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Cljarlotte ^osit
THURSDAY, NOVEMBER 13, 1997
8A STRICTLY BUSINESS
I'!
Hong Kong market becomes global trading player
■ By Paul Blustein
' THE WASHINGTON POST
j HONG KONG - For insight
{into the Hong Kong Stock
/Exchange, from which Wall
/Street and other world financial
; markets have taken their cue in
■ recent weeks, consider the scene
one morning this week at the Kau
Kee grocery store.
In the front of the tiny shop,
half a dozen locals in T-shirts and
sandals were gathered round a
computer that sat atop a glass
case filled with Chinese pastries.
They took turns typing in ticker
symbols for the latest market
information on stocks such as
Pearl Oriental,S.A.S. Dragon
Holdings and Chung Hwa
Development.
As one man spotted a buying
opportunity and called his broker
on a mobile phone, a 40-ish
woman explained her investment
strategy. “I watch professionals
on TV analyze the market, but I
really buy or sell depending on
my mood,” said the woman, who
dechned to give her name.
“Some days, I just wake up and
decide - I’m going to buy!”
That’s Hong Kong for you. This
is a place where more than one in
five adults plays the market,
often with pluck more common at
a casino table. It’s a place where
the market tends to rise and fall
in sharp swings, as the world has
learned in the last few weeks,
when Hong Kong’s ups and dovras
were often called the cause of
major moves in markets else
where, including the record 554-
point drop in the Dow Jones
industrial average last month.
Hong Kong has a healthy sup
ply of sophisticated financial pro
fessionals, some of them funnel-
ing money from mainland China,
who conduct their trading in
PHOTO/TEXACO
Texaco Refining and Marketing Inc. has introduced a Franchise Outreach Program to provide opportunities to train and operate retail
facilities.
Star appeal
Texaco opens program for disadvantaged groups to own retail shops
By Herbert L. White
THE CHARLOTTE POST
Thxaco’s outreach to racial
minorities now includes a pro
gram to help economically dis
advantaged individuals own
retail facilities.
Tfexaco Refining and
Marketing Inc. has introduced
a Franchise Outreach
Program, which provides
opportunities to operate stores.
Interested parties must be U.S.
citizens, have a high school
diploma or GED and have a net
worth of $250,000 or less,
excluding home equity.
“Tfexaco’s Franchise Outreach
Program is designed for those
individuals who would hke to
nm their own business but lack
sufficient funding,” said John
Price, Tfexaco’s vice president of
marketing.
The petroleum giant has been
trying to clean up its image,
especially among African
Americans, after tapes of top
company officials using racial
slurs were revealed earlier this
year. Tfexaco was also sued by
black employees for racial dis
crimination, which resulted in
an out of court settlement.
The Tbxaco program begins
with four months of intern
training that teaches basic
sldlls from store operations to
retail management followed by
14 months of advanced train
ing. Graduates may also quah-
fy for 100 percent financing of
up to $5 million to buy an exist
ing retail site or to locate a new
franchise. Working capital,
loan repayment assistance and
Ihxaco building incentive pro
grams may also be available.
“This...program provides the
tools which are needed to run a
Tfexaco Star Mart franchise and
helps prepare individuals in all
aspects of retail petroleum
marketing, including manag
ing a Tfexaco Star Mart conve
nience store and operating a
quick service restaurant,” Price
said.
Applications for enrollment
are being accepted through
March 15, 1998. Individuals
accepted to the program must
be willing to relocate for train
ing at their own expense if
needed and be wilhng to devel
op a fimichise in an area with
in California, Washington,
Oregon, Nevada, Colorado,
Arizona, Kansas or Oklahoma.
How to decide which credit card is best
glass-and-steel skyscrapers, not
grocery stores.
But the market here is stiU rela
tively small - at least compared
with New York, Tokyo and
London — and dominated by
shares of local property develop
ers. The total value of companies
traded on the exchange here
stands at around $360 bilhon at
current prices, compared with $9
trillion for the companies traded
on the New York Stock Exchange.
So market experts here profe;^
bemusement that the marker’s
Hang Seng index has become a
leading barometer of global senti
ment. ' y
iA
“It’s ridiculous for Hong Kong ti)
be having such an influence, and
it speaks to the volatihty of tli^
U.S. market, not Hong Kongj”
said Paul Schulte, regional head
of research at ING Baring
Securities Ltd. in Hong Kon^.
CHARLES ROSS
Your
Personal
Finance
If you’re trying to decide what
credit card would be best for you,
you should understand the differ
ences between the two basic
types of cards. Travel and enter
tainment cards, like American
Express and Diners Club.have no
preset credit limits. They are
called charge cards. You are
expected to pay the entire bal
ance each month, and you will
probably be charged an annual
fee.
Bank cards are different. They
do have credit limits, but they
offer you the choice of either pay
ing your full balance and avoid
ing monthly finance charges, or
paying a minimum amount each
month plus finance charges.
Bank cards generally carry the
VISA or MasterCard names, but
they’re actually issued by individ
ual banks, and their terms can
vary widely.
The real deal on annual fees
As you shop for credit cards,
youll discover that many travel
and entertainment cards, such as
American Express and Diners
Club, charge an annual fee hke
MasterCard or Visa card.
Standard bank cards sometimes
charge a fee, too; the average is
over $16.
Some standard bank cards
advertise a low annual fee or no
fee. Here’s the key question to ask
the issuing bank: will they waive
the annual fee? It is especially
important if you pay your card
bill in full eveiy month in order to
avoid finance charges. In that
case, the annual fee may be your
only expense using your credit
card. Seven out of 10 card usere
incur interest charges. If you’re
one of the seven, your most
important question may be,
what's the interest rate?
Making .sense of interest rate
The interest rate on your credit
card can cost you a lot of money if
you carry a balance from month Grace periods
to month. Fortunately, rates are
dropping. The number of cards
with an interest rate of under 15
percent has more than doubled in
just the last year.
The grace period on a credit
card is the period during which
Money Management
Stretching benefits^
of flexible accounts
By Amanda Danchi
SPECIAL TO THE POST
lo
Many card issuers offer more
than one credit card program. If
you have an excellent credit his
tory, you may qualify for the card
with the lowest interest rate. For
cards with single-digit rates,
banks accept only about 1 in 10
applicants. But for a card in the
12 to 15 percent interest range,
three out of four might be accept
ed.
Credit card rates can change
with little or no notice. So once
you obtain a low-interest card,
compare its rate against current
offerings periodically to make
sure the rate is still competitive.
See CREDIT on page 9A
At most companies, the end of the year signals a period of open enroll
ment for joining and making changes to many benefit programs,
including flexible spending accounts. Authorized under Section 125,(jf
the Internal Revenue Code, flexible spending accoimts allow you to ^pt
aside a certain percentage of your pre-tax salary to pay for quafifi^s
medical expenses that are not covered by insurance, as well as for
dependent care costs. The North Carolina Association of CPAs pointe
out that FSAs are one of the most cost-effective means to pay for su^
expenses and that it’s important to take the time now to estimate next
year’s expenses as accurately as possible. -v
How FSAs work ”■
Typically, the amount you choose to set aside for qualified medidM
and dependent care expenses is deducted from your paycheck each ptre
period and put into an account for you. Upon submission of the
required documentation, your employer reimburses you for thosfe
expenses. Because the money you set aside is deducted from your pay
check before taxes, FASs offer a significant tax benefit. For example; if
you’re in the 28-percent tax bracket and you choose to set aside $l,o66
for the year, you save $280 in federal income tax, N
Qualified medical expenses 'j
Flexible spending accounts can be used to cover a wide range of oiif-
of pocket medical expenses including health insurance deductibles arid
co-payments, prescription drugs, eyeglasses, contact lenses and dentM
work. Expenses for cosmetic siugeiy, health club membership, arid
nonprescription drugs are not eligible for reimbursement,
lo
Dependent care expenses
-if
Many employers offer similar flexible spending accounts that aUdW
employees to allocate pretax dollars to cover child or elder care expend
es, such as day care, before - and after-school care, and day camp. Keep
in mind, however, that participation in your employer’s dependent cafe
spending account may affect your eligibility for the child-care tax cred
it. You must reduce doUar-for-dollar the amount of yoiu- dependent care
expenses eligible for the credit by the amount excluded from your gross
income and allocated to your spending account. Before you sign up for
Have patience wheii
dealing with stocks i
The chief problem with investors is not money, but self. i
This is the thought of Benjamin Graham, one of the legends of invest
ing. Tb win in the stock market,
said, not only must you create a OMAR DILLARD
solid financial plan, you also must
stick with it. 'That second part is
where the “self” comes in and can
cause problems.
When the market is going up in
giant leaps, it's easy to stick with
your investment plan. When it .
starts down, however, some investors become their own enemies. Many-
abandon financial plans, dump good stocks and mutual funds, and nifi
for the door. .. j
Tb help you avoid the panic pitfall, heed the following suggestions:
First, keep in mind that it is a market of stocks, not a stock market.
Forget about indexes, predictions eind daily fluctuations, and instead
focus on identifying and sticking with good businesses. 'These are the
companies that will continue to grow and adjust to economic condi^i
tions. In the event of a market correction, these companies are the on^
most likely to recover and march on to new highs. |
Another investing expert, Warren Buffett, says the market is not
factor in his decision-making. ' If somebody handed me a prediction bylj
the most revered intellectual on the subject, with figures for unenl-i|
ployment or interest rates, or whatever it might be for the next twpS
years, we would not pay any attention to it,” he says in the bookS
“Warren Buffett Speaks: Wit and Wisdom from the World’s Greate^S
Investor,” compiled by Janet Lowe. Instead, Buffett focuses on welj-^
managed companies that are priced right. j 5]
If it makes sense to buy good stocks, it also makes sense to hold on tf/Ij
them. History shows that the price of a stock is linked to the earning^IJ
of the company. The market is only a short-term measure of whajj]
someone is willing to pay for that company’s stock at a particular tuna.
In an iffy market, this price can be based on nothing more than emci^
tions. Over the long term, however, stock prices follow profits. So if the S
price drops, yet profits remain strong, intelligent investors buy ratherN
than sell. There are only three basic reasons to seU a stock: when
stock has reached its full potential, to correct a mistake, or to readjusf;*!}
your portfolio due to changing objectives. j
Common stocks historically have been one of the most profitably tj
investments. With an average return of about 10.5 percent over thy||j
past 50 years, common stocks have doubled a patient investor's mone '
about every seven years.