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

To: Beiming Wang who wrote (2542)	11/5/1998 2:23:00 PM
From: Tom	Read Replies (2) \| Respond to of 2951

Hello, Beiming. I've been trying to contact you. Please check your private messages when you have time. Coming support for the HSI is expected at around 10,000, which is psychological. The next support will be at around 9,850. ----- *What do you think about the likelihood of serious foreign buying in the HSI market?* Serious buying? Yes, but not in any significant amounts. I agree w/ the Goldman analyst in Hong Kong who said, "It is better to stand behind a tidal wave than just in front of one." That's probably the perspective of some of the funds. Too, if this is not the bottom, how far away can bottom be? *Most local players are either chickened out or sitting on the sideline as they are truly scared for the time being.* I don't believe fundamental prospects for East Asia have changed much since you and I last discussed them. There will, nevertheless, be some rallies to play. I think the locals ought to be concerned, Beiming. I think Honkongers are now adjusting to the current realities. They, of course, will do this very well. Economic numbers are not getting any better in the SAR. As for the Mainland, GDP growth is zero. Yes, truly, I do believe -- zero! Also FDI in China has all but fallen apart. Too, there are certain aspects of the China economy that seem plastic when concrete would be preferable. For example: I commented to someone several weeks ago that I was not overly excited about Shanghai's progress, only for feeling that foundational monies were assigned and utilised poorly. But my feet are not in Shanghai, so I can not say for certain. Not that I am not excited for Shanghai's future, whenever that may be, but what I see is akin to building the road between Tchin and Tchan. A great effort but a little of "too much, too soon." More monies will be required some future day for projects that should have been done right the first time. This, however, could probably be seen as just a pet concern of mine. (Thanks to Marc Faber for the Tchin and Tchan lesson from A Chinese Story.) I, myself, am keeping investments on the lean side, and still imagine a yuan devaluation some time around Spring Festival. *It looks like only foreign players can do something in the short run. Recent rally, to a large degree, depends on the foreign buying and the covering of the short position.* I believe it's only a bear market rally. From a global perspective, I don't have much faith in the U.S. Federal Reserve's credit reflation. Its's a weak solution, and not a global one. Although the recent rise in the Nikkei is an indication of what Barton Biggs, and a few other analysts I've read, feel are better times in the distance. There remain many economic and financial potholes all across East Asia. *Thanks for advice!* You're welcome, as always. Wish I could provide something more certain. I'd be interested to know what your thoughts are as well. ----- Meanwhile,... They're hitting Shenzhen from both sides of the border. Appears like a fairly vigorous effort being conducted on the part of both Beijing and Hong Kong. Beijing has already initiated two (2) capital spending plans for those wishing to form joint ventures in the Shenzhen zone. No particular target or plan was specified for the Hong Kong money. My guess: The Shenzhen zone has all the human and hardware tools in-place. It would, therefor, be a good idea to maintain the technology and manufacturing strength those tools provide. Beijing does not want to see all that infrastructure and expertise wither on the vine, so to speak. They must keep the Shenzhen development humming along.