PHILLIP TOSE seems to be making a bid to launch Peregrine as the investment bank which specialises in doing business with regimes which normally appear close to the top of lists handed out by Amnesty International rather than the World Bank. For this week the investment house last week announced it was heading for North Korea, which is a market that other bankers in town might regard as somewhat pre-emerging. Last year, Peregrine entered into a joint venture in the seafood business, so they could get into the Burma investment market. Peregrine staff were talking about running a Burma International Trust and Investment Corp, on the CITIC model. The Peregrine fund obviously needed the chop of the State Law and Order Restoration Committee generals, who can be found from time to time in Hong Kong in the company of Peregrine executives telling journalists about the depth of the Peregrine relationship with Burma's 'government'. This week, Mr Tose announced he would fly to North Korea to sign a deal for a joint venture to act as a conduit of foreign money into the country. [A deal which a few weeks ago his office denied point blank would ever happen]. Mr Tose believes there are great opportunities for investment in the 'power, telecommunication and infrastructure' sectors in North Korea. Maybe there are, but the move raises questions about the processes behind commercial decisions to move into countries which are causing deep concern among much of the free world. Profit is obviously the driving force of Peregrine. It must be assumed that the shareholders are aware of the long lead times which exist in even marginally developed marekts before commitment is repaid - how many banks have really made meaningful profits out of China? And North Korea trails even Albania in terms of adopting market practices. Many of those investors are to be found in the United States of America. State pension funds, college retirement funds as well as mutual funds for the man, and veteran, in the street, are shareholders in Peregrine. To many of them North Korea remains an enemy, with which only an armistice was signed in 1953, and which was still shooting down US helicoptors a few months ago. This could provide an interesting exercise in investor relations. And if that doesn't provide any sleepless nights at Peregrine, there are some people suffering from insomnia at the moment. The arrest of former Shougang chairman Zhou Beifang, has triggered waves of speculation about what is happening in China. The closeness of the Shougang group to the Deng family is never far from analysts' minds. Deng Zifang, the youngest son of the ailing patriarch, is on the board of one of the Hong Kong-listed arms of Shougang. More arrests seem to be following and it looks as if we might be witnessing a genuine move by China to crack down on corruption. Unfortunately, China's obsession with secrecy is cloaking what is going on. Shougang's disclosure was slow, and it is still incomplete. The lack of information on red chips was ever a problem, especially in a town where 'company visit' means analysts taking tea in a Central office block. Lack of data on back-door-listed China firms is even worse; no prospectuses and no real idea about those assets injected into Shougang's listed arms. On the one hand, old Zhou might have stuck assets in tremendously undervalued in order to suck out some value himself. On the other hand, they could have been massively overvalued and the investors in Hong Kong ripped off. Despite a claim in The Economist - that some people in Hong Kong knew of the arrests early, the Deng index of firms linked to the family didn't show it in the days before the shock. Indeed, it has been moving upwards all month. The trouble is, all of this is mere empty speculation and that's all we'll get until the company makes a clean breast of it. On Wednesday, it looked to unwary observers as if the land auction had gone horribly wrong. The market plummeted just after the news at 2.30 pm that Eton Properties was to buy the Cox's Road site for $1.02 billion. But the market just fell through the floor and ended the day 2.14 per cent down. It wasn't the auction. Which, despite some unsold lots in Sha Tin and Kowloon Bay, was considered neutral. It was rumours that Washington DC was about to go belly up and had only gone on trading because it has been failing to pay creditors. The next day, share prices the world over had their best excuse to recover for months. Allan Greenspan of the US Federal Reserve started talking about interest rates coming down in America on Thursday night and Wall Street made it past 4,000 points. Hong Kong shares leaped on opening to over 8,100 from a previous close of 7,976. It was Mr Greenspan who sent equity and bond markets into a tailspin last February by raising rates. Now, it begins to look as if enough cooling has been done and it's time to turn the heat back up under the US economy just a little. The Fed is as cryptic as Beijing, however. Until the Open Market Committee cuts rates, anything could happen - which is why Fed watchers get paid so much. But if the cycle has peaked, next week could be a turning point.