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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (33362)	5/9/2003 12:48:57 AM
From: elmatador	Respond to of 74559

<<(China's) mutual-fund industry and stockmarkets are fledglings, so the Chinese keep most of their money in humdrum bank deposits, which pay a miserly 2% in interest before tax. If India's experience is a guide, many will now shift their money into gold. But wait a moment! mutual fund and the stockmarket are in the dumps. Bank deposit pays also miserly %, why gold is not an option for the rest of the world then?

To: TobagoJack who wrote (33362)	5/9/2003 12:51:32 AM
From: elmatador	Respond to of 74559

Party continues for the Real By Jennifer Hughes in London Published: May 7 2003 19:31 \| Last Updated: May 7 2003 19:31 The rally in the Brazilian Real may have been checked last week by comments by the president, but it appears the enthusiasm of strategists and investors for Brazilian assets has not been dented and most expect the currency to strengthen further. The Real retreated after reports last Thursday that Luiz Inacio Lula da Silva, Brazil's president, said the real should "not strengthen too much". A day later, he insisted the government would not interfere with the exchange rate. On Wednesday the Real appeared to have already resumed its upwards path. The dollar eased to R$2.97, close to last week's eight-month highs. Analysts said intervention fears could temper the speed of the Real's rally but were doubtful investor interest in Brazil's markets would diminish. "With such strong factors in favour of Brazil, it will be very difficult for the authorities to prevent enthusiasm," said Mitul Kotecha, global head of foreign exchange strategy at Credit Agricole Indosuez, who highlighted the rise in risk appetite and investors' search for higher yields. That trend was highlighted this week with the US Federal Reserve's shift to an easing bias and its warning of a risk of falling inflation. That suggests US interest rates will remain on hold or head lower in the coming months and highlights the attraction of higher yields on offer elsewhere. The rise in risk appetite has also led US investors to look further afield. Latin America, where asset prices and currencies slumped last year, has benefited from this. Brazil's Real has gained more than 15 per cent against the dollar this year after depreciating by one-third in 2002. Last week, high demand for the government's first global bond in a year underlined investor enthusiasm for Brazil. Last year, Brazilian bond prices slumped and the Real followed on concerns over the outcome of the presidential election. Lula, as the president is known, was perceived to be a left-wing populist, sparking market fears his victory could be followed by a default on Brazil's massive debt. Those fears did not materialise and the administration's tough reform plans have won market approval. Moreover, strategists still see the Real as undervalued. "We believe that the 26.5 per cent yield combined with current 10 per cent undervaluation will continue to attract investors," said Juliette Declercq, emerging markets currency strategist at JP Morgan, which has a target of R$2.75 to the dollar and isconsidered long-term fair value at R$2.7. Argentina's peso, which collapsed last year after its 1:1 peg against the dollar crumbled, has also gained significantly against the US currency and on Wednesday stood 17 per cent higher year-to-date at 2.82 pesos. High yields, an improving economic picture and investor interest in the region have supported the currency. But the central bank last week intervened to stop the dollar falling below 2.8 pesos, a level the authorities unofficially view as fair value. The bank bought $91m - its largest action since the collapse of the peg. "We're likely to see some stability and possibly a little reversal for the peso at these levels," said Callum Henderson, emerging markets economist at Bank of America. "The peso was massively undervalued and we've seen a natural correction, but there's a lot of hard work to do on the economy - last year was nothing less than a meltdown." Argentina defaulted on its debt in 2001 and was forced to implement exchange controls and freeze bank deposits after the collapse of the peso's peg prompted Argentines desperate to preserve funds to transfer them out of the country.

To: TobagoJack who wrote (33362)	5/9/2003 5:36:08 AM
From: elmatador	Read Replies (1) \| Respond to of 74559

Japan's share-support measures means nationalization. Message 18532030 news.ft.com Print money to buy shares?

To: TobagoJack who wrote (33362)	6/14/2003 9:13:00 AM
From: aknahow	Read Replies (2) \| Respond to of 74559

Sinclair may have been right on the potential impact but China did not liberalize investment purchases of gold on June 1. An article at Chinadaily.com explains that this has been put off until later this year. Search for "bullion" and go to 5/20/2003 date for the article. Sinclair dissed someone who asked about the lack of impact, apparently Sinclair was unaware of the date having slipped. Rather after calling attention to the significant impact the move would have on the pog, he told the questioner that people expected too much.