Comments on: Time To Consider Chinese Stocks http://www.tradersnarrative.com/time-to-consider-chinese-stocks-2040.html Freshly squeezed market commentary & analysis Sat, 20 Mar 2010 11:21:19 +0000 http://wordpress.org/?v=2.0.2 by: worldtrader http://www.tradersnarrative.com/time-to-consider-chinese-stocks-2040.html#comment-35435 Thu, 06 Nov 2008 00:18:57 +0000 http://www.tradersnarrative.com/time-to-consider-chinese-stocks-2040.html#comment-35435 The government will not stop those shares from "circulating." Because the executives and beneficiaries of those shares are all ex-government or friends/family of government. As the Communist government slowly transforms itself, the wealth of the state industries will be transferred into the political power elite through private equity ownership of old state enterprises. And those new management (old guard with new incentives) will run the state enterprises more efficiently and for profit (their own pocket). That said, there will be many savvy investors willing to take over any shares that hit the market. But again, don't expect a sky-rocketing 600% ride up in the next few years as there is considerable overhang of sellers from 2000 to 6000 in the Shanghai Index. The government will not stop those shares from “circulating.” Because the executives and beneficiaries of those shares are all ex-government or friends/family of government.

As the Communist government slowly transforms itself, the wealth of the state industries will be transferred into the political power elite through private equity ownership of old state enterprises. And those new management (old guard with new incentives) will run the state enterprises more efficiently and for profit (their own pocket).

That said, there will be many savvy investors willing to take over any shares that hit the market. But again, don’t expect a sky-rocketing 600% ride up in the next few years as there is considerable overhang of sellers from 2000 to 6000 in the Shanghai Index.

]]> by: Greg Feirman http://www.tradersnarrative.com/time-to-consider-chinese-stocks-2040.html#comment-35423 Tue, 04 Nov 2008 18:22:47 +0000 http://www.tradersnarrative.com/time-to-consider-chinese-stocks-2040.html#comment-35423 You can trade China via FXI as well. You can trade China via FXI as well.

]]> by: pej http://www.tradersnarrative.com/time-to-consider-chinese-stocks-2040.html#comment-35419 Tue, 04 Nov 2008 12:20:46 +0000 http://www.tradersnarrative.com/time-to-consider-chinese-stocks-2040.html#comment-35419 Many thanks Babak, this is a great post. And thanks Poohbear for the valuable info as well, I wasn't aware of this at all neither. Many thanks Babak, this is a great post. And thanks Poohbear for the valuable info as well, I wasn’t aware of this at all neither.

]]> by: Joe http://www.tradersnarrative.com/time-to-consider-chinese-stocks-2040.html#comment-35415 Tue, 04 Nov 2008 06:03:04 +0000 http://www.tradersnarrative.com/time-to-consider-chinese-stocks-2040.html#comment-35415 Babak. A very nice site. Solar stocks going up on an apparent Democratic win ? aside: I went to your ABOUT section and tried a custom Google search. Got an error. Babak. A very nice site. Solar stocks going up on an apparent Democratic win ?

aside: I went to your ABOUT section and tried a custom Google search. Got an error.

]]> by: Babak http://www.tradersnarrative.com/time-to-consider-chinese-stocks-2040.html#comment-35408 Mon, 03 Nov 2008 23:57:44 +0000 http://www.tradersnarrative.com/time-to-consider-chinese-stocks-2040.html#comment-35408 interesting, I didn't know that. Do you think the Chinese government will put a halt to that? they are very active in massaging the stock market, with stamp taxes and jaw boning it, etc. So you think it can fall to 1000-1200? The <a href="http://www.tradersnarrative.com/chinese-stamp-duty-increase-death-knell-for-mania-1007.html">long term chart</a> shows significant support at ~1750. interesting, I didn’t know that. Do you think the Chinese government will put a halt to that? they are very active in massaging the stock market, with stamp taxes and jaw boning it, etc. So you think it can fall to 1000-1200? The long term chart shows significant support at ~1750.

]]> by: Poohbear http://www.tradersnarrative.com/time-to-consider-chinese-stocks-2040.html#comment-35407 Mon, 03 Nov 2008 23:08:33 +0000 http://www.tradersnarrative.com/time-to-consider-chinese-stocks-2040.html#comment-35407 A rule of thumb is when bubble bursts it usually drops back to the 'root' where it starts. Isn't the 'root' level more likely to be around 1000 - 1200? A serious problem in Chinese market is each month huge amounts (aggregate amount larger than the current circulation) of 'non-circulation' shares becoming eligible to be sold onto the market. Most of these shares were bought by state-owned enterprises when the public companies were 'reformed' into limited-liability corporations. And the initial costs of these 'non-circulation' shares were virtually zero. This means regardless of the current stock market level, there will always be huge amounts of shares waiting to be dumped onto market as profit taking! A rule of thumb is when bubble bursts it usually drops back to the ‘root’ where it starts. Isn’t the ‘root’ level more likely to be around 1000 - 1200?

A serious problem in Chinese market is each month huge amounts (aggregate amount larger than the current circulation) of ‘non-circulation’ shares becoming eligible to be sold onto the market. Most of these shares were bought by state-owned enterprises when the public companies were ‘reformed’ into limited-liability corporations. And the initial costs of these ‘non-circulation’ shares were virtually zero. This means regardless of the current stock market level, there will always be huge amounts of shares waiting to be dumped onto market as profit taking!

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