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A hot topic amongst amateurish investors (likely myself) recently is the coming back of the lion bank.

In terms of tactics, the move was perfect: They chose the week before our country celebrated its 60th birthday, and when the stock market is hot and frothy (alas, not bubble as yet, I hope).

But, what's the point in strategy ?

"To gain entrance to the Chinese market." You may say.

No, I believe it's not the market, but more for the stock to be listed in the Shanghai Stock Exchange. (That's why the lion has to show a friendly hand to our country and give a vote of confidence just prior to the birthday !)

The question therefore boils down to: Why does the lion want to be listed in our country ?

Like all business decision, there could only be one answer: Money.

In other words, it plans to issue new stock.

"Why does it need financing ?"

The possible answers are obvious: Either it does not have sufficient money (despite the share placement earlier this year) to cover the loss in the subprime lending, or it is planning for further merge-and-acquisition.

I shall leave it to your judgement whether that's a good news.