with steady surplusses coming to china i think that they don´t have to sell bonds to fund their investment vehicle. than the effect for bonds will be more severe. but this scenario is unlikely.
for the rest of the equity market this should be fantastic news on top of the petro$ another major suppert to pimp up valuations.
nur ne frage der zeit bis china diesen schritt vollzieht. so ziemlich jedes investment ausserhalb us anleihen erscheint mir besser. unterm strich glaube ich aber das dieser schritt für us aktien unterm strich negativ sein wird bzw das us aktien am wenigsten profitieren werden.. (siehe beispiele im post). zuerst werden diese summen fehlen um zukünftig us anleihen zu erwerben.
dank der ständigen zuflüsse werden sie sicher keine $anlagen verkaufen müssen. sollte das doch der fall sein (extrem unwahrscheinlich) dürften die auswirkungen spürbar sein.
für die restlichen aktienmärkte sind das fantastische news. neben den petro$ kommt jetzt noch china hinzu um die bewertungen höher als gewöhnlich zu halten.
The agency will ``maximize the profits'' of the reserves, Finance Minister Jin Renqing said today. Lou Jiwei, promoted to China's cabinet on March 6, will manage at least $200 billion as head of the agency, said Yu Yongding, an adviser to the People's Bank of China.
China, the world's second-largest holder of U.S Treasuries, now invests most of its currency reserves in dollar assets and is losing from exchange-rate movements as the yuan gains. The agency's creation may prompt a flood of Chinese investments into overseas technology companies, mines and oil fields to support an economy that grew 10.7 percent last year.
State-owned Temasek managed S$129 billion ($84 billion) of assets for Singapore's government as of March last year, holding stakes in companies ranging from Chinese banks and Indian textile makers to domestic airlines and telecommunications operators.
``We will model it on international best practices, including that by Singapore's Temasek,'' Jin said today at a press conference in Beijing. ``We will try to maximize the profits and returns on our management of foreign exchange, guided by the principles of safety and risk management.''
Temasek's profit surged 71 percent to a record S$12.8 billion in the year ended March 2006, while it returned 24 percent to shareholders, matching the MSCI AC Asia Pacific excluding Japan Index and outperforming Singapore's key Straits Times Index, according to Bloomberg data. The yield on the benchmark 10-year U.S. Treasury bond is 4.51 percent. ( and it is in $...zudem noch in $..)..
The nation's foreign-exchange reserves jumped 26 percent, or by more than $200 billion, last year to become the world's largest, driven partly by a record trade surplus.
Jin didn't say how much the agency will manage or elaborate on its investment strategy. He declined to confirm whether his former deputy will head the agency. China's 2006 holdings of U.S. government bonds rose 12.5 percent to $349.6 billion.
China is trying to find new methods to invest the reserves without letting the yuan appreciate too quickly.
The yuan fell 0.06 percent to 7.7442 to the U.S. dollar at 4:07 p.m., after yesterday reaching the strongest since a peg to the dollar was scrapped in July 2005. The currency has risen about 7 percent since the end of the fixed link. (really shocking..../ wirklich dramatisch...)