| |
| |
|
Investing Information |
|
|
|
Chinas Inscrutable Currency Strategy
Purpose: Expose Opportunities for Smart Investors The move by China's central bank to drop the yuan's rigid peg to the dollar on the day of my return after a three-week trip to Asia left a host of questions unanswered. The basket of currencies that will allegedly determine the value of the yuan going forward was not disclosed. What sort of band the currency will be allowed to fluctuate within is not at all clear. The 2% revaluation in the currency on Thursday followed by a slight strengthening on Friday week may actually encourage further short-term speculation since most economists believe the yuan is undervalued by roughly 10% to 20%. With $1 trillion of trade transactions each year and hot money capital inflows equivalent to 5% of its GDP, the uncertainty concerning the Chinese currency is high. Not In the Mainland Direct Currency Approach Direct iShare Approach All of the 25 stocks included in the China iShare are listed on the Hong Kong Stock Exchange. Some of them are incorporated in mainland China (H shares) and some of them are incorporated in Hong Kong (red chips). The total market capitalization of the index is $170 billion. The broadest Xinhua China index includes 1,355 listed companies with a total market cap of $550 billion. To put this in perspective, the average market capitalization for a company in the S&P Global 100 Index is $70 billion. Again, that's for one company. The China iShare provides good exposure to three key sectors of China: energy (20%), telcom (19%) and industrial (18%). This concentration can be viewed as a plus or a minus depending on your perspective. For example, some smart investors are placing a bigger bet on China's consumer markets. The top five companies represent 40% of the index. The annual operating expenses of the China iShare are only 0.74% compared to 2% plus for other alternatives out there including actively managed Asia and greater China region funds. Keep in mind that most of these companies are still largely controlled and owned by the Chinese government. Indirect Approach Indirect Currency Play The Play for the Informed Malaysia, positioned along the strategically important Straits of Malacca , should be on every investors radar screen for the following reasons: It has little external debt and healthy foreign exchange reserves. In area, it is slightly larger than New Mexico. Canada? Starbucks? China represents an enormous opportunity for long-term investors but an indirect approach may be the smartest strategy. Next week: find out what is the next great Asian Bull Market in the 21st century - hint" It's not China! Carl Delfeld is head of the global advisory firm Chartwell Partners and editor of the Chartwell Advisor and the Asia Investor Intelligence newsletters. He served on the executive board of the Asian Development Bank and is the author of The New Global Investor (iUniverse:2005). For more information go to www.chartwelladvisor.com or call 877-221-1496 Carl Delfeld is head of the global advisory firm Chartwell Partners and is editor of the "Chartwell Advisor" and the "Asia Investor Intelligence" newsletters. He served on the Executive Board of Directors of the Asian Development Bank in Manila and is the author of The New Global Investor (iUniverse: 2005). For more information go to http://www.chartwelladvisor.com or call 877-221-1496.
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
Shop More, Save More for College Gimmick or Reality? The man sat in a chair beside a dressing room at a Tampa, Fla. maternity store. How to Invest Your Money Think carefully on how to invest your money because if you make wrong decisions it could cost you dearly. There are many ways in which to invest your money and as such seeking the advice of a professional would be a very wise move. Stock Market Horizons: Gold $3,000, Oil $70 In the last two decades, even though gold prices have dwindled from $850 to $350 an ounce, there are still market gurus who predict gold price to hit $3000 an ounce. Hecla seems to be quite bullish about the future. Sitcom Investing A fickle stock market encourages good-humored mockery.Recently, as I watched the premiere of a sitcom, an obvious omission breached television etiquette. Trend Following Trend following also called momentum trading is the simplest and safest method of stock market investing. It puts you in stocks and mutual funds that are going up and gets you out when they start down. Short Term Savings Products When you invest, it simply means that you are putting your funds in products, in this case short-term savings vehicles, which will allow you to reap high financial rewards.Here is a list of the more common short term savings products you should consider investing in. Beta Factors: How They Can Be Used In The Current Situation Ever since the turn of the century, world stock markets have been very volatile. In other words there have been significant movements (up or down) in share prices. Financial Planners "Financial planners are like dentists: they may occasionally inflict pain, but in the end, you will be better off for following their advice!"Whoever wrote these lines must have either been a financial planner or someone who relied heavily on planners for finance management. We all know that planning our finances is vital. Can Your Annuity Do This? Many people buy annuities according to their agent's recommendations. However, many people do not even know what they own. Basic Options Terms Options are good investing and speculative instruments. But options terminology may confuse even experienced investors. Useful Tips on Investing Here are some useful tips on investing. When you make an investment, you are giving your money to a company or an enterprise, hoping that it will be successful and pay you back with even more money. Angel Investors: Who They Are & When Are They Appropriate Angel investors are individuals who invest in emerging business ventures. Angels typically provide both capital and know-how to companies who are in either their start-up or expansion phases. IF - The Wonders of Investing If it seems as if all investors are selling, who is buying? If trading has become entertainment for you, it may be time to refocus on profits. If your stock has reached an annual low, can it go any lower? If your stock has reached an annual high, can it go any higher? If all the television analysts jumped off a bridge, would anyone care? If your portfolio is based solely on fundamental analysis, perhaps it is time to learn technical analysis. Stock Market Money Management Skills Let's start by saying: You can't be afraid to take a loss. The investors that are the most successful in the stock market are the people who are willing to lose money. Investing in Car Dealerships: How to Do It Right The financial characteristics of the automobile dealership are attractive:". . Planning for Retirement Almost without exception, people don't start planning for their retirement early enough in their lives. Young people leaving High School or College and going into their first paid position find it difficult to look or see ahead to age sixty or sixty-five. Buying a Home - Your BIGGEST Investment This column has often focused on intangible investments like stocks that a young investor might hold in their portfolio. While these are one of the most important components of an investment plan, it is not the dominant one for most young people. Looking For a Safe Investment? Try a Certificate of Deposit If you are looking for a safe investment and you have between $100 -$1,000 to invest, you should consider a certificate of deposit or CD. When purchased through a bank, CD's are federally insured up to $100,000. Holy Grail Investments Every year I go to the Money Show inOrlando, Florida. Thousands attend. Using Divergences to Keep Out of Bad Trades The American Football season just came to an end with my team getting close to the championship but falling short again. I am a big fan of the Indianapolis Colts and we keep having a groundhog day season year after year but it is still fun to watch.
|
