I have initiated a small position on China stock market via ETF. HK 2823. What do you guys think? Past 2 years has been brutal for china stock market. But i think longer term (meaning 2 years to 5 years), even a ETF can be a multi-bagger.
Reason?
1) China story not going away. China is going to be the biggest economy by far
2) Multi year lows, so buying at current price cant be that far from bottom. But of course we buy carefully in stages. Prepared to double down 2 more times.
3) I do not know enough of china market to stock pick and i do not trust too. So either fund or ETF is next best.
4) HK dollar risk is minimal. I borrow in USD at 1% interest to buy this ETF. If HK ever delink from USD, it will only go up. So i gain. If not, then just pay the 1% borrowing cost for next 3 years.
Any thoughts.
invest in what china needs to buy. China story needs natural resources for it's development, it needs raw material for it's factories To transition from a primitive economy into a modern one the only way is to consume natural resources to construct skyscrapers homes bridges, thousands of miles of roads and rails they need steel, coal, stone and they need it by the ton, just invest in wherever these resources are. It could be singapore malaysia australia or nz or brazil If you want to play safe the safest way I think is to invest in china RMB that is now deeply undervalued once it becomes a reserve currency means it will be traded and the currency will start to appreciate.
Buy keep and come what may If one day it ever gains parity to sing $ it will mean a 500% profit
(18-09-2012, 04:22 PM)greypiggi Wrote: [ -> ]4) HK dollar risk is minimal. I borrow in USD at 1% interest to buy this ETF. If HK ever delink from USD, it will only go up. So i gain. If not, then just pay the 1% borrowing cost for next 3 years.
Any thoughts.
what is hk 2823?
and why is it that..when hkd depegs from usd, it will only go up?
how do u borrow usd 1% to buy this etf? so u r in a way long hkd short usd?
I tend to have a pessimistic view of China in the short term.
China has reached a level that the growth must be fueled from within rather by exporting. However, the per capita income of China is only around US$5-6k. At this income level, I wonder how much growth can they extract out of their local economy despite their large population. Exporting wise, they probably have to up their technical ladder to producing good local branded products for the world rather than being the factory for the world. In this aspect, I had yet to see the transformation.
Frauds!!! I am not sure. But, looking at the S-chips, I have a bad feeling that there may be lots of big companies or even local governments that are doing the same thing but have yet to be discovered.
Politically, the single party mode that China is operating may not sit well with the masses and it is getting harder to control the flow of information now than ever. I thought it is a matter of time they have to adopt multi-parties parliament and elections.
Long term wise, they will face the same problem as Singapore with a reducing TFR. The ageing population.
(19-09-2012, 07:04 AM)yeokiwi Wrote: [ -> ]I tend to have a pessimistic view of China in the short term.
China has reached a level that the growth must be fueled from within rather by exporting. However, the per capita income of China is only around US$5-6k. At this income level, I wonder how much growth can they extract out of their local economy despite their large population. Exporting wise, they probably have to up their technical ladder to producing good local branded products for the world rather than being the factory for the world. In this aspect, I had yet to see the transformation.
Frauds!!! I am not sure. But, looking at the S-chips, I have a bad feeling that there may be lots of big companies or even local governments that are doing the same thing but have yet to be discovered.
Politically, the single party mode that China is operating may not sit well with the masses and it is getting harder to control the flow of information now than ever. I thought it is a matter of time they have to adopt multi-parties parliament and elections.
Long term wise, they will face the same problem as Singapore with a reducing TFR. The ageing population.
I don't share your views I think you can find crooked companies in all countries even in singapore but it's your opnion that's why I also said safest is invest in their currency you may not trust the ceo the company or even the officials but the currency is
legal tender.
(19-09-2012, 07:35 AM)sgd Wrote: [ -> ] (19-09-2012, 07:04 AM)yeokiwi Wrote: [ -> ]I tend to have a pessimistic view of China in the short term.
China has reached a level that the growth must be fueled from within rather by exporting. However, the per capita income of China is only around US$5-6k. At this income level, I wonder how much growth can they extract out of their local economy despite their large population. Exporting wise, they probably have to up their technical ladder to producing good local branded products for the world rather than being the factory for the world. In this aspect, I had yet to see the transformation.
Frauds!!! I am not sure. But, looking at the S-chips, I have a bad feeling that there may be lots of big companies or even local governments that are doing the same thing but have yet to be discovered.
Politically, the single party mode that China is operating may not sit well with the masses and it is getting harder to control the flow of information now than ever. I thought it is a matter of time they have to adopt multi-parties parliament and elections.
Long term wise, they will face the same problem as Singapore with a reducing TFR. The ageing population.
I don't share your views I think you can find crooked companies in all countries even in singapore but it's your opnion that's why I also said safest is invest in their currency you may not trust the ceo the company or even the officials but the currency is legal tender.
Yes, indeed. Crooked companies are everywhere.
I am just extrapolating the behaviour of S-chip companies to similar entities in China. It may be very different for companies operating in China than in Singapore since they will be charged and convicted if they are found guilty. As for china government officials, they wield even more power locally and it can be quite tempting for them to be corrupted.
The recent Bo Xilai case in ChongQing is rather interesting in this aspect.
Murder aside, how do they manage to acquire so much wealth despite their low monthly income?
Well everybody knows is not difficult to amass wealth if in a position of power. Someone like bo xilai could have a lot of oversight and authority but a small limited budget to do things, he has responsibilities to fulfill to his party and he also wants to achieve his own political ambition, his province turf could originally been very under developed people uneducated poor jobless there could be pollution etc etc etc and as a politician your are not a engineer an educator or even a businessman how do you tackle all these problems if you can't even understand it? So luckily to do all this the business community comes in handy and that's how they get roped in to help.
Fortunately once a person comes into a position of power people will want to know you and do things for you to be in your favor and gratitude. They want to be the sugar king, flour king, seafood king they want monopoly over these things etc ... by giving capable people in your circle these things they could take care of problems for you. They could make a huge donation to charity, to education, to welfare to make you look good to the community and your party and it shows people that you are capable and somebody who have many contacts who can move things. If everybody in china is playing this kind game I think it will be quite difficult to be different.
(18-09-2012, 10:32 PM)pianist Wrote: [ -> ] (18-09-2012, 04:22 PM)greypiggi Wrote: [ -> ]4) HK dollar risk is minimal. I borrow in USD at 1% interest to buy this ETF. If HK ever delink from USD, it will only go up. So i gain. If not, then just pay the 1% borrowing cost for next 3 years.
Any thoughts.
what is hk 2823?
and why is it that..when hkd depegs from usd, it will only go up?
how do u borrow usd 1% to buy this etf? so u r in a way long hkd short usd?
It is a ETF traded in HK for the 50 biggest companies in Shanghai.
personal analysis. HKD is pegged to USD right now. HK economy is much stronger than US and should follow China's economy. If HKD depeg, short term will be bullish for HKD. I borrow in USD then convert to HKD to buy.
Borrow from bank. You need to use either the private banks or the 1 level down private client/DBS treasure type service. PB will give you the 1% and below. The latter will probably try to charge you 1.3 to 1.5.
(19-09-2012, 10:27 AM)greypiggi Wrote: [ -> ] (18-09-2012, 10:32 PM)pianist Wrote: [ -> ] (18-09-2012, 04:22 PM)greypiggi Wrote: [ -> ]4) HK dollar risk is minimal. I borrow in USD at 1% interest to buy this ETF. If HK ever delink from USD, it will only go up. So i gain. If not, then just pay the 1% borrowing cost for next 3 years.
Any thoughts.
what is hk 2823?
and why is it that..when hkd depegs from usd, it will only go up?
how do u borrow usd 1% to buy this etf? so u r in a way long hkd short usd?
It is a ETF traded in HK for the 50 biggest companies in Shanghai.
personal analysis. HKD is pegged to USD right now. HK economy is much stronger than US and should follow China's economy. If HKD depeg, short term will be bullish for HKD. I borrow in USD then convert to HKD to buy.
Borrow from bank. You need to use either the private banks or the 1 level down private client/DBS treasure type service. PB will give you the 1% and below. The latter will probably try to charge you 1.3 to 1.5.
Hi greypiggi,
do u need any collateral to borrow at 1%?
thanks!
(19-09-2012, 10:42 AM)funman168 Wrote: [ -> ] (19-09-2012, 10:27 AM)greypiggi Wrote: [ -> ] (18-09-2012, 10:32 PM)pianist Wrote: [ -> ] (18-09-2012, 04:22 PM)greypiggi Wrote: [ -> ]4) HK dollar risk is minimal. I borrow in USD at 1% interest to buy this ETF. If HK ever delink from USD, it will only go up. So i gain. If not, then just pay the 1% borrowing cost for next 3 years.
Any thoughts.
what is hk 2823?
and why is it that..when hkd depegs from usd, it will only go up?
how do u borrow usd 1% to buy this etf? so u r in a way long hkd short usd?
It is a ETF traded in HK for the 50 biggest companies in Shanghai.
personal analysis. HKD is pegged to USD right now. HK economy is much stronger than US and should follow China's economy. If HKD depeg, short term will be bullish for HKD. I borrow in USD then convert to HKD to buy.
Borrow from bank. You need to use either the private banks or the 1 level down private client/DBS treasure type service. PB will give you the 1% and below. The latter will probably try to charge you 1.3 to 1.5.
Hi greypiggi,
do u need any collateral to borrow at 1%?
thanks!
say you open a 1M account with a PB. they probably can loan you another 1M. So you got 2M to play around on what they bank calls marginable securities.