Tuesday, February 09, 2010
China is Buying Stock
An important information has surfaced: China Investment Corp., the PRC's $200-billion (U.S.) sovereign wealth fund, has been quietly buying shares on the NASDAQ, pushing up prices. CIC has been accumulating stakes in resource firms including Canada's Kinross Gold Corp. and Potash Corp. China is the world's largest commodity buyer and part of the fund's mandate is to invest directly in materials producers to offset China's costs.
This explains the unexplained strength of POT and Israel Chemicals in face of the total collapse of the potash cartel. Maybe I was wrong in discharging these stocks.
Follow Up: Definitely! The potash shares are rocketing! The price of potash fertilizer is 350 $/ton (last year it was 1,000 $) yet potash miners's shares are strong! Because China is trying to buy these companies! How could I know this?