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Volume II, Episode 53
March 24, 2008
Kuomintang Wins Taiwan - Business Gains on Gradual Reunification - Chinese Markets Bearish

March 17, 2008

Shanghai Bubble Burst? Beijing Election - A Special Comment on Tibet

March 12, 2008

Beijing Plays Musical Chairs: Report on the National People’s Congress - Chinese Stocks Tank!

March 5, 2008

Markets Plunge - Sovereign Wealth Fund - IPOs - National People's Congress convenes

February 21, 2008

Private Equity Buys Chinese - Macro Update - Sovereign Wealth Fund IPOs - more!

February 13, 2008

General Motors Turns Chinese - New China Funds - Coal Boom?

February 6, 2008

Macro Effects of Winter Storms - IPOs - Happy Year of the Rat! - more

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: A political shift in Taipei with the election of Ma Ying-jeou and the Kuomintang win for Taiwan, the week's Alpha Bet, and Chinese markets bearish predicament...
Sinomania! Volume II Webisode 53, March 24, 2008

A Monumental Shift in Taiwan!
With New Opportunities.

The Alpha Bet!
And China's Market Bear.


Ma Ying-jeou won the presidential election on Taiwan with 58 percent of the vote ushering the Kuomintang or KMT or Nationalist party – the party founded by Sun Yat-sen – back to power after a contentious eight year absence during which the economy of Taiwan has stagnated. Ma is to the party born raised on Taiwan and has advanced degrees from the USA including a doctorate from Harvard.

Ma is committed to quick action on closer business and transport links with mainland China across the tightly controlled Taiwan Straits including airspace. But the first direct action may be accepting a gift of Pandas, Beijing’s favorite way to put a fresh face on old ties.

It is hard to underestimate how significant this political change on Taiwan is particularly while press outside Asia continues to obsess on Tibet. For while the Chinese frontier may appear unsettled on its Himalayan border the island of Taiwan with 23 million people and one of the largest economies in the world is growing however slowly closer by popular choice.

The proponents of independence for Taiwan had their biggest defeat in many years this past Saturday. The vast majority of people on Taiwan according to the latest polls want status quo and a decision on Taiwan later. Of the decision later crowd about an equal number want unification as independence, around 10 percent each.


What we can expect now is greatly increased investment and trade flows particularly to Shanghai and the coastal areas across the Straits such as Fujian and Zhejiang provinces and an increase of cultural influences in pop music, television, and maybe someday a return of the KMT to national politics. During the last election cycle in 2004 the KMT was rumoured to have operations in Fujian and Shanghai. And in 2005 Ma Ying-jeou’s predecessor toured China in an historic tour.

The Taiwan exchange’s benchmark TAIEX Index (^TWII) surged March 24 up almost four percent to 8,865.35. Goldman Sachs says the index may go to 10,000 this year and their call was answered by a major influx of foreign buyers. Morgan Stanley is also bullish on Taiwan equities saying they are the best buys in emerging markets, under-valued and under-owned.

The TAIEX sometimes called the TWSE or TSEC is a weighted index of all listed common shares on Taiwan’s exchange and was started in 1966. As recently as late January it was below 7,500 where it had essentially peaked back in May 2006.

Shares in all major sectors rallied with construction companies leading with a 6.7 percent gain and microchip companies – strong in Taiwan– saw good gains. Expect increased offshoring of chip production particularly to Shanghai to accelerate.

Integration with China however will carry some risk for Taiwan shares of older traditional companies such as China Steel, Formosa Petrochemicals, CPC Corporation as they are subject to intense competition from their big mainland rivals.

Also today the New Taiwan dollar hit a ten-year high against the US dollar at 30.201 to the dollar.


This week’s Alpha Bet starts with 2610.TW for China Airlines, the top carrier in Taiwan which gained almost 15 percent since last Monday. Sellers controlled the action today but price was still up over two and half percent at close March 24.

China Airlines has been planning since 2000, if not earlier, for direct flights to mainland China particularly cargo with considerable investments already in Shanghai. Direct air links is one of the first integrations expected when Ma Ying-jeou is inaugurated.

The Hong Kong IPO market is flat if not dead. Two Chinese firms dropped IPO plans this week after lackluster interest – Evergrande Real Estate Group and Wing Fat Printing.

China Meilan Group, a chemical producer out of Jiangsu province north of Shanghai is planning an IPO on Hong Kong to raise up to one billion Hong Kong dollars, around $128 million US dollars, but not expected until the third quarter according to the South China Morning Post.

China Life, China’s biggest life insurance company, invested $300 million US dollars in the giant VISA IPO on Wall Street and its stake has gained about fifty percent.

But Ping An Insurance has not fared so well. The company has now bought up to half of the Dutch financial conglomerate Fortis NV and spent almost three and half billion US dollars. The company is being criticized for its acquisition binge and its shares fell almost ten percent today in Shanghai. Wags in the market are blaming Ping An for Shanghai’s losses overall as Ping An’s troubles precipitated the current slide.


And now for the bad news – Shanghai and Hong Kong are bearish. The Hang Seng closed at 21,108 before Good Friday down almost three and a half percent and back to a plateau around 20,000. The Hang Seng China Enterprise fared worse, down 5.27%.

In Shanghai the Composite Index ended March 24 at 3,626.19 down almost five percent after falling all day. It remains down from the start of the year and now a bear. The CSI 300 is down almost the same amount and closed March 24 at 3,857. Shanghai Bs are barely up from their collapse last week, closed today at 259.31. ShenZhen Bs down again to 544.32 and look stuck around 500.

I’ll see you next week on The Sinomania! Show.

© Sinomania! 2008 All Rights Reserved.

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