On Friday, China raised quoats to $100 billion and cut barriers to moving foreign currency in and out of the country, reports Nick Edwards for Reuters.
Consequently, PEK’s premiums have steadily declined over the past couple of weeks.
“One risk to a collapse in premium in PEK is that later investors will get better pricing because of the fallen premium,” Hempstead added. “From a structural standpoint, PEK does what it’s supposed to do.”
Market Vectors China ETF
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Max Chen contributed to this article.