Yesterday, the market was up over 700 points as the 17th Communist Party Congress got under way. Today it was down because there is concern that the new leadership may implement measures to cool the economy and therefore "burst the bubble". What new leadership?
All major decisions are taken at the premier and vice premier level. There may be changes at the head of various departments, etc. but the working level will also remain the same. So, there will be very little rocking of the boat by the "new brooms". The concept of a "new broom" is a very westernised. In the West, new leaders typically fought their way to the top, and are anxious to "clean house" so that they start anew. In the East, one gets to the top by being a team player, and we can expect the major directions to remain unchanged as new leadsers are picked to carry on the work of the old.
Most Asian markets fell on renewed credit-crunch jitters and profit-taking, but Shanghai shares bucked the trend, closing at another record high. Yesterday, Shanghai topped 6,000 for the first time rising 5 times over 2 years. Many have compared Shanghai to Taiwan in the early 90's which also rose 5 times in 18 months. However, we must remember that taiwan continued to double over the next 2 years before it came crashing down.
HSBC took a pounding because of Citi's write downs, and this brought all the financials down with it, including the Mainland ones.
Market Indices
Australia All Ordinaries 6692.00 - 0.70%
Bombay Sensex* 19081.23 + 0.12%
Hong Kong Hang Seng 28954.55 - 1.98%
Japan Nikkei 17137.92 - 1.27%
Shanghai Composite 6092.05 + 1.03%
Singapore STI 3810.72 - 1.33%
South Korea Composite 2005.76 - 1.46%
Taiwan Weighted 9592.47 + 0.78%
*Intraday trading
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