It was interesting to see an article in the Economist this week focusing on Chinese reform rather than the traditional obsession with the GDP number. Over the last few weeks we have seen reform allowing mainland mutual funds on to the southbound through train, announcements on capital gains and dividend taxes for Hong Kong residents wishing to get on the northbound train and further moves to enhance yuan usage via the newly forming Asian Infrastructure Investment Bank. Meanwhile, official statistics show that mainland China mutual funds now have assets under management (AUM) in excess of RMB 5 trillion. The biggest story in equity markets over the last two weeks has been Hong Kong, where a wave of mainland Chinese retail money has come down on the southbound through train, pushing up prices very sharply. To some, this might look like the summer of 2007, where in the midst of a global bull market the Hang Seng Index (HSI) jumped over 50%, but to me it really does look ‘different this time'. Read my full "Market Thinking" report here: (VIEW LINK)



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