SINGAPORE (Reuters) - Fund manager and investment author Jim Rogers said he was selling stock in Wall Street banks because of a likely housing market slump and suggested buying sugar as a way into commodities.

Rogers, who co-founded the Qantum hedge fund with billionaire investor George Soros in 1970, is a long-time commodity bull and believes that fast growth in Asia, especially China, makes the region more attractive to investors than the United States or Europe.

"Financial companies, stock brokers, investment banks -- I am short. I am short financial services companies, mainly in America. I am short (U.S. home funding firm) Fannie Mae (FNM.N)," he told reporters after a speech to investors, adding that America's financial sector offered "the best" short selling opportunities available.

Investors have been increasingly nervous about U.S. financial stocks as the market for risky, or subprime, mortgages faces a possible crisis due to rising defaults and repossessions.

"The problems with the housing market have a long way to go in the United States. Probably more so than in any other country. But the excesses in the world economy are on Wall Street: investment bankers. Those guys are making vast fortunes, that's not the way the world works."

Rogers traveled around 116 countries in 2000-2002 in a yellow Mercedes coupe. He also traveled through China in the 1990s, looking for investment ideas and collecting material for his popular books, which include titles such as "Hot commodities: How anyone can invest profitably in the world's best market" and "Investment Biker: Around the World with Jim Rogers."

"China is the next great country in the world -- whether we like it or not. And a lot of people in the West do not like it that China is the next great country in the world," he said, citing the country's high savings rate and hard-working people.

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But Rogers also warned that Chinese shares were overvalued after the Shanghai Composite Index .SSEC gained more than 35 percent since the start of the year.

"I wouldn't buy Chinese shares now. I'm not selling my Chinese shares," he said, adding that if the stock market fell by 40 or 50 percent "I would increase my position in a big way."

Rogers, 64, said his favorite commodities investments were agricultural products.

"At the moment, if I'm looking for a new investment in commodities I would look at agriculture."

He said lead was his least favorite commodity after the metal hit a record. In early London Metal Exchange business on Thursday, three-month lead MPB3 traded at more than $2,900 per ton supported by strong fundamentals and speculative buying.

Lead has gained more than 72 percent since the start of the year as investors, attracted by an outlook of firm demand and tight supply, have bought heavily.

"It doesn't mean I'm selling lead, it just means that its probably my least favorite. Sugar is 85 percent below its all-time high, lead hit a new all-time high...and is up 600 or 700 percent in the last few years."

Rogers reiterated an idea first aired two years ago to sell his New York apartment and move to a Chinese-speaking city with his family to enable his bilingual daughter to attend a Chinese school -- although he appeared to have cooled to a plan to move to China's mainland.

As Hong Kong, Shanghai and Beijing were ruled out because of air pollution, he is considering Singapore as well as the Chinese cities of Dalian, Huangzhou and Qingdao.

"At the moment, Singapore is one of the most interesting," he said, adding that one drawback was that the city-state "is not enough Chinese."

(Source)⇒Reuters