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China Takes Next Step In Currency Globalization, With Some HK Stocks Priced In Yuan

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China’s gradual internationalization of its currency will shift to its next leg on Monday when about two dozen Chinese companies start trading in their home currency in Hong Kong’s stock market. Hong Kong stocks such as Alibaba (NYSE: BABA) and Tencent are among the 24 stocks which will be priced and traded in both yuan and the Hong Kong dollar under the Dual Counter Model on the Hong Kong stock exchange (HKEX) from Monday. The scheme is targeting overseas investors with yuan holdings initially, but will later include mainland investors via the Hong Kong-China Stock Connect link-up later. Offshore yuan deposits in Hong Kong alone are estimated at some 833 billion yuan ($117 billion). Fund managers say the step reflects Beijing’s desire to expand the use of yuan outside China and provide another avenue for yuan-denominated investment, thus reducing the risk of capital outflows chasing higher-yielding currencies such as the U.S. dollar. “China is pushing yuan internationalization to avert geopolitical risks and reduce reliance on the dollar, and for that purpose, you need wider use of the Chinese currency,” said Ding Wendie, strategist of Global Capital Investment at China Asset Management Co (Chunam). Ding said the scheme is a major milestone and expects the model to be expanded in the future, beyond stocks to bonds and even alternative assets, boosting overseas asset pools denominated in yuan. The initiative comes amid a steady stream of bilateral yuan-denominated deals China has struck with trading partners, from Chinese oil purchases in the Middle East to commodities trade with partners from Brazil to Russia. Beijing has retained close ties with Moscow despite the invasion of Ukraine. The U.S. dollar remains the dominant global currency, accounting for 42% of global payments. The yuan’s share is just 2.29%, but is up from 1.95% two years ago. A significant breakthrough in China’s efforts to promote use of the yuan came this month, when Pakistan paid for its first government-to-government import of discounted Russian crude oil in yuan. “When a currency is internationalized, it’s not only used in trade, physical goods, or services. It also has to be parked in investment vehicles,” said Dong Chen, Head of Asia Macroeconomic Research at Picket Wealth Management. For foreign investors with yuan holdings, “buying shares in Hong Kong without really going into mainland China will be a much, much easier way to park your holdings of this currency,” he said. YUAN INCENTIVES Under the dual counter arrangement, investors can choose to trade a stock either using Hong Kong dollars via the HKD counter, or yuan via the RMB counter, with market makers providing liquidity and minimizing price discrepancies. Most of the first batch of stocks eligible for yuan trading – which include AIA Group (OTC:AAGIY), Sun Hung Kai Properties and Hang Seng Bank Ltd – are not listed in China. Fund managers expect a lukewarm interest in the yuan counters initially, given near-term risks including a weakening yuan and wobbly stocks as China’s economy struggles. But they expect demand to pick up over time. “Mainland investors, including mutual fund companies like us, have genuine incentives to trade Hong Kong stocks in yuan,” said Ding of ChinaAMC. “Our fund returns and dividends are priced in yuan, so using the RMB counter can remove forex exchange costs, and shield us from currency volatility.” There are many other reasons to trade in yuan, said David Friedland, Asia Pacific managing director at Interactive Brokers (NASDAQ:IBKR), which offers yuan-trading services. “There’s lot of political uncertainty these days so you may want to hold yuan rather than U.S. dollars, or the Hong Kong dollar, which is pegged to the U.S. dollar.”

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A Beginner’s Guide to Investing: Building Wealth for the Future

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In today’s dynamic financial landscape, understanding the fundamentals of investing is paramount for individuals seeking to secure their financial future and build wealth. While the prospect of investing may seem daunting to beginners, armed with the right knowledge and strategies, anyone can embark on the journey towards financial independence. This comprehensive guide aims to demystify the world of investing, providing beginners with the essential tools and insights to navigate the markets confidently and effectively.

The Basics of Investing
Understanding the fundamental concepts of investing is the first step towards becoming a successful investor. We will explore key concepts such as risk and return, diversification, and the power of compound interest. By grasping these foundational principles, beginners can develop a solid understanding of how investments work and the factors that influence their performance.

The Psychology of Investing

Understanding the psychological aspects of investing is crucial for beginners. We will explore concepts such as cognitive biases, emotional decision-making, and the importance of maintaining a rational mindset in the face of market volatility. By recognizing common psychological pitfalls, investors can make more informed and objective decisions, ultimately enhancing their long-term investment success.

Setting Investment Goals
Before diving into the world of investing, it’s essential to define clear investment goals tailored to your unique financial aspirations and circumstances. In this chapter, we will discuss the importance of setting SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals and how they serve as a roadmap for your investment journey. Whether your goal is to save for retirement, purchase a home, or fund your children’s education, establishing clear objectives will guide your investment decisions and keep you focused on the path to success.

 Understanding Asset Classes
Investors have a myriad of asset classes to choose from, each with its own risk and return characteristics. In this chapter, we will delve into the major asset classes, including stocks, bonds, real estate, and cash equivalents, examining their features, benefits, and considerations for investment. By understanding the role of each asset class in a diversified investment portfolio, beginners can construct a well-balanced investment strategy aligned with their risk tolerance and financial goals.

 Investment Strategies and Approaches
With a plethora of investment strategies and approaches available, choosing the right one can be overwhelming for beginners. In this chapter, we will explore various investment strategies, ranging from passive index investing to active stock picking and everything in between. Additionally, we will discuss the importance of asset allocation, rebalancing, and staying disciplined in the face of market fluctuations. By selecting a strategy that aligns with your investment objectives and risk tolerance, you can optimize your chances of achieving long-term investment success.

Getting Started with Investing
Now that you’ve laid the groundwork for your investment journey, it’s time to take action and start investing. In this final chapter, we will provide practical guidance on opening an investment account, selecting suitable investment vehicles, and executing your investment plan. Whether you choose to invest through a brokerage account, employer-sponsored retirement plan, or robo-advisor platform, understanding the mechanics of investing and implementing sound investment practices will set you on the path to financial empowerment and wealth accumulation.

Behavioral Finance and Market Anomalies

Behavioral finance examines how psychological biases and irrational behavior influence financial markets and investor decision-making. We will delve into the fascinating world of market anomalies, including phenomena such as the “January effect,” “momentum investing,” and “value investing.” By understanding these anomalies, investors can exploit market inefficiencies and potentially generate alpha in their portfolios.

In conclusion, Investing is a journey that requires patience, discipline, and continuous learning. By equipping yourself with the knowledge and tools outlined in this guide, you can embark on your investment journey with confidence and clarity. Remember, investing is not a one-size-fits-all endeavor, and it’s essential to adapt your investment strategy to changing market conditions and personal circumstances. With diligence and perseverance, you have the potential to achieve your financial goals and build a brighter future for yourself and your loved ones.

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Investing: Strategies, Tips, and Tools for Financial Success

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Investing is a cornerstone of building wealth and achieving financial success. However, navigating the complex world of investment requires careful planning, strategic decision-making, and access to the right tools and resources. In this guide, we’ll explore proven investment strategies, valuable tips from experts, and essential tools to help you make informed decisions and achieve your financial goals.

Understanding Investment Strategies:
Investment strategies are essential for achieving long-term financial goals. From passive investing through index funds to active trading strategies, such as value investing and growth investing, each approach has its benefits and risks. By understanding the fundamentals of different investment strategies, investors can tailor their approach to align with their risk tolerance, investment objectives, and time horizon.

 Tips for Successful Investing:
Successful investing requires more than just picking the right stocks or assets. It involves disciplined decision-making, patience, and a long-term perspective. Here are some tips to enhance your investing success:
– Set clear financial goals and develop a comprehensive investment plan.
– Diversify your portfolio across different asset classes to manage risk.
– Stay informed about market trends, economic indicators, and geopolitical events.
– Avoid emotional decision-making and stick to your investment strategy.
– Continuously review and rebalance your portfolio to maintain alignment with your goals and risk tolerance.

Essential Tools for Investors:
Access to the right tools and resources can significantly enhance your investing experience and outcomes. Here are some essential tools for investors:
Online brokerage platforms: Choose a reputable brokerage platform that offers a user-friendly interface, competitive fees, and access to a wide range of investment products.
Investment research platforms: Utilize research tools and resources to conduct fundamental and technical analysis, track market trends, and evaluate investment opportunities.
Portfolio management software: Streamline portfolio tracking, performance monitoring, and asset allocation with portfolio management software.
– Financial education resources: Invest in your financial literacy by leveraging books, courses, webinars, and seminars to deepen your understanding of investing principles and strategies.

In conclusion, Investing is a journey that requires continuous learning, adaptation, and disciplined execution. By leveraging proven investment strategies, incorporating valuable tips from experts, and utilizing essential tools and resources, investors can navigate the complexities of financial markets with confidence and achieve long-term success. Empower yourself with knowledge, cultivate sound investing habits, and embark on a path toward financial prosperity.

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Ford Signs Initial Deal To Sell Germany Plant To Investor

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Ford Motor Company (NYSE:F) held a work meeting Friday where the Detroit automaker revealed that they have found what was described as a major international investor for Ford’s German plant in Saar louis and signed initial agreements together with the western state of Saarland. “This is an excellent basis for further negotiations, with the potential to create around 2,500 jobs in Saar Louis,” said Martin Sander, head of the company’s German unit Ford Werke. “This week we have taken a big step towards this goal,” he said, adding that the aim was still to transform the plant and create future employment opportunities. According to a late January report by The Wall Street Journal, China’s BYD (OTC: BYDDY) was one of fifteen investors expressing interest in acquiring the Ford site in Saar louis once the production of the Ford Focus, its current model, ceases in 2025. Shares of F are up 0.67% in premarket trading on Friday.

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