ArranP

Does anyone have a good recommendation for online brokers trading Chinese equities. A lot of the online brokers don't seem to offer and the bigger banks have you tied up in funds.

Any recommendations?

When dealling with Chinese equities, you would probably need to deal in equities listed on the via the hang seng exchange (hong kong), as the shanghai exchange (beijeng) is off-limits for people other than the chinese themselves.

I don't know but the only offshore broker I know off is Internex maybe they deal on the Hang Seng Exchange ??

But becareful with equities at the moment, I understand the recent change in bond yields may signify a sell-off is soon due in equities, which in-turn would cause a correction ie. a dip to occur.

This is only my observation, and as a novice investor my be totally incorrect.

The price/earnings of shares for China companies listed on the Shanghai Composite Exchange have quadrupled, and this is indicates correction is due!

Would this correction be to the share listed on the Shanghai Composite Exchange only, or is the share price for these China companies listed on the Hang Seng Exchange likely to drop also inline with correction on the Shanghai Composite Exchange ?

The type of shares, as well as the share markets, in China -Shanghai and Shenzhen- and Hong Kong, are a bit complicated.

This is a link which explains the A - B - H and N shares on the different markets. Maybe it can help a little.

The problem is that there is a big, sometimes even huge, difference in price between 'A' and 'B' shares, although they represent the same companies. The average price-difference is about 50% (!); sometimes lower sometimes even larger.

http://www.learnmoney.co.uk/advice/advice-43.html

It's hard to say whether the Hong Kong listed companies will suffer as well if the mainland Chinese markets drop but some sectors could be effected; how much is the question. But if the mainland sneezes it could storm in Hong Kong.

Personally I'm not too afraid of a major correction since the China markets went up some 150% in 2006 and around 40-50% this year. Even with a correction of 30-40% it would still leave the economy (and listed companies) intact.

Back to your question if the HK market will drop as well....possibly and likely but not for a long period I guess.

But, stockmarkets.......who knows for sure....

LaoPo

Thanks LaoPo,

For now I have switched my investments from equity to non-equity funds into uk property, these give a stable 10% return.

At least until the correction has occured, then I can think about my re-entry point into equities for the recovery.

Thanks.

Regards

Arran.

Arran,

As you pointed out, I try not to look at the short term and more at the long term. I think your concerns about the chinese construction boom is real and short term as there are always corrections - but if you look more long term at things like the urbanization of a young maturing country - then irregardless of any crash - however severe will only be a correction - the nature of demand, migration, maturing economy/workforce, etc. ensure that china will follow the path other mature economies have traveled - as will thailand.

If you have noticed - thailand has been building bridges into laos - not because of laos but beyond into the vietnam = china factor. Also, there is work on Asia Highway 1 which will connect all the way from western asia to japan. There is real development in the region because the region is coming up and maturing. The consensus is that the entire region will become a great trading block including russia - along with the other great trading blocks of south america and europe. Whatever happens with crashes, and any unexpected stuff - there really is only one way for things to go - and that is continued growth - however sporadic, up and down and what have you.

In the short term = as I have stated many times - I expect a correction soon - and thailand will be in a good position because they are not as bubbled up as other economies in the region - whcih means they will have less of a correction - but if you look at all the ingredients they share with china, such as a young maturing economy with a young workforce which equals a class of workers who will eventually all move out and buy things for the first time as opposed to an economy of replacers.

What can stop it? A huge unexpected event - but again only temporarily (a year - many years) as the law of nature dictates all things grow unless impeded, but nature is tough and eventually will find a way to overcome the impediment - unless it is too strong - then... well we don't want to go there!

I won't talk about the U.S. as I think it will be only in the past tense and I don't like to look back!

Thanks,

An interesting read, alot of people agree with you in that there will soon be a correction to the China market.

According to p/e ratios the Shanghai Composite exchange is more bubbled up than the Hang Seng exchange.

Do you expect a correction to both exchanges or just the Shanghai Composite ?

The price/earnings of shares for China companies listed on the Shanghai Composite Exchange have quadrupled, and this is indicates correction is due!

Would this correction be to the share listed on the Shanghai Composite Exchange only, or is the share price for these China companies listed on the Hang Seng Exchange likely to drop also inline with correction on the Shanghai Composite Exchange ?

Naka - I'm going to stick my neck out,

Although the form you quote does not say so if your UK taxable income is over the personal allowance (£5,200 or so) then you do pay tax on the saving (above the allowance).

I'd love to be proved wrong?

(grammatical error corrected)

Briley, I like you for many years assumed interest on UK savings was taxable. Not the case! 18 months ago I visted a reputable expat financial advisor here in Thailand to basicly iron out my savings and pension plans. This subject arose and he said this was not the case. I then contacted the tax office in the UK enquiring about this and they said it was right. The reason I had payed tax on my savings is that I had neglected to tick a box (9.7 on your UK tax return) to claim back personal allowances. Ticking this box in conjunction with claiming you are non-resident allows you to claim back interest on my UK savings. I realised this had been happening for around 5 years and wrote them a letter stating such. A month later I recieved a hefty payment into my bank account. Cause for celebration.

In addition last year I also recieved a letter that because I had been a non-resident for some years and had no taxable income in the UK then they would no longer send me a return each year to complete! Officially off their radar, happy days!

Are you certain ?, I'm not stating this is not the case, however I read this R105 form and also contacted the IR, they said I get the interest paid tax free, however at the end of year when I file my self assesment, I pay the tax then. ie. the tax payment is only deferred, I'm talking here about interest returns of GBP 6,000+. This was all discussed in the case of being "non-uk resident", the conclusion I came to, was that uk derived income has uk tax payable, wether non-resident or not.

Also, for getting consistent returns, yes with cash accounts you can get just over 6%, capital guaranteed. However take a look also too the fund "Ground Rent", it has given between 8-10% consistently over the past 10 years, however capital is not guaranteed.

Most articles I read describe the economy of China as to be the Number 1 in the World over the longer term.

Also many articles describe a certain amount of uncertainty about equities of China (those internal and those listed on the Hong Kong exchange) over the short term, in that they have grown a significant amount already and are therefore, for one reason or another, are due a correction.

So, lets imagine this to be true and the equities of China (also on the Hong Kong exchange) make their correction. What impact on construction in China would their be, would the drop in price of company shares alter the pace of construction? The number of houses/flats to be built ? Would it affect the demand in commodities needed to supply the boom in China construction and its economic growth ?

I made a little bit more. the 300k is the liquid capital I'm investing, I have capital tied-up as deposits in UK properties.

ooh, I get to blow my own trumpet :-)

Like Microsoft is to the domestic computer, SAP is to the business www.sap.com.

The SAP IT Contracter in UK/Europe earns upwards of £140,000 per year + overtime.

Also, I got into property around 2001, just prior to the boom.

no comment ?? therefore this thread will drop like a brick.

There fore I put it to you it is not a good time to invest in thai property, my apologies to those heavily invest already.

Regards

Arran.

try kimberley clarke, they are manufacturers of sanitry appiances, and an international company, also based in thailand, they should be able to point you in the right direction.

I have a friend who facilitates the imports thru customs for manufactureres of hydralic power machines used in thailands construction industry, maybe she could help ?

Thanks SonicD, thats helped improve my understanding.

May I ask, to draw a comparison:

i) what level of return in percentage terms are we getting from our capital investments?

ii) did we go low, medium or agressive ?

ii) cash / bonds / equities or commodities ?

Yes, I'm busy reading http://www.unbiased.co.uk/, started last night. Thanks.

And as you say will contact a few of them to get a feel.

I think I get it, so thats why the baht is so strong from the sterling at the moment because the dollar is weak.

I noticed the GBP / THB pair flucuates 1 or 2 % alot of the time.

I don't know yet where I can "currency trade" this pair, does anyone know an online site that does ? hopefully with a GBP trading account ?

Thanks for feedback.

What can one expect to pay to an IFA ?

Non resident means you spend no more than approx 90 days (maybe inclusive days of travel) in the UK year on year.

Fill out and submit a P85 to inform them of your intent to leave the UK.

Also you can call the Non Resident UK Help Line for an informal chat.

http://www.hmrc.gov.uk/contactus/helplines.htm#37

HMRC Residency (Tax matters for those not-resident in the UK)

0845 070 0040

Overseas

+44 151 210 2222

Mon – Fri 7:30am to 5pm

Closed Bank Holidays.

Answers queries regarding Income Tax / Capital Gains Tax for customers who live or work abroad.

Interest from UK "OnShore" Savings accounts is classified as "UK derived income" and therefore liable for uk tax. The R105 only defers this tax payment, until a self assesment is completed and tax liability calculated from here.

However there is tax to be paid on interest from onshore UK savings accounts.

The only way to not pay UK based income tax, is to bank with offshore savings accounts.

Just spoke the HMRC to clarify this point.

True but you have your personal allowance of around 5K so if you dont exceed that and have no other UK income you will pay no UK tax

By the way Arran if you want meaningful advice it would help if you tell us whether you are UK resident or parhaps have been resident for years in Thailand.. Who knows ! Can you provide any info on this ?

hi Topfield,

I am UK resident until the end of the this year or early next year. Then will re-locate to Thailand.

This year I spend putting my affairs into order, my UK tax allowance will be taken up by UK rental income. I have £300k+ to find a home for with low risk and maximum return, this together with UK rental income is to be used as my income.

Arran

Interest from UK "OnShore" Savings accounts is classified as "UK derived income" and therefore liable for uk tax. The R105 only defers this tax payment, until a self assesment is completed and tax liability calculated from here.

However there is tax to be paid on interest from onshore UK savings accounts.

The only way to not pay UK based income tax, is to bank with offshore savings accounts.

Just spoke the HMRC to clarify this point.

Is interest from a UK onshore savings account classified as "uk derrived income" ? If so, is there not tax to be paid ?

Also, how does the R105 form relate here ?

Thanks.

Arran.

Here is the rating for the Anglo Irish Bank - Isle Of Man

http://www.angloirishbank.co.im/about-aib/index.asp

It says it has an A+ rating, am I exposing myself to a high degree of risk If I were to put all my capital with them ? or should I divervsify ?

If I were to diversify, how many different institions should I use to spread the capital ? If this is more than 5 or 6 it gets difficult in: i - finding them, ii - registering, iii - getting the interest paid into central account etc.

How I do I find an independant advisor ? What checks can I make / questions can I ask to establish their degree of independance and authenticity?

How do I know I can trust them with my money ? Sorry to ask what may seem a simple question, but if/when I hand over my money how do I know I'm not being ripped off? Do I get a receipt or certificate ?

Thanks comments so far.

Thanks to everyone for their comments so far.

In conclusion, to invest in bonds one needs to go through a banker or broker ?

Do all the major banks have these representatives for investing in bonds? which are the best organisations to contact to make these bond investments ?

Thanks for feedback

Arran, with regard to bonds there is very little over 6 percent. I assume you wish to stick to sterling.

The eurosterling bond with the highest rate I could find is Cable and Wireless which matures in 2o12 and yields 8.4 percent annually and 7.61 to maturity. Pierson plc 2014 is yeilding 6.43 to maturity.

If you want a perpetual you have Standard Chartered yielding 6.2 per cent...it yielded 8 percent in 2002if I remember rightly.

Please do not ignore what I wrote in my first reply namely that Anglo Irish allow you to take out 60k in your case, so you can take out and place with them this amount at a higher rate without penalty should rates rate.....and that is a unique offer .

Thanks topfield, for these bonds.

Where can these and bonds likes them be found, are they listed on websites somewhere ?

I do take your point on giving due consideration to the Anglo Irish fixed term bond. I find myself reluctant to invest money easily, therefore this fixed-term deposit is my favourite. However, that being the case, in the meantime I would like to spend time researching other forms of investments.

Arran