Foreigners have missed the recent doubling of the Shanghai stockmarket, but investors can still take part in what is likely to be the trade of the decade, says GaveKal's Louis-Vincent Gave.
Mr Gave is the chief executive and co-founder of one of the most widely respected China research firms in GaveKal Dragonomics. The Hong Kong-based firm also manages money, and it's in his capacity as an investor that Gave finds himself enthusiastically describing himself as a "massive China bull".
His argument is essentially that the global investment community is under-exposed to Chinese stocks and bonds, but will be compelled to increase their exposure over the coming two or three years as Chinese financial assets begin to be included more fully in the global benchmarks that passive – and many active – institutional investors track.
The usual responses from outside observers to the more than doubling in the Shanghai Stock Exchange Composite Index in a year is regret at having missed it, followed by a degree of comfort, in as much that such a rapid move is likely to snap back just as quickly....
"So far it has been a liquidity-driven bull market. Money has come out of Chinese retail investors and into shares," he says. "But
the tidal wave that is about to hit – and it is a tidal wave – is foreign investor money."Gave's advice for Australian investors is blunt: "Either you get in front of it or you are going to be left chasing your tail. I believe we are at the beginning of a massive bull market.".....
.... the introduction of the Hong Kong-Shanghai Stock Connect program has handed foreigners access to listed Chinese companies. Meanwhile, Chinese policymakers are moving aggressively towards full convertibility of the renminbi. In November, the International Monetary Fund will meet to decide on whether to add China's currency to the select group reserve currencies, which currently includes the United States dollar, the euro, the British sterling, and the yen.
"I think that come November the IMF will vote 'yes'," Gave says.....
www.smh.com.au/business/markets/...-start-20150520-gh5zrd.html
China’s bulls have switched their attention to Shenzhen stocks ahead of a potential link with Hong Kong’s stock market later this year. Analysts expect China to inaugurate a link between Shenzhen and Hong Kong’s stock market sometime in the second half of this year, giving foreign investors direct access to Shenzhen shares and expanding the access mainland investors gained to Hong Kong last November with the launch of Shanghai-HK Stock Connect......
blogs.barrons.com/asiastocks/2015/05/22/...eek-at-7-year-high/