Paul,
the following is an email from a friend in HK. Comments?
Ramsey
+++++++++++++++++++++++++++++++
Stocks in China have been propelled by interest rate cuts with room for
more cuts, an official sanction of higher stock prices to boost consumer
sentiment, excellent long-term economic prospects, and a previously
oversold position.
I haven*t been paying attention to the economic numbers of the other
Asian countries, but it seems that they are all returning to positive
economic growth this year. Although stock prices are now at high
levels, I think exchange rates are still broadly lower, making stocks
and other assets attractive. I suppose, too, small inflows from Western
portfolio managers make a big impact. There is also the perception that
these countries went through some economic reforms, and even political
reforms.
HK alone may not have positive economic growth this year. It serves a
growing China but long-term is losing out to the fast-learning Mainland.
Meanwhile it may get a Disneyland and, if Professor Tien Changlin is
right, high tech investments are coming in that will make Hong Kong a
high tech hub. New immigration rules will try to draw high tech talents
from all over China.
Can things really turn around just like that? That is the $64 million
dollar question. I wouldn't be surprised if the HK market turns out to
be a little ahead of itself, but then the rosy anticipations cannot be
dis-proved quickly either. In short: who knows? not me |
