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.