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Volume I, Episode 34
October 4, 2007
Hong Kong Booms - Commodities & Inflation Impact - Oil at $100 a barrel? - more

September 25, 2007

UAW Tells GM No Jobs For China - Markets Hit 5,500 - China's Auto Industry - IPOs

September 19, 2007

New IPOs Rock Shanghai! But is Resistance Building? A Big Push for Private Equity…

September 10, 2007

Report on APEC 2007 - Energy Security - Markets Update - IPOs in Hong Kong

August 30, 2007

Chinese Stocks Stay Up - Big Bond Sale - IPOs - Upcoming Party Congress

August 22, 2007

China Stock Markets Get Higher But For How Much Longer? - Surprise Rate Hike - IPO Update

August 14, 2007

China Toy Recall - Markets & IPOs - Western Banks Catch Asian Flu?

August 6, 2007

Shanghai Composite Busts Past 4,600 - Beijing Bets on Banks - Chinese IPOs in Japan

July 31, 2007

China Stocks Up Again & Again! - Pussyfooting Around Currency? - Democracy in Japan?!

July 25, 2007

Will Barclay's Turn Chinese? 2Q/H1 Macro Report + IPOs!

July 19, 2007

Food Fight! China-USA sling hash / Peak Oil? / Markets Flat Line...

July 10, 2007

Chinese markets confused? Big IPOs - Chery+Chrysler

June 27, 2007

COSCO - China Mobile - IPOs - Telecom Mergers & Acquisitions

June 21, 2007

New Record Highs in Hong Kong, Shanghai: Will Beijing Put On the Squeeze? - IPOs & more

June 15, 2007

Fundamental Misalignment: US-China currency war - stock markets up & IPOs

June 7, 2007

China Stock Pop - Hot News items - climate change, tainted food...

May 31, 2007

Chinese stock markets hiccup - IPOs - USA-China Trade Gap

May 25, 2007

Report on the 2nd USA/China Strategic Economic Dialogue: Win-Win or When-When? - Market numbers - New IPOs

May 18, 2007

New life for Hong Kong? IPO Update - USA/China summit

May 11, 2007

Will Shanghai end up like NASDAQ or Nikkei? - IPOs

April 30, 2007

Tulips to Dotcom - is Sino Mania the next big bubble?

April 20, 2007

The Heat is on! - IPO Report - Air Pollution in China

April 15, 2007

China markets, IPO update, Beijing Ready for Olympics?

March 30, 2007

China markets up, up, up! Sinomania! goes to China

March 23, 2007

Focus on National People's Congress... Hi-Tech, IPOs

March 17, 2007

China's new investment strategy, IPOs, the Wrap...

March 7, 2007

China syndrome or hong bao bounce? New IPOs... more!

February 27, 2007

China Stock Market Yo-Yo, new IPO issues, the wrap

February 17, 2007

Chinese New Year edition! Will China buy Chrysler & more!

February 9, 2007

The USA-China WTO trade dispute and New IPOs

February 1, 2007

IPOs: New Red Chip — Bubble Burst? — USA-China

January 26, 2007

BUBBLE TROUBLE? — IPOs on NASDAQ — Renminbi Yuan

January 20, 2007

IPOs in 3 hot sectors — BAOSteel — Macro Report

HKEX Hang Seng Shanghai
SSE Shanghai Hong Kong
SZEX Shenzhen Beijing
MUSIC in China: Listen!

TRANSCRIPT: Hang Seng gets sinomania, a possible upside to global inflation? The commodities boom and impacts on China trade...
Sinomania! Volume I Webisode 34, October 4, 2007

Hang Seng 30,000?
Is There An Upside to Inflation?
And Commodities Boom!

HANG SENG 30,000?

Markets on mainland China are closed for the National Day holiday, one of China's golden weeks - a week long national holiday. Trading ended last Friday with a bang! The Shanghai Composite hit a new record high and closed September 28 over 5,552. The CSI 300 also hit a new record and reached 5,580.813. And Shanghai B shares finally bested May's performance and won back lost ground from the tripling of the transaction stamp tax and closed September 28 at 367.35, a new record.

Meanwhile Hong Kong's markets remain open and there is quite a rally in the Hang Seng index that reached a new record high just under 28,000 on October 2nd but is back below 27,000 today. The Hang Seng has exploded since September and there are many reasons behind the new bull run. Certainly cash coming from China's domestic markets is playing a part but the bigger reason may be the interest rate moves of the United States Federal Reserve since the Hong Kong dollar is directly pegged to the US dollar. In fact some analysts believe this signals a long rise for Hong Kong equities and we may see the Hang Seng go to 30,000 or higher.

Meanwhile Chinese regulators are constricting the flow of liquidity into Hong Kong by delaying direct retail investment by individual Chinese investors and a new rule announced this week aimed at preventing Chinese companies from issuing stock simultaneously in Hong Kong and on domestic markets.


The IPO Report will be back next week!


The big talk of the week is the upward trend in prices of nearly all commodities all over the world. The Commodities Week conference going on this week in London and Dubai has plenty of talk about the amazing global commodities boom that shows little sign of abating.

Speculation is back that oil may reach $100 dollars a barrel as early as 2008 confirming calls made last year by George Soros and Goldman Sachs, among many others. Jeff Rubin, chief economist of Canada's CIBC World Markets is the latest to make this pronouncement. The warnings of two big reports on world oil and supply demands that I discussed in Webisode 24 of this program back in July confirm this view.

Indeed some forecasters believe the world may be in a 50-year commodity boom. And recent prices for everything from lead and copper to wheat will give investors a lot to think about.

One thing appears obvious -- commodity values are affecting prices everywhere. While globalization may trend toward deflationary impact the current reality is that inflation is back and going up. Most countries today remove food and energy prices from official inflation numbers in order to dampen the psychological effects of high inflation. Unfortunately almost everyone is noticing that everything they buy is becoming more expensive everywhere in the world. The real inflation rate in China is probably getting close to double digits and in the USA perhaps as high as eight percent.

Inflation rates like this will have an impact on the Chinese currency and already there are signs that the Yuan may appreciate more than expected. Reading the tea leaves from the last bank regulators meetings in Beijing, Morgan Stanley economist for China Qing Wang believes that Yuan appreciation will accelerate faster than expected.

And that will mean higher prices for Chinese goods. The blame China crowd is already complaining that China's next big export will be inflation. The fact that that inflation is born in a United States mired in recession is beside the point. Increasing the costs of Chinese goods will also be due the quick efforts Chinese regulators and manufacturers are making to improve the quality and safety of Chinese goods in the wake of the toy and tainted food crises. Just today more big headlines about Chinese toy recalls. Despite the apology to China from Mattel and their admission that the toy crisis was a design and oversight problem on their end, the US Consumer Products Safety Commission continues to be the blunt weapon of choice to confront the China trade challenge.

I'll see you next time!

© Sinomania! 2007 All Rights Reserved.

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