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: Tom who wrote (2835)	5/7/1999 2:07:00 PM
From: tom	Read Replies (2) \| Respond to of 2951

HK directors are selling out of HK. This piece is written by the excellent Trevor Greetham, Global Strategist at Merrill Lynch. I can't put the chart on here but you can see that the buy/sell ratio is at the extremely dangerous levels. This is clearly true on an anecdotal basis as well. KS Li looking to offload some Hutch, Sino Land doing a placing etc etc. Nearly every company in HK (in Asia actually) thinks that their stock price is too high and they are putting their money where their mouths are. Anyway here's Trevor....(The HK bit is at the end) "Company directors around the world were record buyers of their own shares last autumn. They took the view, correctly, that central banks would rescue the world economy by cutting interest rates. Since then the Dow has risen 45% despite a 100 basis point increase in the long bond yield. - All trailing measures of value have worsened, but US directors are buying again. The more upbeat assessment of prospective earnings implicit in this action ties in with the exceptionally strong "prices paid" element of Monday's US NAPM report. Pricing power could be returning. - But pricing power and inflation often go hand in hand. If US earnings recover while liquidity is plentiful, Wall Street will probably shrug off a continued bond sell off. But the Fed may end up raising rates. Directors got out early in 1986/7. They bear watching closely this time. - Phase One of the Asian equity market rally could be near an end. The Hang Seng index has doubled since Hong Kong directors bought the August 1998 low. But local directors are selling at the strongest rate since the August 1997 high (see chart). The market looks too far ahead of reality.