Chinese Stock Markets Rocket To Record, Global Thermometer For Risk?

Paulson Indicates ‘Action? Is Needed In Meeting With Chinese Officials
Opening up the strategic economic dialogue between US and Chinese officials today in Washington, US Treasury Secretary Paulson noted that "action " is needed in order to prevent escalation of already heightened tensions between the two nations. Beginning the two day meeting, Paulson stated that “it is up to us, over these two days and the work that follows, to show that words are precursors to action.” With skepticism on both sides, the Treasury Secretary additionally noted that “unfortunately, in America, this (skepticism) is manifesting itself as anti-China sentiment.” Notably, the assembly in Washington is the largest of its kind with both sides boasting notable central bank and political figures. Incidentally, markets are banking on little agreement between both sides as traders took the yuan higher in the overnight to a record level, now trading at a record 7.6560 in the New York session.

Chinese Stock Markets Rocket To Record, Global Thermometer For Risk?
For the second straight session, China?s stock market skyrocketed to close at a record high. Property developers helpe to support the move higher as housing demand is expected to remain robust in the coming quarters, adding to positive bottom lines. As a result, the Shanghai Composite gained 0.9 percent to break above the 4,100 level for the very first time, closing at 4,110.38. Incidentally, today?s surge served as confirmation that investors in the market continue to ignore cautions surrounding a stock bubble, as well as disregarding the People?s Bank of China?s decision to tighten monetary policy all around. For the record, the city?s benchmark index has advanced by nearly 54 percent since the beginning of the year, mounting on top of the 130 percent gain in 2006.

Blackstone Deal Makes Headlines, Obtains $3 Billion In China Funding
Blackstone underwriters expanded the initial deal to bring Blackstone Group LP public after it was established yesterday that Chinese officials had made an investment of $3 billion in the public offering. Part of longer term plans to diversifty the nation?s $1.2 trillion in foreign exchange reserves, the investment will essentially grant access to international opportunities for Chinese investments and help to bolster higher rates of return. Further investments are likely in the works as officials work towards establishing a $200 billion state investment agency.

Hong Kong, Singapore Stock Markets Mixed In Session
Stocks were mixed in Hong Kong and Singapore as market dynamics widely ruled the session. In Hong Kong, investors pared back on positioning hoping to lock in gains made in the recent advance. Leading gainers was crude oil producer Cnooc Ltd. as contracts continued to ride higher on the New York Mercantile Exchange. However, countering the gains on Cnooc shares were declines in Cheung Kong Holdings and China Mobile. Cheung Kong, notably, continued to suffer for the third day after Chairman Li Kai Shing noted that stock valuations “must be a bubble”. As a result, the Hang Seng Index declined 84 points to 20,843.92 in the session. Singapore stocks comparatively rose on the session, closing at another record high. Energy related shares help to boost the overall index higher in the overnight along with regional lenders. Leading the pack was Keppel Corp., the world?s largest maker of oil rigs, as energy contracts continued to trade higher in the Asian and London sessions. Shares of Keppel advanced 2.7 percent to close at S$11.30. DBS Group contributed to the positive gains after announcing that the company received clearance to incorporate in China. Shares rocketed higher on potential future earnings to a seven year high, finally closing up 3.4 percent at S$24.60. As a result, the Straits Times Index was able to fare better than the Hang Seng, adding 36.92 points to 3,551.41.