Salient to Investors:

Nisid Hajari writes:

  • No Chinese firms rank among the 10 most valuable companies in the world by market value down from 5, all state-owned, in 2008. All top 10 are American – evidence of the US economy’s resilience and skill at reinvention. However, one good stock rally could vault the Chinese back into the top 10.
  • Ruchir Sharma at Morgan Stanley Investment Mgmt said global investors have refocused on profitability, and value private companies twice as highly as public ones.
  • The shady wealth management products at the heart of China’s crackdown proliferated in part because private companies cannot access capital as easily as favored state firms.
  • Nicholas Lardy at the Peterson Institute for Intl Economics believe that to staunch the flow of easy money, China will be forced to let interest rates rise. Private companies’ return on assets is 3 times that of state-owned enterprises.

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