Thursday, December 30, 2004

China Revisited

I was wrong about the two China ETFs which I wrote last week - PowerShares Golden Dragon Halter USX China Portfolio (Dragon ETF) and the iShares FTSE/Xinhua China 25 Index Fund (iShare Xinhua ETF).

I read the Motley Fool article and I agree with what they said. The Dragon ETF is better compared to iShare XinHua ETF because:

1. It covers 38 stocks compared to 25 from Xinhua iShare.
2. It covers those China companies which are listed in US as ADRs. In my opinion, having listed in US means that the transparency and the reporting requirements are stricter.

You can read the Motley Fool article here .

Another news article caught my eyes. It goes as follows:

"Mr Jim Rogers, who co-founded the Quantum hedge fund in 1970 with Mr George Soros, says the trading fiasco that cost state-run China Aviation Oil Holding Co US$550 million (S$902 million) is an omen of tougher times ahead for Chinese companies and their investors.

"I can hardly wait," he said.

"There will be a hard landing in 2005 and I'm going to buy when that happens," says Mr Rogers, 62, a New York investor who manages about US$500 million in funds based on his Rogers International Commodity Index.

Make no mistake, he thinks there is a good buy from China, just that he would rather bottom fishing when it crashed. Maybe the valuations now are high. Could he be right? We shall see...


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