On a recent trip to Singapore, I was shocked to see that the 3 bedroom flat that I used to rent with a few people in 2004 for SGP$2,100 was now renting for SGP$4,300. Just over double in 3 years. Now what becomes even more eye-opening is if you take the USD exchange rate fluctuations into account, for those of us still clinging to greenback savings, the rise is closer to 230%. Indeed, according to government statistics, the prices are continuing to rise: in Q2, rents rose 10% and private-home prices rose 8.3 percent, the fastest in 8 years. Now, that’s not so bad when you consider Singapore’s GDP grew a healthy 7.9 percent last year, but it is worrying nevertheless.

China, well known for its capital controls made some steps towards loosening those controls for individual investors last month with the announcement that individual mainland Chinese investors would be able to invest in the HK stock market. However, now it appears the implementation will be another few days or weeks off according to an announcement by the Bank of China (BOC).

Reading Bank of China’s ticker last week was a crash course in China’s stock markets. Towards the end of last week, the bank reported on its sub-prime exposure. On the next trading day, if you were given the two ticker symbols for Bank of China (BOC) and their positions, you’d be hard pressed to guess what BOC’s actual position was. In HK, BOC fell by as much as 5.4% over the course of the trading day*, while in Shanghai, the stock actually rose 1% on a day when the entire market rose 5% overall. What happened?

 

Earlier this week we looked at how the Shanghai market has remained relatively unscathed by the sub-prime meltdown, but what about individual banks' exposure?

 

Losses through the week in major indices around the world and indeed in emerging market countries in Asia, have chipped away yearly gains that most indices have chalked up this year. China's Shanghai index however is up nearly 78% on the year. How is it possible?

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