China's Wahaha Billionaire Says Capital Markets "Suck"
One of China's wealthiest men, Zong Qinghou - founder of the privately listed beverage empire Hangzhou Wahaha Group - is hunting fort deals overseas as the WSJ reports, he believes “The capital markets suck in China.” Since China's stock market bubble burst (after running up from 1000 in 2005 to 7000 in 2007), it has never recovered from its collapse, loitering around 2,000 points ever since. Plagued by too many offerings (run by the government) and a slowing economy, WSJ notes that a common complaint is that the only investors who make money from China’s stock markets are those with inside information. The retail investors that fueled the bubble in the first place remain scarred by the experience, and have mostly stayed away, as Zong concludes: "When the ordinary people invest in it, the market should reward them with some benefits. But it does not." This has driven the desire to 'invest' or speculate in real estate - a topic we discussed yesterday - leading to a looming bubble there also.
China's Shanghai Composite...
China’s richest man has a strong statement for those looking to invest: “The capital markets suck in China.”
Zong Qinghou climbed his way to the top of the list of China’s wealthiest by amassing a fortune of $12.6 billion through his privately listed beverage empire Hangzhou Wahaha Group Co. On Tuesday, he made clear he didn’t gain his wealth through the country’s stock market.
“When the ordinary people invest in it, the market should reward them with some benefits. But it does not,” Mr. Zong said on the sidelines of China’s annual parliamentary session, taking aim at speculators he says ruin the stock market for others. “The speculation has totally ordinary investors of any benefits.”
The sentiment of the billionaire, who is also an NPC representative, speaks volumes about the state of the country’s capital markets, highlighting the monumental obstacles investors face in China as they look for places to park their money in hopes of a return.
In recent years, China’s stock markets have lagged and generally been sluggish, plagued by too many offerings and a slowing Chinese economy. China’s stock bubble burst at the end of 2007 after the benchmark Shanghai Composite Index rose to almost 6,000 points from about 1,000 two years earlier. But the market has never recovered from its collapse, loitering around 2,000 points ever since.
The retail investors that fueled the bubble in the first place remain scarred by the experience, and have mostly stayed away. A common complaint is that the only investors who make money from China’s stock markets are those with inside information.
The Chinese government has made efforts to restore confidence, in part by trying to crack down on insider trading. And China Securities Regulatory Commission Chairman Guo Shuqing has floated the idea of bringing China’s model closer to that of the West, reducing the role the government plays in approving initial public offerings and shifting more power to auditors and investment banks, to foster a more transparent market where the various players take greater responsibility for their actions.
...
So rather than investing in the stock market, Mr. Zong is now looking to park money in high-tech projects. “We are looking for opportunities and will invest in anywhere that needs us in fields including bioengineering and energy-saving electrical appliance etc.,” said Zong.
...
(3 votes)
- advertisements -
»
- 7771 reads
- Printer-friendly version
- Send to friend
And he's right! They don't just suck in China though. Manipulated and medicated everywhere. Rigged. And not acting as "markets". Who'd a guessed that the USA would have more centrally planned economy than Russia or China. Makes it sucky for sure.
Too bad he doesn't differentiate between speculators with skin in the game vs. those with free money backing them.
Speculators are an important risk management function within a market, but only if they expose themselves TO the risk. Otherwise, it's just another factor in the distortion that undermines the market.
yes, a few are playing a different game, buy every block offered for a few pennies per share commission (on the offer) knowing a cb is there to bail them out at 4:00pm
The market closes at four. We need the bailout sooner...
Don't worry, there's a 400 quadrillion collateral backing al CB toxic assets. Now if they can only figure out how to extricate said asset from that timewell in the Hindu-Kush.
"...a common complaint is that the only investors who make money from China’s stock markets are those with inside information."
Hmmm...where else have I seen this phenomenon?
Wahahahahaha Wahahahahahahaha
ZONG is a crook. Most of the "business leaders" in china are big time liars and cheats. NEVER sign a contract with anyone in china -- it is worthless.
Well, how else is it possible to get ahead in an economy where the state owns all?
That would be the one question I'd like to see Jim Rogers answer. The fact that such a smart guy could fail to see this massive moral hazard leads me to believe he is either, a) not really that smart, or b) just another part of the facade.
throw out text books, they are obsolete. Fuck college...that too is teaching you old shit.
supply/demand....got it kids? good. there's your college ed.
Bring him over here and we'll introduce him to "REAL Capitalism". Once we're finished picking him clean we'll mail his bones back home.
lmao
http://members.gamedev.net/vilio/LMAO.jpg
I wish I had a fancy coat like him. What are Chinese soft drinks? What is that? Flavored dog piss?
The only true stock market left....
He is definitely right about the equity markets there. Nothing but wood unless you're in the know.
unless you are a Jew..
The Jew's are sworn to fleece everyone but themselves, when will they fleece one another?!! Very soon
The plague is second generation business owners are lazy, spoiled, play too much golf, and take the approach of, "No more more business."
What's left to do when all the money's been made?
Mamasan can always come up with some options.
The Chinese don't seem to trust their stock market.
How un-American.
Your comment is asking is real Onanymous bait.
The Chinese seem to have realized what a ponzi their stock market is. As Wahaha says, they don't trust their companies.
Dude rolls like a pimp!
Capes aren't just for superheroes anymore. It's all the rage at the fashion shows. Coming Soon - Whale Bone Corsets, Top Hats and Monocles
don't forget rollin' in your shiny Auburn or Cord
I don't know about you guys, but I'm long Burger King outfits.
The monicle thing might work, if it comes back as a high-tech Googicle that at first is only affored/used by the ubers. <Note to Google: you owe me for this one>
So they will call the prototype the "Testicle"?
"Since China's stock market bubble burst (after running up from 1000 in 2005 to 7000 in 2007), it has never recovered from its collapse, loitering around 2,000 points ever since. Plagued by too many offerings (run by the government) and a slowing economy"
what country are we talking about?
The one that centrally plans its economy, manipulates its currency and spies on its citizens. Any clearer?
Oh, you mean the country that jails citizens for leaking the truth and then threatens or colludes with its press to not report these things or the legal process against the jailed citizen?
Yep, the country that is currently scrambling to control resources in Africa and around the globe as its failed Keynesian fiat experiment begins to crumble. You know, the one with the two-tier justice system - one for the serfs and one for the power elite.
Oh I got it, the one that makes and exports poisonous foods and whose legislators are constantly caught with under age prostitutes?
Nailed it, DJ! ;)
Wahaha! I sort yu, ROR!
No, he can't be the richest guy in China. WSJ must be sucking the Central Committee's dick. Stock market has always been a wealth transfer vehicle for those insiders, hasn't it? Its goal is always to make those insiders rich, isn't it? Everytime I read or hear the word investor, I tend to chuckle, and I feel that's a great word for stock market "consumer" that tends to be consumed by " the market."
Just buy gold and silver if capital markets and real estate suck. The land value of Beijing is $20 trillion - so there is plenty of money to invest.
Where one finds a central bank and the right mix of greedy wealthy cronies, a miniority voice goes unheard and underappreciated in the noise of propaganda and centralized policymaking efforts i.e. CONfidence. While the majority fret about inflation and getting their fair share, the real winners are the owners of the perverse monetary system we exist under.
have no fear-US consumers are loaded up with record car loan financed amounts(27K) at record loan lengths (65 months!!!)-on an asset that will be worth less than the loan in a few years. I'll be getting into the car repo business next year.
The scam is this: more lux car repos = more tow trucks = more tow truck sales = more tow truck production = more lux car production = more lux car sales = more lux car repos = INFINITY
"The Cadillac Effect."
I notice that the parking lot at my credit union is always chock-full of big trucks and SUVs. Makes me want to go inside and discuss their fucked up lending standards. How are they so incapable of making good loans?
But since they have no skin in the game either, they could give two fucks.
Thanks Uncle Sugar! You're the greatest!
"When the ordinary people invest in it, the market should reward them with some benefits."
"Again let us dream where the land lies sunny And live, like the bees, on our hearts' old honey, Away from the world that slaves for money-
- Come, journey the way with me."
-Madison Julius Cawein
Here is my wisdom on this subject:
The Chinese Stock market is the purest embodiment of "greater fools theory" capitalism and numerology trading style. No wonder people get burnt.
Now real estate suffers the same cultural/psychological mania.
you could also argue that the Chinese market is priced closest in reality to the shitty state of the world's economy and is the greatest value-as opposed to our Pollyanna market.
How do you say NO SHIT in Chinese?
po laa she'
You mean 'bu la shi' which means literally do not shit.
'No shit' in the English meaning would vary from polite--'zhen de ma?' or profane-'cao' or 'fangpi' and so on.
I don't know, but it sure as hell ain't "on the roadside".
akak, responding to this question from orangedrinkandchips:
said:
I'm not sure how NO SHIT is said in China, but it is written rather clearly. Notice that, in these signs, the actual rule about number two also happens to be rule number two:
http://www.shanghaidiaries.com/archives/IMG_9634.jpg
http://ic.pics.livejournal.com/hannahcharlene/21686346/79952/79952_origi...
Also of note, rule number one suggests that AnAnonymous is not permitted in public parks unless he is "under custody" and, per rule number five, they don't take kindly to activities of feudalistic and superstitious nature.
For those who don't understand akak's reference, this brief video should provide sufficient clarification:
http://www.liveleak.com/view?i=2c9_1328304616