August 22, 2006

Possibility of Hedge Fund Invasion Ruled Out

Despite the recent fluctuations in the exchange rate of Chinese currency, international hedge funds are unable to flood the country and profit from the future appreciation of the currency. Strict management of capital account inflows and outflows prevent hedge fund and other speculative money from invading Chinese market.

Experts have ruled out this possibility. Although overseas hedge fund managers wish to buy more currency, they can't do so because China does not provide corresponding financial derivatives. If these hedge funds want to bet on an appreciating currency, they will have to choose nearby markets in Singapore and South Korea.

Read an interesting post titled "The Debate: Will Hedge Funds Destroy the World?". You will get to know about the impact of hedge funds on market economy.

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August 22, 2006 in Strategy | Permalink




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