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Strategies & Market Trends : HONG KONG -- Ignore unavailable to you. Want to Upgrade?

To: Stitch who wrote (1591)	5/13/1998 5:14:00 PM
From: Tom	Read Replies (3) \| Respond to of 2951

Hello, Stitch! First, my 5 Feb. (#1317) prediction has failed in one aspect. I felt the "late Winter/early Spring correction" would be more sudden. Instead, due to efforts by "plunge protection teams" on both sides of the Pacific, the downside action has been mitigated and might be prolonged. I believe that to be the phantom factor preventing me from indicating June or November for the second downleg. I just didn't see the PPTs with that much more effective weaponry. -- This correction elongates into June. -- Moving along... I could make an attempt at something profound but that would be especially pretentious, even careless, at this point. Truly, better to stay with plain talk and near certainties. What do we know, or what can we be most certain of? Changes in GDP 1996 1997 1998 Indonesia +8.0% +4.6% -12.5% Malaysia +8.6 +7.8 - 2.0 S. Korea +7.3 +5.5 - 5.0 Thailand +5.5 -0.4 - 7.0 Growth is slowing. That's not news. Already cranked into the numbers. I don't see much investor concentration on that aspect of the HK economy. Concentration is once again on the currency. And the greatest threat to economic stability in Hong Kong is, as was before, the public confidence. Should the locals begin to run-away in mass from the HK$ and the HSI, it's all over. Recent reviews of last years action have done much to further confidence in the be-tied Mr. Tsang & Co. But the fact remains. And how would it be were the renminbi to devalue? Near-term: three issues where the yuan renminbi is concerned. 1) It is reported that Mr. Zhu is not finished easing interest rates; and 2) Foreign direct investment (FDI) is reported to be a bit more QTR1/1998 over QTR1/1997. I would suppose that the lion's share of the FDI is once again sourcing from Europe. (Whose banks have the most exposure to East Asia?) That gives some support, yet fear of reduced future FDI keeps the analysts on edge. 3) Devaluation of the renminbi is still much further away than are current and future socio-economic concerns. I'm attempting to stay ahead of the news on those concerns by reading what is coming out of Xinjiang and Sichuan, adjoining provinces. Be awfully tough though, staying ahead of the news. So much scrutiny. India now! Growling about China, supporting and expanding the Burmese Army,...PRC Navy...China saying Indian Ocean does not belong to India. Oh, boy. Sheez! What next? More to your asking, I can recall saying to myself in February, "These property prices are still way too high!" And they still are. I won't be relieved until the asset devaluation is done. Then, yes, resilience. By the way, it sorrows me to hear of the present difficulties in Malaysia. Hopefully, a more even diversification there than in the Archipelago will keep social conditions much more stable. Is there any talk in the KL press of the IMF? I haven't had time to read the Star lately. Also, I've read where Singapore is going full-speed ahead on a US$500 million desalination facility. (Yes, they are VERY expensive.) And will begin two more in the next few years. The first to be functioning in 2001. Always trying to stay one step ahead over in Liliput. Best regards, Tom