Embargoed until:
Press Rlease
 Press Release                                                        00:01 26.01.09




The...
1Based on the average end month index values across global stockmarkets




Chinese stock prices hit by crisis of confiden...
Table 1: China & Major Global Stockmarkets
Country         Dec-98     Dec-07     Dec-08           1 year   10 year   10yrs...
EDITORS' NOTES:



    1. The following indices have been used as benchmarks for share prices:

        Country           ...
Upcoming SlideShare
Loading in …5
×

26 January 2009 – Year of the Rat sees Chinese stock prices ...

214
-1

Published on

Published in: Business, Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
214
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
1
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

26 January 2009 – Year of the Rat sees Chinese stock prices ...

  1. 1. Embargoed until: Press Rlease Press Release 00:01 26.01.09 The third Clerical Medical Chinese Stock Market Review examines the movements in Chinese stock prices over a ten year period (December 1998-December 2008) using stock market indices as benchmarks. Data is measured at an end month index value. Released to coincide with the Chinese New Year on Monday 26th January. YEAR OF THE RAT SEES CHINESE STOCK PRICES FALL 65% • Chinese stock prices, measured by the Shanghai Index, have declined by 65% over the past year from an index value of 5,521 on 31st December 2007 to 1,912 on 31st December 2008, more than double the fall in UK stock prices (-31%) • The decline in Chinese stock prices over the past year was significantly greater than the average fall across the major global stockmarkets (-43%) • Over the past year, stock prices in China have fallen by more than their neighbouring countries and by more than the regional average of -49% • During the past decade the Chinese Shanghai Index rose by 56% (4.6% pa on average) from an index value of 1,220 on 31st December 1998 to 1,912 on 31st December 2008 • China has recorded the biggest rise in equity prices of all the major stockmarket across the world in the past decade and is one of only three of the major global stockmarkets to have recorded an overall increase between 1998 and 2008 Martin Ellis, chief economist at Clerical Medical, said: "The Year of the Rat proved to be a turbulent one for the Chinese stockmarket with stock prices falling by 65% compared to a 43% decline for the average across the major global markets." "China was still one of the few major global stockmarkets to emerge from 2008 with equity prices higher than a decade ago, suggesting that it remains one of the most attractive emerging markets for investors." KEY FINDINGS Chinese stock prices in 2008 Chinese equity prices down 65%1 in Year of the Rat With China about to enter the Year of the Ox in the Chinese calendar, new research by Clerical Medical shows that stock prices in China in 2008 fell by more than double the decline in UK equity prices. Over the past year, the Shanghai Index has declined by 65% from an index value of 5,521 on 31st December 2007 to 1,912 on 31st December 2008. Over the same period, the FTSE100 fell by 31% from 6,457 to 4,434. Clerical Medical is part of the Lloyds Banking Group Tel: 01422 333829 Fax: 01422 333007 Website: http://www.lloydsbankinggroup.com/media.asp
  2. 2. 1Based on the average end month index values across global stockmarkets Chinese stock prices hit by crisis of confidence The drop in Chinese stock prices was more marked than across any of the other major global markets 2. Fears over the impact of a prolonged US recession on the Chinese economy led to a decline in investor confidence with sales of consumer goods, particularly to the US, a key driver of Chinese growth. Additionally, rising inflation and tighter government controls contributed to the sharp fall in Chinese equity prices. Stock prices in China underperform major global stockmarkets2 in 2008 The drop in Chinese stock prices over the past year (-65%) exceeded the decline in all the other major stockmarkets across the world and was significantly greater than the average fall of 43%. Hong Kong recorded the second largest fall (-48%), followed by Australia and France (both -43%). Equity prices in China decline faster than the East Asian3 regional average Over the past year, stock prices in China (-65%) have fallen by more than their neighbouring countries and by more than the regional average2 of -49%. India recorded the second sharpest decline (-55%) in the region, followed by Indonesia (-51%). Chinese stock prices 1998-2008 Chinese stock prices have risen by 57%1 over the past decade Between 1998 and 2008 the Chinese Shanghai Index rose by 57% from an index value of 1,220 on 31 st December 1998 to 1,912 on 31st December 2008. In contrast, the FTSE100 fell by 25% over the same period. China outperforming the major global stockmarkets2 The stockmarket in China recorded the highest rate of growth among the major global stock markets over the past decade. Furthermore, China was one of only three of the major global stockmarkets2 to record an increase in equity prices between 1998 and 2008. Hong Kong (43%) and Australia (30%) were the only other major stockmarkets to see equity price growth over the same period. At the other end of the scale, Japanese stock prices fell by 36% over the decade to the end of 2008, while UK equity prices have fallen by a quarter over the same period. Chinese stock prices have, however, underperformed the regional average Equity prices across East Asia3 have risen by an average of 83% over the decade to 2008. The top performing stock markets in the region were India (267%) and Indonesia (241%), both more than four times the stock price growth recorded in China (57%). The Indian stockmarket has benefited from its status as one of the world's fastest growing economies, while Indonesia benefited from the recent commodity boom. In contrast, equity prices in Taiwan (-28%) and the Philippines (-5%) fell between 1998 and 2008. 1Based on the average end month index values across global stockmarkets 2 Major global stockmarkets comprise China, Hong Kong, Australia, France, Japan, Germany, USA and UK 3 East Asia comprises Indonesia, India, South Korea, Hong Kong, Philippines, China, Malaysia, Thailand and Taiwan. Clerical Medical is part of the Lloyds Banking Group Tel: 01422 333829 Fax: 01422 333007 Website: http://www.lloydsbankinggroup.com/media.asp 2 of 4
  3. 3. Table 1: China & Major Global Stockmarkets Country Dec-98 Dec-07 Dec-08 1 year 10 year 10yrs %pa China 1220 5521 1912 -65% 57% 4.6% Hong Kong 10049 27813 14387 -48% 43% 3.7% Australia 2813 6421 3659 -43% 30% 2.7% France 3943 5614 3218 -43% -18% -2.0% Japan 13842 15308 8860 -42% -36% -4.4% Germany 5002 8067 4810 -40% -4% -0.4% USA 9181 13265 8776 -34% -4% -0.5% UK 5883 6457 4434 -31% -25% -2.8% Average - - - -43.4% 5.3% 0.1% Source: Datastream Table 2: China & East Asian Region Country Dec-98 Dec-07 Dec-08 1 year 10 year 10yrs %pa China 1220 5521 1912 -65% 57% 4.6% India 1359 11154 4988 -55% 267% 13.9% Indonesia 398 2746 1355 -51% 241% 13.0% Philippines 1969 3622 1873 -48% -5% -0.5% Hong Kong 10049 27813 14387 -48% 43% 3.7% Thailand 356 858 450 -48% 26% 2.4% Taiwan 6418 8506 4591 -46% -28% -3.3% South Korea 562 1897 1124 -41% 100% 7.2% Malaysia 586 1445 877 -39% 50% 4.1% Average - - - -49% 83.3% 5.0% Source: Datastream Clerical Medical is part of the Lloyds Banking Group Tel: 01422 333829 Fax: 01422 333007 Website: http://www.lloydsbankinggroup.com/media.asp 3 of 4
  4. 4. EDITORS' NOTES: 1. The following indices have been used as benchmarks for share prices: Country Index Australia ASX ALL ORDINARIES 1971 > - PRICE INDEX Brazil BRAZIL BOVESPA - PRICE INDEX China SHANGHAI SE A SHARE - PRICE INDEX France FRANCE CAC 40 - PRICE INDEX Germany DAX 30 PERFORMANCE - PRICE INDEX Hong Kong HANG SENG - PRICE INDEX India INDIA BSE (100) NATIONAL - PRICE INDEX Indonesia JAKARTA SE COMPOSITE - PRICE INDEX Japan NIKKEI 225 STOCK AVERAGE - PRICE INDEX Malaysia KLCI COMPOSITE - PRICE INDEX Philippines PHILIPPINE SE I(PSEi) - PRICE INDEX Russia RSF EE MT (RUR) INDEX - PRICE INDEX South Korea KOREA SE COMPOSITE (KOSPI) - PRICE INDEX Taiwan TAIWAN SE WEIGHTED - PRICE INDEX Thailand BANGKOK S.E.T. - PRICE INDEX UK FTSE 100 - PRICE INDEX USA DOW JONES INDUSTRIALS - PRICE INDEX 2 International indices have been measured in local currency terms and assume a fully hedged currency exposure. 3. Data is measured as at end month index value. Price indices rather than total return indices have been used for this analysis to obtain a complete data set. "This report is prepared from information that we believe is collated with care, however, it is only intended to highlight issues and it is not intended to be comprehensive. We reserve the right to vary our methodology and to edit or discontinue/withdraw this, or any other report. Any use of this report for an individual's own or third party commercial purposes is done entirely at the risk of the person making such use and solely the responsibility of the person or persons making such reliance. © HBOS plc all rights reserved 2009". Clerical Medical is part of the Lloyds Banking Group Tel: 01422 333829 Fax: 01422 333007 Website: http://www.lloydsbankinggroup.com/media.asp 4 of 4

×