I Think Fed will not cut RATE.....!!!!

why Fed will not cut rate ...?

Reason 1: Higher Inflation problems

Reason 2: All the OPEC country produce crued oil and sell

it in USD, and they import goods in Euro dollar

Reason 3: If dollar become cheaper then Crued oil price

will hike higher then again will create a greater

problems to global economy

Reason 4: If cut rate there will be more moneyy outflow from US. then US face recession

Reason 5: If US recession then who is going to buy the China's Toys ??

So any Suggestions.....?

Hope for the BEST and plan for the WORST (part 2)

Copper, Oil, Corn Lead Commodity Slide; Demand Growth May Slow

Copper, oil and corn led declines in commodities on speculation that U.S. credit-market losses will stunt economic growth and curb demand for raw materials.
Copper dropped to a five-week low, oil slipped from a record and corn fell the most in almost three weeks as equity markets plunged worldwide. The Group of Seven finance ministers and central bankers said the rising cost of credit will sink economic growth. The group represents about two-thirds of the $53 trillion world economy.
``America is going to go through at least one of its hidden recessions,'' Sean Corrigan, chief investment strategist at Diapason Commodities Management, said in an interview in London today. ``If you look at manufacturing and higher industry in America, it's in trouble.''
The UBS Bloomberg CMCI Index of 26 commodities dropped by the most in two weeks. The index fell 1.4 percent to 1,230.398, the biggest decline since Oct. 8. Before today, the index had jumped 19 percent and touched a record high 1,250.7118 on Oct. 19.
Slowing U.S. growth may continue to drive commodity prices lower, contributing to ``a potential commodity rout,'' said Ron Goodis, futures trading director at Equidex Brokerage Group Inc. in Closter, New Jersey. ``People have really gotten caught by surprise. We've got all the commodities in the red today.''
Industrial Metals
The price of industrial metals, which track economic growth, may fall the most of all the commodities, Goodis said.
``Copper could be hit very hard,'' Goodis said.
Copper futures for December delivery fell 6.25 cents, or 1.8 percent, to $3.489 a pound at 9:47 a.m. on the Comex division of the New York Mercantile Exchange, after dropping to $3.45 a pound, the lowest since Sept. 18.
Crude-oil futures for December delivery fell as much as 2.6 percent today to $84.73 a barrel on the New York Mercantile Exchange. The contract reached a record $90.07 on Oct. 19.
Corn for December delivery fell 8.25 cents, or 2.2 percent, to $3.62 a bushel in overnight trading on the Chicago Board of Trade. A close at that price would be the biggest drop for a most-active contract since Oct. 2.

Hope for the BEST and plan for the WORST

China's stocks fell, with the key index dropping the most in five weeks, after Beijing regulators said they may allow arbitrage between shares traded on the mainland and Hong Kong. China Merchants Bank Co. led declines of A shares with Hong Kong listings.
Wuliangye Yibin Co. fell after saying third-quarter profit declined 10 percent from a year earlier. Ping An Insurance (Group) Co. gained after reporting premiums in the first nine months of the year.
The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, slid 152.49, or 2.6 percent, to 5,671.63 at as of 10:03 a.m. local time, the biggest decline since Sept. 11.
Tu Guangshao, vice chairman of the China Securities Regulatory Commission, said in Beijing yesterday that the panel is studying a proposal to allow swaps in A and H shares of Chinese companies. ``We will announce the result of the study soon,'' he said.
Limits on investments in and out of China have helped the mainland's CSI 300 Index almost triple this year, making the Hong Kong-traded shares of Chinese companies a cheaper alternative for investors.
China Merchants, the nation's fourth-largest bank by market value, fell 0.81 yuan, or 2 percent, to 39.99. China Petroleum & Chemical Corp., Asia's biggest refiner, fell 0.40 yuan, or 1.5 percent, to 25.73. Tsingtao Brewery Co., China's second-largest brewer, dropped 0.33 yuan, or 0.9 percent, to 37.97.

China Says to Tighten Property Lending

China on Friday unveiled a series of measures to tighten property lending in its latest attempt to cool the country's overheating real estate market and curb mortgage lending risks.

The central bank and China Banking Regulatory Commission said in a joint statement that it will ban banks from lending to developers found to have been hoarding land. The changes were expected to take immediate effect. Downpayment requirement for second homes were raised to 40% from 30%, and requirements for commercial properties such as offices and shopping malls were increased to 50% from 40%, the statement said.

Mortgage rates for such purchases must be no less than 1.1 times benchmark rates, it said.
"Recently, property prices had gone up quite fast, which is obviously irrational," the statement said. "Once prices tumble, bad loans at commercial banks would surge."

The statement said it would still encourage people to buy their first homes. Downpayments for buying homes smaller than 90 square metres will remain unchanged at 20%, while for larger homes, the rate will be kept at 30%.

It is the second time since last year that the government has guided commercial banks to raise the downpayment requirements for home purchases.

Since 2005, China has raised interest rates, imposed new taxes and restricted lending to cool the robust property market out of concern that a possible collapse might endanger China's financial system and hurt its economy.

However, increases in property prices have accelerated this year, fueled by excess liquidity brought about by the country's widening trade surplus and hot money inflow driven by China's yuan appreciation.

Property prices in 70 major cities jumped 8.2% in August from a year earlier, with prices going up 20.8% in the southern boomtown of Shenzhen and 12.1% in Beijing.

Share prices of Chinese listed developers such as China Vanke have lost ground in the past few days on domestic reports that the government would soon take steps to curb property speculation.

Just be CALM....

It was the best of times,

It was the worst of times,

It was the season of light,

It was the season of darkness,

We had everything before us,

We had nothing before us....

In short, it was a period very like the present...

Dollar Crunching......??

The dollar fell to a record low against the euro and touched the weakest since 1976 versus the Canadian dollar on speculation the Federal Reserve will keep cutting U.S. interest rates.
The dollar posted the biggest weekly losses versus the euro since March as the Fed's half-percentage-point interest-rate cut on Sept. 18 dimmed the allure of U.S. assets. The Fed's trade- weighted dollar index sank to its lowest in 36 years. The dollar may extend its loss next week on reports forecast to show declines in home sales, durable goods and consumer confidence.

The U.S. currency fell 1.6 percent this week to $1.4091 per euro and touched $1.4120 yesterday, the lowest since the euro's inception in January 1999. The dollar has lost 6.3 percent this year against the euro. It will drop to $1.45 per euro within two months, according to Gartman.
The New York Board of Trade's dollar index comparing the U.S. currency against six primary peers including the euro and yen, touched 78.398 yesterday, the lowest since September 1992. The Fed's major currency trade-weighted dollar index dropped to 74.78 on Sept. 20, the weakest since its inception in 1971.

Inflation Concern.....

The benchmark 10-year Treasury note fell the most since March 2006 this week on concern the Federal Reserve's surprise half-point interest-rate cut may rekindle inflation.

After Credit Crunch... then Dollar Crunch...

Foreign Holders Flee Dollar

Interest-rate futures show traders are betting with 100 percent certainty the Fed will trim its benchmark by at least a quarter percentage point to 5 percent at its meeting Sept. 18.
Former Fed Chairman Alan Greenspan said on Sept. 6 that forces behind current market turmoil are ``identical'' to previous economic upheavals, including the 1987 stock-market crash and the aftermath of the 1998 Russian debt default and collapse of hedge fund Long-Term Capital Management LP.
The central bank cut its benchmark rate three times between September and November 1998. The dollar ended the year 13 percent weaker against the yen, and Treasuries fell for three straight quarters starting in the period ended Dec. 31, 1998.

Shifting Reserves
Asian central banks also reduced Treasuries last month in an effort to curb dollar gains against their currencies. Taiwan's central bank cut its currency reserves by $4.9 billion in August, mostly by selling U.S. bonds, George Chou, a deputy governor of Central Bank of the Republic of China (Taiwan), said in an interview.
Even before the flurry of sales, more nations were starting to shift foreign-exchange reserves away from U.S. government bonds.
Taiwan lawmakers are discussing whether to set up a fund to seek higher returns, Chou said. China is starting a fund to do the same for some of its almost $1.4 trillion in reserves. The fund raised $79 billion selling debt to the central bank last month.
China will likely, and appropriately, ``reduce its holdings of dollar assets to get higher returns,'' said Ha Jiming, chief economist in Beijing at China International Capital Corp., the nation's largest securities firm. Ha attends central bank Governor Zhou Xiaochuan's quarterly meeting with the nation's lenders.
The $50 billion Qatar Investment Authority said on Sept. 4 it is looking for options in Asia to counter a weak dollar.

China Delays Buying Hong Kong Stocks

China will hold off from allowing local investors to buy Hong Kong shares directly until rules have been introduced to limit capital outflows, according to three officials at the country's banking regulator.
The State Council blocked the introduction of the share- purchasing program, announced by the State Administration of Foreign Exchange, after concerns were raised by the securities and banking regulators, said the officials, who asked for their names not to be published. China's shares have quadrupled in the past year and valuations are triple those in Hong Kong.

Hong Kong's Hang Seng Index has climbed 18 percent since SAFE's announcement and is today set for its first close above 24,000, while the Hang Seng China Enterprises Index, which tracks the so-called H shares of 41 mainland companies listed in the city, has jumped 31 percent. They're the world's best performers among 89 global benchmarks tracked by Bloomberg.
Hong Kong-listed shares are surging on speculation China's households will pour some of their 17 trillion yuan ($2.3 trillion) of savings into the city's equities once restrictions are relaxed.
The Hang Seng Index and the H-share index are valued at 16 times and 22 times reported earnings, respectively, compared with 52 times for China's CSI 300 Index. All 42 Chinese companies whose shares are listed in both Hong Kong and the mainland are cheaper to buy in Hong Kong, with 18 trading at less than half the price of their China-listed stocks.

QDII Included

Restrictions on China's currency, the yuan, prevent individuals from investing overseas. The government is loosening controls as record trade surpluses drive up the foreign-exchange reserves and complicate efforts to cool the world's fastest- growing major economy.
China last year started allowing banks and brokerages to invest outside of the mainland under the so-called qualified domestic institutional investor, or QDII, program. These investments will also be subject to any new policy regulating capital outflows, according to the three officials at the banking regulator.
China's currency regulator said Aug. 20 that it will allow individuals holding accounts at Bank of China Ltd.'s branch in Tianjin city to buy Hong Kong stocks for the first time. It didn't specify an investment quota or say when the plan can start.
The regulator's lack of specifics didn't deter Li Chuansen. The former Shanghai Electric Group Co. employee, now 54, said he sold his Shanghai apartment for money to buy Hong Kong stocks

So suddenly all the bad news starting to disclose off.......

Deja Vu All Over Again....?

The irony is that today, a decade later, the very same countries affected by crisis a decade ago, are the ones funding a growing U.S. current account deficit. Nicholas Carn, a partner at Odey Asset Management notes, "Countries that have built up large foreign currency reserves and run chronic surpluses, create a different set of issues".
Another irony – if another financial crisis were to emerge, the country most vulnerable would be the U.S.. Marc Chandler of Brown Brothers Harriman adds that if, "at some point if the Chinese pull out, the U.S. dollar would come under attack".

Why is September so bad? Part of the reason is a seasonal slowdown of money flowing into the market, so there's less new money to push up prices. In addition, Stovall says some mutual funds "have October as fiscal year-end, and may be selling losing positions from mid-September until mid-October."

Deja Vu All Over Again....?

Deja Vu All Over Again?
The irony is that today, a decade later, the very same countries affected by crisis a decade ago, are the ones funding a growing U.S. current account deficit. Nicholas Carn, a partner at Odey Asset Management notes, "Countries that have built up large foreign currency reserves and run chronic surpluses, create a different set of issues".
Another irony – if another financial crisis were to emerge, the country most vulnerable would be the U.S.. Marc Chandler of Brown Brothers Harriman adds that if, "at some point if the Chinese pull out, the U.S. dollar would come under attack".

China Makes Fourth Interest Rate Hike This Year

China raised interest rates on Tuesday for the fourth time this year to stabilize inflation after consumer prices rose in July at the fastest pace in more than a decade.

The People's Bank of China said it was raising the rate that banks pay for one-year deposits by 27 basis points, to 3.60 percent, and the corresponding benchmark for lending rates by 18 basis points, to 7.02 percent from 6.84 percent.

Although the timing was a surprise, the action itself was not despite turbulence in global markets that has prompted the Federal Reserve to cut its discount rate and hold out the prospect of a reduction in the federal funds rate.
Most economists had forecast an increase, both to anchor inflationary expectations and to reduce the incentive for savers to take their money out of the bank -- where real deposit rates are deeply negative -- and pile into the surging stock market.

The Market......

Many people still bullish on the market. For me in the long run I have totally no doubt with them but in the near term, I still not Confidence to the market. The reasons which support my view as the below:

• The Subprime problems has already spread through worlwide from US to Europe and of course next will be Asia ( China and S'pore). A smart trader will definetely know the danger when he saw all the Central Banks are start activated their rescue plan to provide liquidity to the market where by the last time it only happened during 911 incident. This indirectly has shown us a very clear picture that the global equity market is really SICK.


• The Superb China market is another fear factors which we need to take into consideration. Just remember "Newton Gravity Law" ( anything which u throw up will definetely come down) F=ma; F=force m=mass a=acceleration. The higher the momentum and the speed then the greater the force it will be. This week Shanghai can up 200 points for you next week it might drop back 250 points for you too.


• 7 days later China Central bank will announce the report regarding which of the bank are actually engage to the Subprime problems ( ICBC, BOC, and CCB) are amongst the hot spots.


• Beijing 2008, according to the research China case is really a different story from others host Country. So it is difficult to predict the market will still bull after 2008. Moreover China has their triple bubble problems ( Quality control, Equity, Polllution)
• Goldman shares were sold down aggressively as investors worried that market turmoil had generated significant losses at two Goldman-managed hedge funds: the flagship US$8 billion Global Alpha and North American Equity Opportunities. Goldman Sachs executives said risk and leverage in those funds had also been reduced. Global Alpha has fallen 27 percent this year, with half of that decline coming last week.

What's happening now? While some hedge funds have put their "no redemptions" clause into action, most are deleveraging, hence the volatility due to the unwinding process

As a conclussion, Physchological problem is still the biggest barriers for the market today.

The Subprime again........ Haihz......

The U.S. subprime-market rout that wiped out $2.1 trillion from global share values last week has

``got a long way to go,'' said Jim Rogers, who predicted the start of the commodities rally in 1999.

This week's rebound in equity markets hasn't persuaded Rogers, 64, to pull out of bets that U.S. investment banks and homebuilders are heading for further declines. ``This was one of the biggest bubbles we've ever had in credit,'' Rogers, chairman of New York-based Beeland Interests Inc., said in an interview from Hong Kong. ``I have been and am still short the investment bankers in America. I'm also short homebuilders.''

The Morgan Stanley Capital International World Index plunged 5.3 percent last week, its worst weekly drop in five years, on concern defaults among subprime mortgages may be spilling over to other credit markets and hurting earnings and takeovers. Further losses may be in store even after the index, which tracks $32.6 trillion of stocks, advanced 0.7 percent this week. ``Given the stage of the credit cycle that we're in now, we would have to expect more negative news popping up,'' Beat Lenherr, who oversees $7 billion as chief investment officer for Asia at LGT Bank in Liechtenstein AG, said late yesterday in an interview in Singapore. ``The market sentiment is a bit nervous to the degree that every bad news is answered with selling.''
No Big Disaster Some investors say sustained consumer spending and jobs growth may help offset the impact of mortgage defaults.
A report due later today may show that payrolls rose 127,000 after a 132,000 gain in June, according to the median estimate of economists surveyed by Bloomberg. The jobless rate is forecast to hold at 4.5 percent for a fourth month, near a six-year low. ``Subprime will not derail the economy and we're not calling for a big disaster,'' said Hans Goetti, Singapore-based managing director at Citi Private Bank, which has assets of $100 billion in Asia. ``Consumer spending will not fall off the cliff as a result.''

The MSCI World Index today climbed 0.1 percent, its fourth gain this week, as investors speculated that better-than- forecast earnings will help offset the impact of mortgage losses.
Financial Stocks Down. A measure of financial companies such as Countrywide Financial Corp. has dropped 3.7 percent so far this year, the only group to decline within the MSCI World Index. Countrywide Financial, the biggest U.S. mortgage lender, said yesterday it has ``significant'' sources of short-term funding after the slump in demand for loans pushed some rivals toward bankruptcy.

Shares of Bear Stearns Cos. fell 13 percent last week after two of its hedge funds failed because of the subprime crisis. Merrill Lynch & Co. is down 3.6 percent this week, heading for its third weekly decline, while stock in Lehman Brothers Holdings Inc. is 5.9 percent lower.
The housing slump may extend into 2008 because of stricter mortgage standards and a glut of properties. IndyMac Bancorp Inc. yesterday said it is joining rival lenders in making ``very major changes'' to home-loan standards and charging higher rates because of a slump in mortgage securities. U.S. homebuilders rose yesterday, pushing a Standard & Poor's index of 16 such companies to a 4.1 percent gain, the measure's biggest advance in six months. The index has dropped 35 percent this year after the worst housing slump in 16 years left eight homebuilders nursing quarterly losses of $1.97 billion.

Conclussion:

No matter how bad the situation will be, it is important for all traders to minimize their casualties in this battle. For me... this time is a very good marrathon battle which make me feel very stressfull .

" Only through perseverance, high spirit and Hardwork will lead us to success"

U.S. Weakness Spells Trouble For Asia

Global economies are interdependent now !!

The Hong Kong and Korean markets have been weak over the past two days, and with good reason. They are very dependent on the U.S. consumer's appetite for their exports.
According to Lombard Research, 8% of Korea's entire GDP depends on exports to the U.S. For China, 7.5% of their GDP is due to exports to the U.S.

The Koreans and Chinese are well aware of this dependency, and they have been trying to shift more exports to Europe, with some success. Nine percent of Korea's GDP consists of sales of goods to Europe; 7% in China's case, according to Lombard Research.

The worry here is that if the U.S.'s consumption of imports suddenly slows down, domestic consumption in Korea and China may not pick up the slack.
There are additional risks to these countries: a rising chorus of protectionist rhetoric in both the U.S. and Europe.

The implications are clear: a sluggish U.S. economy will adversely affect growth in key emerging markets. This highlights the interdependency of the global economy

The Teddy Bear's Stage.....

Some Question to be ask tonight ( 27 July 2007 ):

What will happen today?

• The risk is to the downside, because the markets can easily drop another 3% to 5% before a sufficiently large number of people ask questions about oversold conditions.



• There has been a lot of technical damage, and we're approaching the weekend.



• Q2 GDP may not have the impact it usually has. Traders yesterday were already saying that the world was a different place from Q2 in light of the tightening in credit.



• In fact, we're seeing if the strong GDP may be a negative, since traders are now agitating for a rate cut from the Fed.
  

Can we get a sustainable bounce?

• If the market comes to believe that the Fed will step in and lower rates later in the year, that would help.


• Also, clear signs in a month or two that banks and brokers were able to sell some of their LBO(Leverage Buyout) debt will go a long way toward calming markets

What is the main bear argument?

• Credit and housing deterioration is creating a systemic crises that will lower the markets. Bears say the markets should not be 3% off all time highs with energy, credit, & housing major issues.
  
• Many stocks in S&P were viewed as takeover targets. A "closed" sign on the debt markets is bad news.
  

What is the main bull argument?

• Housing and credit issues do not represent systemic risk to the global markets


• Repricing of leveraged bonds is good


• At end of summer, when repricing occurs,much of the LBO debt will be sold, and stocks will get a lift in September and October when the markets realize the sky has not fallen.


• In the meantime, the banks are not losing money on the LBO mezzanine loans--they are in fact earning interest on it.


• No LBO deal has collapsed, and it's unlikely a major one will collapse.


• The global growth story is the key. IMF raised its global growth forecast. China is the largest contributor to global growth this year. They see faster growth In Germany, China, Russia, India.
  

Why is the market so volatile?

• The repricing of risk is the main reason.


• Some also note that the elimination of the short-sale tick rule may be a factor in the market's volatility. This rule, which required that shorting of a stock could only be done on an uptick or sideways move (but not a downtick), was eliminated a few weeks ago. It is difficult to sort this out, because the recent period of volatility also corresponds with the concerns in the credit market. Most agree that removal of the rule is adding some degree of additional volatility.
  

Can we get an oversold bounce looking like a possibility?

• Yes, at any moment. A surprising number of traders have covered some shorts position. But, any uptick is consider a correction for further Short !!

The Game is START !!!

U.S. stocks tumbled as concern about loan defaults increased, investors balked at funding takeovers and companies including Exxon Mobil Corp. reported earnings that missed analysts' estimates.

Home Sales
New homes sales in the U.S. fell 6.6 percent in June, more than the 2.7 percent drop economists had forecast, signaling no end to the real-estate slump that's weakened the economy. Purchases of new homes in the U.S. dropped 6.6 percent in June, the most since January, to an annual pace of 834,000 last month from a revised 893,000 rate the prior month that was less than previously estimated, the Commerce Department said.

Concern takeovers are costing more to finance also pushed down stocks. About $3.07 trillion in global mergers and acquisitions helped send the S&P 500 and Dow average to records earlier this month.

10-year Bond yield

The yield on the benchmark 10-year note fell 6 basis points, or 0.06 percentage point, to 4.84 percent at 11:01 a.m. in New York, according to bond broker Cantor Fitzgerald LP. It earlier declined to 4.81 percent, the lowest since May 22. The price of the 4 1/2 percent security maturing in May 2017 rose 15/32, or $4.69 per $1,000 face amount, to 97 13/16. Yields move inversely to bond prices.
Ten-year notes yield 21 basis points more than two-year debt, the widest the gap has been since June 26.
The government will auction $13 billion of five-year notes at 1 p.m. New York time.
``Once bucked 4.88 percent on the 10-year note, you're going to have pretty clear sailing to 4.78 percent''

U.S. Durable-Goods Orders Excluding Transport Decline

Orders for U.S.-made durable goods such as computers and telephone equipment unexpectedly dropped in June for a second month as consumer spending slowed. Demand for goods meant to last several years, excluding airplanes and motor vehicles, fell 0.5 percent, after a revised 0.2 percent drop in May

Consumer spending -- which kept the economy alive for most of the past year -- is slowing, leading companies to order less from America's factories. Federal Reserve policy makers have said a lack of business investment is a risk for an economy already hurt by the biggest housing slump in 16 years.

New Zealand Raises Key Interest Rate to Record 8.25%

New Zealand's central bank raised its benchmark interest rate to a record 8.25 percent and said borrowing costs may be high enough to contain inflation, triggering a decline in the nation's currency.

The chance of a rate increase at the central bank's next review on Sept. 13 is 11 percent, according to an index calculated by Credit Suisse. New Zealand's dollar bought 80.13 U.S. cents at 12:25 p.m. in Wellington from 80.36 cents immediately before the statement. The currency this week reached 81.10 U.S. cents, the highest since it began freely trading in March 1985.

Central banks worldwide are grappling to curb inflation pressures. Bank of England's policy makers this month increased their benchmark rate to 5.75 percent. The Bank of Canada this month raised its key rate for the first time in more than a year to 4.5 percent.
Traders increased bets the Reserve Bank of Australia will raise its benchmark rate to 6.5 percent next month after a report yesterday showed consumer prices rose faster than economists expected in the second quarter.

What make China Mobile so Precious

China Mobile Limited (the "Company", and together with its subsidiaries, the "Group") was incorporated in Hong Kong on 3 September 1997. The Company was listed on the New York Stock Exchange and The Stock Exchange of Hong Kong Limited on 22 October 1997 and 23 October 1997, respectively. The Company was admitted as a constituent stock of the Hang Seng Index in Hong Kong on 27 January 1998. As the leading mobile services provider in China, the Group boasts the world's largest unified, contiguous all-digital mobile network and the world's largest mobile subscriber base. In 2006, the Company was once again selected as one of the "FT Global 500" by Financial Times, and the "The World's 2000 Biggest Public Companies" by Forbes magazine. Currently, the Company's corporate credit rating is A/Outlook Stable by Standard and Poor's and A2/Positive Outlook by Moody's (respectively equivalent to China's sovereign credit rating).
The Company operates nationwide mobile telecommunications networks in all 31 provinces, autonomous regions and directly-administered municipalities in Mainland China and in Hong Kong SAR through these thirty-two subsidiaries.
As of 31 December 2006, the Group had an aggregate staff of 111,998 and an aggregate mobile telecommunications subscriber base of over 301.2 million, and enjoyed a market share of approximately 67.5 per cent. in Mainland China. The Group's GSM global roaming services covered 219 countries and regions and its GPRS roaming services covered 138 countries and regions.
The Company's majority shareholder is China Mobile (Hong Kong) Group Limited, which, as of 31 December 2006, indirectly held an equity interest of approximately 74.57 per cent. of the Company through a wholly-owned subsidiary, China Mobile Hong Kong (BVI) Limited. The remaining equity interest of approximately 25.43 per cent. of the Company was held by public investors.

Major Reasons

~Number of Subscriber reach 332 million in China untill June 2007.

~JP Morgan and UBS upgraded China Mobile From hold to buy

~China is going to announce the first 3G license holder by end of this year.(90% is going to China Mobile)

In Conclusion

A Gigantic company with a EPS 22.5rmb and the world largest mobile operating company, it is difficult for CM to plunge. So there is no reason for this counter to go wrong. Remember China Goverment is soon to announce it 1st 3G licence to China Mobile. Why must it issue to CM ? the answer is if not China Mobile then who else ???

China Raises Rates After Fastest Economic Growth in 12 Years

China raised interest rates for the third time since March to cool an economy that grew at its fastest pace in 12 years last quarter, stoking inflation.

The benchmark one-year lending rate will increase to 6.84 percent -- the highest in more than eight years -- from 6.57 percent, starting tomorrow, the People's Bank of China said today on its Web site. The one-year deposit rate will jump to 3.33 percent from 3.06 percent.
China is trying to stop the flood of cash from record trade surpluses from fueling inflation, asset bubbles and overcapacity in manufacturing. Consumer prices rose by the most in almost three years in June because of a spike in food costs. Factory and property investment has surged.

The inflation rate was 4.4 percent last month. That's more than returns on bank deposits, encouraging households to bet on stocks instead and making it harder for the government to cool the share market.

Urban fixed-asset investment climbed 26.7 percent in the first six months, accelerating from the 24.5 percent increase for all of 2006.
China is under pressure to allow faster appreciation of the yuan to slow the flood of money into the economy from an export boom and ease trade tensions with the U.S. and Europe.

Export Boom

The world's fourth-largest economy expanded 11.9 percent in the second quarter from a year earlier. China exported $112.5 billion more than it imported in the first six months, an increase of 84 percent from a year earlier. The CSI 300 Index of stocks has climbed 95 percent this year after more than doubling in 2006. Rising food prices, high stock and property prices and excessive liquidity from the trade surplus.

The central bank has ordered lenders to set aside larger reserves of money five times this year. The government also plans to soak up cash by selling 1.55 trillion yuan ($205 billion) of bonds as part of setting up an agency to manage some of the country's $1.3 trillion of foreign-exchange reserves. The National Development and Reform Commission, China's top economic planning agency, forecasts the trade surplus will widen to a record $250 billion to $300 billion this year, up from $177.5 billion in 2006.

China's Bonds May Drop Further on Rate, Tax Moves

Chinese bonds, Asia's worst performers this year, will drop further should the central bank raise interest rates and cut taxes on deposit income, according to China Galaxy Securities Co.
The government may seek to make bank accounts more attractive after inflation prompted households to seek higher returns in stocks and property. Parliament approved a cut in the 20 percent tax last month, without setting a date.
``Bonds may fall further because it seems likely that the deposit interest tax will be cut by half,'' said Feng Chen, a Beijing-based fixed-income analyst at Galaxy, the nation's biggest securities brokerage by assets. ``The bond price has included the forecast of a hike of about 27 basis points.''
A government report yesterday showed the economy expanded 11.9 percent in the second quarter from a year earlier, the fastest in 12 years, reinforcing speculation that the People's Bank of China will raise rates for a third time this year. The consumer price index climbed 4.4 percent in June, higher than China's one-year deposit rate of 3.06 percent.
The yield on three-year bonds rose 1.3 basis points to 3.44 percent yesterday, according to the China Interbank Market. The debt's yield has risen 1 percentage point so far this year. The 2.66 percent security due February declined 0.03, or 0.3 yuan per 1,000 yuan face amount, to 98.08.
The bond market has slumped 2.6 percent this year, the worst performer among 10 local-currency debt markets tracked by HSBC Holdings Plc. It slumped as the central bank raised interest rates twice and increased the reserve requirement of banks five times to mop up excess money in the economy.

China's GDP Grows at Fastest Pace in 12 Years

China's economy grew at the fastest pace in 12 years in the second quarter and inflation accelerated the most in nearly three, adding pressure on the government to raise interest rates and cool investment.
Gross domestic product expanded 11.9 percent from a year earlier, the statistics bureau said in Beijing today, up from 11.1 percent in the first quarter. Inflation climbed to 4.4 percent in June, breaching the central bank's annual 3 percent target for a fourth month.

``China will continue to strengthen and improve macro- economic controls in the second half of this year,'' the statistics bureau said in today's statement. China's export- fueled growth will probably also fan tension with the U.S. and Europe, which contend that an artificially low yuan unfairly favors its exporters. The figures ``appear to give policy makers little room to delay a lending and deposit rate hike,'' said Martin Haigh, head of Asian sales trading at Cazenove Asia Ltd.,

The central bank is expected to increase the benchmark one- year interest rate from 6.57 percent and the deposit rate from 3.06 percent at least once more this year

Stocks in U.S. Poised for 10 Percent Drop, Options Bets Show

Bets in the options market against the Standard & Poor's 500 Index have exceeded wagers it will rise by a 2-to-1 margin for a month, the longest since Bloomberg began compiling the data in 1995.

That's seen as a warning sign the market is due for a decline of 5 to 10 percent after the S&P 500 rose to two records last week, say managers of almost $1 trillion at Morgan Stanley Global Wealth Management, National City Private Client Group and Russell Investment Group. The Leuthold Group, whose flagship fund has beaten 99 percent of similar funds over the last five years, expects the S&P 500 to slide as much as 19 percent by the end of the year.

The options market is ``a bell ringer,'' said David Darst, who oversees $728 billion as chief investment strategist at New York-based Morgan Stanley's private banking unit. ``On a short- term basis, the market's ahead of itself and could have a pullback.'' Darst, who cashed in some stocks in the past 12 months, said the market could drop as much as 10 percent.

The increase in so-called put options coincides with analysts' outlook for the worst corporate earnings since 2002. Retail sales slid in June by the most in almost two years, a signal that near-record gasoline prices and falling home values are taking a bigger toll on consumers than economists had forecast.

Hence, it is predicted there will be a sharp fall correction coming to the town before continue our journey to 1442 .... Becarefull......!!!

Not yet ... Not yet......

We think rising risk aversion could lead to some weakness in share prices in Q307, which would present a buying opportunity. We remain positive on the near-term prospects for the market. Although valuations are no longer at value levels, we believe accelerating earnings momentum, rising dividend yields, and increasing ROE should continue to support a re-rating to our forward PE estimate of 16.5x (end-2007 KLCI target of 1,442). We expect the following themes to support a favourable environment for upward earnings estimate revisions:


Start of the property up-cycle.
We believe the residential property sector’s typical up-cycle has just begun. Based on our estimates, we think the typical property cycle in Malaysia lasts four years from trough to peak. We estimate residential property sales could reach RM40bn in 2008 (up 33% from 2006levels).

— Additional incentives to stimulate the property sector (recent incentives included the easing of foreign ownership restrictions and waiver of the real property gains tax) should further support the up-cycle. We believe these new measures could lead to a more broad-based rise in the property sector, which could potentially lead to a more balanced growth profile for the Malaysian economy.

Ninth Malaysia Plan:
financing not an issue. Although most major highimpact Ninth Malaysia Plan infrastructure projects have not yet started, the federal government registered a 148% YoY rise in development spending in Q107. We expect several high-impact Ninth Malaysia Plan infrastructure projects to break ground in H207 and support our GDP forecast of 5.6%.

— A quick look at the revenue side suggests the federal government continues to enjoy windfall profits from Petronas (the national oil company) and higher dividends from government-linked companies (GLCs).

— Although not our base-case scenario, we think this gives the Malaysian government flexibility to lower taxes to stimulate domestic consumption. We see several scenarios for tax cuts: 1) a reduction in personal income tax rates (we estimate a 100bp reduction would free up around RM600m), and 2) a reduction in the stamp duty (most likely in the property sector).

Potential earnings surprises.
We believe our FY07-09 EPS estimates could prove conservative in view of: 1) higher loan growth and lower loan loss provisions for banks; 2) higher average CPO prices; and 3) a possible tax break for PLUS Expressways. Potential earnings downside, however, could come from the energy sector because of higher fuel costs and from Proton.

— Accounting for these four items, a scenario analysis indicates our FY07
growth forecasts could increase to 25.8% (from 20%), while our FY08 and FY09 EPS growth estimates could increase to 11.8% and 9.2% (from 8.7% and 8.6%), respectively.

The Tankan Survey ....

"Tankan Survey is an economic survey of Japanese business issued by the central Bank of Japan, which it then uses to formulate monetary policy. The report is released four times a year in April, July, October and mid-December.

The survey covers thousands of Japanese companies with a specified minimum amount of capital, although firms deemed sufficiently influential may also be included. The companies are asked about current trends and conditions in the business place and their respective industries as well as their expected business activities for the next quarter and year. "

Confidence among Japan's largest manufacturers held near a two-year high and companies said they're increasing spending, supporting the central bank's argument for a third interest-rate increase in seven years.
The Tankan, Japan's most closely watched business survey, showed confidence among large manufacturers was unchanged at 23 points in June from March and near December's two-year high of 25, the Bank of Japan said in Tokyo today. The result matched the median estimate of 26 economists surveyed by Bloomberg News. A positive number means optimists outnumber pessimists.
Sentiment among non-manufacturers held at a 15-year high of 22 points for a third quarter as the export-led expansion creates jobs and spurs consumer spending. The survey supports expectations that the bank will raise rates as soon as August.
``The good business environment for the manufacturing sector is spreading to the non-manufacturers and I think that might have something to do with growing household income,'' said Masayuki Kichikawa, a senior economist and currency analyst at Mitsubishi UFJ Securities in Tokyo. The survey result is ``somewhat'' supportive of a rate increase in August, he said.
The yen traded at 123.24 per dollar at 9:50 a.m. in Tokyo compared with 123.09 before the report was published. The yield on Japan's benchmark 10-year bond fell 1 basis point to 1.855 percent.

Every Day is a New day.....

Lessons learn from yesterday.......:

• "Yesterday losses does not mean that today will also be defeated...."
  

• " Take into Accounts that great love and great achievements involve GREAT RISK "
  

• " The most important is when you lose, NEVER lose the lesson"

Again every day is a new day.... Tomorrow will be better.....!!

Saudi Arabia and Asia....

High oil prices and increases in Saudi Arabia's oil output have improved the health of Saudi Arabia's fiscal position, and in turn provided a boost to domestic demand. Foreign investment has also strengthened, driven by the development of Saudi's gas, petrochemicals, power and water supply projects. Against this background, the Saudi economy grew by an estimated 5.4% in 2006, and is expected to further expand by 5.3% in 2007.Except 2000, Saudi Arabia had recorded fiscal deficits from 1983 to 2002. In order to contain the deficits, the Saudi government had exercised restraints on its spending. Helped by a strengthening of oil prices, the government has recorded budget surplus since 2003. The budget surplus is expected to continue in 2007 amid the still high oil prices, as the majority of the government revenue comes from oil earnings.On the external front, over three quarters of Saudi's exports are oil and energy products, such as petrochemicals, plastics and related raw materials. Leading export destinations are the US, Japan, South Korea, India and China. Meanwhile, major import items include machinery, transport equipment, foodstuffs, metals, minerals, textiles and clothing. Principal suppliers are the US, Japan, Germany, China and the UK.

Trade Policy

In December 2005, Saudi Arabia became the 149th member of the WTO after over 12 years of negotiations. In 1993, when Saudi Arabia first applied for membership of the General Agreement on Tariff and Trade (GATT), the predecessor of the WTO, 75% of Saudi's tariffs on imports were at 12%. Since 2003, 85% of tariffs have been lowered to 5% or less.Saudi Arabia's WTO commitments provide for foreign participation in its wholesale and retail trade. Upon accession, foreign companies can hold up to 51% of the equity in a wholesale or retail business. The limit will be increased to 75% by December 2008.However, some products remain restricted from entering Saudi Arabia for religious, health or security reasons. Prohibited items include alcoholic beverages, pork, non-medical drugs, non-Islamic religious materials, weapons and weapon-related electronic equipment. In addition, foreign companies that are deemed to support Israel in one way or another are blacklisted because of the Arab League boycott of Israel, to which Saudi Arabia is a participant.Tariffs are mostly ad valorem. The tie between Saudi Arabia and its fellow members of the Gulf Co-operation Council (GCC) -- Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates -- is strong. In November 1999, the GCC agreed to form a customs union. The customs union took effect from 1 January 2003. The accord establishes a single tariff of 5% on 1,500 imported items from non-member countries. It also provides a list of other essential items that can be imported duty-free. Under the accord, goods imported into the GCC area can be freely transported subsequently throughout the region without paying additional tariffs.

Hong Kong's Trade with Saudi Arabia^

Hong Kong's total exports to Saudi Arabia during January-November 2006 surged by 22% to US$335 million, after a 2% growth to US$300 million in 2005. Major export items to Saudi Arabia during January-November 2006 included watches and clocks (18% of the total), telecommunications equipment and parts (13%), women's or girls' wear of textile fabrics (10%), other apparel articles (7%) and footwear (4%).On the other hand, Hong Kong's imports from Saudi Arabia increased by 7% to US$442 million during January-November 2006, after a 17% growth to US$435 million in 2005. Major import items from Saudi Arabia during January-November 2006 included polymers of ethylene in primary forms (41% of the total), hydrocarbons (30%), other plastics in primary forms (9%), alcohols and phenols (6%) and non-electric engines and motors (5%)

Power Ranger.....

Power Sector ...


Over in Singapore, Temasek Holdings said it would sell its three power stations, Power Seraya, Senoko Power and Tuas Power, from September 2007 with completion targeted for the end of next year or early 2009.

This signals yet another attempt by the Government of Singapore to dispose the three power plants. Following the liberalization process for the energy market started in 1995, the government in 2000 said that it was lifting foreign ownership limit to sell the power generation companies which account for about three quarter of electricity produced in the island state. But weak market sentiment and disputes over gas supplies saw the divestment repeatedly postponed.

Temasek claimed that the conditions are more conducive now. Singapore's economy is set for continued growth and recent legislative changes have set the stage for liberalization. Moreover, the power plants, we believe, have undergone significant improvements to boost their efficiency levels.

The changes in ownership are not expected to affect electricity selling prices. Under a system put in place (purportedly a power pooling system) SP Services buys electricity from all generating companies before selling to households and industrial consumers. SP Services also has an automated pricing mechanism in place to pass-on any fluctuation in energy costs. There would also not be any changes in management and staff for another three years under the collective agreements signed recently.

Each power plants is said to be worth S$2bn-S$3bn. The sale may be by way of tender or via initial public offers but Temasek said the first power plant would likely be offered through a tender process. Temasek's financial advisors are Morgan Stanley and Credit Suisse.

Temasek did not say who are the interested parties. But previous attempts to sell the power assets attracted foreign parties like Intergen (US) and Tokyo Electric Power Company (Japan). Tenaga Nasional and YTL Power were also interested to bid for them at one time. Singapore-based interested parties include Keppel Corp and SembCorp Industries (which have their own power plants) and CitySpring Infrastructure Trust (Temasek-linked).

Trade Idea: maintaining Buy recommendations for Tenaga and YTL Power for their earnings growth and steady dividend prospects. At this juncture, it is expect the offer to cause a hollowing out on utilities investment in Malaysia. With the three power plants already operating at high efficiency levels and limited growth potentials, ROI is likely to be the main driver behind most bidders. That aside, the news flow could provide some mild excitement to the sector.

Lowest since 1991 ......

US Homebuilders’ confidence fell this month to the lowest since February 1991 as interest rates climbed and delinquencies surged. The National Association of Home Builders/Wells Fargo index of sentiment declined to 28 this month from 30 in May. Readings below 50 mean most homebuilders view the housing market conditions as poor. Homebuilders are losing money as they cut prices to stem a slide in sales as banks tightened the standards for mortgages applications and approvals. Builders have scaled back projects to work off bloated inventories, a sign housing construction will weigh on growth for the rest of the year. Federal Reserve last month acknowledged that the housing recession will hold down growth longer than they had anticipated, but at the same time maintained the outlook for “moderate'' growth in the overall economy as consumer spending gains and manufacturing accelerates.

Crude oil: Approaching US$70 per barrel due to risks on Nigerian supplies. Crude oil price for July delivery jumped by US$1.09 or 1.6% to nine-month high of US$69.09 per barrel after Chevron Corp. and Eni SpA yesterday reported attacks on facilities in Nigeria, where the two main oil workers’ unions plan to join an indefinite general strike.

Hedge Funds Forecast Windfall in Europe's Growing Power Market

Hedge fund manager Marcel Melis ignores stock charts, commodities reports and bond prices as he sips his morning coffee. All his attention is focused on one thing: the weather. Melis analyzes forecasts for areas from the snowcapped mountains of Norway to the beaches of Spain's Costa del Sol to predict changes in demand for power and gas. The founder of Energy Capital Management BV, which has raised $60 million and started trading in October, targets returns of 25 to 30 percent.

The number of hedge funds with more than a quarter of their capital in European energy jumped fivefold to 50 last year as German utilities began releasing data on plant outages, helping traders forecast supply in the region's largest market, according to Energy Hedge Fund Center LLC. The value of derivatives traded on the European Energy Exchange in Germany more than doubled to 58.75 billion euros ($78.08 billion). European power prices are on the rise after falling to records following the mildest winter in more than 100 years. Germany's third-quarter power contract has been the focus of traders ever since April 11, when the U.K.'s Met Office said the summer in northwest Europe would probably be hotter than average, boosting demand for power and increasing the risk of price spikes. The contract rose as high as 49.30 euros a megawatt hour on May 18, after dropping to 36.40 in February. It closed at 44.25 euros on June 14.

US Treasury

Worries over rising global interest rates amidst escalating inflation and robust global economic growth pushed US Treasury yields to new highs on Tuesday. The 10T reached 5.30%, a level not seen since May 2002. Overnight, China’s consumer prices rose a higher-than-expected 3.4% year-on-year in May. That rattled Treasuries as the data reinforced fears about rising global inflation and the need for higher interest rates to keep inflation in check. In addition, lukewarm reception from indirect bidders for the $8 billion 10-year note auction also spooked the market. Indirect bidders only bought 10.9% of the issue, down from 44.3% during the prior auction. EUR/USD was in a downtrend the entire day, reaching an 11-week low towards late NY trading. EUR/USD fetched $1.3303, down from $1.3359 Monday. The jump in US bond yields lure traders away from the euro and towards the greenback. Elsewhere, the yen rose marginally against the greenback as investors cut back on their yen carry trades in lieu of the drop in risk appetites recently. The yen was last reported done at 121.69 yen compared to 121.73 yen Monday.

Asian Dollar Credits

Asian dollar bonds slumped on Tuesday amidst a renewed climb in US Treasury yields. Nonetheless, prior to the sell-off in the afternoon, sentiment was quite robust in the morning session. As bond yields rose towards London open, sellers surfaced in droves widening credit spreads up to 5bps in the High Grade segment.
The High Yield segment bore the brunt of the selling on Wednesday morning. The Phils were quoted more than $1 lower on the longer-end whereas the Indons were also quoted close to $2 lower along the 2037 maturities.

Market Outlook for the week ...

Last weeks’s market sentiment was affected by a number of negative news such as (i) bird flu, (ii) Megan Media’s >RM300m irregular accounting and (iii) the sharp retracement of CPO due to the market talk of delaying the increment of export duty by the Indonesian Government. On a positive note, Volkswagen is back into the picture with Proton. Technically speaking, we believe the KLCI to fluctuate within a lower trading range between 1340 and 1365, for the week due to weaker technical setups. Nonetheless, we expect the lower liners to shine as per the “more promising” technical picture.

Broadly inline, but … As expected the KLCI oscillated within the range of 1345/75 in the previous week. Though more positive, we have yet to see any meaningful improvement in trading volume,. We reckon the thinly traded volume could be due to the “school holiday” period and expect trading volume to improve in tandem with the end of the long holidays. Nonetheless, the weak weekly closing of KLCI coupled with the weaker technical indicators , could suggest a lower trading range ahead. Based on TD Range Projection methodology, we expect the KLCI to fluctuate between the levels of 1340 and 1365 for the week. To support the weak upward momentum, the KLCI needs to clear and sustain above the 1365-expected week high during early of the week (with the help of strong overnight Dow’s performance).

Asian Stocks Rise on Japan's Economic Growth

Japan's economy expanded more than the government initially reported in the first quarter after better-than-expected spending by companies. The world's second-largest economy grew at an annual 3.3 percent rate in the three months ended March 31, the Cabinet Office said in Tokyo today, faster than the 2.4 percent preliminary number.

``Capital expenditure figures have shown consistent growth and they are what have been leading the economy for a long, long time, backed by corporate earnings,'' said Graham Davis, director of the Economist Intelligence Unit in Tokyo. Business investment surged 13.6 percent to a record in the quarter from a year earlier, the Finance Ministry said last week. The release accounted for about 60 percent of the capital spending component of GDP.

``Capital spending is solid now and has room to grow,'' said Yoshiki Shinke, an economist at Dai-Ichi Life Research Institute in Tokyo. ``We've been seeing brighter data out of Japan recently so there's no reason to be pessimistic.'' The lowest borrowing costs in the industrialized world and sales and profits at record levels are encouraging companies to refurbish factories and add capacity, making it likely investment will help the economy avoid a slowdown even as exports cool. Net exports -- the difference between exports and imports -- added 0.5 percentage point to first-quarter growth, revised up from 0.4 percent, as imports rose less than initially reported.

Malaysia Finds Bird-Flu Virus in Village Outside Kuala Lumpur

Malaysia has found the bird flu virus in a village outside the capital Kuala Lumpur and will cull poultry in the area to prevent its spread, the Department of Veterinary Services said today.Samples taken from Paya Jaras Hilir village, which reported the sudden death of 60 chickens within three days on June 2, tested positive for highly pathogenic avian influenza, or HPAI, the department said in a faxed release.The H5N1 strain of the bird flu virus, which has caused deaths among humans in neighboring Indonesia, is part of the HPAI group. The department didn't say if H5N1 was detected.Malaysia reported its first outbreak of avian influenza in more than a year in February 2006, when the H5N1 strain killed 40 chickens in the state of Selangor. The country declared itself free of the disease four months later.

China's Stocks Tumble Again.......

China's stocks tumbled after the government's main securities newspaper signaled that policy makers won't try to arrest a slump that wiped out $224 billion of market value in the previous three trading days.

The CSI 300 Index dropped 7.2 percent to 3530.19 as of 2:40 p.m. local time. The measure, which tripled in the past 10 months, has plunged 15 percent from its May 29 peak after the government increased the tax on share trades to 0.3 percent.

The speed that stock prices soared by was ``extremely unusual'' and highlighted ``structural bubbles'' in the market, the state-owned China Securities Journal wrote in an editorial.
About half of the stocks included in the CSI 300 plunged by the 10 percent daily limit, including Huaneng Power International Inc., the nation's largest electricity producer, and Air China Ltd., the biggest international carrier.

``Investors, particularly those who have recently entered the market, are a bit disappointed that the government hasn't done anything to support the market,'' said Fan Dizhao, who helps manage about $1.8 billion at Guotai Asset Management Co. in Shanghai. China Vanke Co. led declines among property developers after a newspaper report said the government will soon announce measures to cool the real estate market, including increasing the supply of land. Even after the recent declines, the CSI 300, which tracks yuan-denominated A shares listed on China's two exchanges, is up 72 percent this year.

The problem is here why the regional market not following the fall ? Is this a golden opportunity for you to buy in more shares at lower price ? This question I strongly believed that nobody will answer me directly because there is no specific answer for this. Again we need to Let The Market Rule....

Still Have to Becarefull although "Let The Market Rule"........

Can someone use a suitable animal to describe what is a "Equity Market"? For me I prefer to describe it as Crocodile/ Buaya. Why ? Because when the crocodile want to hunt for victim they usually will pretent stagnent and open up their Big Mouth, then what if a bird fly into it's mouth...... "KAP" the crocodile will straigth away swallow the pitty bird..

So in this crucial crocodile world, we need to be smart as mousedeer, we must well understand the whole trend and do not ever "Bang" against the train (Trend). If today the whole world is talking about the "Shanghai Bubble" then do u dare to say NO ? My bos told me before we can only "die" one time. If in this case I would like to wait rather to react because our upside (profit) is limited meanwhile expose to an unlimited downside risk...

For Malaysian, there are plentty of good stocks like SAAG perform much much greater return than you buy China Food or others foreign share. Foreign share for the moment is not so encouraging due to the whole regional market sentiment is volatile and the higher currency exposure. Again the " Far Water could not safe Near Fire " theory have to be consider in our judgement whether to invest overseas or not for the current moment.....

Berhati-hati di Bursa Saham...

Malaysia's Economy Expanded Faster Than Expected on Spending....??

Malaysia's economy expanded faster than economists expected in the first quarter as rising government spending and investment countered weaker overseas demand.The $147 billion economy added 5.3 percent from a year earlier after gaining 5.7 percent in the fourth quarter, the central bank said in a statement in Kuala Lumpur. While the pace was the slowest since a revised 5.2 percent in the third quarter of 2005.

Malaysia, among the world's top 20 trading nations, is counting on higher public spending and private investment this year to lift growth to 6 percent as a faltering U.S. economy threatens demand for goods such as Intel Corp. semiconductors and Dell Inc. notebook computers that are produced in Southeast Asia's third-largest economy.The U.S. is Malaysia largest overseas market, accounting for about a fifth of export sales. The world's largest economy grew at a 1.3 percent annual rate in the first quarter, the slowest pace in four years, after a slump in home building and a bigger trade deficit reduced growth, the Commerce Department said April 27.

Spending

The government will spend an additional 8 billion ringgit a year on the higher salaries and a doubling of cost of living allowances, helping boost growth by as much as 0.5 percentage point this year, Second Finance Minister Nor Mohamed Yakcop said May 22. He declined to say if the measures would help economic growth meet or exceed the 6 percent forecast this year.Easing inflation and higher investment approvals will help Malaysia's economy this year, the Malaysian Institute of Economic Research said April 17, when it raised Malaysia's 2007 growth forecast to 5.6 percent.The institute's consumer sentiment index rose to 124.1 in the first quarter from 110.9 in the previous three months, helped by rising stocks, higher wages and stable jobs. The business conditions index dropped to 105.5 from 107.2.

China Triples Stock-Trading Tax; Shares Fall in Everywhere.......

China tripled the tax on securities trading to cool demand for equities, sending China Life Insurance Co. and other U.S.-traded mainland shares lower.
The government raised the stamp tax to 0.3 percent from 0.1 percent, effective May 30, the official Xinhua News Agency reported, citing the Ministry of Finance. China Life, the nation's biggest insurer, slid $1.33 to $46.51 and PetroChina Co., the top energy company, fell 80 cents to $128.15 in U.S. trading.
The higher tax is aimed at promoting a ``healthy'' stock market, Xinhua said. The CSI 300 Index surged threefold in the past year, prompting central bank officials, former U.S. Federal Reserve Chairman Alan Greenspan and Li Ka-shing, Asia's richest man, to warn of the market's imminent collapse. The CSI 300, which tracks yuan-denominated A shares, today rallied to all-time high, its 11th record this month.
``It's a great way to massage the market down,'' said Don Elefson, who manages $1.2 billion in emerging market stocks at U.S. Trust Co. of New York. For the Chinese government, ``this is merely a way of saying, `Fine, if you want to invest in a market at crazy levels, go crazy. But we're going to make it more expensive for you.'''
The Bank of New York China ADR index slid to its low of the day following the Xinhua report. It finished with a 1 percent drop. The Morgan Stanley Capital International Emerging Market Index erased its gains, losing 0.3 percent.
China Telecom Corp., the country's biggest fixed-line phone operator, slipped 59 cents to $52.76. Brilliance China Automotive Holdings Ltd., an automaker, fell 72 cents to $23.48.
Opening Brokerage Accounts
China's brokerage accounts topped 100 million for the first time as investors yesterday opened a record 455,111 accounts to trade mainland shares and mutual funds, according to the China Securities Depository & Clearing Corp.
More than 20 million accounts have been opened at brokerages so far this year, four times the amount in all of 2006, according to the clearing house.

Asia's Most Expensive

Investors opened 362,719 accounts at brokerages on May 24, the fifth straight day the tally has exceeded 300,000, according to figures on the China Depository & Clearing Corp.'s Web site. So far this year, 20.9 million accounts have been opened, four times the amount in 2006, the clearing house's data shows.
The CSI 300 is now valued at 46 times earnings, making the mainland market the most expensive in the Asia-Pacific region.
Greenspan last week joined central bank Governor Zhaou Xiaochuan and Asia's richest man Li Ka-shing in warning of a bubble on China's stock market. The index fell 0.5 percent the day after Greenspan's comment. It resumed its gains the next day, closing 1.7 percent higher.
The CSI 300 has climbed 15 percent since May 6, when the central bank's Zhou said he was concerned about stock valuations. It also rose to a record after billionaire Li on May 17 said the market ``must be a bubble.'

China Stock Index Breaches 4,000 Points, After Doubling in 2007

China's CSI 300 Index rose above 4000 for the first time, driven by a surge in new investors who are ignoring warnings of a bubble to enter a market that's doubled this year. China Merchants Bank Co. paced the gain.

The benchmark CSI 300, which tracks yuan-denominated A shares listed on China's two exchanges, climbed 105.32, or 2.6 percent, to 4090.57 as of 1:23 p.m. local time. Investors opened more than 300,000 accounts a day last week, even as former Federal Reserve Chairman Alan Greenspan called the rally unsustainable and said the market may undergo a ``dramatic contraction''.
Merchants Bank, the nation's third-biggest publicly traded lender, rose 0.41 yuan, or 1.9 percent, to 21.53. China Petroleum & Chemical Corp., Asia's biggest oil refiner, also known as Sinopec, jumped 0.59 yuan, or 4.8 percent, to 12.99. China International Marine Containers Co., the world's largest maker of freight containers, gained 3.17 yuan, or the 10 percent daily cap, to 34.82
Households are shifting funds into the stock market, seeking better returns than they can get on their bank deposits. The central bank's benchmark one-year deposit rate, a ceiling for deposit rates commercial banks can offer, is 3.06 percent, little more than the nation's 3 percent inflation rate. The CSI 300 has risen 198 percent in the past year.

Hong Kong Export Growth May Accelerate on China Trade

Hong Kong's exports probably grew at a faster pace in April as the city shipped more goods to and from China. Overseas sales rose 8.7 percent from a year earlier, after gaining 6.9 percent in March. The government will release trade figures at 4:15 p.m. today. Surging Chinese exports and growing demand for foreign goods in the mainland boosted shipments through Hong Kong. The city, located at the mouth of the Pearl River, serves as a trading hub for China, the world's fastest-growing major economy.

In addition, a slowing U.S. economy may curb demand for goods shipped through Hong Kong. Gross domestic product in the world's largest economy grew 1.3 percent in the first quarter, the smallest increase in four years. The U.S. was the second- biggest buyer of Hong Kong's exports last year after China. Hong Kong's imports probably grew 11.3 percent in April from a year earlier.

Large Yuan Appreciation Would Hurt China

A ``large'' appreciation of the yuan would hurt China's economy, Vice Premier Wu Yi said, signaling the nation won't cave in to U.S. demands for faster gains to ease the U.S. trade deficit.

The yuan's value isn't the cause of the deficit, Wu said today at a dinner in Washington attended by U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke. About 85 percent of the trade surplus is generated by foreign companies exporting products from China that are no longer made in the U.S., such as shoes, she added. Vice Premier Wu concluded two days of talks with Paulson yesterday aimed at easing U.S.-China tensions exacerbated by last year's record $232.5 billion U.S. trade deficit with China. U.S. legislators have pledged to proceed with sanctions against Chinese imports unless the yuan climbs faster.
``China will definitely not drop its policy of letting the yuan rise gradually,'' said Xiao Minjie, a senior economist at Daiwa Institute of Research in Shanghai. ``A big yuan appreciation would affect China's exports,'' Xiao said, citing the textile industry. China is concerned faster appreciation of the yuan would hurt company profit and jobs. The textile industry, which accounted for 72 percent of China's trade surplus last year, loses 8.2 billion yuan ($1.1 billion) for every percentage point of currency appreciation, the China National Textile and Apparel Council estimates.

what will happen if 100 idiots and 1 genius met together...?

Former Federal Reserve Chairman Alan Greenspan said he was concerned Chinese stocks might undergo a ``dramatic contraction'' after its main stock index jumped more than 90 percent this year. The benchmark CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, rose to a record 3938.95 today. The index more than doubled last year as investors bet corporate profits would be boosted by the world's fastest-growing major economy. ``It is clearly unsustainable,'' Greenspan told a conference in Madrid today by satellite. ``There is going to be a dramatic contraction at some point.'' China last week increased the amount it lets the yuan move against the dollar and raised interest rates to restrain economic growth and a swelling trade surplus. The changes came ahead of two days of meetings in Washington between Treasury Secretary Henry Paulson and his Chinese counterpart, Vice Premier Wu Yi, aimed at smoothing trade frictions.

Greenspan's comments contributed to the first decline in U.S. stocks in four days. The Dow Jones Industrial Average dropped 14.30, or 0.1 percent, to 13,525.65 after earlier reaching a record. Chinese stocks also declined in U.S. trading. ``The strength of the Chinese market has kind of spilled over into the positive sentiment here in the U.S.,'' said Michael James, senior equity trader at Wedbush Morgan Securities in Los Angeles. ``To have someone like Chairman Greenspan calling for a dramatic contraction in the Chinese markets might have made a few people a little nervous.''

What if u holding alots of overseas' Shares and met with market crash ?

1. Panic and fainted
2. Still steady and buy more to average your cost
3. follow the majority to cut loss

any others idea...?


Conclusion:

When 1 people said the market is toppish then it might be not true, but what if everybody said the same again and again to you ?

Consumer Spending Boost.....?

The details of salary revision for civil servants were announced yesterday and were broadly in line with our earlier expectation. While the Government did not approve the Cuepacs’ request wholesale, the total amount of additional expenditure of the Government is higher than the original proposal. Consequently, we see a bigger impact on consumer spending by 1.1ppts and 2ppts respectively in 2007 and 2008, resulting in higher GDP growth of 0.5ppts and 1ppt respectively. However, we also see fiscal deficit of the Federal Government rising significantly. Although financing of the deficit is not an issue, the country may subject to downgrades by international rating agencies due to its lack of commitment in bringing down the deficit level.

Cuepacs’ proposal not accepted wholesale … As highlighted in our report dated 8 May, we had already expected some discount to the Cuepacs’ proposal due to financial constraint at the Federal Government level. To re-cap, the Cuepacs had proposed a broad-based salary revision ranging from 10% for higher ranking officers to 40% for lower income employees. Instead, the Government announced that the approved salary revision is between 7.5% and 35% as the following:

(i) 35% increase for Support Group II (Grades 1 to 16), the lowest category of public
employees;
(ii) 25% increase for Support Group I (Grades 17 to 40);
(iii) 15% increase for the Management and Professional Group (Grades 41 to 54); and
(iv) 7.5% increase for the Premier Grade of the Public Sector (Jusa).

Nevertheless, civil servants should welcome the announcement that the new salary scheme will become effective on 1 July, in line with our earlier expectation. Again, the Government may still opt to stagger the implementation in 2007 (i.e. back-dating the revision in lump sum payments) but the actual impact could begin to filter through the economy as soon as the confirmation of new salary scheme due to “announcement effect” (i.e. households factoring in higher future income) … but total spending turns out to be higher. Even though the Government did not adjust the salary scheme for civil servants as per Cuepacs’ request, the total amount of additional expenditure of the Federal Government is higher than the original proposal. The higher amount of expenditure is due mainly to an additional 20% increment for police and army workforce, a 100% increase in the Cost of Living Allowance (COLA) and a revision to pension payments for retired civil servants. The Prime Minister said the salary revision will cost the Government additional RM3.4bn in 2007 and RM6.8bn in 2008, while the COLA payments will result in additional spending of RM0.6bn in 2007 and RM1.2bn in 2008. All in all, the Government will need to bear an additional operating expenditure of RM4bn this year and RM8bn from the year 2008 onwards. This is significantly higher than the earlier sum of RM5bn estimated by the Cuepacs.

Bigger impact seen on economic growth.
With the higher amount of spending on emoluments, pensions and COLA payments, we can expect bigger impact on the Malaysian economy arising from multiplier effect of the collective monetary adjustments for civil servants. Using the Marginal Propensity to Consume (MPC) ratio 0.45 in 2006 and an import leakage assumption of 10%, the entire salary revision (RM8bn per annum) could generate an additional RM5.4bn of consumer spending per annum. The additional consumption could lift private consumption growth by 1.1ppts and 2ppts respectively in 2007 and 2008. After applying the respective deflators, the entire salary revision scheme will contribute an additional 0.5ppts and 1ppt respectively to real GDP growth in 2007 and 2008

Conclusions

A higher Deficit may occur for Malaysia in futures....