The China money II

For the past few years, Asia stock market has been going up all the way. Driven by region booming economy, record earning and strong liquidity, many of the big companies command a rich valuation. In the low interest rate environment, people would seek better return for their cash, resulting in asset inflation. Too much money chasing too little asset. This is without consideration of all the China saving that is trapped inside the country.

The recent sub prime problem cause liquidity to suffer. Follow by America or Europe fund redemption, fund manager has to sell stocks for cash. Although I don't expect the market to come back so quickly. But time has told us that it is difficult to time the market. Now, the stock market seems to be back on where they were except the small caps. Recently, the news is anticipate the liquidity from different source, China.

Following is one of the news found in the forum. QDII fund might be interested in China company listed abroad. However, the China government fund might be interested to diversify their holdings. Gone with the days that they mainly buying US bond, they might start buying Asia growing companies. It might be interesting to watch the blue chips on SGX. Likely candidates to be banks, property company and conglomerate.

0045 GMT [Dow Jones] The recently launched Chinese state investment company could be interested in Singapore targets, says Credit Suisse. China Investment Corp., or CIC, started operations Sept. 29 with US$200 billion under management; "we believe it is worthwhile analyzing the potential investment targets of CIC - a new but extremely large investor." Says Temasek would welcome having its Chinese peer to take small, strategic stakes in Temasek-linked companies. Possible candidates include SIA (C6L.SG), SGX (S68.SG), DBS (D05.SG), SingTel (Z74.SG), SembCorp Marine (S51.SG), Neptune Orient (N03.SG), ST Engineering (S63.SG) and SPH (T39.SG). (KIG)