Commodity guru Rogers says not selling China shares...????

Discussion in 'Wall St. News' started by S2007S, Apr 16, 2007.

  1. S2007S

    S2007S

    By Jeffrey Hodgson

    HONG KONG, March 29 (Reuters) - Commodities and investment guru Jim Rogers said on Thursday he was holding on to his Chinese shares, even though the market is pricey and a bubble may be developing.

    "I own Chinese shares. I'm not selling Chinese shares. If the Chinese stock market doubles again this year I'll have to sell, because then it's a full-fledged bubble," he told a media briefing after a speech in Hong Kong.

    "If it goes down 50 percent this year I will buy a lot more Chinese shares. I'm not smart enough to know what it's going to do, but I'm not selling China at all."

    China's benchmark Shanghai composite stock index <.SSEC> broke a half-decade losing streak last year to rise more than 130 percent, while Hong Kong's Hang Seng <.HSI> jumped more then 34 percent. Both indexes then pushed to new highs, before Shanghai stocks plunged nearly 9 percent on Feb. 27, helping trigger a global stock market slide. They have since recovered and hit a fresh record high on Thursday.

    "There's no question that PEs (price to earnings ratios) in China in the A-share market are too high for some companies, but that doesn't mean it can't get much worse. When you have a bubble develop, crazy things happen," he said.

    "The Chinese stock market could double this year, even though it's expensive right now."

    He added that his favourite sectors in the Chinese market are tourism, water, agriculture, infrastructure and companies that help clean up pollution.

    Rogers first rose to fame as the co-founder of the Quantum Fund with billionaire investor George Soros in the 1970s. In recent years he's become better known for his bullish stance on commodities and founding of the Rogers International Commodity Index <.RICIX>.

    He is also the author of "Hot Commodities", and two books on his global travels, "Adventure Capitalist" and "Investment Biker".
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    Rogers reiterated his view that commodity markets will rise for years to come, boosted by demand from the economies of China and India. By comparison, he said both stocks and bonds are overvalued.

    "I would urge you to go home and sell all your bonds. I know some of you are bond managers. I would go home and get another job," he told a Hong Kong business audience.

    He later told reporters that the most promising commodities were agricultural products.

    "Oil is going to go much higher over the next few years, but in the meantime there's more money to be made in cotton, or sugar or coffee or some of the other things," he said.

    He reiterated past calls that the dollar will eventually plunge in value and that the euro will disappear within 15 to 20 years.

    He also told the audience that if he were in charge of the U.S. Federal Reserve he would abolish the central bank and let market set the level of interest rates.

    "America's had three central banks in our history. The first two failed. In my view this one is going to fail too," he said.