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ETLK + 25% +.03 Vol. 26,000 eom
Good Read.
FEATURE-Hong Kong, hit by global slowdown, woos U.S.
By Andrea Ricci
NEW YORK, June 9 (Reuters) - Hong Kong, once the bustling bastion of capitalism on communist shores, is no longer the lifeline linking mainland China to the rest of the world -- and that is making the territory a hard sell to U.S. business.
With economic growth an anemic 0.1 percent rate last year, investors are skeptical about Hong Kong, especially when mainland growth is topping 7.0 percent per year as Beijing aggressively stimulates China's economy.
So, Hong Kong Financial Secretary Antony Leung on his first official visit to the United States last week sought to put on a brighter spin, telling the Asia Society here he was "optimistic" the economy could achieve the government's forecast for 1.0 percent growth this year.
Hong Kong has posted negative year-on-year growth in each of the past three quarters. But Leung emphasized that the economy actually grew 0.3 percent in the January through March period when measured a different way -- quarter-on-quarter.
Most economists also expect a pick-up later in 2002 on rising export demand for everything from sweaters to software to financial services from the territory's major trading partners, notably the United States.
For the finance minister to build U.S. confidence in Hong Kong is important. The United States is the territory's second-largest trade partner after mainland China and the two economies are closely linked by virtue of the Hong Kong's dollar's peg to the U.S. dollar through a strict currency board system.
But more than that, many U.S. banks and companies have their Asian headquarters in Hong Kong, and American businesses have been using the territory as a base for their China ventures for years.
CHINA'S PIE
Few dispute that Hong Kong will stage a mild cyclical recovery this year. More at issue is its long-term future.
Hong Kong, a territory of 6.8 million people, became China's southernmost city when it was returned to the mainland by Britain in mid-1997, after some 150 years of colonial rule.
It was two years before the handover, in 1995, when Fortune Magazine famously predicted the change would bring the death of Hong Kong, which for decades had prospered as a free-wheeling entrepot for mainland China, unfettered by the Communist mainland and protected by British-style laws.
Hong Kong didn't die, but five years later, Leung finds himself fighting the perception that Hong Kong is in trouble, not because it is becoming too much like China, but because China is becoming more and more like Hong Kong.
China's joining of the World Trade Organization in December last year narrowed the gap further. As the mainland becomes more open to foreign business, more and more companies are looking to access China directly and bypassing Hong Kong.
But Leung did not seem worried. Hong Kong may have to share more of the China pie, but the pie is getting bigger.
"We see links (with the United States) expanding in future, now that China is a member of the WTO," he told the Asia Society.
Most analysts have said it's too early to tell how many firms would go directly to the mainland, and indeed the number of companies establishing Asia headquarters in Hong Kong in recent months has risen.
But the expectation is that an increasing number of firms will take the China route.
"More and more companies will set up directly in China," said Pieter van der Schaft, Asia regional economist at Barclays Capital in Hong Kong, "But there will always be ancillary business in Hong Kong, in finance, insurance and legal services.
"That, however, doesn't mean Hong Kong doesn't need to restructure," he added, pointing to rigidities in the property market and aviation sector and to weak anti-trust laws.
In some areas at least, the government is trying. For example, it is making efforts to improve efficiencies at its border crossings with China, improvements aimed at keeping shipments from going directly to the mainland.
Hong Kong ports are considered by many shippers to be the most efficient in the world. But they are far more expensive to use than their counterparts on the mainland.
PEG TO STAY
In his U.S. trip, Leung also met with Federal Reserve Chairman Alan Greenspan, where he played up Hong Kong's free-market mentality, rule of law and level playing field for business. He also met with members of Congress and business leaders as well as Lawrence Lindsey, the White House chief economic adviser.
He also visited the Heritage Foundation think tank, which in 2002 named Hong Kong the world's freest economy, as it has every year since starting the rankings in 1995.
But while Hong Kong retained the top spot, the foundation chastised the government for what it called interference in the judiciary and the press, charges Leung is sure to answer.
In New York, Leung discussed the U.S. economy with officials from the New York Fed and met with representatives from ratings agencies Moody's Investors Service, Standard and Poor's Corp and Fitch.
Both Moody's and S&P have expressed concern about Hong Kong's budget deficit. The gap, which is more than 5 percent of GDP, has been exacerbated by years of deflation which has eroded tax receipts while spending continues unabated.
Leung said deflation was just part and parcel of Hong Kong's increasing integration with lower-cost mainland China. While painful, the adjustment process ultimately would make Hong Kong more competitive, helping it to achieve its aim of remaining China's most important city and the gateway to southern China's populous and prosperous Pearl River Delta.
The Hong Kong dollar peg, which has been a source of stability for the economy and comfort to foreign investors since its inception in 1983, has contributed to deflation.
Because the exchange rate cannot absorb changes in the economy, adjustments must come through asset prices.
But Leung dismissed concerns about the currency regime. repeating the government's long-held policy.
"We have no plan to change the currency peg," he said.
06/09/02 12:03 ET
solon2002 ( aka DAD ) Thanks for the update. Glad all are safe. eom
Well, it's about that time. See you all next ( interesting ) week. " TGIF "
OT: I say that we award post #10,000 to OCErnie inabsentia!
Geez, Andi, didn't you find this week interesting enough? Can't imagine next week being more so!!! LOL
Hello, Germany - Am I seeing GREEN for HRCT/HCT on light volume?
But, FOR HOW LONG????? eom
boatRgirl - Yes, my software ( CSCO ) and e-learning ( SMTF ) issues have turned GREEN, too!!!
Telecom Perspective: A synopsis
A New Serious Tone at Supercomm
By Cody Willard
Special to TheStreet.com
ATLANTA -- What's so striking about this year's Supercomm? Compared with the annual telecom trade shows of years past, it's the very serious, down-to-earth attitude prevalent among the many companies here.
Last year's Supercomm was rampant with two distinctly unproductive approaches. First, there were ridiculous pie-in-the-sky executives, apparent holdouts from 2000 who somehow still believed that the telecom markets were sustaining a minor downturn. (The key word there is "minor.") Second, there were the utterly depressed marketing and sales reps at the booths, who mumbled and grumbled about how much they hated their jobs. They didn't have to complain for long; many of them lost their jobs soon after.
OT:EZ - That quote sounds very much like cognitive dissonance theory. "Believe nothing, no matter where you read it, or who said it, no matter if I have said it, unless it agrees with your own reason and your common sense."
Buddha
Several areas in the world are on the brink of full scale war, we
have ongoing concerns with terrorism, major accountant firms are
not to be trusted, we are possibly headed for a third consecutive
down year in the Markets (hasn't happened since before WWII),and now Intel disappoints. Hey, can't get any better than this. TGIF Looking for a GREEN DAY!!!
WHOA!!! I just realized that I now hold more HRCT shares than Dr. Phan but, then again, I guess we ALL do. Wonder how my analyst will react tonight when I pay him with some (1875) shares???
boatRgirl - Just got my shares, but had to pay ASK. At these prices, HRCT will eventually make today's buyers very happy people or.......Well, I am an optimistic ( but fortunately I do have that appointment tonight!).
ETLK pps dropping...MMs looking to attract business???
MisterEC - Hello! I bought more yesterday at 0.08 and am trying to do the same today, but they are playing with me!!!
OKAY, EZ, I give up!!! What's the difference between " URGENT " and " IMPORTANT "??? Being over 50, I have one idea
and it relates to when I am on a long road trip or sitting through a concert/lecture/movie!
Deb - I bought yesterday and have another order in today, but then again, I also have scheduled an appointment with my analyst for tonight...Geez, could there be a connection???
Courtesy of " kazspud " on RB Board:
China Railcom Targets 2%-3% Telecom Market Share In 2002
04-23-02
BEIJING -(Dow Jones)- State-owned operator China Railway
Communications Co. said it will seek to boost its share of China's increasingly competitive telecommunications services market to 2%-3% this year.
Was my buying yesterday fortuitous...only time will tell? :)
EZ - That is exactly what I have been doing. Wearing out my BLACKJACK software program in preparation for next week's casino trip. LOL
I just don't know people, I heard some analysts speculate that the Markets may be in for a third, consecutive, down year.
I believe the last time that happened was pre-WWII. Hey, Deb, compared to these current Markets, BLACKJACK is looking real simple to me!!!
I do, but cannot afford one...all my monies are tired up with HRCT!!!! LOL
Okay, I just bought more!
Those with a little more cash to work with can pick-up some more ETLK today, too!
Free - I am currently deciding on more HRCT shares or options on both CSCO and SUNW.....options it is!!!
Tin - Didn't Bob get in trouble for saying that to a few of his female contestants????
tin - How about a trip to Hawaii? Couldn't hurt.....
TFN - The group meets the second Tuesday of each month in the basement of the local VFW hall. Expect to see you there!
According to Dr. Phan, who wrote, " Dr. Ching has a much different management style than mine. He is much more focused and deliberated. The news might be few and slow-coming, but the progress is continuing. He should have another shareholders’ letter in the next 10 days to update all of you on Hartcourt’s operations." I guess that gives you two more weeks to load up! Sorry, but been here long enough to get away with it....
Related Article Mentioning China Telecom: http://biz.yahoo.com/djus/020528/200205280814000341_1.html
Would like to wish all HRCT Longs a safe and restful Holiday weekend. Please take a moment to remember those currently in
harm's way and those that have gone before them.
http://www.usmemorialday.org/images/PONDERS.jpg
Lets see, been with HRCT for 4 years and using the 20 year yard stick, I have completed 20% of the journey. Well, I guess my beneficiaries will be glad I held!
MBR - In therapy, we refer to that as a " breakthrough." Congratulations!
spooky - Can you provide me with a link to German quotes? Had some computer problems and lost mine. TIA
G/M Board! Any trading in Germany today?
TOTALLY OT: Those of you interested in a speculative, biomedical
issue might want to check out CALY.
Article: Asian Wireless Business http://www.bangkokpost.com/Business/13May2002_biz54.html
Agilent set to boost its wireless business
Thailand is Asia's top growth market
Mongkol Jullayothin
Agilent Technology Co is preparing to gain a stronger foothold in Thailand, which it ranks as its fastest growing market for wireless communications, and the Asia-Pacific region in order to tap the explosive growth in wireless business.
The US-based company was spun off from Hewlett Packard in 1999. Communications is one of the company's three main business lines, in addition to electronics and life science and chemical analysis.
The company is the world leader for wireless component testing, with 80% of mobile telephones globally tested by Agilent products, according to Alan Grahame, vice-president of marketing.
The products, widely used by the mobile phone operators, play a key role in helping them to install networks properly.
``The measurement products are needed by operators because the clarity of the signal is the key to competitiveness in this business,' said Mr Grahame.
He said the company also was a leading producer of fibre-optic products and had a joint venture in Thailand under the name of Fabricnet Co. Fabricnet supplies leading producers including Lucent Technologies and Nokia.
While the telecommunications business was facing difficulties in the rest of the world, Asia offered high hope for potential growth, said Jimmy Tan, Agilent's vice-president for the Asia-Pacific region.
He said the leading Asian operators were investing heavily in networks after having suspended activity during the 1997 financial crisis.
Mr Tan said China, with its huge population, was the biggest market for the California-based company. However, he said Thailand was the fastest-growing market for wireless business in the region.
In Thailand, the company's main customers include the leading state and private telecommunications operators and the dominant Internet service providers.
Currently, the company is improving products to serve third-generation wireless (3G) systems.
``The advancement is now at the R&D stage. But we are making sure that our products will be launched as soon as the new service is launched commercially,' said Mr Grahame.
Agilent is spending 20% of its total revenue on research and development.
Futures are positive. Looking forward to a positive finish to this trading week. Would enjoy seeing some GREEN for both HRCT and ETLK.