Breakingviews - Selloff shows China’s lack of investment traction

Growth stocks typically get hit hardest when investors start fretting about interest rate hikes and inflation. The tech-heavy Nasdaq Composite fell 5% on Thursday on worries about the U.S. Federal Reserve Board’s stance, while the broader S&P 500 fell 3.6%. The Nasdaq Golden Dragon IndexIt’s the latest sign of rapidly cooling international interest in the People’s Republic. Hong Kong’s channel for foreigners trading Chinese equities in Shanghai and Shenzhen witnessed $5.

China currently accounts for 31% of MSCI’s benchmark Emerging Markets index, twice the weighting of Taiwan at number two. That reflects years of successful work by officials to attract more sophisticated foreign institutional money, which can offset capital outflows and reduce domestic exchanges’ notorious volatility. The most popular U.S.-listed Chinese stocks have already lined up alternative listings in Hong Kong, so offshore investors won’t be stuck with untradeable shares.

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Breakingviews - The elusive value of past investment mistakesLast week, a new business and finance library opened its doors in Edinburgh’s New Town. The Library of Mistakes was named by its founder, the investment strategist Russell Napier, in the fond belief that the study of history can improve financial understanding, as he says, “one mistake at a time.” Appropriately enough Alistair Darling, Britain’s Chancellor of the Exchequer during the global financial crisis of 2008, inaugurated the library. Judging by recent events, investors haven’t learned much from that earth-shattering event.
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