WHILE naive investors may find the sudden change in Morgan Stanley's sentiment on the Hong Kong stock market intriguing, veterans well versed with the workings of the prominent American merchant bank probably consider the whole thing commonplace.
In his latest report entitled A Slight Case of Acrophobia, Morgan Stanley global strategist Barton Biggs, the man who had earlier been ''maximum bullish'' on China and Hong Kong, did an about-face by saying that the territory's market was getting a little ''frothy'' and advised clients to unload local stocks.
After word got out of the report, the market predictably sold off.
Predictably, too, Mr Biggs' ''new'' scenario brought about a swift and strong reaction from Hong Kong financial houses, which demanded to know the cause of the sudden change in the American investment bank's outlook on the local market.
''Mr Barton Biggs is said to be a mountain climber, scaling South American peaks on his holidays, so one can assume he is not afraid of heights,'' writes Jardine Fleming in its latest market report to professional clients.
Aside from the Japanese fund houses, which have been recently equally ''maximum bullish'', Jardine Fleming is, perhaps, more candid in stating that ''many of the reasons he gave for buying the Hong Kong stocks [in his previous report, released seven weeks ago], now seem to be the same reasons he gives for selling it.'' In his earlier report, Mr Biggs said China was still the ''premier growth and investment market in the world'', which is why he decided to increase his Hong Kong weighting in the first place.
Now, Mr Biggs says he has become shy of Hong Kong, seeming to noticing suddenly that it is unclear who the winners will be in China's struggle for succession and seeing it as a destabilising effect - as if the condition had not existed before.
