Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Ron Bower who wrote (1702)	5/27/1998 10:29:00 AM
From: WONG	Respond to of 2951

Sir Donald rejects recession talk From the SCMP today..... Updated at 4.07pm: Financial Secretary Donald Tsang Yam-kuen on Wednesday rejected suggestions of that Hong Kong is in recession and the Democrats demanded the Government be more open about the economy. Sir Donald admitted that growth was slow but cautioned against describing the economy as in recession. ''We should not be overly worried and use words such as economic recession,'' Sir Donald said. Sir Donald's comments, made the day after Chief Executive Tung Chee-hwa said economic growth could be negative for the first time in years, called for calm. He said the SAR's economic fundamentals were ''very good''. ''Our banking sector is still doing well, and our markets are very stable,'' he said. The financial woes were caused by external factors, he said. As he spoke, the blue-chip Hang Seng Index fell almost four per cent. It later closed 5.26 per cent lower at 8,983.43, down 498.78. Sir Donald refused to comment on first-quarter Gross Domestic Product figures due out on Friday, but said: ''We have to realise that with all the early indicators now, we already had a very rough last quarter in the end of 1997, we are having a very rough quarter in the first part of 1998 as well - we have to face up to these realities.'' However, Democratic Party chairman Martin Lee Chu-ming said the government had not been open enough about economic problems. ''My complaint is, why were we not forewarned earlier that this could happen?'' he said. Mr Lee, whose Democrats are the biggest party in the newly elected Legislative Council, vowed to monitor government moves on the economy. Democrat officials would prepare a package of economic proposals, he said. Experts said on Wednesday they believed growth in the first quarter will be no higher than two per cent, down from 2.7 per cent in the last quarter of 1997. ''For the first quarter, we estimate GDP at around minus 1.6 per cent,'' Anthony Chan, chief regional economist at HSBC Securities, said. The estimate was revised down from negative 0.8 per cent, Mr Chan said. The last time Hong Kong experienced negative quarterly growth was in the third quarter of 1985. The economy then contracted 2.9 per cent. Shamus Mok, chief economist at the Bank of East Asia, said: ''For the first quarter of 1998, GDP will be a lot lower than the 2.7 per cent in the fourth quarter of 1997. ''It would be lower than two per cent, and even that is an optimistic figure.'' Phillip Smyth, regional economist at Paribas Asia Equity, agreed. ''It's quite clear that things have not improved since the fourth quarter and we expect the number to be worse, between one to two per cent.''

To: Ron Bower who wrote (1702)	5/27/1998 4:21:00 PM
From: MikeM54321	Read Replies (1) \| Respond to of 2951

I know we are beating a deadhorse in our debate about whether or not China will devalue, so I thought I would only post new information about this subject. There seems to be about 10 articles a day from US money managers, economists, financial reporters, etc. concerning devaluation. I would say it's 40% "Yes, they may." vs. 60% saying "No way." But I did find an article strictly from the Japanese perspective concerning the Asian Crisis. Interesting what they have to say. Particularly what they say in the fourth paragraph. Sounds like they are enjoying the devaluation of ANY currencies in Asia, contrary to the political face their government puts on. You know they would never talk like this if they thought their conversation was going to be published in a US newspaper. I obviously got this from a Japanese paper. Very interesting and telling comments. MikeM(From Florida) >>Japanese Firms Still Gung Ho on Asia Ko Hirano Daily Yomiuri Staff Writer Asia's high market potential, diligent workforces and high savings rates will continue to attract Japanese investment, even though the region currently is undergoing economic turmoil, panelists said in the third session, titled "Japanese Corporations' Asian Strategy Today." The five business leaders also agreed that the Asian economic crisis was unlikely to change the medium- and long-term business strategies of Japanese companies in Asia--namely, direct investment, technology transfer and personnel training toward the eventual localization of operations. At the same time, the panelists expressed optimism that troubled economies would recover in the near future. The discussion was moderated by Mitsuo Kono, chairman of the Domestic and Foreign Information Institute. "Our business operations in Asia may be slightly reduced due to the crisis, but our basic strategy will not change because there is huge potential for telecommunications equipment in Asia," said Iwao Shinohara, associate senior vice president of NEC Corp. `The crisis has cut the sales of our products in Asia by 15-20 percent, but I think financially troubled Asian countries will get back on track in a couple of years," said Yasuo Morimoto, vice president of Toshiba Corp., pointing out that the infrastructure market in Asia is worth about 150 trillion yen. Koji Hasegawa, director of Toyota Motor Corp., predicted that the Asian economy would recover and enjoy an annual growth rate of about 5-6 percent after structural adjustment. Keiichi Koseki, executive managing director of Ajinomoto Co., said, "The drop in value of Southeast Asian currencies lowered the dollar-based production cost, thereby boosting cost competitiveness." Morimoto expressed a similar view. "The depreciation of currencies will not hurt us because it will help us increase exports," he said. The price competitiveness of Ajinomoto's products would be boosted if the Chinese currency were devalued, Koseki added. The Chinese economy and the possible devaluation of the yuan were central issues in the discussion. Fumiaki Fujino, managing director of Itochu Corp., predicted that China would shift from an export-oriented development pattern to a development pattern led by domestic demand. Labor-intensive industries would shift from coastal areas to the inland region, which is inhabited by about 900 million people, he said. "The key to the future of China is how the nation will reform state-run enterprises and how it will deal with unemployment arising from the envisaged reforms," It is expected that 11 million people will be laid off following the privatization of state enterprises, he said. The panelists agreed that it was unlikely that China would devalue the yuan in the near future. China probably will not devalue its currency because it wants to develop an environment for stable economic growth using foreign capital and investment, they said.<<