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Sinomania! the truth about china
China SEARCH Engine
Volume II, Episode 47
February 6, 2008
Hang Seng Plunge! Macro Effects of Winter Storms - IPOs - Happy Year of the Rat!

January 29, 2008

Chinese Stocks: Correction or Bear? Davos 2008 - IPOs!
January 20, 2008

Four predictions for where Chinese stocks will be in 2008 - plus more!

December 31, 2007

A brief look back at some of the images of 2007

December 20, 2007

Markets Sag - Chevron Gas Deal - Aging Time Bomb? - Property ETF - IPOs - more!

December 10, 2007

US-China Summits in Beijing - QFII Up to $30 Billion (US) - IPOs losing steam?

November 27, 2007

Chinese Stock Prices Melt - Sarkozy Up to Beijing - IPO Updates - Will Trent Lott Lobby for Taiwan?

November 20, 2007

Currency Crisis! Dollars Drained by China, OPEC Continue Down - Inflation

November 14, 2007

Time to Short China's Yo-Yo Market? - Mining In or Out? IPOs - more

November 2, 2007

Oil Shock! Price Problems At the Chinese Pump - Stocks: Where's the Correction?

October 24, 2007

SPECIAL REPORT: 17th Party Congress - Shanghai Bubbles? - Market Numbers

October 15, 2007

China Bull Run Gets New Highs - PetroChina - IPOs - Money - more

October 9, 2007

Chinese Stocks Up & Up - IPOs - Iron & Steel - Pacific Pipeline - more

October 4, 2007

Hong Kong Booms - Commodities, Inflation, 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: Hong Kong, Shanghai stocks battered, macro effects and analyst opinions of the winter storms, IPOs on the ASX, Happy Chinese New Year wish...
Sinomania! Volume II Webisode 47, February 6, 2008

Hang Seng Plunge!
The Blizzard of ’08 Hits China’s Economy.
This Week’s Alpha Bet.
And Happy New Year!


Hong Kong stock markets plunged with the benchmark Hang Seng Index down almost five and a half percent and the China Enterprise Index down nearly seven percent on February 5th.

The Shanghai Composite rose over eight percent on Monday but closed down February 5 at 4,599.70 and seems stuck at the point (4,600) that I predicted it would begin this year. The CSI 300 Index, the global darling of 2007, is trying to hold value around 5,000 and closed February 5 at 4,921.87. Shanghai B shares appear unable to move and ended down to close at 317.71. ShenZhen B shares struggle to maintain a baseline at 700 and closed down at 674 on February 5th.

The yo-yo effect of the market appears consistent with my predictions that 2008 will see greater volatility as a rule.

Taiwan shares though were up one to two percent on Tuesday. I’ll have a lot more to say about Taiwan shares in the weeks ahead.

Remember, stock markets in greater China including Hong Kong, Taiwan, and South Korea will be closed the rest of the week for the Chinese New Year holidays.


The impact of the cold snap and snowstorms across central and southern China is being felt in the national economy and in tourism and retail sales in particular. A lot is being read into the giant crowds of unhappy holiday travelers and some sources are comparing current events to the SARS crisis in 2003 expecting major policy changes and political upheavals. I believe this is over reaction and typical of the aloof reporting on China that comes from the pages of the Economist magazine or the New York Times. After all the impact on GDP growth of the storms is estimated at just over two tenths of one percent, equivalent to a big oil price shock in the USA for example, not enough to do real damage to the economy.

Morgan Stanley’s chief China economist Qing Wang in Hong Kong believes Beijing will ease macro controls this year to compensate for slowing exports, thanks to recession in the US, Europe, and Japan, and effects of this year’s big natural disaster. Specifically, Morgan Stanley’s call is for no rate hikes from the Chinese central bank (the People’s Bank of China) and toleration for expanding money supply. Expectations are that Beijing will resort to its usual blunt policy response if growth slows – government financing of big capital investments such as infrastructure projects. The current wisdom is Beijing cannot abide growth under 10%. The World Bank just revised its forecast for 2008 to 9.6%.

One aspect of China’s situation that is expected and accepted is continued inflation. Food inflation is predicted up as the winter storms have affected agriculture across China and the prices for such staples as fresh vegetables are already rising. A flip side, the Yuan should appreciate even faster this year, some analysts say perhaps as much as nine percent over the US dollar.

Because of the uncertainties in the direction of China’s economy many analysts predict that Beijing will not ease capital controls and the individual retail investor program for Hong Kong and index futures trading will be delayed.

But China Securities Regulatory Commission just gave the go ahead to two new closed-end mutual funds from China Southern Fund Management Company and CCB Principal Asset Management Company. These are the first stock funds approved since the freeze put in place after last summer’s surge in the stock markets. I believe Beijing will do what it takes to prevent any collapse of Chinese share prices.


This Week’s Alpha Bet starts with A-S-X for Australian Stock Exchange with plenty of China related action and IPOs.

LeeDee Holdings, a Zhejiang province based manufacturer of natural biodegradable packaging materials, is planning an IPO on the ASX to sell up to 24 million ordinary shares at fifty cents Australian per share. The IPO will close on the 13th and begin trading at the end of the month. LeeDee has been in business since 1987 and produces innovative materials such as cellophane made from cotton pulp.

China Steel Australia Limited, the owner of a nickel pig iron producer in Shandong province is planning an IPO on the ASX priced around twenty cents Australian. The IPO closes on the 15th with trading next month.

And the Australian mining giant Rio Tinto rejected BHP Billiton’s offer. The decision comes after a huge investment stake from Chinese conglomerate Chinalco, the parent of Hong Kong and New York Stock Exchange listed CHALCO, of $12.8 billion US dollars financed by the China Development Bank along with the American aluminum giant Alcoa.

And the anticipated blockbuster IPO of China Railway Construction on the Hong Kong and Shanghai markets is delayed awaiting approval. It could raise up to $4 billion US dollars.

Tan Rongyao, spokesman of the State Electricity Regulatory Commission was quoted as saying possible IPOs of China’s giant State Grid Corp and China Southern Grid Corporation is back in the pipeline but no details were given and approval must come from Beijing’s State Assets Administration -- two really big possible IPOs to watch.


2008 is the Year of the earth Rat. It is the start of a new “great year” in the Chinese calendar system and is the 25th year of the 18th cycle of the 2nd epoch of the Chinese lunisolar calendar. The last year of the earth rat was 1948 and before that 1888. Look back to those eras for some clues as to what to expect this year.

Many blessings to you and your family! I’ll see you next time!


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