HaavBline

China Expands Foreign Investment Limits, So Why Are Global Banks Slow to Act?

1. Not every QFII has applied and/or approved maximum quota. There is a minimum quota requirement ($50M), and an overall quota limit ($30B) as well. Individual QFII participants are expected to use the quota they requested and were approved. They are not allowed to trade unused quotas.

2. Only in 2007, the overall quota limit was expanded from $10B to $30B. The actual used total has risen from somewhere less than $10B in 2007 to $15B now. Considering the weverely damaged western financial industries over this time span, this is clearly very solid growth.

3. New rules does not need to increase the total quota, just raise the upper limit and reduce the lower limit from $50M to $20M. Allowing more flexibilities for foreign institutional investors.

Knowledge Is Power: Jittery Bulls in the China Shop

Some people has been worrying that US might become trapped in a Japan (post-bubble) scenario. But I think Germany is a much more likely candidate than US to follow Japan into a long term decline.

R.I.P. P.P.I.P.?

Agreed. Financials is not a deep bargain it was 2 weeks ago. Energy is a better deal now.


On Mar 26 10:37 AM toomuchgas wrote:

> Who knows? There is no visibility. Why would anyone bet on financials
> when the oils are so cheap and have clean balance sheets?