Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
Stock Market Crash Edition - 26th Mar 19
Handy Ways to Boost Your Home Income - 26th Mar 19
US Treasury Bond Yield Inversion and Political Fed Cycles - 26th Mar 19
Golan Heights Oil all about the Shekels - 26th Mar 19
Falling Yields a Catalyst for The Gold Catalyst - 26th Mar 19
Can We Lock Up Rachel Maddow Now? - 25th Mar 19
Real US National Debt Might Be $230 Trillion - 25th Mar 19
Friday's Stock Market Sell-Off - New Downtrend or Just Correction? - 25th Mar 19
20 Days Left to Find Buying Opportunities In Gold - 25th Mar 19
Will the Historic Imbalance in Gold Stocks to Gold Price Resolve ? - 25th Mar 19
EasySMX Wireless Games Controllers Review - 25th Mar 19
Stock Market Short-term Top - 25th Mar 19
UK Population Growth - Latest ONS Immigration Statistics and Consequences - 24th Mar 19
The Fed Follows Trump's Tweets, And Does The Right Thing - 24th Mar 19
Yield Curves, 2yr Yield, SPX Stocks and a Crack Up Boom? - 24th Mar 19
Risk/Reward in Silver Favors Buying Now, Not Waiting for Big Moves - 23rd Mar 19
Similarities Between Stock Market Today and Previous Bull Market Tops - 23rd Mar 19
Stock Market DOW Seasonal Trend Analysis - 23rd Mar 19
US Dollar Breakdown on Fed Was Much Worse Than It Looks - 23rd Mar 19
Gold Mid-Tier GDXJ Stocks Fundamentals - 23rd Mar 19
Which Currency Pairs Stand to Benefit from Prevailing Risk Aversion? - 23rd Mar 19
If You Get These 3 Things Right, You’ll Never Have to Worry About Money - 22nd Mar 19
March 2019 Cryptocurrency Technical Analysis - 22nd Mar 19
Turkey Tourist Fakes Market Bargains Haggling Top Tips - 22nd Mar 19
Next Recession: Finding A 48% Yield Amid The Ruins - 22nd Mar 19
Your Future Stock Returns Might Unpleasantly Surprise You - 22nd Mar 19
Fed Acknowledges “Recession Risks”. Run for the Hills! - 22nd Mar 19
Will Bridging Loans Grow in Demand and Usage in 2019? - 22nd Mar 19
Does Fed Know Something Gold Investors Do Not Know? - 21st Mar 19
Gold …Some Confirmations to Watch For - 21st Mar 19
UKIP No Longer About BrExit, Becomes BNP 2.0, Muslim Hate Party - 21st Mar 19
A Message to the Gold Bulls: Relying on the CoT Gives You A False Sense of Security - 20th Mar 19
The Secret to Funding a Green New Deal - 20th Mar 19
Vietnam, Part I: Colonialism and National Liberation - 20th Mar 19
Will the Fed Cut its Interest Rate Forecast, Pushing Gold Higher? - 20th Mar 19
Dow Jones Stock Market Topping Pattern - 20th Mar 19
Gold Stocks Outperform Gold but Not Stocks - 20th Mar 19
Here’s What You’re Not Hearing About the US - China Trade War - 20th Mar 19
US Overdosing on Debt - 19th Mar 19
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

Chinese Stock Market Winning Streak To Continue During 2008

Stock-Markets / Chinese Stock Market Jan 09, 2008 - 07:00 AM GMT

By: Money_and_Markets

Stock-Markets

Best Financial Markets Analysis ArticleTony Sagami writes: Almost exactly a year ago, I told you how the U.S. economy was headed for more weakness while the Chinese economy would continue growing like a weed. And I suggested you "make it your New Year's resolution to add some Asian spice to your portfolio this year."

Look at what the markets have done since then: The S&P 500 was up just 3.5% in 2007; the Shanghai Composite Index, which measures the performance of mainland China stocks, skyrocketed 97%. That's on top of a 130% gain in 2006!


Don't think for a second that those kinds of gains were limited to shares trading in China. There are more than 100 Chinese companies listed right here on the New York, American and Nasdaq stock exchanges, and many of them posted tremendous results last year. Just check out my table for lots of examples!

Of course, the bigger issue is whether or not Chinese stocks can continue to deliver those global-leading gains. My answer: Absolutely!

Company/Ticker 2007 Gain
AirMedia Group/AMCN 49.20%
Aluminum Corp of China/ACH 119.60%
APT Satellite/ATS 46.50%
Baidu.com/BIDU 245.90%
China Architectural Engineering/RCH 147.10%
China Digital TV/STV 68.60%
China Eastern Airlines/CEA 383.40%
China Finance Online/JRJC 394.30%
China Life Insurance/LFC 52.20%
China Medical Tech/CMED 65.80%
China Mobile/CHL 105.20%
China Petro & Chemical/SNP 63.10%
China Southern Airlines/ZNH 45.20%
China Sunergy/CSUN 50.20%
China Telecom/CHA 46.70%
China Unicom/CHU 52.80%
CNOOC/CEO 82.90%
Ctrip.com/CTRP 85.20%
E-House/EJ 72.70%
Focus Media/FMCN 71.10%
Global Sources/GSOL 91.20%
JA Solar/JASO 365.30%
LDK Solar/LDK 74.10%
Mindray Medical/MR 80.80%
New Oriental Education/EDU 140.30%
Perfect World/PWRD 74.30%
Shanda Interactive/SNDA 53.60%
Sina/SINA 54.40%
Sohu.com/SOHU 127.20%
Solarfun Power/SOLF 181.50%
Suntech Power/STP 142.00%
Trina Solar/TSL 184.70%
Wuxi Pharmatech/WX 108.90%
Yazhou Coal Mining/YZC 144.30%
Yingli Green Energy/YGE 251.80%

Four Reasons Why Chinese Stocks Should Post Big Gains in 2008

Reason #1: Foreign money pouring into China. I'm sure you've heard about the Chinese pouring big money into some of America's largest corporations, including Citigroup, Morgan Stanley, and Bear Stearns. In 2007, Chinese buyers spent a staggering $29.2 billion acquiring foreign companies.

More important, however, is the fact that foreign money is pouring into China. In the first 11 months of last year, a staggering $61.68 billion of direct foreign dollars was invested in China. That's more than twice the amount China spent acquiring foreign companies.

Where did the $61 billion go? Into factories, real estate, and businesses. In fact, $21 billion of it went right into publicly-traded Chinese companies.

I think that flood of money is going to grow, which translates into even higher Chinese stock prices.

Reason #2: No Chinese economic slowdown in sight. In 2000, the Chinese Academy of Social Sciences forecasted that the Chinese economy would quadruple in size by 2020. The Chinese government now expects that to happen 10 years ahead of schedule!

That's what happens when your economy expands more than 10% a year for five years in a row.

In my opinion, 2008 is going to bring more of the same — double-digit growth. China's Center for State Information agrees, projecting economic expansion of 10.8% in 2008. Of course, they've been so conservative in the past, that I expect even more than that.

Look, stock prices follow earnings, and strong corporate earnings follow strong economic growth. In other words, Chinese stocks should be headed a whole lot higher.

Reason #3: Three Big Events in China. In a very short time, the world is going to hear nothing but "China, China, China" as we approach the 2008 Beijing Olympics.

The Beijing Olympics are just the beginning of China's construction spree!
The Beijing Olympics are just the beginning of China's construction spree!

Beijing is building a dozen Olympic sports centers ... a new cross-city underground railway ... dozens of dazzling office towers ... a massive airport terminal ... and a colossal egg-shaped performance center. All told, China will spend $35 billion on Olympic preparation.

And even if you think the Beijing boost is already priced in, you need to think about another economic boom coming in 2010 from both the World Expo in Shanghai and the Asian Games in Guangzhou.

The year-and-a-half-long World Expo is expected to bring 70 million visitors to Shanghai and cost $40 billion. The Asian Games, similar to our Pan American Games, should generate $27 billion in construction spending.

So, while the Beijing Olympics are big, they're hardly the end of the Chinese infrastructure building boom.

And unlike our country, which has to deal with pesky things like budgets, China is a command economy controlled by the communist party. The country's leaders can spend as much money as they want because (a) they have it, with a $1.3 trillion war chest of cash reserves and (b) they make the rules.

Reason #4: Money is on China's mind. To really get the China story, you have to understand the mindset of Chinese investors. A new report from Google China explains it perfectly ...

According to Google China, the most frequently searched word in all of China last year was "stocks." The second, third, and sixth most searched names were the three largest banks in China — "China Merchants Bank," "Industrial and Commercial Bank of China," and "China Construction Bank."

The average Chinese saves more than 20% of his paycheck and many of those dollars are and will continue to go into the stock market. Think of it like a Grand Canyon-sized 401(k) plan that injects billions of dollars into the stock market each month.

So, with all that said ....

Here Are Five Ways to Add Some China Kick to Your Portfolio

#1. Exchange-traded funds: We've been telling you a lot about exchange-traded funds (ETFs). That's because these investments can give you a diversified stake in a particular sector, index or country in one shot.

There are several ETFs that can give you direct exposure to China and its mega-growth neighbors, but the iShares FTSE/Xinhua China 25 Index (FXI) is the most popular Chinese ETF.

#2. Mutual Funds: ETFs are great, but don't forget about traditional, actively-managed mutual funds, either. Some of my favorites are U.S. Global's China Region Opportunity (USCOX), Fidelity's China Region (FHKCX), and T. Rowe Price's New Asia (PRASX).

#3. Chinese companies on U.S. exchanges: As I pointed out earlier, more than 100 Chinese companies are listed on U.S. exchanges. What's more, they are some of the largest and most profitable companies in all of China. My Asia Stock Alert subscribers, for example, own several of the red-hot stocks I listed in my table above!

#4. Chinese companies on foreign exchanges: A lot of really attractive Chinese companies are listed on the Hong Kong Stock Exchange, and others can be found on the exchanges in Singapore and London.

If you've never bought a stock on a foreign stock exchange, you'll be surprised at how easy it is. All you need is a broker with an international trading desk and the ticker symbol of the stock!

#5. U.S. companies doing big business in China. U.S. companies have been doing business in overseas markets for a long time. But these days, some American firms are getting the bulk of their revenues from outside the U.S.

For example, both Yum Brands — which runs Pizza Hut, Taco Bell, and KFC — and casino company Las Vegas Sands both garner more than half of their sales from outside the U.S.

In other words, even carefully selected U.S. companies can give you a very significant stake in China!

Which of these investments is right for you? The answer depends on a lot of things: How aggressive you are, whether you're more of a do-it-yourselfer, and how focused you want to get.

But the most important thing is that you consider adding some Asian investments to your portfolio. That's where I continue to see the biggest profit potential.

Best wishes,

Tony

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com .

Money and Markets Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules