Author: Monty Guild

We have all been hearing about sovereign wealth funds [SWF's] which are estimated to have $1.2 trillion US available for investment in the rest of the world. Countries like Singapore, China, the mid East and several other countries around the world have SWFs to diversify their national investments.

In addition to these funds, a more recent development is the advent of QDII funds from China (Qualified Domestic Institutional Investors).

This is money owned by banks, insurance companies and wealthy individuals that China allows to leave the country to be invested abroad. It is estimated that these QDII investments will total about $140 billion over the next 12 months.

We estimate that about half will be invested in Hong Kong and the rest in stocks throughout the world.

This equals about 11 days of trading volume of all Hong Kong stocks.

Obviously the other half represents increased demand for stocks, precious metals and currencies outside of China. Since the Chinese Yuan is only rising 5% per year versus the $USD while gold, commodities and many other currencies are rising faster, much of this money will find its way into gold and related investments like commodities and non US currencies.

Respectfully yours,
Monty

JSMineset

This entry was posted on Monday, October 8th, 2007 at 2:01 pm and is filed under 1 - Gold, 2 - Silver, BRIC - Brazil, Russia, India, China. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.