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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (16693)	11/23/2004 7:00:27 PM
From: RealMuLan	Read Replies (1) \| Respond to of 116555

The Next Great China Gold Rush -- Dodgy Debt: William Pesek Jr. Nov. 24 (Bloomberg) -- It didn't make banner headlines, yet Citigroup Inc.'s investment in a Hong Kong-listed real estate outfit portends one of the big stories of 2005: Chinese debt. The world's biggest financial services company is grabbing a 16.4 percent stake in Silver Grant International Industries Ltd., an affiliate of China's biggest buyer of distressed assets. The idea is to compete with Goldman Sachs Group Inc. and Morgan Stanley in the second-largest bad-loan market after Japan. China doesn't have liquid bond markets, yet investors are scrambling to get in on the next Chinese gold rush: More than $450 billion of bad loans held by China's four-biggest commercial banks and their asset management companies. The hope is to buy dodgy loans at a fraction of their face value and sell the assets at a profit as the world's fastest-growing major economy expands. It's as much an economic opportunity as an investment one. China is growing 9 percent and benefiting from a gold-run mentality that's attracting most of the world's foreign direct investment. Yet its dysfunctional banking system is raising questions about the economic outlook. quote.bloomberg.com