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

To: RealMuLan who wrote (5458)	9/19/2005 9:18:01 AM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

[here is another example that foreigners are benefitting from the Chinese economic development MORE THAN domestic Chinese. No wonder they are so excited about China]--Lex live: Chinese stocks Monday September 19, 8:15 am ET It is one of the many ironies of China's ostensibly socialist system that the people's money cannot buy the cream of state assets. Take PetroChina (NYSE:PTR). While China's domestic currency A-share market has fallen more than a tenth so far this year, Hong Kong-listed PetroChina stock has almost doubled and delivers a sweet 5 per cent dividend yield. Last year, that was worth some $5bn to Beijing and another $570m to foreign investors - but precisely zero to domestic Chinese who are barred from investing overseas. Similar anomalies abound. When China's better-run companies received the green light to list, many went overseas. Although China's markets offered a bigger bounty - initial public offerings were priced at a steep premium to other markets - follow-on trading is more predictable in Hong Kong, with its deep pool of international institutional buyers. Now the Shanghai stock exchange wants a share of the good companies. This is not just socialism talking: the ailing local markets are stuffed with poor quality companies. Anything between one third and one half of A-shares deserves to be weeded out, leaving plenty of room for blue chips like PetroChina. Creating the mooted Chinese Depositary Receipts, however, will be no easy task. The absence of a properly convertible currency means the CDRs will not be fully fungible with underlying shares listed in overseas markets. If the float in China is slim, therefore, the CDRs are likely to trade at a big premium. As with the existing A-shares, that would leave the Chinese paying more for their companies than foreigners. biz.yahoo.com