Stock markets around the globe are up significantly in the wake of the U.S. “fiscal cliff” deal. Many stocks are benefiting, even those with seemingly indirect links to the U.S. and its fiscal woes. One Chinese stock is up more than 6%, but questions persist for the company.
Like natural gas, coal is an energy sector that has suffered from declining growth around the world, particularly in China.
The People’s Bank of China (PBOC) announced Wednesday that reserve requirements would be selectively cut by 200 basis points (2%) for hundreds of branches of the Agricultural Bank of China, in order to boost rural credit.
China is hungry for coal, but growth has has been slowing down and prices are well below the government’s official price cap. It’s a trend that analysts at DBS Group Research say will continue for several months to come.
In our request for profits in China we started with the big ETF Fund FTSE China 25 Index (FXI, quote) and are drilling down looking for the best-of-breed companies that fit our oil & and gas, consumer and telecom premise for surgical 2012 China plays.
Analysis seem to be split on weather China’s economy is coming in for a hard landing or not, but colleagues who have been to China recently indicate see both less construction cranes and more consumption of non-necessity items such as smart phones, electronics, education and a higher standard of eating.
News of a steep drop in new unemployment benefits claims in the United States sent stocks in Asia and Europe up Friday. Unemployment claims for the week dropped to 364,000, their lowest level in three-and-a-half years.