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Technology Stocks : Deswell Industries (DSWL)
DSWL 3.695-3.5%Nov 20 3:59 PM EST
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To: j rector who wrote (253)11/19/1997 12:36:00 PM
From: Steven Yang  Read Replies (2) of 1418
 
I do not think that Chinese Yuan will be devalued. In early 1994, the Chinese Yuan was devalued from 5.5 per dollar to around 8.5 per dollar. Since then, the Yuan has been fairly stable relative to US dollar. As a matter of fact, it appreciates by about 3-5% since the beginning of the year.

This is why I feel that DSWLF's margin will be eroded if there were a devaluation in HK currency. In a larger sense, the appreciation of Chinese Yuan relative to US dollar is the biggest long term negative to companies like DSWLF, NTAIF, and others. [The other would be the political instability.] As time goes on, China might lose its labor cost advantage. But, I guess it would not happen within 3-5 years.

Steven
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