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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Frodo Baxter who wrote (6234)	9/8/1998 6:08:00 AM
From: tom	Read Replies (1) \| Respond to of 9980

Unfortunately I'm in a long only position but I guess you're right. I do consider it more of an opportunity to sell holdings to a willing buyer who doesn't care about price than a signal to actually short the market. The risk of the government changing the rules was always a possibility and so I'm not sure how happy I'd feel being a leveraged short of HK and if I was I would use very close stops. Also, the practicalities of shorting HK are a bit messy. The Sep futures are at a big discount (although this discount has narrowed since the Aug expiration) and there is no stock available for shorting so all in all it's a bit tricky. Another strategy would be to switch from the overvalued HK index stocks into the beaten up non-index stocks. Examples are switching from Hang Seng and HSBC into Dao Heng or perhaps some of the smaller banks like Wing Lung or Liu Chong Hing Bank (although looking at the charts I think this advice is about 2 days too late). The recent moves by the HKMA to turn itself into a central bank are very bad in the long term but very good for keeping small bankrupt banks afloat over the next few months. For a UK investor switching from HSBC into Standard Chartered seems to be a no-brainer (and the new Standard Chartered boss, Rana Talwar has bought a load of shares yesterday - are there any HSBC directors buying? I'd suspect not!) Another idea would be to switch from HK into other emerging markets. As HK is the battleground for emerging markets the world over then I think you would get more bang for your buck elsewhere if things improve in HK. Perhaps Argentina would be a good idea as the market moves in tandem with HK. Or how about the Templeton Emerging Markets fund which is trading at a discount now (12%) for the first time in a long time. What do you reckon?