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Technology Stocks : Deswell Industries (DSWL) -- Ignore unavailable to you. Want to Upgrade?

To: Ron Bower who wrote (876)	8/7/1998 6:07:00 PM
From: Ron Bower	Read Replies (2) \| Respond to of 1418

I made this post to the Hong Kong thread: Message 5442353 IMO there is an increasing chance the yuan will be devalued. The Yangtze River floods have been disastrous effecting millions of acres of prime farmland, causing power outages to a large amount of businesses and industry and it's unknown how long it will be until power can be restored, and made hundreds of thousands homeless. Add this to weak earnings reports from China's Government owned companies. This has made a major change in the situation. China now needs an increase in export commerce to compensate for the problems in the domestic economy. This would require a weaker yuan. It does not mean a weaker $HK. Hong Kong has enough foreign cash reserves to buy all of the $HK in circulation. While I don't believe this will happen, the amount of $HK converted to $US over the next few months may make the $HK almost non-existent. This may be a desirable situation to China. If use of the $HK were to sharply decline, the yuan would become more widely in use in Hong Kong with the $US the currency of international commerce and property. Effect on Deswell - very little effect on assets, lower costs, and an improved ability to compete. JMHO, Ron