China-Asia Stocks

[Fortune_Cookie]

KRLD "SUNDAY MORNING STAFF MEETING",
3/7/2004 - Transcript
"Stock Index Tracks Fastest Growing Economy"
TIM HALTER-CHINA INDEX

3/07/2004

Coming up - KRLD's Mike Rogers looks at the fastest growing economy in the world - China, with Tim Halter of Dallas who tracks the growth.

Its 6:35 on Sunday Mornings Staff Meeting. Good morning - Tracking one of the fastest growing economies of the world - that's the idea behind a new stock index founded by a Dallas County man. Tim Halter says his Halter USX China Index follows 35 of the biggest companies based in that country and traded here in the U.S. This past week he spoke with KRLD's Mike Rogers.

Tim: We believe for many different and compelling reasons that China represents the best investment opportunity in the world today and likely probably for a few decades to come.

Mike: So to reflect that economic growth in China you put together this index. You got 35 companies on it right?

Tim: That is correct, here is the idea- if you believe China is the place to invest, how do you participate? You have a couple of options - one is to go and actually invest in or buy stocks that are listed overseas. Most people here though are rather uncomfortable with that. Maybe some professionals and institutions and so forth but the average investor isn't really comfortable with investing in the Shanghai Stock Exchange. We don't understands its rules, its laws, etc. Therefore, we have identified the universe of the companies that are doing the majority of their business in China but yet are traded publicly here in the U.S. And that is the basic idea, the premise behind the Halter USX China Index.

Mike: Are there that many companies like that?

Tim: At the moment there are 35 that meet our criteria. There are more than 35 Chinese companies traded here, but we have established certain minimum criteria. They must be a certain size or liquidity, have to be listed on at least the New York Stock Exchange, Nasdaq or American Stock Exchange. So yes at the moment there are 35 that qualify and that number is growing all the time. Probably in my guestamation we will surpass 50 by the end of the year.

Mike: What kinds of companies are these?

Tim: It is actually interesting in that it represents fairly well almost the entire Chinese economy and its pretty diverse. We have everything from airlines to automobiles to Internet to mining to oil & gas, chemical, telecommunication. Really, it's a microcosm of what constitutes the Chinese economy and wrapped up into one index.

Mike: Are all of these growing companies - all of them doing well now?

Tim: There are two answers to that question. There are the companies themselves and generally speaking yes. They are growing - of course the economy is growing overall extremely fast and certain sectors are growing faster than others. For example, the automobile industry has taken off like a rocket. The infrastructure of the electricity industry is growing very quickly. The telecommunications industry is another one. Already there are more cell phones in China than there are in the US. But that only taps a small fraction of the potential there. There are many people in China that don't have any phone service at all; so wireless is a great option. That is an extremely fast growing industry and so as far as industry and company growth - absolutely. But performance of the Chinese stocks is a separate story. As a group our index was up over 100% last year, in fact 103% for the year. It certainly is indicative of how well Chinese stocks are doing here in the U.S. market.

Mike: If you invested in these 35 companies last year at this time - you would have doubled your money.

Tim: That is correct.

Mike: That is amazing.

Mike: If you would like to check out Halter's stock list you can log onto his website USXChinaIndex.com.