Olympics putting the spotlight on Chinese investing yet again
The Chinese markets have been beaten severely this year, its key index is still 50% off its highs set late last year. With this kind of large scale correction the Chinese investing scene looks to be primed for a well paying investment.
The Chinese economy is growing like no other around the world, its June trade surplus clocked in at $25 Billion beating expectations of analysts who expected a slowdown due to Chinese energy imports. The Chinese economy is facing a struggle to power itself and its manufacturing industry after the costly repairs from earthquake damage have sucked electricity from underneath the country.
Speculation was quick to enter the Chinese market and even quicker to leave. After a correction of 50%, which was largely due to the amount of speculator money fleeing the country, the fundamentals of the Chinese economy are still strong. China’s currency is accelerating in value quickly in response to strong economics of the area while its markets are falling. This represents a perfect opportunity to buy a whole country on the cheap.
FXI is one of my favorite ETFs in the Chinese market. It tracks the return of Xinhua China 25 index which is like the Dow Jones of the US stock market. The ETF is a great way to get into the Chinese top stocks and earn a return equal to the overall return of QUALITY Chinese stocks.
The ETF is getting some support from an old gap in the chart at the $42.50 level. With the Olympics coming to an end shortly, I’d be a buyer here, that is when FXI trades through the recent downtrend.