Investing in Russia and investing in China are not exactly the easiest places for U.S. institutions to commit billions of dollars for exposure. There are Russian ETFs and China ETFs, and there are of course large public companies there. There are also ADRs that trade in New York or OTC. The problem is that there can be certain holding risks like liquidity and possible government regulations either limiting sales or limiting how much can be purchased. So what are investors supposed to think when Sinopec in China and Lukoil in Russia raise more than $6 billion in bond offerings in the United States?
For starters, these notes and bonds are only geared toward large investors and institutions. These are generally considered to be 144A private placements and are not registered securities with the Securities and Exchange Commission. Translation: possibly low or no liquidity.
China Petroleum & Chemical Corp. (NYSE:…
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