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Wednesday, March 10, 2010

China Stocks

China's economy is growing at an annualized rate of 9-10 percent while the US economy is at 3-5 percent "normally". The huge economic growth created a lot of opportunities for investors around the world. Wall Street analysts are paying increasing attention to well-run Chinese companies. Even though the stock market in China is young (started since early 1990), and it has a total market capitalization of only less than $2 trillion, the prospect for growth can not be overstated. For comparison, the United States has a total market capitalization of about $20 trillion while the GDP of USA is roughly 5 times that of China.
While many people believe in China's stock market's growth potential, there are huge ups and downs in the Chinese stock market prices, just like any stock markets around the world. Tremendous price gains was witnessed in China stock market in 2006. The year of 2007 for China stock market saw the peak for all major Chinese stock index. 2008 is a year that witnessed a continued slide in Chinese stock prices that leads to the notion of China stock market crash 2008.
Chinese capital markets are still evolving constantly. In Oct 2009, ChiNext was launched as the market platform for innovative enterprises in China to list their shares.
Featured Stock
Industrial and Commercial Bank of China or ICBC in short, is the latest state owned bank to go public in China. The ICBC IPO, raising $21.1 billion, is the biggest in the world as of Nov. 2006. It surpassed a previous record held by NTT DoCoMo of its $18 billion IPO in 1998. It is the hot China stock in 2006.
China Life Insurance Corp is another stellar performer among large China stocks ADR in 2006. China life stock was up by more than 100% after stock split.
In 2007, Chinese IPO stocks in US market continued to perform pretty well. One of the new Chinese IPO stock, WuXi PharmaTech (Cayman) Inc. (WuXi), has more than doubled its IPO price after raising over $160 million by selling ADR on the NYSE.

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