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Yet it has been a laggard. This is a top pick for H shares for China in 2017. The other bank with great vision in this area is CCB, which has invested in Ant Financial. BUY H shares CCB and CICC. (See attached PPT for portfolios and China fintech details). C. IPOs in 2017. I think Zhong An will be a surprise for 2017 in the Hong Kong market. Its market cap is expected to be $10 bn and it has interesting potential in so many areas of insurance. It remains an insurance company whose marginal cost of a new customer is zero. It has a talented team of 900 engineers and has new AI and blockchain divisions. It is rolling out an impressive array of products including corporate solutions for insurance and investment plans. Lufax CEO Greg Gibb made a big splash at the Finnovasia (Schulte Research co-sponsored it) in Hong Kong last month. The company is a diversified financial conglomerate akin to "Schwab meets etrade and Fidelity" -- only 25 years ago. It needs an IPO north of $25 bn in order for the private equity partners to make money. Lastly, Ant Financial will come to the market for a $60 bn IPO in 2017 -- also in Hong Kong. This is a mothership company that goes to the heart of China's system. Its early investors are CIC, CDB, CCB, China Life and other vital organs of the system. It will not be allowed to fail. There are some questions about whether to own this through Alibaba, since Alibaba will own 33% of Ant post IPO. I'm in this camp. Buy Alibaba on this pullback. (See attached PPT for the full China Fintech Report). 2. Koch Industries saturates both the offices of Trump as well as Pence. Mega bullish for Russia, oil and gas companies. Mega bearish for alternative energy. A. The Koch Brothers are not just two grumpy men -- they are a political party. Koch Industries is the second biggest private company in the US after Cargill. They operate public and secretive political entities in 32 states and dole out more than $500 million each political cycle to various entities in the strongest places. The political entities employ more than 1,200 people and the amount of donations available to right wing causes varies dramatically but is as high as $750 million per cycle. It is the third largest party in the US after the Democratic and Republican party. It controls the Libre Alliance, Americans for Prosperity, Freedom Partners, Institute for Energy Research, American Energy Alliance and Concerned Veterans. B. What do they do with their money? They support right wing Republican candidates for all organizations -- attorneys general, Senate, House and state political figures. This is where it gets interesting. Freedom Partners is thought of as the "Koch bank". Guess who ran this? Marc Short. It controls about $250 mn in funds for political activity. Guess who employed Marc Short as chief of staff? Indiana Governor Mike Pence. Guess who then employed him as chief of staff? President-elect Trump. Matt Lloyd is in charge of communications and strategy for VP-elect Pence -- he came from Koch Industries. Governor Pence was a frequent attendee of the secretive semi-annual meetings of the Koch Brothers. Guess who raised more than $100 million for Freedom Partners? Don McGahn. Guess who is the new White House Counsel for President-elect Trump? Don McGahn. (McGahn was embroiled in the Tom Delay scandal in the 2000s). Guess who had two companies which had Koch Brothers as investors and whose chief of staff (Chenowith) came from the Koch world? The new CIA- designate chief Mike Pompeo. (Pompeo's Kansas campaign received a $900,000 donation from Koch). Guess who gave $1 mn to Americans for Prosperity? Education secretary designate Betsy Devos. Guess who has written the strategy paper for the Department of Energy transition? Tom Pyle -- He is affiliated with the Koch Industries Office of federal Affairs and the Institute for Energy Research. Guess who was caught up in a Koch Industries scandal for a petrochemical port project (with a Koch affiliated Messr. Henneberry)? Governor Nikki Haley who is UN Ambassador designate. HOUSE_OVERSIGHT_026038