Thursday, April 26, 2007

Chinese individuals stampede into stocks

End March Chinese mutual fund AUM equal $150B. This is an industry that did not exist five years ago and was tiny two years ago. End of 2006 AUM was $110B so Mrs. Wang bought $40 billion in stocks in Q4. Total Chinese household bank deposits equal $2.2 trillion. There are 90 million individual brokerage accounts open, increasing at 200 thousand per day.

The Chinese authorities WILL clamp down on this, they WILL NOT allow it to get completely out of control. The only question is WHEN.

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