HenryTo
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Joined: 06 Aug 2004
Posts: 11732
Location: Los Angeles, California
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 Posted: Thu Jun 14, 2007 4:03 pm Post subject: |
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The Standard on the imminent tightening:
http://www.thestandard.com.hk/news_detail.asp?pp_cat=2&art_id=46808&sid=14053747&con_type=1
| Quote: | In particular, the State Council said it will use financial and tax measures to control liquidity, although it did not elaborate.
Latest data show that consumer prices hit a 27-month high of 3.4 percent last month, largely driven by a surge in food prices, while the trade surplus ballooned to US$22.45 billion (HK$175.11 billion), pouring more money into the economy and mounting pressure on the central bank to allow faster appreciation of the yuan against the US dollar.
Household deposits in May declined sharply by 278.4 billion yuan (HK$284.5 billion), surpassing the 167 billion yuan drop in April, further indicating money is shifting into stocks and raising the prospects of an asset price bubble. Analysts believe such a drastic drop in household savings shows cash in the bank is shifting to the equity market. "Investors have digested the news of interest rate increases, and we can expect an upward trend in the stock market," said Castor Pang Wai-sun, a strategist at Sun Hung Kai Financial. He expects a 27-basis-point rate increase this week.
The clamor for stock investment is reflected in the surge in trading accounts. The number of account openings, which had fallen below 200,000 a day in the wake of the stamp duty increase, rebounded to 219,065 new accounts Tuesday, although still far below previous levels. |
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