<P><FONT size=5>HSBC 汇丰－亚洲股市展望－是调整而不是熊市！ </FONT></P>
<P><FONT size=5>17 August 2007     10页</FONT></P>
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<P>􀀗 Markets feel scary at the moment but, in fact, this correction<BR>looks similar to those in 2004 and 2006<BR>􀀗 There are no signs of any deterioration in Asian<BR>fundamentals (at least not yet), and the trigger of the<BR>correction (US credit markets) is very remote from Asia<BR>􀀗 We think the correction is likely to last longer but is unlikely<BR>to turn into a bear market<BR>In some ways, the past three weeks were a good time to be on summer vacation. While it<BR>was frustrating to be away from the action with markets falling so sharply, it is often<BR>better at times of great volatility like this for a strategist to ignore the noise and resist<BR>making snap judgements. To be more thoughtful and take the longer view is usually a<BR>better way to respond. But, more than three weeks now into this market decline, it should<BR>be possible to draw some tentative conclusions.<BR>To the close of markets on Wednesday, MSCI Asia Pacific had fallen 9.8% from its peak<BR>on July 24 and MSCI Asia Pacific 11.7%. (Both fell another 2% or so on Thursday but<BR>final market data was not available at the time of writing this AI.)<BR>The bull market which began in April 2003 has been characterised by long upswings with<BR>sharp corrections. As Chart 1 below shows, Asia ex Japan has trebled since the start of<BR>2003 but, in that time there have been two corrections of greater than 15% (April 2004<BR>and May 2006), and another two sell-offs that almost reached 10% (March 2005 and<BR>February this year).<BR>AI – Asia Insights</P>