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Long-term reversals in U.S. stock returns are better explained as the rational reactions of investors to locked-in capital gains than an irrational overreaction to news. Predictors of returns based on the overreaction hypothesis have no power, while those that measure locked-in capital gains do, completely subsuming past returns measures that are traditionally used to predict long-term returns. In data from Hong Kong, where investment income is not taxed, reversals are nonexistent, and returns are not forecastable either by traditional measures or by measures based on the capital gains lock-in hypothesis that successfully predict U.S. returns. [ABSTRACT FROM AUTHOR]

We propose the asymmetric multiscale detrended cross-correlation analysis (MS-ADCCA) method and apply MS-ADCCA method to explore the existence of asymmetric cross-correlation for daily price returns in US and Chinese stock markets and to assess the properties of these asym-metric cross-correlations. The results all show the existences of asymmetric cross-correlations, while small asymmetries at small scales and larger asymmetries at larger scales are also displayed. There is a strong similarity between S&P500 and DJI, and we reveal that the asymmetries depend more on the cross-correlations of S&P500 vs. DJI, S&P500 vs. NQCI, DJI vs. NQCI, and ShangZheng vs. ShenCheng when the market is falling than rising, respectively. By comparing the spectra of S&P500 vs. NQCI and DJI vs. NQCI with uptrends and downtrends, we detect some new characteristics which lead to some new conclusions. Likewise, some new conclusions also can be drawn by the new characteristics displayed through the comparison between the spec-tra of ShangZheng vs. HSI and ShenCheng vs. HSI. Obviously, we conclude that although the overall spectra are similar and one market has the same effect when it is rising and falling in the study of asymmetric cross-correlations between it and different markets, the cross-correlations and asymmetries on the trends of the different markets are all different. MS-ADCCA method can detect the differences on the asymmetric cross-correlations by different trends of markets. Moreover, the uniqueness of cross-correlation between NQCI and HSI can be detected in the study of the asymmetric cross-correlations, which confirms that HSI is unique in the Chinese stock mar-kets and NQCI is unique in the US stock markets further. [ABSTRACT FROM AUTHOR]

We examine how fluctuations in financial and housing markets in the United States affect asset returns and GDP in Hong Kong. In contrast to studies using linear specifications, which find that the United States and Hong Kong are virtually delinked in terms of the asset markets, our regime-switching models indicate that an unexpected change in US stock returns, followed by the TED spread, has the most significant effect on Hong Kong asset returns and GDP, typically in a regime of high return and low volatility. For in-sample one-step-ahead forecasting, the US term spread is the best predictor. [ABSTRACT FROM AUTHOR]

This paper analyzes aggregate return to capital statistics for China, the United States, and Japan in order to investigate the causes of an unusually high investment rate and increasing foreign direct investment (FDI) inflows to China. We also analyze labor's share of output and capital-output ratio statistics to predict future trends in the return to capital in China. Our findings allow us to come to four conclusions: (1) China's high investment rate corresponds to a high return to capital in the country, just as high investment rates in the United States and Japan historically correspond to a high return to capital. (2) A comparatively higher return to capital attracted FDI to China. (3) Investment rates among these three countries show no signs of convergence so far. These differences will likely persist, encouraging FDI to continue to flow into China in near future. (4) The return to capital in China will likely decrease in the long run, as the experiences of Japan and the United States indicate, but will only decrease and become stable after a certain level of capital stock and development is reached. [ABSTRACT FROM AUTHOR]

Stock returns in China exhibit significant co-movement with provincial return indices after controlling for the industry effect, consistent with local co-movement findings in the United States. The magnitude of such co-movement increases with participation in trading by local investors. Trading activities of individual stocks also co-vary with provincial volume. The last two findings support the roles of investor behaviour in explaining the local return co-movement phenomenon. [ABSTRACT FROM AUTHOR]

This article studies the market reaction surrounding the announcement of the convertible bonds issuance in Chinese market, and partly explains the difference of influence on underlying securities in mature market such as the US market and emerging market in China. Meanwhile, it reveals how insiders in Chinese market use convertible bonds as a tool to manage the expected return of external investors. [ABSTRACT FROM AUTHOR]

Presents information on managing risks of private equity investing in China. Why the country is a hot destination for global venture capital; How the inefficiencies of the markets in China make investing a risk despite the huge economic growth; Lack of information that would tell how many venture capitalists and private equity investors have made money in the Chinese market; Suggestion that investors should look at a shorter exit window than they would in the United States; Role of Chinese regulations and how they effect foreign investors; Advice t6o focus on later-stage deals; Look at venture capital opportunities in the government sector; Passive versus active investors; Co-investing which is not encouraged with governmental affiliated investment funds; Management of risks and return on investment.

A comparison of Hong Kong and United States rate-of-return regulation indicates differences in the definition of the rate base and in the proportion of it permitted a fair rate of return, These differences imply that Hong Kong electric utilities utilize proportionately more fixed (less current) assets, and that these assets are financed proportionately more by equity (less by debt), than their United States counterparts. Our results support both these predictions, providing further evidence that since rate-of-return regulation is implemented by reference to "reported" results, comparatively minor differences in regulatory frameworks can have quite dramatic consequences for utilities' asset structure and financing mix. [ABSTRACT FROM AUTHOR]