Slowing growth in China may cause the country to lose some of the investments by European firms operating in the country, according to a recent poll. But the good news is, the country’s “A” shares may finally be included in the MSCI emerging markets index once the government is able to address some issues. But when, nobody knows. For now, investors are disappointed by the MSCI’s delayed action, and vented out their frustrations on the stock market.
European firms operating in China eyes cost cutting, shifting their investments. According to a survey by the European Union Chamber of Commerce in China, a number of its members are considering cutting jobs to lower costs, and even move some of their investments to other countries. This is triggered by concerns about the slowing economy. The Wall Street Journal (paywall)
Chinese shares end slightly lower in another bumpy session. Disappointed by the delay in the inclusion of “A” shares into the MSCI emerging markets index, Chinese investors pushed the main indexes lower Wednesday. The Shanghai Composite Index closed down 0.1%, rebounding from an over 2% decline in the early morning session, while the CSI300 index lost 0.2%. Hong Kong was last seen down 0.2%. Reuters/The Wall Street Journal (paywall)
China may relax margin financing rule.The China Securities Regulatory Commission is considering allowing brokers to rollover margin trading and short-selling contracts once or twice for every six months. The regulator may change its rules so that investors could extend the maturity of their contracts to ease the pressure for them to sell their stock holdings during margin calls, averting a massive selloff that could cause the market to collapse. Bloomberg
Yen rises to two-week high after central bank chief’s remarks to lawmakers. Haruhiko Kuroda, the governor of the Bank of Japan, said the country’s currency is “very week” based on the real effective exchange rate. His comments before a lower house committee pushed the dollar to as low as 122.77 yen, its weakest since May 27. Nikkei Asian Review
Japanese firms core machinery orders rise in April. Used as a gauge for future capital spending, core machinery orders jumped a 3.8%, seasonally-adjusted, in April from March. That was the second straight month that it expanded, boding well for the economy. Nikkei Asian Review
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