Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Predictive Modeling Suggests US Stock Markets 12% Over Valued - 27th May 20
Why Stocks Bear Market Rallies Are So Tricky - 27th May 20
Precious Metals Hit Resistance - 27th May 20
Crude Oil Cuts Get Another Saudi Boost as Oil Demand Begins to Show Signs of Life - 27th May 20
Where the Markets are heading after COVID-19? - 27th May 20
Silver Springboards Higher – What’s Next? - 26th May 20
Stock Market Key Resistance Breakout Is Where the Rubber Meets the Road - 26th May 20
5 Ways To Amp Up Your CFD Trading Today - 26th May 20
The Anatomy of a Gold Stock Bull Market - 26th May 20
Stock Market Critical Price Level Could Soon Prompt A Big Move - 25th May 20
Will Powell Decouple Gold from the Stock Market? - 25th May 20
How Muslims Celebrated EID in Lockdown Britain 2020 - UK - 25th May 20
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20
China’s ‘Two Sessions’ herald Rebound of Economy - 22nd May 20
Signs Of Long Term Devaluation US Real Estate - 22nd May 20
Reading the Tea Leaves of Gold’s Upcoming Move - 22nd May 20
Gold, Silver, Mining Stocks Teeter On The Brink Of A Breakout - 21st May 20
Another Bank Bailout Under Cover of a Virus - 21st May 20
Do No Credit Check Loans Online Instant Approval Options Actually Exist? - 21st May 20
An Eye-Opening Perspective: Emerging Markets and Epidemics - 21st May 20
US Housing Market Covid-19 Crisis - 21st May 20
The Coronavirus Just Hit the “Fast-Forward” Button on These Three Industries - 21st May 20
AMD Zen 3 Ryzen 9 4950x Intel Destroying 24 core 48 thread Processor? - 21st May 20
Dow Stock Market Trend Analysis and Forecast - 20th May 20
The Credit Markets Gave Their Nod to the S&P 500 Upswing - 20th May 20
Where to get proper HGH treatment in USA - 20th May 20
Silver Is Ensured A Prosperous 2020 Thanks To The Fed - 20th May 20
It’s Not Only Palladium That You Better Listen To - 20th May 20
DJIA Stock Market Technical Trend Analysis - 19th May 20
US Real Estate Showing Signs Of Covid19 Collateral Damage - 19th May 20
Gold Stocks Fundamental Indicators - 19th May 20
Why This Wave is Usually a Market Downturn's Most Wicked - 19th May 20
Gold Mining Stocks Flip from Losses to 5x Leveraged Gains! - 19th May 20
Silver Price Begins To Accelerate Higher Faster Than Gold - 19th May 20
Gold Will Soar Soon; World Now Faces 'Monetary Armageddon' - 19th May 20
Gold Mining Stocks Fundamentals - 18th May 20
Why the Largest Cyberattack in History Will Happen Within Six Months - 18th May 20
New AMD Ryzen 4900x and 4950x Zen3 4th Gen Processors Clock Speed and Cores Specs - 18th May 20
Learn How to Play the Violin, Kids Activities and Learning During Lockdown - 18th May 20
The Great Economy Reopening Gamble - 17th May 20
Powell Sends a Message With Love for Gold - 17th May 20
An Economic Renaissance Emerges – Stock Market Look Out Below - 17th May 20
Learn more about the UK Casino Self-exclusion - 17th May 20
Will Stocks Lead the Way Lower for Gold Miners? - 15th May 20
Are Small-Cap Stocks (Russell 2k) Headed For A Double Dip? - 15th May 20
Coronavirus Will Wipe Out These Three Industries for Good - 15th May 20
Gold and Silver: As We Go from Deflation to Hyperinflation - 15th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

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