I think China is going to devalue, on August 11/12. And I look to this recent spat with Taiwan as a catalyst to preannounce it to the markets in a vain attempt to lower the Hang Seng. Spread some rumours around, rattle the war sticks, then devalue. I was looking at devaluation to occur at least 1 week before options expiration. Then I expect them to buy the futures and support the HS market.
HK stocks end down on China-Taiwan conflict rumour
HONG KONG, Aug 5 (Reuters) - Hong Kong stocks closed sharply lower on Thursday after a rumour of a Chinese air strike on Taiwan -- denied by Taipei -- caused rates to spike, prompting a general selloff.
The Hang Seng Index (^HSI - news) ended down 336.68 points or 2.48 percent at 13,254.34 after being down 2.87 percent at one point in the afternoon session. Turnover rose to HK$5.60 billion from HK$5.11 billion on Wednesday.
Declines outnumbered advances 514 to 81.
A money market dealer at a British bank said US/HK forwards jumped after lunch on the air raid rumour, with one-year forwards rising to 1,300-1,350 compared with 1,180-1,210 at the open.
The spike forced up interbank rates by about 25 basis points across the board, alarming stock market investors already concerned that China might devalue the yen.
'There was one (rumour) that military action had started,'' said South China Securities director Howard Gorges, adding that an official denial of the rumour initially failed to stem the selling. |
