Wednesday, April 20, 2016

China’s Pension Gamble?
Pension Fund consultant Leo Kolivakis references China's announcement that it will allow state pension funds to invest in stocks to help lift the stock market liquidity .. but warns: "Creating a mature stock market requires more than pumping in additional funds. China’s capital markets need wholesale reforms that minimize political interference more than they need pension money. My advice to China's policymakers, stop tampering with the markets, you're only going to turn a steep correction into a deep depression. Your pension funds can invest in Chinese equities but if they don't have the right governance and are told when to buy and sell equities, they're doomed to fail and they will lose a pile of dough which will create an even bigger problem down the road. I'm far more worried about China now than anything else. If its stock market bubble bursts in a spectacular fashion, it will wreak havoc on China's real economy and reinforce global deflation pressures." .. Kolivakis also worries about central bankers in general - "I wish central bankers, Chinese interventionists, and global greenshoots the best of luck navigating this market as we head into the second half of the year. Keep your eyes peeled on the U.S. dollar, the yen and emerging market currencies. Something is going to break and it's not going to be pretty."
LINK HERE to the commentary

1 comment:

Anonymous said...

How can anyone be worried about China at a time like this for Europe ?