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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (311)	8/12/2003 2:51:00 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

China plays or Bermuda plays? By R SIVANITHY ONE of the more interesting issues to ponder is the current obsession with China plays in the local stock market. Judging by the huge volumes done in these counters, they are certainly popular with local traders. But why? Because they possess good financials, offer decent prospects and are therefore sound investments? Or because it's easy to inflate a speculative bubble in such stocks, given how little is known about them? Consider that for vague tax-related reasons, many of these companies are incorporated in Bermuda. Most local observers accept this as a fact of life, but if pressed, they probably won't be able to say exactly what these tax advantages are. Furthermore, like that other popular place of incorporation, the British Virgin Islands, Bermuda is a place that is largely unknown to local investors. Worse, research coverage of these counters is limited to the occasional chart view issued by local brokers. Few analysts have actually ventured to China - or Bermuda - to verify the veracity of the many impressive claims made by the companies concerned. One has to wonder: How is it possible for an analyst sitting in Singapore to venture an opinion on a company incorporated in Bermuda that has its main operations in some far-flung, unheard-of Chinese province? business-times.asia1.com.sg