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

To: Tom who wrote (2079)	8/13/1998 8:44:00 AM
From: Ron Bower	Read Replies (1) \| Respond to of 2951

Tom, The HSI has fallen sharply. Reason now given is potential Russian ruble devaluation. WHAT? I could understand the fall on fears of a yuan devaluation, but how do they tie Russia into it? TIA, Ron

To: Tom who wrote (2079)	8/13/1998 9:05:00 AM
From: Ron Bower	Read Replies (2) \| Respond to of 2951

Tom, I don't understand the markets at all. I have two HK/China exporters doing well and they aren't the exception. Tuesday August 11 1998 Strong export recovery slashes pressure for yuan devaluation WANG XIANGWEI Mainland exports staged a strong recovery last month, raising hopes that a sustained rebound could ease mounting pressure and speculation of a possible yuan devaluation. Exports grew 3.5 per cent year on year in July to US$16.16 billion, up from a 1.6 per cent increase in June after exports fell 1.5 per cent in May for the first time in nearly two months, Xinhua news agency and the China Central Television (CCTV) reporte yesterday. "The July's export performance is much better than market expectations," Liao Qun, a senior economist at the Standard Chartered Bank, said. As July's imports fell 6.4 per cent to $11.96 billion - the worst monthly decline so far this year - the trade surplus for the month was $4.2 billion, lifting the surplus for the first seven months of this year to $26.71 billion. "If the recovery sustains and the trade surplus continue to go up, that will be good news for the stability of yuan," Mr Liao said. Many analysts expected worse, with some predicting a zero export growth in the third quarter and negative growth in the fourth quarter because of the Asian financial crisis. Mainland exports rose more than 20 per cent last year. There have been growing fears Beijing might be forced to devalue its currency to increase its export competitiveness. Such fears have sent jitters across Asia's stock markets in the past few weeks, hitting mainland-related shares in Hong Kong particularly hard. Beijing has repeatedly said it would not devalue the yuan and has been prepared to pay a heavy price for the promise. Yesterday, Xinhua hinted the export slump had bottomed out and the recovery was expected to continue in the coming months. It attributed the recovery to exporters adapting to the weaker operating environment and to Beijing's export stimulation packages including expanded credits and increased tax rebates. During the weekend, Beijing announced it would increase tax rebates for the third batch of commodities including telecommunications equipment and other electronics. Xinhua said the sharp declines in exports to Southeast Asia, Japan, and South Korea - mainland's key exporting countries in Asia - started to stall in July. Exports to Europe, the US, Latin America, and Africa registered more than 18 per cent growth rates last month, CCTV reported. Trade officials have indicated exports were expected to receive a strong boost from Christmas spending by consumers in the US and Europe.