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Friday, August 18, 2006

Globetrotting across China & Japan

By Yaser Anwar, CSC of Stock Market Beat

According to local press, China's overseas investment through the FDII program is expected to reach $10 billion by the end of 2006. Given Hong Kong’s priority status for receiving China’s liquidity outflow, Chinese stocks traded in Hong Kong, especially insurance companies, should be the beneficiaries.

China's Prime Minister called for urgent steps to prevent the investment boom from soaring out of control as the government forecast GDP growth would only slow to 10.8 percent in the next quarter from a year earlier.

S&P raised credit ratings of both Hong Kong & China citing China’s persistent efforts to strengthen the banking system. The industrial production of Singapore rose by 22.5% vs 12.8% last year.

With constantly climbing consumer prices in Japan & an improving labor market has confirmed the end of deflation and the country’s economic recovery which would benefit the region overall.

With Japan's economic rebound halfway into its fourth year and driven by domestic demand, the IMF said the medium-term outlook for Japan's economy was favorable. It forecasts for GDP growth would reach 2.9 percent this year, slowing to just over 2 percent in 2007.

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