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How to Play the Chinese Stock Market From the US at Trader’s Narrative

While the Chinese stock market is white hot, non-Chinese are not allowed to participate. The only thing we can do is the next best thing: proxies in the form of ADRs or neighboring Asian markets like Hong Kong and Singapore.

Meanwhile, Li Ka-shing, Asia’s richest man said that the Chinese stock market “must be a bubble” and that he was worried about it. But I have a nagging feeling this mania will only get crazier (before it eventually bursts).

Reports of grandmothers investing and trading are trickling in already but we still have to see a truly spectacular zoom higher. I wouldn’t even be surprised if the wide eyed new investors in China would view Li Ka-shing’s from a conspiratorial point of view (”he wants to jawbone the market lower so he can buy more”).

If you want to play this volatile market, either long or short here are your options as an outsider:

There are also two Exchange Traded Funds: iShares FTSE/Xinhua China 25 Index Fund (FXI) and the Powershares Golden Dragon Halter USX China Portfolio (PGJ). Who names these things?

The relevant Asian market ETFs are: Singapore iShares (EWS) and the Hong Kong iShares (EWH). Whether the Chinese market continues its meteoric rise or crashes, these are the ETFs which will be most effected.

Chinese ADRs
Here is an alphabetical list of Chinese ADRs trading on US exchanges.

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4 Responses to “How to Play the Chinese Stock Market From the US”  

  1. 1 crt

    There’s also CAF, the (recent) chinese a-share closed end fund from morgan stanley:

  2. 2 David Andrew Taylor

    At the end of business, China raised its interest rates again, and increased the reserve requirements for bank deposits in yet another effort to curb the economy. Wonder how the market is going to react to that? Li Ka-shing is right. It’s a bubble. Very speculative. If the market gets rocked again like it did at the end of February, the implications could metastasize throughout the entire financial world. Let’s see how China does on Monday their’s.

  3. 3 Babak

    crt, thanks. I forgot about that one!

    David, I think it needs a catalyst otherwise it’ll just keep rolling along.

  1. 1 China Stock Market A-Shares: Morgan Stanley A Shares Fund (CAF)

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