Chinese tumble unlikely to affect global markets

Discussion in 'Wall St. News' started by S2007S, May 5, 2007.

  1. S2007S


    I think this post is worth bookmarking, all of the sudden the hottest market in the world is now less likely to affect the global markets....hmmmm!!!!!

    Chinese tumble unlikely to affect global markets

    Printable Version
    Email A Friend
    Published: 07:00 Saturday 05 May 2007
    By: Alan O'Sullivan, Funds Reporter

    The China Syndrome: is the top about to blow off? - Comment here
    Related News Articles

    Investment manager Williams De Broe has said that any future fall in the Chinese stock market is unlikely to affect global markets even though there is a high level of demand domestically for equity investment.

    The Chinese stock market rose by 130% in 2006 and is 44% higher so far this year as measured by the Shanghai exchange. In Shenzhen the market rose 98% last year and is 93% up so far in 2007.

    Yet even though the manager admits that the continuing domestic clamour for equity is turning Chinese equities into a bubble, it dismisses any further falls as an ‘aberration’ similar to the one-day 9% in Shanghai at the end of February.

    Williams De Broe head of research Jim Wood-Smith said: ‘All bubbles ipso facto go pop… But does this signal the end of the four year bull market or a huge buying opportunity? There are strong odds in favour of the latter. China currently accounts for 0.7% of the capitalisation of the FTSE All World Index, roughly half that of Hong Kong, so the global scale of a halving of prices is minimal.’

    He believes that the evidence from February and March is that there are lots of potential buyers looking for any chance to buy cheap shares.

    ‘It is also logical that the valuation differential between Shanghai and Hong Kong should close,’ he said. ‘It seems harsh to say so, but the fall out from a Chinese crash is not likely to be significant, rather a small storm in a gaiwan [Chinese covered teacup].’
  2. I'm going to get an article published.

    I think I shall call it "Monkeys Are Going To Fly From My Ass."

    Maybe someone will publish it.
  3. Oh rly. Last time china dipped, the dow dropped 400 points in one day just a few weeks ago .

    "It'll be different this time".

    That article is the same kind of trip that we saw in early 2000.