SINGAPORE: Investor Marc Faber said China’s economy will slow and possibly “crash” within a year as declines in stock and commodity prices signal the nation’s property bubble is set to burst.
The Shanghai Composite Index has failed to regain its 2009 high while industrial commodities and shares of Australian resource exporters are acting “heavy”, Faber said. The opening of the World Expo in Shanghai last week is “not a particularly good omen”, he said, citing a property bust and depression that followed the 1873 World Exhibition in Vienna.
“The market is telling you that something is not quite right,” Faber, the publisher of the Gloom, Boom & Doom report, said in a Bloomberg Television interview in Hong Kong on Monday.
“The Chinese economy is going to slow down regardless. It is more likely that we will even have a crash sometime in the next nine to 12 months.”
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An index tracking Chinese stocks traded in Hong Kong dropped 1.8% on Monday, the most in two weeks, after the central bank raised reserve requirements for the third time this year.
The Shanghai Composite has slumped 12% this year, Asia’s worst performer, as policy makers seek to rein in a lending boom that’s spurred record gains in property prices. China’s markets are shut for a holiday on Monday.
Copper touched a seven-week low and BHP Billiton, the world’s biggest mining company, fell the most since February on concern spending in the world’s third-largest economy will slow and after Australia boosted taxes on commodities producers. Rio Tinto, the third-largest, slid as much as 6 %.
Chanos, Rogoff
Faber joins hedge fund manager Jim Chanos and Harvard University’s Kenneth Rogoff in warning of a crash in China. China is “on a treadmill to hell” because it’s hooked on property development for driving growth, Chanos said in an interview last month.
As much as 60% of the country’s gross domestic product relies on construction, he said. Rogoff said in February a debt-fuelled bubble in China may trigger a regional recession within a decade.
More @ http://economictimes.indiatimes.com/markets/global-markets/China-may-crash-in-next-9-12-months-Marc-Faber/articleshow/5887630.cms
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Heard on the Street: Tata Motors skids as US hedge offloads shares
Domestic fund goes ga-ga over Graphite India
An aggressive fund manager of a large domestic fund house is going bananas over Graphite India, a manufacturer of graphite electrodes.
According to the grapevine, this fund manager has bought a sizeable chunk of the stock recently, as he is betting on better prospects for the industry. On Monday, the stock, which has risen 16% in a month, closed at Rs 102, down almost 1% from the previous close.
According to analysts, growth of graphite electrodes, a key input in steel production through the electric arc furnace (EAF) route, will increase rapidly compared to EAF steel production in the next couple of years as steel manufacturers are stocking up graphite electrode inventory.
Further, the company is also expected to reap strong labour cost advantages as compared to its peers in the developed markets.
Tata Motors skids as US hedge offloads shares
Shares of Tata Motors snapped a three-day winning rally on Monday, ending at Rs 855.55, down almost 2%. According to the grapevine, a US-based hedge fund, whose Asia operations are run by a maverick fund manager, has offloaded a portion of their holding it had accumulated recently.
Brokers said the fund booked profits partly after the stock rose 6% last week compared to Sensex’s drop of 0.5%. The stock’s trating, which was a sell at most brokerages till recently, has been upgraded to a buy due to improvement in operations of Jaguar and Land Rover, which has been the cause of concern for most investors.
(Contributed by Apurv Gupta)
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Src: Economictimes, DP blog and etc
An aggressive fund manager of a large domestic fund house is going bananas over Graphite India, a manufacturer of graphite electrodes.
According to the grapevine, this fund manager has bought a sizeable chunk of the stock recently, as he is betting on better prospects for the industry. On Monday, the stock, which has risen 16% in a month, closed at Rs 102, down almost 1% from the previous close.
According to analysts, growth of graphite electrodes, a key input in steel production through the electric arc furnace (EAF) route, will increase rapidly compared to EAF steel production in the next couple of years as steel manufacturers are stocking up graphite electrode inventory.
Further, the company is also expected to reap strong labour cost advantages as compared to its peers in the developed markets.
Tata Motors skids as US hedge offloads shares
Shares of Tata Motors snapped a three-day winning rally on Monday, ending at Rs 855.55, down almost 2%. According to the grapevine, a US-based hedge fund, whose Asia operations are run by a maverick fund manager, has offloaded a portion of their holding it had accumulated recently.
Brokers said the fund booked profits partly after the stock rose 6% last week compared to Sensex’s drop of 0.5%. The stock’s trating, which was a sell at most brokerages till recently, has been upgraded to a buy due to improvement in operations of Jaguar and Land Rover, which has been the cause of concern for most investors.
(Contributed by Apurv Gupta)
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Daily News Roundup - May 4 2010
Mumbai derailed, markets back on track
Biocon
Vijaya Bank
Subros
Indian Bank
Ashok Leyland Ltd
Src: Economictimes, DP blog and etc