Executives at Chinese companies are ecstatic these days. Finally, after a near total delisting of Chinese firms floating on US exchanges – followed by long gaps of time when no mainlander dared test those waters – investors in New York are biting again at the shares China tossed from afar on a rusty hook. Here’s the latest one to file for a listing.
Of course, that fishing line goes from China and through a complex network of entities and a shell company in the Cayman islands before it ever reaches New York. If you chomp down on a bad one, don’t count on ever hearing from the fisherman at the end of the line.
Still, the development is a major plus for capital-starved firms in China. Even better, China’s securities regulator might open the stock market to IPOs again after a full year without a single domestic listing. Apparently someone told the China Securities Regulatory Commission that, if Shanghai wanted to be a global finance hub by 2020, it might need at least some semblance of a functioning stock market.
If only things were better for Chinese investors at home; investment opportunities are bleak at present. So, the team at the China Economic Review tower have put together some options for where the typical Chinese guy sleeping on a mattress stuffed with cash can put his money.
Buy sugar. The National Development and Reform Commission will attempt to stop the stock piling of the sweet stuff because there’s about 6 million tons in inventory. Get it on the cheap now as the government dumps it and wait for an international sugar shortage. This sounds far fetched but it’s probably less risky than a wealth management product from Huaxia Bank. Plus, sleeping on a pile of sugar will give you fewer back problems than a bed of banknotes.
Get your hands on a Picasso. This Chinese billionaire did. You know art is only going to skyrocket in value – though perhaps not as quickly as residential property in Shanghai.
Speaking of property investments, buy a mall in China. It’s common knowledge that there’s a mall on every street corner of every city. The market seems saturated. However, as more people migrate to the city, the number of girls pressuring their boyfriends to buy them a designer handbag is set to jump through the roof. This US private equity fund obviously has its ear to the ground.
CER’s No. 1 pick is local government bonds. The massive political meeting that kicks off in Beijing on Saturday, the Third Plenum, is set to jumpstart that market. And if we’ve learned anything from the past 20 years of development in China, it’s that local government officials can do just about anything with their cash and still come out driving an Audi and without a cent of on-the-books debt. Get behind that as fast as you possibly can.