'GET those two monkeys off my back' has been the cry of domestic investors since early 1994. The monkeys are the interest rate burden and political and economic instability in China.
Now that the US economy is decidedly off the boil and an election year is approaching, the interest rate primate is almost ready to jump off our backs. Stocks have recognised this since early this year, as the index has put on more than 2,000 points.
Still to come off the back is the Chinese monkey.
The austerity plan continues to squeeze Chinese enterprises mercilessly. Many Hong Kong companies dependent on China for business are also drowning in red ink, thanks to troubles across the border.
The political situation in China is a factor in this. We note that Deng rumours no longer move the market the way they did earlier this year.
President Jiang Zemin has in the space of a few weeks secured his position as the top man.
His ability to arrest, try and expel Harry Wu, attract Hillary Clinton to Beijing, knock tens of per cent off the Taiwan bourse with a few missiles and appear likely to have a summit with President Bill Clinton in October are the attributes of a man in control.
