Here in the Emerging Markets Insider blog as well as in past G3 Global Options and G3 Global Investor issues I've discussed my views on China's "Olympic glow" and how it may fade following the games.

So I've continued to keep an eye on the situation, hoping such a sell-off would reap some nice oversold opportunities for us as global investors. We have already seen some weakness in those markets, but now there appears to be hope that the government will put some of its massive resources and capital reserves as an economic stimulus infusion. That would work to prevent or ease a slowdown from happening.

If this thesis of government intervention preventing economic decline proves valid and plays out in real life, industries that could benefit would include steel and iron ore as well as infrastructure and construction firms - especially those who have been badly beaten down and those who have close inroads already paved with the Chinese government.

So, with this new perspective, I've been digging through all the usual suspects in this area. We're already invested in a couple of the likely infrastructure beneficiaries in the G3 Global Options portfolio, but there are others that could even also ride this trend to recover nicely from their current share price levels.

Remember, this country is the world's largest consumer of steel, iron ore, aluminum, nickel, coal and copper, so a big bump in government spending should increase demand for commodities globally and benefit ore minors for example, such as those based in Australia, Peru and Chile.

The obvious players there include the likes of Australia's BHP Billiton and US based (but with most operations in Peru) Southern Copper Corp. (PCU). Those investments may pan out eventually, but I would buy cautiously. I don't believe they have the right fundamental to underlie a solid rally vs. some of their better-positioned peers.

I'm looking into a short list of other companies - one in Brazil and one on the China mainland, which may fit the investment bill better.

More in this week's G3 Global Options issue...

Best wishes,

Jeff Manera
G3 Global Options,
Emerging Markets Insider
Email: Jmanera@EmergingMarketsInsider.net