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Volume I, Episode 36
October 15, 2007
Chinese Bull Run Gets New Highs - PetroChina - IPOs - Money - more

October 9, 2007

Chinese Stocks Up & Up - IPOs - Iron & Steel - Pacific Pipeline - more
October 4, 2007

Hong Kong Booms - Commodities, Inflation, Oil at $100 a barrel? - more
September 25, 2007

UAW Tells GM No Jobs For China - Markets Hit 5,500 - China's Auto Industry - IPOs

September 19, 2007

New IPOs Rock Shanghai! But is Resistance Building? A Big Push for Private Equity…

September 10, 2007

Report on APEC 2007 - Energy Security - Markets Update - IPOs in Hong Kong

August 30, 2007

Chinese Stocks Stay Up - Big Bond Sale - IPOs - Upcoming Party Congress

August 22, 2007

China Stock Markets Get Higher But For How Much Longer? - Surprise Rate Hike - IPO Update

August 14, 2007

China Toy Recall - Markets & IPOs - Western Banks Catch Asian Flu?

August 6, 2007

Shanghai Composite Busts Past 4,600 - Beijing Bets on Banks - Chinese IPOs in Japan

July 31, 2007

China Stocks Up Again & Again! - Pussyfooting Around Currency? - Democracy in Japan?!

July 25, 2007

Will Barclay's Turn Chinese? 2Q/H1 Macro Report + IPOs!

July 19, 2007

Food Fight! China-USA sling hash / Peak Oil? / Markets Flat Line...

July 10, 2007

Chinese markets confused? Big IPOs - Chery+Chrysler

June 27, 2007

COSCO - China Mobile - IPOs - Telecom Mergers & Acquisitions

June 21, 2007

New Record Highs in Hong Kong, Shanghai: Will Beijing Put On the Squeeze? - IPOs & more

June 15, 2007

Fundamental Misalignment: US-China currency war - stock markets up & IPOs

June 7, 2007

China Stock Pop - Hot News items - climate change, tainted food...

May 31, 2007

Chinese stock markets hiccup - IPOs - USA-China Trade Gap

May 25, 2007

Report on the 2nd USA/China Strategic Economic Dialogue: Win-Win or When-When? - Market numbers - New IPOs

May 18, 2007

New life for Hong Kong? IPO Update - USA/China summit

May 11, 2007

Will Shanghai end up like NASDAQ or Nikkei? - IPOs

April 30, 2007

Tulips to Dotcom - is Sino Mania the next big bubble?

April 20, 2007

The Heat is on! - IPO Report - Air Pollution in China

April 15, 2007

China markets, IPO update, Beijing Ready for Olympics?

March 30, 2007

China markets up, up, up! Sinomania! goes to China

March 23, 2007

Focus on National People's Congress... Hi-Tech, IPOs

March 17, 2007

China's new investment strategy, IPOs, the Wrap...

March 7, 2007

China syndrome or hong bao bounce? New IPOs... more!

February 27, 2007

China Stock Market Yo-Yo, new IPO issues, the wrap

February 17, 2007

Chinese New Year edition! Will China buy Chrysler & more!

February 9, 2007

The USA-China WTO trade dispute and New IPOs

February 1, 2007

IPOs: New Red Chip — Bubble Burst? — USA-China

January 26, 2007

BUBBLE TROUBLE? — IPOs on NASDAQ — Renminbi Yuan

January 20, 2007

IPOs in 3 hot sectors — BAOSteel — Macro Report

HKEX Hang Seng Shanghai
SSE Shanghai Hong Kong
SZEX Shenzhen Beijing
MUSIC in China: Listen!

TRANSCRIPT: Chinese stock markets reach new records, yet again, leading to more speculation on inflation, PetroChina market capitalization soars, some interesting IPOs in the works, and a mention of that start of the 17th Communist Party Congress in Beijing...
Sinomania! Volume I Webisode 36, October 15, 2007

The Great Chinese Bull Market Continues
With New Record Highs in Hong Kong and Shanghai!
Party Bosses Congress in Beijing - can they plan harmonious correction?


The Shanghai Composite Index broke through 6,000 on October 15 to close at 6,030 continuing a steep rise since just last week. The CSI 300 Index follows somewhat less dramatically with a new record of 5,832.447 today. Shanghai Bs have exploded since our last episode and closed October 15 at 387.183, a new record. Conversely, ShenZhen Bs have taken a nose dive and closed today at 759.606, the lowest level since September 13, wiping out a month's gain.

Who's up? PetroChina is up, up almost nine and half percent today alone in New York to close at $236.44 a share. Only two months ago PetroChina was selling for $125. PetroChina shares trade on the New York Stock Exchange as PTR, an ADR or American Depository Receipt with a ratio of 1 ADR to 100 home country shares. Today's rise helped make PetroChina the second most valuable company in the world with a market capitalization of $434 billion US dollars. Now Asia's biggest corporation will challenge ExxonMobil for the top spot.

PetroChina is a darling of investment houses and although one well-known guru, Warren Buffet, has decreased holdings, his Berkshire Hathaway company remains the top six institutional holder.

Famous contrarian Mark Mobius, a Templeton manager of emerging markets, is bullish on the stock and increasing his exposure to it up to five percent. In an interview in Hong Kong, Mobius said he was bullish on energy stocks and believe they have a "way to go" as long as oil prices rise.

Mark Mobius is the latest stock soothsayer singing the virtues of the Hong Kong exchanges. He thinks the Hang Seng Index at 30,000 is possible and believes Hong Kong is the best value of all the major equity markets with many Hong Kong companies currently selling at a discount. Hong Kong overall is selling at under 20 times profits while the Shanghai Composite sells at 50 times profits.

But while the Hong Kong market may seem cheap compared to Shanghai, the two are increasingly symbiotic. The hottest stocks in Hong Kong are Chinese H shares and Red Chips which now make up over half of Hong Kong's market valuation.

And the big run up in Hong Kong shares is due to speculation of when - not if - mainland Chinese domestic retail investors are let in. I have no news whether Chinese regulators will agree on their positions and actually begin a coherent program but many analysts believe it will be in place by next year. JPMorgan is saying it could lead to $60 billion US dollars worth of capital flow into the Hong Kong market, so something to think about and perhaps plan around over the next year.


Money is everywhere and the central government appears unable to control the growth of China's money supply with M2 money growing around 18.5 % in September and bank credit expanding over 17% - both figures well above targets despite recent interest rate hikes and other efforts to slow it down. China's central bank, the People's Bank of China, is expected to raise the ratio of required reserves to 13% a new high in an effort to stop bank lending.

Most economists predict inflation will stay high and become potentially very dangerous if it can't be brought under control by second half 2008. On the flipside, Renminbi appreciation should accelerate faster. Morgan Stanley's forecast is for the Yuan to trade at 7.30 to the US dollar by year's end.


GobiMin, a mining company trading in Toronto (TSXV:GMN) will IPO part of its subsidiary Xinjiang Yakesi Resources on either Shanghai or Shenzhen sometime next year. Money raised will be used to further develop its nickel and copper deposits and fund acquisitions. No further details at this time.

Giant Interactive Group, holding company for Z T game, has filed application for an IPO on the New York Stock Exchange. Giant is the brainchild of Shi Yuzhu, a young Chinese entrepreneur, and his Z T Online was last year's most popular online game in China. This is the first time a Chinese technology startup is looking to the New York Stock Exchange rather than NASDAQ. Estimates range up to $400 million in proceeds if the IPO goes through. Online gaming is big business in China so this could be one to look out for.

Meanwhile, heavyweights China Mobile and PetroChina are still eying A share listings as soon as possible.


Communist Party bosses are meeting all week in Beijing in a closely watched but misunderstood congress. The powers that be mainstream media are quick to dismiss the party meeting with shallow coverage and plenty of talk about jockeying for position and scandals of meetings past. While the party congress is an important part of the Chinese political process it is not - as many would have you believe - an end unto itself. Nothing will be decided and the true course of policy direction determined until affirmed at next year's National People's Congress in March.

I'll have a full report on the party congress and what clues it will give for opportunities in China's growth and investment direction in next week's show. Until then,

I'll see you next time!

© Sinomania! 2007 All Rights Reserved.

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