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When you get Ajisen Ramen going into property as well as textile company and semi conductor company, you should be very very wary.

It is always when every one throws away any thought of risk management and go with the flow thats when you know you are near overbought levels. One is a Chinese state tobacco company. Another, a Japanese ramen chain. And finally, an obscure Hong Kong semiconductor manufacturer. What they have in common: They are the latest companies to jump on the real-estate bandwagon as prices soar in Hong Kong and mainland China. For some experts, they are also troubling evidence of froth in both property markets. Last week, a small manufacturer of diodes and transistors called Sino-Tech International Holdings Ltd. stunned investors by announcing that it was “diversifying into the property sector,” buying a luxury three-story residence in Hong Kong’s swank Peak district for more than 280 million Hong Kong dollars (US$36 million) in cash, one of the biggest sums ever for a property here. Sino-Tech wanted to take advantage of “a good investment opportunity” and “diversify its income base,” the company said, but shareholders were unimpressed, shaving off about a quarter of the company’s market capitalization in two days. That made Sino-Tech the latest in a string of companies large and small, state-owned and privately run, that are piling into Hong Kong and mainland China’s property market—despite no demonstrable experience in the sector. Hong Kong’s small and open market has long made it one of the region’s most volatile, while mainland China’s relatively immature market is still prone to wild price swings and policy risks. But historically low borrowing rates and large government stimulus packages have brought a rush of relatively unsophisticated latecomers into the real-estate market in search of easy money. Read more...