Over the past few weeks, we have seen a nearly $1 trillion selloff in Chinese equities. Most of this was caused by new regulations from Beijing. The longer-term ramifications of Beijing's move should not be ignored. It wasn't long ago that the Chinese government wiped out ANT Financial just before its initial public offering. Furthermore, last Friday, the U.S. Securities and Exchange Commission has banned any new listings of Chinese companies until further disclosures are made. You can bet that a lot of investors wish that the exchange made this decision months earlier!

 

Why is this important?

 

Money managers around the world are finding the uncertainty too great to invest in Chinese companies, even though many of them are at depressed valuations. The money that used to flow into these companies will have to find a new home. Benefactors will likely be Asia and Europe – and the biggest benefactor will likely be the United States.

 

We currently have no exposure to Chinese securities in any of our models.

 

I have also attached our Monthly World Markets Report from our CIBC Investment Strategy Group.

 

As always if you have any questions, please feel free to give us a call anytime.

 

Have a great weekend.

 

Milan