With US stocks suddenly in freefall, they are only now catching up to a recent bout of weakness in China where the Shanghai Composite – which has gone nowhere since early July – just dropped below its 50DMA.
The lack of a market meltup in China, however, has clearly not dented local appetite for stocks and as a result the founder of China’s biggest bottled water company – whose red-capped plastic bottles can be seen at most official gatherings in China because apparently in China there are huge barriers to entry to putting clean water in a plastic bottle – just became the country’s third-richest person after shares in his company surged 54% on their IPO in Hong Kong. Nongfu, raising more than $1 billion in its Hong Kong initial public offering this week.
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WNU Editor: I tried to get into this business in China in the early 1990s. My Chinese partners were /are connected, but unfortunately not connected enough. We could not get the permits and licenses to pull it off. I was told later that there were too many hands who wanted to be greased.