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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (628)	8/31/2003 2:40:40 PM
From: RealMuLan	Read Replies (2) \| Respond to of 6370

Buffett's move into China is set to lure the copycat investors August 31, 2003 By Bloomberg Warren Buffett, Sage of China? It may be time to add this to the list of nicknames by which the Sage of Omaha is known. That's because the world's second-richest man made a big - and, as we learnt yesterday, profitable - bet on China this year. It all began in March, when Buffett told Berkshire Hathaway shareholders US stocks were too expensive. The search for cheaper ones brought a man not known for risky international plays to a surprising place: China. In April, he began acquiring shares in PetroChina, the nation's biggest oil producer. Buffett's moves are often subject to banner headlines and copycat investing. Yet his bet on PetroChina inspired more intrigue than usual - and it may continue to do so. Berkshire Hathaway is now PetroChina's third-largest shareholder with 13.35 percent of its traded stock. That's stellar news for Berkshire Hathaway's shareholders, considering the oil producer's shares are up more than 58 percent this year. A what-did-he-know-that-we-didn't buzz is bound to accompany any positive return Buffett makes on an investment. But that's especially so when the gains are in an unconventional investment. And China, for all the attention and good press it receives, can still be very much that. The rush to invest in China features a who's who of globalisation's biggest players: Allianz, Carrefour, Citigroup, Coca-Cola, Eastman Kodak, General Motors, Honda Motor, Hutchison Whampoa, Michelin, News Corporation, Siemens, Sony, Wal-Mart Stores and so on. Name a company and, chances are, it's scurrying to the mainland to benefit from cheap labour and land. But institutional investors have been far more sceptical. China's dodgy corporate governance, fragile financial system and questions about social stability are putting off many shorter-term folks as it opens its economy. Hence the significance of Buffett's bet on PetroChina. To inquiring financial minds everywhere, it meant one of the world's most astute investors was gaining confidence in China's outlook. Buffett, after all, has rarely been an emerging market enthusiast, unless he's getting a real bargain. His interest in China is sure to sway other big investors to follow suit. busrep.co.za