The Great Wall of Cash extending to BlackStone
The news on China: 3 billion stake in a private-equity group Blackstone (as reported by WSJ). Finally, a diversification from the BOC holdings of 1.3 trillion USD in foreign exchange reserves into instruments different from t-bills. Let's see the responses around the globe on that issue...
In a broader context, check out Bill Cara's week in review where he argues that China finally gets a piece of the Gnomes (powerful private equity groups):
"...
I truly believe that the natural market cycle reversed from Bull to Bear on or about May 10, 2006. I believe the Gnomes panicked, and had Pres. Bush pull Treasury Sec. John Snow out of his position and, as a ‘thank you for favors rendered’ put him into the head position at the Humungous Private Equity Corp (HPEC) unit Cerberus.
You see, HPEC (KKR, Carlyle Group, Blackstone, Bain, Cerberus et al) represents the Gnomes, and these are the very private string-pullers who pull the chains of the President and key Senators of the US, and central bankers and finance ministers, and people like them who have been boosted to power by so-called “democratic” forces in other countries.
HPEC, in May 2006, had an agenda in place, which has been playing out since then. It involves the take-over of listed corporations in many countries, and the total funds being provided by Humungous Bank & Broker (HB&B) is over $1 trillion. A Bear market starting in May 2006 would have stopped those plans.
It might have even kept the Chinese from joining HPEC. Yes, China has agreed to take a $3 billion stake in Blackstone Group. Hmmm. ..."
China Matters chimes in with its interesting (as usual) insight on the Great Wall of Cash:
Excerpt below:
" Traditionally, the only practical destination was US Treasuries, which made the Chinese government (in their view) hostage to the US government. No matter how annoyed Beijing became with Washington, Bank of China would have to continue to buy Treasuries in order to find a safe haven for its forex, and maintain the value of existing holdings of US debt.
The Chinese government took a small step to allocate central forex reserves through market forces by involving "qualified investors" but I expect was properly anxious about the sticky fingers on the invisible hand.
They also tried to buy our stuff (a.k.a. direct interest in corporations that own or make things) but the CNOOC debacle taught them high profile asset purchases can attract US domestic political opposition and push up the price (or make the deal impossible).So the Blackstone deal looks like a smart way out of the forex dead end.
Smart, greedy capitalists allocate the capital more efficiently and profitably than any BOC bureaucrat ever could.They provide the public face of acquisition, with the Yellow Menace just one of many silent partners.
Wall Street types hungry for their bite of the China asset eggroll create a political constuency for a moderate China policy in Washington.
And the Chinese government gets more leverage over the business community through a continual presence as owner, rather than an occasional buyer of US products..."
So the question is... How can you trade this? Any ideas? Any ETFs to invest in? Short on bonds expecting the yields to rise?
1 comment:
La verdad es que ante este panorama los ETF’s que se me ocurren ya no constituyen la mejor opción, tal como dijo Eduardo Rivas en su comentario, “hoy por hoy el nyse ya no es será el hit, sino el China market” y es que es cierto, de acuerdo con noticias de Bloomberg, el mercado chino está emitiendo señales que nos indican un boom, tal vez pueda salirse de control, sí pero se encuentra en una espiral de crecimiento importante donde se estan generando empresas grandes y miles de personas con dinero para mover. Asimismo, mi comentario se vincula en el sentido que China, incluyendo el gobierno, tiene dinero por mover y por colocar, en mi poca capacidad analítica veo que tanto como individuos como corporaciones y gobierno tienen un excedente por colocar y que quieren hacer rendir. A mi me llama la atención en lo personal indicadores que leo, como por ejemplo del american stock Exchange China index, que indica saltos del 5%, los cuales interpretan como crecimientos sin igual, en los mismos se menciona que el gobierno chino determina que hay un interés de que inversores diversifiquen sus intereses hacia otros mercados, pues incluso para los bancos solo se permite colocar el 50% en el doméstico. Tanto se ha comentado que china está llevando a cabo una estrategia de diversificación de foreign Exchange reserves; Por otro lado, creo que los “bonds” sí tienen proyección, ya que se ha publicado que los inversionistas internacionales están comprando US bonds ahora pues tienen percepciones favorables hacia ellos; En cuanto al aspecto de negocio, en realidad coincido que China busque una participación importante, no por nada invierte en una HPEC, además no hay que dejar de ver señales importantes como el constante crecimiento de las exportaciones chinas y el hecho de que China ya es el segundo país con más valores de US sólo después de Japón.
Post a Comment