia Insight. I'm Angeline Ong and this is Reuters. br/