China Bubble Analysis

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Asian markets are safe haven from credit crisis
2008-03-22 16:19:00
From The IndependentThe rapid Asian growth story has been a lucrative play for investors over the past five years. In China, where the economy has grown at an incredible average rate of 9.8 per cent a year since 2003, stock markets have almost trebled over the period, while some funds that invest in the region have delivered even better returns.In India, which has seen average annual GDP growth of almost 8 per cent, the Bombay stock exchange has grown fivefold over the same period.But the big question on everyone's lips over the past year is whether the booming economies of China and India – as well as some of the smaller Asian countries – can survive an economic slowdown in the West.Although China and India have taken over as the engine of the global economy in recent years, the US is still the world's largest consumer and, some argue, its fortunes remain inextricably linked to those in Asia. Others, however, claim that domestic demand is growing quickly enough in Asia to pic...
More About: Credit , Markets , Safe , Crisis

Five reasons to start worrying
2008-03-22 16:14:00
From The StarFinancial world's woes are spilling over to Main Street, and threatening CanadaThis week began in trauma.It was announced Monday that one of the world's largest securities firms, Bear Stearns & Co. Inc., had effectively gone bankrupt. And that, in a most unusual step, the U.S. Federal Reserve had hastily arranged a forced marriage between Bear Stearns and the larger JP Morgan Chase & Co., America's third-largest bank. Stock markets worldwide plunged in response.The week ended with traumatized speculation about which illustrious bank or brokerage would be next to go toes up, and whether the Fed, other central bankers worldwide, and cool heads at the financial institutions themselves had the collective wit to stave off a meltdown in the global financial system.Oh, and the United States appears to be heading into the worst recession in a generation.[Read more]
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China unveils proposed rules for NASDAQ-style market
2008-03-22 16:12:00
From India TimesSHANGHAI: China 's top securities regulator on Saturday unveiled a set of proposed rules for a long-planned Nasdaq -style domestic stock exchange to fund business start-ups. The rules, published in major securities newspapers to solicit public opinions, mark a step closer to the launch of the second board that has long been delayed partly because of the burst of the Internet bubble in 2000.The exchange, to be located in the southern city of Shenzhen, will provide an exit route for private equity investors, who have poured billions of dollars into the world's fastest-growing major economy. The draft rules set a much lower listing threshold than those for the country's main boards in Shanghai and Shenzhen, where most of the more than 1,400 listed companies are state-controlled firms.China opened another board in Shenzhen in 2004 especially for small and medium-sized firms. Under the proposed rules, a second-board listing applicant must have two consecutive years of pr...
More About: Market , Style , Rules

Pop goes the gold bubble
2008-03-22 16:09:00
From Blogging StocksWith gold prices plummeting 11% since Monday, the question is whether we can say that the run up in the precious metals sector is over? Investors need to remember that nothing goes up in a straight line forever. No matter what analysts say, their is no new paradigm or anything like that, and with gold enjoying a nice seven-to-eight year run, it could very well be over.From Internet stocks to real estate to China we always hear new reasons, that even though these sectors already produced returns in the hundreds of percent, it's still worth it to pull the trigger and invest.I know about the argument that you need to hold gold as a hedge against inflation, but let's get real. That reason has been thrown around for the last few months. Previously, investing in gold was a supply and demand issue.With such strong global growth causing major demand for gold, supply wasn't able to meet that demand. As such, we were told the price needs to rise. Now everyone is saying ...
More About: Gold , Bubble

China fund sales ebb, redemptions up as shrs fall
2008-03-20 18:20:00
From ReutersSHANGHAI, March 20 (Reuters) - Demand for China 's equity funds has plunged while redemptions jumped amid a broad sell-off in the domestic A-share market, explaining why Beijing's recent approvals of a batch of new stock funds have failed to boost the market, fund managers said on Thursday.Since January, Beijing has approved nearly 20 new stock funds -- close to half the level for all of last year -- in an apparent bid to arrest a further slide in stock prices.But the newly launched equity funds, which followed an informal five-month halt in new fund approvals amid a then red-hot stock market, have met with tepid buying interest as the stock market tumbled from a record high set in mid-October, fund managers said.The benchmark Shanghai composite index .SSEC has fallen nearly 40 percent since October, due largely to fears of a U.S. recession and a flood of new stock supply at home. The magnitude of the decline has also worried securities regulators.Sales of new funds at ...
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China stock index down 3 per cent, confidence weak
2008-03-20 18:19:00
From India TimesSHANGHAI: China 's main stock index tumbled more than 3 per cent on Thursday, led by large-caps, as analysts cited weak market sentiment, undermined by huge corporate fund-raising plans and slumping global markets. The retreat wiped out the 2.53 per cent gain in a short-lived technical rebound on Wednesday, which was propelled by rumours that the government would take steps, such as cutting the stock trading stamp duty, to boost the market.Thursday's pull-back also indicated the market was not likely to see an immediate floor in the near term, analysts said. "Investor confidence is so weak that even a stamp duty cut wouldn't be able to rescue the market," said Wu Haijun, Shanghai principal at Power Pacific Corp of Canada, one of a limited number of foreign firms allowed to buy A shares.We expect the market to continue its weakness at least up to April or May, when the prospects of overseas markets will become clearer," Wu said. The index's dive came despite very s...
More About: Stock , Cent , Confidence , Index

The giant slows down
2008-02-17 19:10:00
From Naples Daily NewsSHANGHAI, China — After booming in recent years, China’s real estate market is finally beginning to feel the pinch from sagging demand and tighter controls.One of China’s biggest real estate agencies, Chuanghui Real Estate, has shuttered dozens of outlets in Shanghai and other cities, leaving behind angry customers and employees, following an ill-timed expansion just as the market was peaking.Several other agencies around the country also have closed down or scaled back.So far, the retrenchment appears to be mainly limited to property brokers — the businesses first to feel the pinch when people stop buying new homes, for whatever the reason. But the moves could herald the beginning of a broader slowdown in one of Asia’s hottest real estate markets.The government has been wrestling to get control of the property sector, worried that rising prices for housing are pushing poorer Chinese out of the market at a time when overall inflation is surging.Regula...
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Is IMF austerity only for the poor?
2008-02-17 19:08:00
From The Times of IndiaTen years ago, the Asian financial crisis ravaged south-east Asia. The IMF prescribed severe austerity and economic shrinkage. You chaps have been living beyond your means for years, it said, and have severe structural problems that cannot be reflated away. So, you need bitter monetary medicine (sky-high interest rates) and fiscal medicine (slashing government spending and fiscal deficits). Yes, the shrinkage of GDP will be painful, but will cure your structural ailments and improve your long-term health. Ten years later we have another financial crisis, originating this time in the US. But the IMF, which prescribed austerity for Asia in 1997, is prescribing fiscal and monetary stimulation in the US, to save it from the consequences of its own follies. This is not only bad economics but also outrageous politics. It looks like a double standard that discriminates against the poor.The US has for a decade indulged in chronic overspending, reflected in gargantuan ...
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The debt delusion
2008-02-17 19:07:00
From Daily TimesWASHINGTON, DC: A second big American interest-rate cut in a fortnight, alongside an economic stimulus plan that united Republicans and Democrats, demonstrates that US policymakers are keen to head off a recession that looks like the consequence of rising mortgage defaults and falling home prices. But there is a deeper problem that has been overlooked: the US economy relies upon asset price inflation and rising indebtedness to fuel growth.Therein lies a profound contradiction. On one hand, policy must fuel asset bubbles to keep the economy growing. On the other hand, such bubbles inevitably create financial crises when they eventually implode.This is a contradiction with global implications. Many countries have relied for growth on US consumer spending and investments in outsourcing to supply those consumers. If America’s bubble economy is now tapped out, global growth will slow sharply. It is not clear that other countries have the will or capacity to develop alte...
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Will the Chinese boom turn to bust?
2008-02-17 19:04:00
From Times OnlineVeteran investor in the Asian dragon Philip Ehrmann does not expect the turmoil in world markets to take the steam out of its growthInvestors are still piling into China funds even though it has been one of the worst performers during the global credit crunch. The MSCI Zhong Hua index has slumped by about 30% since the onset of the credit turmoil in August.Nevertheless, Gartmore’s China Opportunities fund was the most popular of the year among investors using the TD Waterhouse fund supermarket, and it accounts for almost one fifth of funds bought and sold in January this year.Philip Ehrmann, the former manager of the Gartmore fund, is one of the longest-serving China managers in the business. He started covering equities in 1981 as America was shaking off a recession that ultimately spread to China. This time things will be different, he believes.Ehrmann left Gartmore in 2006 following a management buy-out to join rival Jupiter, where he launched the Jupiter China...
More About: Chinese , Bust , Boom , Turn

Is Europe’s housing market next?
2008-02-17 19:02:00
From Daily TimesA bubble in the American housing market, fueled in part by so-called “sub-prime” mortgages, was the catalyst for today’s financial market turbulence. But the bubble was not confined to the United States. In Europe, house prices have also increased sharply over the last decade, more dramatically than in the US in many cases. The same is true of other OECD countries and emerging markets, where rapidly increasing incomes have put pressure on asset prices.Indeed, with a few exceptions (essentially Germany and Japan), housing prices have risen almost everywhere to levels never seen before. How could such a global pattern emerge when real estate is the most local of all assets?Recent research suggests that the global housing boom was closely linked to the unprecedented increase in the supply of liquidity by major central banks. To be sure, financial innovation, like lending to buyers who would not normally have qualified for mortgage loans (sub-prime borrowers) also ...
More About: Market , Housing

Hong Kong shares close lower amid US economy worries; shipping cos tumble U
2008-01-15 20:35:00
From CNNHONG KONG (XFN-ASIA) - Share prices closed sharply lower, falling for the fourth straight session as investors remained cautious ahead of key US economic data and results announcements from financial majors such as Citigroup. (NYSE:C)The market opened higher after a rebound on Wall Street overnight, but quickly lost steam as worries over the US economy resurfaced.The market opened higher after a rebound on Wall Street overnight, but quickly lost steam as worries over the US economy resurfaced.HSBC was down after Goldman Sachs (NYSE:GS) cut its target price on the stock, citing possible US recession and continued subprime-loans related problems, while shipping firms tumbled amid worries over a drop in demand in the event of a US economic downturn.China Mobile fell over 4 pct after its parent ended talks with Apple Inc over bringing the iPhone to China, while HKEx also pressured the key index as it extended yesterday's 6 pct slide.Oil stocks turned lower after early gains, wi...
More About: Economy , Hong Kong , Shipping , Close , Lower

Citigroup raises $14.5 billion as subprime losses mount
2008-01-15 20:32:00
From AFPNEW YORK (AFP) — US banking colossus Citigroup said Tuesday it had raised 14.5 billion dollars in fresh capital, including nearly seven billion from the government of Singapore, as it seeks to shore up finances stricken by the US housing crisis.Other investors included the Kuwait Investment Authority, long-time Citigroup investor Prince Alwaleed bin Talal bin Abdulaziz of Saudi Arabia and former Citigroup chief executive Sanford Weill among others.Executives said the bank was also offering two billion dollars in new securities which would boost the total amount of fresh capital raised to over 14 billion dollars.Citigroup unveiled its new backers as it also revealed a fourth-quarter net loss of 9.83 billion dollars, and net income for 2007 of 3.62 billion dollars.Citigroup needs fresh capital because its losses tied to mortgage investments have ballooned in recent months.America's second-largest financial institution by market worth, behind Bank of America, said it had wri...
More About: Losses , Subprime , Mount , Billion

US subprime lenders targeted blacks, poor: report
2008-01-15 20:30:00
From AFPWASHINGTON (AFP) — US mortgage lenders targeted minorities and people with low incomes in recent years as the "best candidates" for subprime home loans, with devastating economic consequences, a report claimed Tuesday.The report by the United for a Fair Economy (UFE) advocacy group said subprime mortgages, home loans issued to Americans with scant finances, were "ruthlessly hawked" and that a "solid majority of subprime loan recipients were people of color."Hundreds of thousands of families lost their homes to foreclosure last year after failing to keep up with mortgage payments, a hefty chunk of which were subprime loans, amid a national housing downturn that shows no sign of easing.Some economists believe the almost two-year-long housing slump could pitch the world's largest economy into a recession."The crisis has ruined many economic lives and many communities," the UFE report said, adding that "even a surface check of the demographics shows that, in city after city, ...
More About: Report , Poor , Blacks , Subprime , Lenders

Investors in Asia Should Think Small in 2008
2007-12-22 06:23:00
From BloombergDec. 21 (Bloomberg) -- Investors in emerging Asia have various options, such as Chinese stocks or the smaller markets, including Hong Kong, Singapore, Taiwan, Thailand, Malaysia and South Korea.Unless you are the kind of individual who enjoys battling governments that hold most, if not all, of the cards, option two should prove a less risky and more profitable strategy -- at least for the next several months.Chinese stock markets are cooling. After soaring 188 percent in the year through Oct. 16, China's CSI 300 Index has since fallen 14 percent. The Hang Seng China Enterprises Index, consisting of mainland Chinese companies that trade in Hong Kong, has slumped 19 percent since mid-October.Meanwhile, China is beset with accelerating inflation and an overheated economy that expanded 11.5 percent in the first nine months of 2007 from a year earlier. Propelled by higher energy, labor and food costs, consumer prices jumped to an 11- year peak of 6.9 percent in November fr...
More About: Small , 2008

China wages a cool war
2007-12-22 06:17:00
From Asia Times OnlineHONG KONG - The Chinese government, which spent 2007 trying to prevent the country's economy overheating, caught investors on the hop this week with the sixth interest rate rise of the year, adding to indications that it will intensify its efforts to cool the economy in the coming 12 months.With effect from December 21, the one-year deposit rate was raised by 27 basis points to 4.14% , while the one-year lending rate was raised by 18 basis points to a nine-year high of 7.47%. These and other interest rate adjustments came as a surprise as previous rate increases were revealed on Fridays after the stock markets had closed or during weekends.In another move to encourage depositors to keep their money in banks and not invest them in stock and the property markets, the People's Bank of China , the central bank, lowered the rate paid on money held in current accounts to 0.72% from 0.81%. A PBoC spokesperson said that the move was meant to encourage depositors to pu...
More About: Cool , Wages , Ages

Morgan Stanley rules out China bubble scenario
2007-12-22 06:13:00
From Asian InvestorThe firm believes China will be able to handle the multiple challenges of a US economic slowdown, asset reflation and monetary tightening.Morgan Stanley believes that even if the US slips into recession in 2008, the Chinese economy will continue its robust expansion, with only some disruptions from export slowdown and asset price deflation.“We are now ruling out a bubble scenario for Chinese equities, although we remain bullish on the Hong Kong listed offshore China equities in 2008,” Morgan Stanley writes in a recent report. “We think corporate China can handle the three challenges including a US recession and export slowdown, domestic asset price deflation, and monetary tightening and austerity controls, well through 2008.”As “decoupling believers”, Morgan Stanley believes the MSCI Barra China will produce an earnings growth of 24% in the coming year, although market multiples might contract if the US recession materializes. Morgan Stanley uses the c...
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China property boom falters, but crash unlikely
2007-12-20 12:33:00
From GuardianSHANGHAI, Dec 20 (Reuters) - Wang Zhiyong, a 34-year-old salesman of credit card billing equipment, regrets paying 1.2 million yuan ($163,000) in August for a one-bedroom apartment near Shanghai's downtown area.He rents out the 46 square metre (495 square foot) apartment, and estimates that gives him a 3.5 percent annual return. But the bank charges him 7.83 percent a year on his 20-year mortgage, and interest rates look set to rise further given high inflation."The investment doesn't make sense if property prices stop rising," said Wang, who is father of a three-year-old son and spent most of his family's savings buying the apartment.Eight years into a boom that has tripled home prices in major cities such as Shanghai and Beijing -- and pushed them up much faster in downtown areas -- China 's red-hot property market is showing signs of flagging.High prices, rising interest rates and a government drive to cool speculation are dampening the market.Many Chinese bought ...
More About: Property , Crash , Boom , Pert

Subprime hit gives Morgan Stanley its 1st-ever loss
2007-12-20 12:31:00
From Chicago TribuneMorgan Stanley on Wednesday reported a $9.4 billion write-down from bad bets on mortgage-related debt, leading to the first quarterly loss in its 73-year history, and said it was taking a $5 billion infusion from an arm of the Chinese government.The write-down, nearly triple what Morgan Stanley warned of in November, pushed the investment house to a fourth-quarter net loss of $3.59 billion, or $3.61 a share, compared with a profit of $2.21 billion, or $2.08 a share, a year earlier. Analysts expected a loss of 39 cents a share for the latest period.Morgan Stanley reported negative net revenue of $450 million because of the write-downs, compared with revenue of $7.85 billion a year ago.Morgan Stanley is the latest Wall Street firm to be punished by the unfolding credit crisis and to be forced to reach out to a foreign government for a major investment to shore up its books. Major global banks have lost $100 billion in the past six months alone."This quarter will pu...
More About: Loss , Subprime

A stock crash is just what China needs
2007-12-14 16:19:00
From Asia Times OnlineBy all accounts, Chinese companies have become a lot better at disclosing information and at running their management operations more professionally. The Big Four accounting firms do brisk business in China , auditing many of the earnings disclosures required of the 1,400 Chinese companies listed on stock exchanges in Shanghai and Shenzhen - as well as in Hong Kong, London and New York.This newfound market transparency is such a dramatic evolution from the old days of state control - in which companies had production runs and sales figures officially set by communist bureaucrats instead of capitalist market forces - that it might be tempting to believe that international standards of corporate governance and transparent management are taking hold in China.Perhaps as telling as the proliferation of taxi-driver day-traders in predicting the end of the tech stock bubble earlier this decade, a random man who struck up a conversation on a New York subway platform rec...
More About: Stock , Crash , Needs

China to open financial market but yuan stable
2007-12-14 16:17:00
From The Australian BusinessUS Treasury Secretary Henry Paulson says China has pledged to widen its financial markets for foreigners but will not budge on the issue of faster yuan appreciation.The two sides also have agreed to co-operate on management of their strategic oil reserves, according to Chinese press reports.After the close of two days of talks in Beijing, Mr Paulson announced on Thursday that China had agreed to let foreign companies doing business in China, including banks, raise money on its stock and bond markets - a long-anticipated move that could help foreign companies manage their cash flow and expand sales more quickly.For the past year, the forum for talks with Beijing, known as the Strategic Economic Dialogue, has been Mr Paulson's primary vehicle to open China's financial system and speed the strengthening of its currency.However, the discussions have made limited progress, and some executives have complained about China's slow pace in implemented pledges it...
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Currency revaluation can drive Chinese economic reform - Paulson
2007-12-14 16:16:00
From ForbesXIANGHE, China (XFN-ASIA) - The further revaluation of China's currency could help drive forward the reform of China's economy, said US Treasury Secretary Henry Paulson, speaking at the end of the Strategic Economic Dialogue.'China has an economy that is built around exports and investing heavily in export industries, and relatively low levels of domestic consumption,' Paulson told reporters.'It is going to take a while to deal with these fundamental structural issues, and we focus on the renminbi issue because that in many ways is a proxy for reform.'He said that the Chinese economic 'miracle' was an 'anomaly', and that China has now become a big presence on the international market without fully opening up its economy.'It is difficult to have a market-driven economy if you don't have real market signals,' he said. 'If you have a currency that doesn't reflect fundamental economics it is difficult. The Chinese understand and appreciate this.'Although Pauls...
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China: Bubble pop just got louder
2007-12-12 14:53:00
From Blogging StocksWith news that consumer prices in China soared 6.9% in November, investors should take this as just another sign that the bubble that is the Chinese stock market is in "popping" mode.Investors shouldn't get fooled by analysts saying not to worry about what actually is happening in the economy because growth is so strong. Surging inflation is usually a good sign of what's in store for an economy. Emerging market investors should look at other markets like Israel for instance. I don't want to be a conspiracy theorist, but could it be that the big institutions continually say not to worry, because, with the Chinese stock market still being quite illiquid, they are trying to unload all their positions?Peter Brimelow had a really interesting piece about the potential for a crash in China. He quotes former investment banker Mark Hutchinson:"To see why a crash may be coming, it is worth examining the behavior of the China Investment Corporation, the $200 billion sove...
More About: Bubble

Robert Shiller warns that asset bubbles are risk to global economy
2007-11-18 04:08:00
From AME InfoRobert Shiller, Stanley B Resor Professor of Economics, Yale University, warned that possible speculative bubbles in stock, real estate and oil markets could cause instability in the global economy.'Perhaps we have gotten a little too confident in the global economic growth. The problem is high oil, stock and real estate prices. There is a question about whether all this can be explained by low interest rates. This is a question that I can't authoritatively answer. But I believe that a substantial part is speculative bubble thinking. We have gotten too confident of the prices in these markets.''The unwinding of these markets is the most serious risk facing these markets today,' he said.In explaining his comments, he suggested that high oil prices are a concern for the world economy, since prices are at all-time or near all-time highs. He noted that although oil may play a smaller part of the global economy, this diminished impact is overstated, and so high oil pric...
More About: Economy , Global , Risk , Bubbles

Turmoil in money markets to continue: Dodge
2007-11-18 04:06:00
From National PostOTTAWA -- There is no quick end in sight to the unprecedented volatility in foreign exchange markets that is putting world economic growth at risk, David Dodge , the governor of the Bank of Canada, said Saturday between meetings in South Africa with his counterparts and finance ministers from 20 countries.Mr. Dodge said the downside risks posed to growth have increased at a faster pace than anticipated when finance minister and bank governors from the seven largest industrial countries met at the International Monetary Fund headquarters in Washington, D.C. last month."It is quite clear that the global financial turbulence that we were experiencing then is going to be more prolonged, and its volatility is likely to continue to be higher for longer, certainly longer than we anticipated when we met at the IMF last month," Mr. Dodge told reporters in a conference call from Kleinmond, a seaside resort south of Cape Town."That clearly poses a risk which we're going to ha...
More About: Money , Markets , Conti

Blackstone COO: No clear picture on mortgage hole
2007-11-12 18:16:00
From ReutersNEW YORK (Reuters) - Blackstone Group (BX.N: Quote, Profile, Research) President and Chief Operating Officer Hamilton James said on Monday bank executives don't have a clear picture of how the mortgage "black hole" would play out.James, who was speaking on a conference call to analysts after announcing quarterly results, added that only 15 percent to 20 percent of bank losses were related to leverage finance, with the remainder being mortgage related.[Read more]
More About: Picture , Mortgage , Clear , Hole

Asian markets fall sharply after U.S. drop Friday
2007-11-12 18:15:00
From ihtTOKYO: Asian markets fell sharply Monday after Wall Street declined at the end of last week on renewed concerns about U.S. mortgage problems. European markets were mixed.Major banks warned last week of further losses in their debt portfolios, raising investor concerns that the credit market slump isn't abating."Basically, the subprime loan issue still drags on, and there is no prospect of what can end the problem," said Shinichi Ichikawa, chief strategist at Credit Suisse of the declines in Asian markets.Japan's benchmark Nikkei 225 index fell 2.5 percent, and Hong Kong's Hang Seng dropped 3.9 percent. In South Korea, the Korea Composite Stock Price Index, or Kospi, fell 3.4 percent.Both the Hang Seng and the Kospi fell more than 4 percent during intraday trade, and the Nikkei dipped below 15,000 points for the first time since July 2006.In Europe, the U.K.'s benchmark FTSE-100 index was up 0.2 percent at 6,314.30, after briefly dipping into the red as a fire in east Lon...
More About: Markets , Friday , Fall , Drop

HSBC suffers in subprime fallout
2007-11-12 18:11:00
From Sydney Morning HearldHSBC Holdings, Europe's biggest bank by market value, dropped to an almost three-month low in trading in Hong Kong yesterday after Morgan Stanley downgraded the stock on concern provisions for US loan defaults will increase.The stock fell 2.8 per cent to $HK137.10 ($19.60) during the day, the biggest decline since October 22. Morgan Stanley cut its rating on HSBC from "overweight" to "equal weight" and slashed its price target from $HK160 to $HK131. Goldman Sachs cut its stock target on HSBC from $HK161 to $HK156.Morgan Stanley expects "a significant jump in credit costs across consumer loan classes", a Hong Kong-based analyst, Anil Agarwal, wrote in a note yesterday. With defaults increasing, HSBC's $US2.1 billion ($2.34 billion) of provisions against its $US45 billion mortgage services business "looks light", he said.The credit market shakeout that started with a collapse in US subprime mortgages this year has cost the world's largest banks and securit...
More About: Subprime , Prim , Fallout , Allo

U.S. Stocks Gain, Led by Banks; Citigroup, Wal-Mart, IBM Rise
2007-11-12 18:09:00
From BloombergNov. 12 (Bloomberg) -- U.S. stocks rose for the first time in four days after investors snapped up shares of banks, brokerages and department stores that had fallen to their cheapest valuations in at least 12 years.Citigroup Inc., Bank of America Corp. and Wal-Mart Stores Inc. led the gains. International Business Machines Corp., the world's largest computer-services company, climbed the most since July after agreeing to buy business-software maker Cognos Inc. in the biggest takeover of a technology company in a month.The Standard & Poor's 500 Index added 6.39, or 0.4 percent, to 1,460.09 at 11:47 a.m. in New York. The Dow Jones Industrial Average increased 73.16, or 0.6 percent, to 13,115.9. The Nasdaq Composite Index gained 2.66, or 0.1 percent, to 2,630.6. About three stocks advanced for every two that fell on the New York Stock Exchange.``We think you actually want to be buyers of the brokers and the big banks,'' said David Katz, who helps manage $1.7 billi...
More About: Stocks , Banks , Wal-Mart

ETF INVESTING: New ETF Lets Investors Profit If China's Stock Market Tumble
2007-11-12 18:08:00
From CNNBOSTON (Dow Jones) -- Investors who believe that China's soaring stock market is due for crash now have a new tool to put their money where their mouth is.Exchange-traded fund manager ProShares last week launched the first ETFs geared to short international-stock indexes, including a fund that seeks to deliver twice the inverse, or opposite, daily return of Chinese stocks.UltraShort FTSE/Xinhua China 25 ProShare (FXP) , which shorts Chinese stocks, is generating plenty of buzz."With the FTSE/Xinhua China 25 Index appreciating by nearly 600% in the last five years, there is a great deal of talk of a potential for a 'China bubble,'" said ProShares Chief Executive Michael Sapir.The new ETF "can be used by investors to protect a portfolio with China exposure from losses or to pursue gains from a falling Chinese market," he added.Investors who sell stocks short are betting on a market decline since they stand to profit from lower prices, or they want to hedge an existing inves...
More About: Stock Market , Market , Profit , Investing , Stock