In the field of communicating new research ideas, CLSA has long been the market leader in cutting through the clutter, but for its latest megabullish view on Hong Kong, the firm took things to the next level by hiring a cinema.

Its "Boomtown" research report was launched at the UA cinema in the Pacific Place shopping mall, in conjunction with a tribute to the local Hong Kong film scene.

Fund managers were treated to a noodle box, popcorn and Coke as they listened to chief economist Dr Jim Walker give his bullish view of the Hong Kong economy, and heard from Hong Kong research head Amar Gill who gave his stock picks and Christine Loh of Civic Exchange who talked about the political scene.

Closing the lunch was William Pfeiffer, the ex-Sony Columbia Asia boss now running Celestial Pictures - the firm which owns the rights to 800 classic Hong Kong movies. Pfeiffer gave a 12 minute history of Hong Kong cinema and then showed a montage of key moments from the city's cinema heritage.

The montage included excerpts from movies such as "Buddha's Palm" (1964), the "Angel with the Iron Fists" (1966) and the scene in "Golden Swallow" (1968) where 28 girls form a human bridge over a canyon.

Likewise for those with a bent for trivia, Pfeiffer pointed out that Hong Kong's first movie was made in 1909 and was entitled "Stealing the Roasted Duck".

None of this had anything to do with CLSA's report, but as gimmicks go it was quite entertaining.

The event was designed to present CLSA's "Boomtown" report to the attendant fund managers. The presentation was not timid and gave quite possibly the most bullish view on the Hong Kong economy that has been delivered since the Asian financial crisis. CLSA predicted the start of a 20 year Hong Kong boom.

CLSA was megabullish on the city's prospects in large part thanks to China. The influx of one million mainland tourists per month who spend on average $6000 is merely the most visible boost it sees to a long term secular growth story. Such huge mainland spending, along with Hong Kong companies repatriating profits from China has seen the M1 money supply grow by 20%. "China's capital surplus is coming to Hong Kong," says Walker. "FDI into Hong Kong from China has become positive. In the old days the reverse was true."

CLSA reckons the Hong Kong economy will see average real growth of 6.5% per year for the next 15 years. And deflation is now officially dead. "We expect the composite CPI to go positive by the second half of 2004 and head up towards 3% by the middle of 2005."

The return of mild inflation, Walker says, will be a boost to the local property market and confidence.

Hong Kong, says Walker, will benefit greatly over the next 15 years from the unique attributes that make it valuable to the mainland Chinese. The fact that mainlanders know Gucci bags sold in Hong Kong are "authentic" is one key advantage the city has as a shopping mecca. Additionally, the fact that along with Macau it is the only "free city" in the world that mainland Chinese can visit as individuals is critical. With Disney and likewise the proximity to Macau's new casinos that draw is set to increase, says Walker.

Another big advantage is the fact that banks here are privately-owned. "Rich mainland individuals don't want to put their money in state-owned banks, where they don't know who might have access to their records," comments Walker. They will use private Hong Kong banks and this, he says, will be a major and sustainable boost for Hong Kong's wealth management industry.

These factors lead to CLSA predicting the Hang Seng Index will break through 18,000 in the next 12-18 months and see 50% growth from today's level within three years. In fact, in the battle of the bulls, Dr Jim chided Gill that his predictions were "too conservative" and would be a lot of higher if he fully incorporated all his economic forecasts.

If you want to hear more from the most bullish man in Central, you can reach him on [email protected]