Friday, 1 June 2007

Sell in May and Go Away? Review

Well, looks like I was wrong along with the old adage. The Chinese indices do look very precarious at the moment with a couple of large falls this week.

However, The Economist reports that the Chinese government is setting up a $300 bln fund for investment purposes and given their concerns over what a stockmarket collapse might do for social stability in China, one wonders whether they might step in and prop up the market.

Rumours abound that they are out to buy natural resources companies globally, to satisfy their ever-increasing demands for industrial materials and energy, which should prop the sector up.

On that point, the Chinese bought out Rover, Britain's last mass market car maker last year, stripped out the factory, moved all the production lines to China and resumed production there. All that's now left here is an assembly plant employing 130 people - see this BBC article. One wonders if that might become a model for Chinese 'investment' in the West.

The Yen's on a knife edge at the moment too, right back at its previous lows in February, but may become irrelevant if the global liquidity spigot moves to China, Russia and the petroleum states and their governments' investment billions.


Rodrigo said...

Oi, achei teu blog pelo google tá bem interessante gostei desse post. Quando der dá uma passada pelo meu blog, é sobre camisetas personalizadas, mostra passo a passo como criar uma camiseta personalizada bem maneira. Até mais.

Angus Alderman said...

As this seems to have been published to hundreds of other blogs too, I guess this is my first experience of 'blogspam'!