What do expats do to invest their RMB incomes? I have some RMB and I don't want to convert it to USD - but I am afraid housing prices are too high and I think it is to late to invest in the stock market. Where else could I invest my RMB that is better than bank interest and NOT unreasonably risky.

Those of you with sketchy business plans please do NOT PM or reply - I am looking for common investment alternatives like the stock market or real estate (just not those two).

Invest in Gold, it is still one of the best stores of wealth. Now is a perfect time to buy as the metal is resonably priced, if there is any troubling events or energy crisises to come this year - and I believe we may see a few - the price of gold will head skyward, additionally as the populations of China and India gain more wealth they will store there excess cash in Gold, the average savings rate in China is 40% of income and India would be similar, this means rising demand for the metal which already has a limited supply, all this will equate to much higher prices. You may want to do a little research; as I believe there may be a minimum investment requirement for Gold in China.

I wouldn't convert any cash into USD either, the currency is in decline and 'helicopter Ben' is happily printing more cash so the dollars you have are fast becoming worthless.

Assuming that this thread is not a setup for someone with no previous posts to come in and say "try Austin Morris etc" then there are various investments to choose from. I agree with Me_Again that US dollars would not be a wise move at the moment although I have no opinion about gold. I can see both sides of the arguement for that one.

If you have a reasonably long term view (3years+) then i would say look at an emerging markets fund. That could be a good way to take advantage of the growth in China and other countries without the risks of investing directly in those countries.

The expectations for the stock market are that it will continue upward growth albeit at a rate somewhat slower than the last year or two. Still, riding the Chinese stock exchange requires a bit of luck and a lot of research. Also, only Chinese citizens can buy A shares.

I wouldn't put all my eggs in the gold basket. Traditionally, gold is known as a hedge against inflation and not a long term method for accumulating wealth. The claims that gold will shoot skyward have been around for a long time and have generally been inaccurate inasmuch as gold's value can be influenced upon heavily by world events or by world non-events. So, while there is room for gold to go up, a stroke of luck in geopolitical events can as easily send gold down.

It seems like a relatively safe investment are Chinese government bonds, though the return is a low 3% after tax. Mutual funds have been doing quite well and are expected to continue doing well for a while. These are two investments that do not require you to be a Chinese citizen.

Don't worry - it is not a set up. I don't have anything against Austin Morris (they approached me) but I feel I am sophisticated enough to research my own investments and not depend on mutual funds (works well for me in N.A.).

Gold is an option I had not thought of. I think we all agree the U.S. dollar is trending down - and gold will float above it - but I think the RMB will strengthen faster than gold and still prefer to find an RMB investment.

I have the luxury of investing as a Chinese (wife) or non-Chinese citizen.....

Hmm...I'm not good in investment though. Anybody care to give some opinions on water?

Yep, agreed with underh20 point of view. Not all into gold!

Through your wife you can purchase Shanghai A shares. You can purchase mutual fund shares and government bonds on your own.

Gold is not a very practical investment in China unless you like bank products tied to the actual price of gold but which involve no physical delivery of the precious metal. Physical gold which you can put your hands on in China carries a higher premium over spot than that purchased in, say, the US.

ash96 wrote:Anybody care to give some opinions on water?

Drink at least 64 ounces daily while avoiding tap water.

underh20 wrote:

ash96 wrote:Anybody care to give some opinions on water?

Drink at least 64 ounces daily while avoiding tap water.

Hahaha, I'm serious. Not that water. I mean water pricing...some people from ABN-AMRO recommended it to me.

Not All into anything, for god sakes. The key is to have some diversifications, but then again not too much or else anything that will do well won't mean squat

Gold is definitely a very interesting investment....

Not sure what kind of investment you mean. Are you talking about shares in companies that produce or process water? Chinese companies?

underh20 wrote:Not sure what kind of investment you mean. Are you talking about shares in companies that produce or process water? Chinese companies?

Yep, not sure. Hahaha, you thought i was joking on water out of a sudden? Yep, actually I'm not sure what's good to invest in China other than properties.

Well, it's water index. It's more on the companies like Pentair Inc, Aqua America and such. Quite blur...

Not familiar with companies like Aqua America, but on the Shanghai and Shenzhen Exchanges you need to be careful -- very careful -- about investing. Much of the boom the past year or two is more the result of an excess amount of investment funds than it is about well performing companies. I stick to the Chinese version of blue chips and, for now, banks and related IPOs, but only on the Shanghai Exchange. The Shenzhen Exchange is a lost cause. The HK Exchange is good, though.

Like I mentioned, mutual funds are doing well and are expected to perform well in the near future. The key is investing more in the fund management company than the fund itself.

I still think there is room for real estate, though it isn't as easy as it was before. Before you could buy anything at just wait for it to go up; pretty much idiot-proof. Now you actually have to pick well where to buy and what to buy.

Real estate has that PITA (Pain in the ass) factor too because you have to rent it. If I did buy I'd like to go out of Shanghai to where the prices are closer to the costs (part of the reason I have so much RMB is selling an apartment in Guangzhou that did very well over the last two years. Also - real estate here tends to quit being new after 3-5 years and then decrease in value...

Mutual funds never worked for me back home. BUT - I sure can't read (or trust) the financial statements here. The water companies might be a good idea - something NOT sexy and frothy right now like the banks (I made a lot of money selling my mutual funds and buying boring old economy stocks right before the dot-bomb).

Ash96 - Can you PM me more info - OR can you tell us all who at AMB Ambro you talked to?

underh20 wrote:Not familiar with companies like Aqua America, but on the Shanghai and Shenzhen Exchanges you need to be careful -- very careful -- about investing. Much of the boom the past year or two is more the result of an excess amount of investment funds than it is about well performing companies. I stick to the Chinese version of blue chips and, for now, banks and related IPOs, but only on the Shanghai Exchange. The Shenzhen Exchange is a lost cause. The HK Exchange is good, though.

Like I mentioned, mutual funds are doing well and are expected to perform well in the near future. The key is investing more in the fund management company than the fund itself.

I still think there is room for real estate, though it isn't as easy as it was before. Before you could buy anything at just wait for it to go up; pretty much idiot-proof. Now you actually have to pick well where to buy and what to buy.

Yep, but real estate pricing is already high. It's great if you did it few years back. Thanks for all the info, appreciated. I'm not very good in this line. While reading and receiving info from others...I'll do some research for better understanding.

Cheers

Renegade wrote:Real estate has that PITA (Pain in the ass) factor too because you have to rent it. If I did buy I'd like to go out of Shanghai to where the prices are closer to the costs (part of the reason I have so much RMB is selling an apartment in Guangzhou that did very well over the last two years. Also - real estate here tends to quit being new after 3-5 years and then decrease in value...

Mutual funds never worked for me back home. BUT - I sure can't read (or trust) the financial statements here. The water companies might be a good idea - something NOT sexy and frothy right now like the banks (I made a lot of money selling my mutual funds and buying boring old economy stocks right before the dot-bomb).

Ash96 - Can you PM me more info - OR can you tell us all who at AMB Ambro you talked to?

Yep, you won't feel much of PITA if you stay permanent in Shanghai. You're having good knowledge in real estate too. Expectations to decrease or even stagnant should be in the next few years. Maybe around 3-5years as you mentioned.

RMB is getting higher and USD is getting low. Euro keep it up but too late to go into it.

How about investing in Chinese Contemporary art, there are many great artists in China now that are recognised internationally and make a sound investment with possible great returns, as well as been able to enjoy it everyday.
PM me if you would like more details.

bougie wrote:Not All into anything, for god sakes. The key is to have some diversifications, but then again not too much or else anything that will do well won't mean squat.

Good point Bougie. It’s ok to put all your eggs in one basket as long as you watch the basket very closely. Read Common Stocks, Uncommon Profits by Phil Fisher.

^ Will try to get my hands on it, Wolfy. If I could only get amazon to work on this bloody machine of mine ... even with proxies it is not agreeing with me ..

That's a book that's also on my list to get. Another couple of good ones for anyone interested in stocks/shares are:

"One up on Wall Street" by Peter Lynch. Talks mainly about the US but is applicable anywhere.

"The Naked Trader" Robbie Burns. Based on UK info.

If anyone wants to put more effort into trading then another one called "How to Make Money in Stocks", William O'Neil is interesting.

I have and have read Peter Lynch "One up on wall street" and it is a good read and could be applied anywhere .

Hi All,

I am also looking for better form investments for my RMB. I could send them back home and reinvest in the stock market at home. But I hope to invest locally in China so that the returns can be maximized with RMB eventual appreciation.

Can we just purchase any of the unit trusts from the banks or investment companies? Saw some local investment companies offer ETFs can we purchase those?

Thanks.

Foreigners can purchase mutual funds such as those offered in most banks. What foreigners cannot do directly is to buy Shanghai A shares.

We bought some ETF (in my Chinese wife's name) last year and that was great (more than doubled on some of it) - but now it is VERY heavily weighted to a few really large companies (the banks) and that is one of the reasons I fear it could just as easily go down.

I do read there is supposed to be Shanghai stock index futures trading right away. Anyone know about that - especially if there are put and call options on those futures? With options and a CD you can build a safe investment that has good upside (if you do it yourself you can save a lot from letting a bank prepackage it for you).

rt75 - the ETF trades like a share even though it is a fund so I am not sure if you can own it or not. If you get an answer from a broker I would like to know.

Renegade wrote:We bought some ETF (in my Chinese wife's name) last year and that was great (more than doubled on some of it) - but now it is VERY heavily weighted to a few really large companies (the banks) and that is one of the reasons I fear it could just as easily go down.

I do read there is supposed to be Shanghai stock index futures trading right away. Anyone know about that - especially if there are put and call options on those futures? With options and a CD you can build a safe investment that has good upside (if you do it yourself you can save a lot from letting a bank prepackage it for you).

rt75 - the ETF trades like a share even though it is a fund so I am not sure if you can own it or not. If you get an answer from a broker I would like to know.

So, do you trade on fundamentals or on technical or on a hybrid of both for the derivative instruments?

Renegade wrote:We bought some ETF (in my Chinese wife's name) last year and that was great (more than doubled on some of it) - but now it is VERY heavily weighted to a few really large companies (the banks) and that is one of the reasons I fear it could just as easily go down.

I do read there is supposed to be Shanghai stock index futures trading right away. Anyone know about that - especially if there are put and call options on those futures? With options and a CD you can build a safe investment that has good upside (if you do it yourself you can save a lot from letting a bank prepackage it for you).

rt75 - the ETF trades like a share even though it is a fund so I am not sure if you can own it or not. If you get an answer from a broker I would like to know.

Hi Renegade,

Which ETF did you purchase? I saw from one of the local financial magazines that there is this company, chinaamc, offering ETF (www.chinaamc.com). But it seems that the minimunm investment is 1,000,000 units. Way out of my reach. I have yet to check if foreigners can purchase ETF. My personnal preference will be ETF because of the low management fees.

ETFs are only available to Chinese citizens if the stocks included in the basket are Shanghai A shares according to brokers at United Securities and GuangFa Securities.

The reason that ETF fees are so low is that they require a minimum investment of far more than the typical 5,000 RMB for most mutual funds. However, if you buy your mutual funds from the right source, the fee for mutual funds is often lower than for ETFs especially when you consider that with ETFs you pay not only management fees, but also a brokerage commission when purchasing.

zexian wrote:
So, do you trade on fundamentals or on technical or on a hybrid of both for the derivative instruments?

I used to work with commodity dreivatives - and we were the ones selling fancy products to people who wanted the upside if prices went up but didn't want the risk. These are the promises where you get your capital back but you can make more money if gold, stocks, oil, currency, etc. go up.

In this case I am wondering about being one of those greedy people - I want to put my money in a CD but invest the interest payments in call options on the Shanghai index. My belief is that the Shanghai index may go as much as 30% higher - but no more and even if it does go up that much it will fall back before the year is over. I'm also worried that if my guess is wrong it's that it will not go up at all (I am not worried it will go up more than 30%).

Does that make me a fundamental or technical guy?

UnderH - you mentioned there is still some good real estate ideas left. What type of ideas are you thinking? Residential, commercial or other? I know the best way to make money there is buy old and fix up but still you have to have th right piece of property.

RE: Art. A valid investment but I am an accounting/finance guy - I could not properly evaluate an art investment to save my soul!

Renegade wrote:

zexian wrote:
So, do you trade on fundamentals or on technical or on a hybrid of both for the derivative instruments?

I used to work with commodity dreivatives - and we were the ones selling fancy products to people who wanted the upside if prices went up but didn't want the risk. These are the promises where you get your capital back but you can make more money if gold, stocks, oil, currency, etc. go up.

In this case I am wondering about being one of those greedy people - I want to put my money in a CD but invest the interest payments in call options on the Shanghai index. My belief is that the Shanghai index may go as much as 30% higher - but no more and even if it does go up that much it will fall back before the year is over. I'm also worried that if my guess is wrong it's that it will not go up at all (I am not worried it will go up more than 30%).

Does that make me a fundamental or technical guy?

UnderH - you mentioned there is still some good real estate ideas left. What type of ideas are you thinking? Residential, commercial or other? I know the best way to make money there is buy old and fix up but still you have to have th right piece of property.

RE: Art. A valid investment but I am an accounting/finance guy - I could not properly evaluate an art investment to save my soul!

I see......Have you excecuted any trades on derivatives instruments before?

If you have, on which exchange and on which specific instrument?