HONG KONG STOCKS
A critical week coming up...
Hang Seng really needs to pick up this week, or it may soon revisit the Lows.
HSI-16,000 is proving a formidable barrier so far
Link: http://www.greenenergyinvestors.com/index.php?showtopic=5460
Full Version: Hong Kong Stocks
Green Energy Investors > GEI-N / Bubb's Cafe & GEI's Networking > GEI-Net: Bubb's Cafe, and Diaries section
(from DrB's Diary)
HONG KONG STOCKS
A critical week coming up...
Hang Seng really needs to pick up this week, or it may soon revisit the Lows.
HSI-16,000 is proving a formidable barrier so far
Link: http://www.greenenergyinvestors.com/index.php?showtopic=5460
HONG KONG STOCKS
A critical week coming up...
Hang Seng really needs to pick up this week, or it may soon revisit the Lows.
HSI-16,000 is proving a formidable barrier so far
Link: http://www.greenenergyinvestors.com/index.php?showtopic=5460
TODAY (Thursday) could be ugly.
Wall street was down over 200points, and HSBC fell 8% overnight
on reports that it would have to raise more capital
Wall street was down over 200points, and HSBC fell 8% overnight
on reports that it would have to raise more capital
Useful here? - Canaccord sends me reports like this
Market update
The CSI 300 Index returned 3.7% last week, outperforming the North American markets.
Policy reading
The Chinese government unveiled its revival plan for the auto industry providing incentives to stimulate auto consumption. The government will reduce purchase tax for small-passenger cars and subsidize farmers to upgrade their vehicles.
The government also approved the revival plan for the steel industry, which focuses on the structural change of the industry by limiting capacity, promoting M&A, improving technology, and managing iron ore import.
China reduced fuel prices again by 2-3% on January 15. Domestic fuel prices are expected to follow world crude oil more closely and may have more room for further reduction.
Economy watch
China's December export dropped by 2.8% from the same month of 2007, while import declined even faster at 21% YoY. This compares to November decline of 2.2% YoY for export and 17.9% for import.
The Central Bank reported a 17.8% increase in money supply (M2) and a surge of new loans issued in December, suggesting that the government's loosening monetary policy and stimulus plan are taking effect.
The Chinese Banking Regulatory Commission reported a sharp drop of bad loan ratio for Chinese commercial banks from 5.49% in Q3, to 2.45% in Q4/08, largely due to the restructuring of the Agricultural Bank.
For more research and our coverage universe online, visit Canaccord Adams' Research Portal
Market update
The CSI 300 Index returned 3.7% last week, outperforming the North American markets.
Policy reading
The Chinese government unveiled its revival plan for the auto industry providing incentives to stimulate auto consumption. The government will reduce purchase tax for small-passenger cars and subsidize farmers to upgrade their vehicles.
The government also approved the revival plan for the steel industry, which focuses on the structural change of the industry by limiting capacity, promoting M&A, improving technology, and managing iron ore import.
China reduced fuel prices again by 2-3% on January 15. Domestic fuel prices are expected to follow world crude oil more closely and may have more room for further reduction.
Economy watch
China's December export dropped by 2.8% from the same month of 2007, while import declined even faster at 21% YoY. This compares to November decline of 2.2% YoY for export and 17.9% for import.
The Central Bank reported a 17.8% increase in money supply (M2) and a surge of new loans issued in December, suggesting that the government's loosening monetary policy and stimulus plan are taking effect.
The Chinese Banking Regulatory Commission reported a sharp drop of bad loan ratio for Chinese commercial banks from 5.49% in Q3, to 2.45% in Q4/08, largely due to the restructuring of the Agricultural Bank.
For more research and our coverage universe online, visit Canaccord Adams' Research Portal
HSBC's FALL is not over yet, I reckon
=========
I am now targetting that 1994 high (hk$43.50) and the 1998 low (HK$44.00, adjusted for 3:1 split).
Latest is:
HSBC : hk $ 58.10 Change: -4.20
Open: 57.00 High: 59.00 Low: 56.80
Volume: 45,231,666
Percent Change: -6.74%
== == ==
MARKET TALK: HSI Down 3.3% Midday; HSBC Remains Chief Drag
1238 [Dow Jones] HSI down 3.3% at 12,896.02 midday amid regional weakness, with HSBC (0005.HK) again chief drag on index; volume though tepid at HK$20.48 billion, may signal selling pressure easing with HSI now down 18.2% vs year-to-date high of 15,763 hit Jan. 7. Support may come in at intraday low of 12,816.25. ICEA says Obama's inauguration may improve sentiment in U.S. tonight but investors "should grasp the opportunity to trim positions before the long holiday," as U.S. reporting season entering full swing, earnings disappointments likely. HSBC down 6.7% at HK$58.10, falling for 7th day amid persistent worries of fund-raising; is responsible for 107 points of HSI's 444-point drop. Top cap China Mobile (0941.HK) outperforms, only down 0.2% at HK$69.00, after December new adds regain 7 million threshold
=========
I am now targetting that 1994 high (hk$43.50) and the 1998 low (HK$44.00, adjusted for 3:1 split).
Latest is:
HSBC : hk $ 58.10 Change: -4.20
Open: 57.00 High: 59.00 Low: 56.80
Volume: 45,231,666
Percent Change: -6.74%
== == ==
MARKET TALK: HSI Down 3.3% Midday; HSBC Remains Chief Drag
1238 [Dow Jones] HSI down 3.3% at 12,896.02 midday amid regional weakness, with HSBC (0005.HK) again chief drag on index; volume though tepid at HK$20.48 billion, may signal selling pressure easing with HSI now down 18.2% vs year-to-date high of 15,763 hit Jan. 7. Support may come in at intraday low of 12,816.25. ICEA says Obama's inauguration may improve sentiment in U.S. tonight but investors "should grasp the opportunity to trim positions before the long holiday," as U.S. reporting season entering full swing, earnings disappointments likely. HSBC down 6.7% at HK$58.10, falling for 7th day amid persistent worries of fund-raising; is responsible for 107 points of HSI's 444-point drop. Top cap China Mobile (0941.HK) outperforms, only down 0.2% at HK$69.00, after December new adds regain 7 million threshold
China stocks seem to be up, while the US is falling
THIS should be good for HK stocks & property - eventually
FULL REFUND to Minibond investors from Sun Hung Kai : HK$85 million to be paid in 30 days
21 banks and three brokerage firms were involved in selling these toxic securities
43,700 Hong Kongers invested HK$15.7 Billion / before Lehman's mid-Sept. collapse
FULL REFUND to Minibond investors from Sun Hung Kai : HK$85 million to be paid in 30 days
21 banks and three brokerage firms were involved in selling these toxic securities
43,700 Hong Kongers invested HK$15.7 Billion / before Lehman's mid-Sept. collapse
BIRTH OF A CYCLICAL BULL-MARKET?
19 Jan 2009
BIG PICTURE – “Bull-markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria” – John Templeton, Founder of Templeton Funds
The coming year may go down in history as a wildly bullish one. After the shocking asset-liquidation witnessed in 2008, the following 12 months are likely to provide fantastic investment returns. Given the negative economic news and awful investor sentiment, my assessment may sound absurd but it looks as though the bear-market ended late last year and we are now in the early stages of a new cyclical bull-market. Below are some of the reasons why I believe the skies are clearing for a 4-5 year bull-market:
Surging liquidity – central banks have pumped trillions into the banking system
Low-interest rates – yield on cash and cash equivalents is at a historical low
Declining corporate bond yields– risk appetite is returning
Declining Ted Spread – inter-banking lending rate has declined, a positive sign
Low valuations – various stock markets are trading at very attractive multiples
Horrendous investor sentiment – a contrary bullish indicator
Volatility has peaked – VIX has topped out and is falling
US Dollar rally has ended – bullish for the markets
Global stock markets are making higher lows – sign of base building
Huge amount of cash on the sidelines – US$8.85 trillion or 74% of US market cap
Now, I am well aware that the above prognosis goes against the mainstream bearish view. After all, most professional and amateur investors are very worried about the state of the global economy and many are expecting a horrendous economic depression. Furthermore, according to some prominent bears, our world is heading into a deflationary bust and the Dow Jones Industrial Average is about to contract by another 50-60%.
For sure, anything is possible in the business world, but at this stage, a 1929 style economic depression is out of the question. Back then, the US economy contracted by a whopping 46%, unemployment went through the roof and thousands of Americans lost their entire savings as roughly 5,000 banks went bust. This time around, the US economy has barely shrunk, the unemployment rate is not even close to the 1982 recession and not a single person has lost money due to a bank-run. So, at least the current circumstances do not warrant a prolonged economic depression.
Let there be no doubt that the US economy is certainly struggling - housing starts, permits and home sales are at multi-decade lows, auto-sales have slumped, retail sales have contracted, unemployment is rising and manufacturing is at the lowest level since 1980. Despite all these negatives, the state of the world’s largest economy is still nowhere near as bad as it was during the Great Depression.
It is interesting to note that Professor Nouriel Roubini (who correctly forecasted the extent of this economic slowdown) was recently interviewed by the Financial Times. During the interview he stated, “We are going to avoid the Great Depression and a severe recession even if there is a risk of protracted slow economic growth”.
If Professor Roubini is correct about the economy, then I suspect global equity and commodity markets will see explosive moves from the current levels. We must remember that the investment community is manic-depressive and most participants have already factored in a gut-wrenching economic recession or worse. So, if the current recession does not morph into the widely expected prolonged depression, investors will have to re-think their investment strategy and this will be the catalyst for a powerful rally. Given the dismal yield available in cash and government bonds, when investors search for higher yields, capital will flow towards the beaten down equity and commodity markets. At the same time, US Treasuries will witness a spectacular crash. Figure 1 shows the astonishing decline in the yield available on 3-month US Treasury Bills.
/more: http://www.quamnet.com/newscolumnistconten...ticleId=1110156
19 Jan 2009
BIG PICTURE – “Bull-markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria” – John Templeton, Founder of Templeton Funds
The coming year may go down in history as a wildly bullish one. After the shocking asset-liquidation witnessed in 2008, the following 12 months are likely to provide fantastic investment returns. Given the negative economic news and awful investor sentiment, my assessment may sound absurd but it looks as though the bear-market ended late last year and we are now in the early stages of a new cyclical bull-market. Below are some of the reasons why I believe the skies are clearing for a 4-5 year bull-market:
Surging liquidity – central banks have pumped trillions into the banking system
Low-interest rates – yield on cash and cash equivalents is at a historical low
Declining corporate bond yields– risk appetite is returning
Declining Ted Spread – inter-banking lending rate has declined, a positive sign
Low valuations – various stock markets are trading at very attractive multiples
Horrendous investor sentiment – a contrary bullish indicator
Volatility has peaked – VIX has topped out and is falling
US Dollar rally has ended – bullish for the markets
Global stock markets are making higher lows – sign of base building
Huge amount of cash on the sidelines – US$8.85 trillion or 74% of US market cap
Now, I am well aware that the above prognosis goes against the mainstream bearish view. After all, most professional and amateur investors are very worried about the state of the global economy and many are expecting a horrendous economic depression. Furthermore, according to some prominent bears, our world is heading into a deflationary bust and the Dow Jones Industrial Average is about to contract by another 50-60%.
For sure, anything is possible in the business world, but at this stage, a 1929 style economic depression is out of the question. Back then, the US economy contracted by a whopping 46%, unemployment went through the roof and thousands of Americans lost their entire savings as roughly 5,000 banks went bust. This time around, the US economy has barely shrunk, the unemployment rate is not even close to the 1982 recession and not a single person has lost money due to a bank-run. So, at least the current circumstances do not warrant a prolonged economic depression.
Let there be no doubt that the US economy is certainly struggling - housing starts, permits and home sales are at multi-decade lows, auto-sales have slumped, retail sales have contracted, unemployment is rising and manufacturing is at the lowest level since 1980. Despite all these negatives, the state of the world’s largest economy is still nowhere near as bad as it was during the Great Depression.
It is interesting to note that Professor Nouriel Roubini (who correctly forecasted the extent of this economic slowdown) was recently interviewed by the Financial Times. During the interview he stated, “We are going to avoid the Great Depression and a severe recession even if there is a risk of protracted slow economic growth”.
If Professor Roubini is correct about the economy, then I suspect global equity and commodity markets will see explosive moves from the current levels. We must remember that the investment community is manic-depressive and most participants have already factored in a gut-wrenching economic recession or worse. So, if the current recession does not morph into the widely expected prolonged depression, investors will have to re-think their investment strategy and this will be the catalyst for a powerful rally. Given the dismal yield available in cash and government bonds, when investors search for higher yields, capital will flow towards the beaten down equity and commodity markets. At the same time, US Treasuries will witness a spectacular crash. Figure 1 shows the astonishing decline in the yield available on 3-month US Treasury Bills.
/more: http://www.quamnet.com/newscolumnistconten...ticleId=1110156
NO HELP FROM CHINA the past two days
China Stocks Fall, Led by Jiangxi Copper, Materials Producers
By Zhang Shidong
Feb. 18 (Bloomberg) -- China’s benchmark stock index fell the most in almost two months on concern recent gains were excessive and demand for raw materials will decline further.
Jiangxi Copper Co., China’s biggest producer of the metal, retreated 3.8 percent and PetroChina Co., the nation’s biggest oil company, lost 3.8 percent after a measure of commodities prices plunged to the lowest level since June 2002. Shanghai Pudong Development Bank Co. and Industrial Bank Co. dropped more than 4 percent after Morgan Stanley downgraded its recommendation on the two banks.
The Shanghai Composite, which tracks the bigger of China’s stock exchanges, retreated 73.50, or 3.2 percent, to 2,245.95 as of 1:48 p.m. local time, extending yesterday’s 2.9 percent decline. The drop pared this year’s rally to 24 percent, still the most among 90 benchmark gauges worldwide tracked by Bloomberg.
“Stocks are a bit expensive now after such a rally this year and that has inevitably prompted selling for profit,” said Zhang Ling, who manages the equivalent of $1.1 billion at ICBC Credit Suisse Asset Management Co. in Beijing.
The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, declined 2.9 percent to 2,316.39.
This year’s rally lured the most new Chinese investors to the market in almost 11 months. A total of 427,460 new accounts to trade stocks were opened last week, according to data from China Securities Depository & Clearing Corp., almost double the number in the previous week and the highest since the five days to March 28.
/more: http://www.bloomberg.com/apps/news?pid=206...r=world_indices
China Stocks Fall, Led by Jiangxi Copper, Materials Producers
By Zhang Shidong
Feb. 18 (Bloomberg) -- China’s benchmark stock index fell the most in almost two months on concern recent gains were excessive and demand for raw materials will decline further.
Jiangxi Copper Co., China’s biggest producer of the metal, retreated 3.8 percent and PetroChina Co., the nation’s biggest oil company, lost 3.8 percent after a measure of commodities prices plunged to the lowest level since June 2002. Shanghai Pudong Development Bank Co. and Industrial Bank Co. dropped more than 4 percent after Morgan Stanley downgraded its recommendation on the two banks.
The Shanghai Composite, which tracks the bigger of China’s stock exchanges, retreated 73.50, or 3.2 percent, to 2,245.95 as of 1:48 p.m. local time, extending yesterday’s 2.9 percent decline. The drop pared this year’s rally to 24 percent, still the most among 90 benchmark gauges worldwide tracked by Bloomberg.
“Stocks are a bit expensive now after such a rally this year and that has inevitably prompted selling for profit,” said Zhang Ling, who manages the equivalent of $1.1 billion at ICBC Credit Suisse Asset Management Co. in Beijing.
The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, declined 2.9 percent to 2,316.39.
This year’s rally lured the most new Chinese investors to the market in almost 11 months. A total of 427,460 new accounts to trade stocks were opened last week, according to data from China Securities Depository & Clearing Corp., almost double the number in the previous week and the highest since the five days to March 28.
/more: http://www.bloomberg.com/apps/news?pid=206...r=world_indices
Chan Says H-Shares Gap With A-Shares Not Sustainable: NewsClip
Feb. 20 (Bloomberg) -- Vincent Chan, head of China research at Credit Suisse Group, talks with Bloomberg Television about the outlook for the valuation gap between China stocks in Hong Kong with mainland-traded shares. (Source: Bloomberg) \
Video: http://www.bloomberg.com/apps/news?pid=new...id=a6sVZR0mOcBs
= 2/
Shares on the Shanghai and Shenzhen stock exchanges are currently trading at a 50 percent premium to their peers in Hong Kong, more than the 31 percent average since 2006, Credit Suisse’s Hong Kong-based analysts Vincent Chan and Peggy Chan wrote in a Feb. 16 report. They advised investors to buy H shares, saying that the MSCI China Index may rise to 50.8 by the end of the year, a 29 percent increase from yesterday’s close.
The Shanghai Composite Index has gained 31 percent this year, the best performer among the 90 global benchmarks tracked by Bloomberg on speculation the government will add to a 4 trillion yuan ($585 billion) stimulus package. The MSCI China Index has retreated 3.6 percent during the same period.
“China’s economic growth in 2009 will be stronger than the consensus market forecast, which should prove a pleasant surprise for the market,” the analysts wrote. “The market cap to GDP for China is not particularly high, so we believe the valuation gap closure will be due mainly to rising H share prices.”
China’s economy will probably grow 8 percent this year, compared with a 6.7 percent projection by the International Monetary Fund, the Credit Suisse analysts estimated.
A Share Premium
The Hang Seng China AH Premium Index, which tracks the premium of A shares to H shares, climbed to 160.50 yesterday, the highest since Nov. 20. That’s still lower than the peak of 208.06 reached on Jan. 16, 2008.
“The huge valuation gap between A and H shares usually emerges during a big bull market for the A share market and in our view it is too far-fetched to assume we will see a big bull market for either A or H shares in 2009,” the analysts wrote.
The brokerage estimates that the Shanghai A Share Index may end the year at 1,808.8, a 28 percent retreat from yesterday’s close, according to the report.
17 feb./more: http://www.bloomberg.com/apps/news?pid=206...id=a4sJZW8zhEeU
= 3/
‘Terrific Time’ to Buy in Hong Kong, JPMorgan Says (Update1)
By Hanny Wan
Feb. 17 (Bloomberg) -- The prospect of more Chinese stimulus measures and shares trading at “historical” lows make it a “terrific time” to buy stocks in Hong Kong, JPMorgan Asset Management said.
The firm, with about $1.1 trillion of assets, is favoring China’s consumer stocks listed in the city for its JF Hong Kong Fund and JF Greater China Fund, according to Emerson Yip, who manages the two funds. He’s betting that policies to bolster an economy that grew at an annualized 6.8 percent in the fourth quarter, the weakest pace since 2001, will bear fruit.
China “will do its best to come close to 8 percent,” Yip told reporters in Hong Kong today. “If in the second half of this year, the world economy continues to stay in a rut, the Chinese authorities will implement additional measures to try to come close to this 8 percent target.”
. . .
He declined to name the stocks that he was buying. China Mobile Ltd., China Life Insurance Co., and Industrial and Commercial Bank of China Ltd. are among the top 10 holdings of Yip’s funds, according to JPMorgan Funds’ latest monthly report.
/more: http://www.bloomberg.com/apps/news?pid=new...id=aU3AxpST6qnA
Feb. 20 (Bloomberg) -- Vincent Chan, head of China research at Credit Suisse Group, talks with Bloomberg Television about the outlook for the valuation gap between China stocks in Hong Kong with mainland-traded shares. (Source: Bloomberg) \
Video: http://www.bloomberg.com/apps/news?pid=new...id=a6sVZR0mOcBs
= 2/
Shares on the Shanghai and Shenzhen stock exchanges are currently trading at a 50 percent premium to their peers in Hong Kong, more than the 31 percent average since 2006, Credit Suisse’s Hong Kong-based analysts Vincent Chan and Peggy Chan wrote in a Feb. 16 report. They advised investors to buy H shares, saying that the MSCI China Index may rise to 50.8 by the end of the year, a 29 percent increase from yesterday’s close.
The Shanghai Composite Index has gained 31 percent this year, the best performer among the 90 global benchmarks tracked by Bloomberg on speculation the government will add to a 4 trillion yuan ($585 billion) stimulus package. The MSCI China Index has retreated 3.6 percent during the same period.
“China’s economic growth in 2009 will be stronger than the consensus market forecast, which should prove a pleasant surprise for the market,” the analysts wrote. “The market cap to GDP for China is not particularly high, so we believe the valuation gap closure will be due mainly to rising H share prices.”
China’s economy will probably grow 8 percent this year, compared with a 6.7 percent projection by the International Monetary Fund, the Credit Suisse analysts estimated.
A Share Premium
The Hang Seng China AH Premium Index, which tracks the premium of A shares to H shares, climbed to 160.50 yesterday, the highest since Nov. 20. That’s still lower than the peak of 208.06 reached on Jan. 16, 2008.
“The huge valuation gap between A and H shares usually emerges during a big bull market for the A share market and in our view it is too far-fetched to assume we will see a big bull market for either A or H shares in 2009,” the analysts wrote.
The brokerage estimates that the Shanghai A Share Index may end the year at 1,808.8, a 28 percent retreat from yesterday’s close, according to the report.
17 feb./more: http://www.bloomberg.com/apps/news?pid=206...id=a4sJZW8zhEeU
= 3/
‘Terrific Time’ to Buy in Hong Kong, JPMorgan Says (Update1)
By Hanny Wan
Feb. 17 (Bloomberg) -- The prospect of more Chinese stimulus measures and shares trading at “historical” lows make it a “terrific time” to buy stocks in Hong Kong, JPMorgan Asset Management said.
The firm, with about $1.1 trillion of assets, is favoring China’s consumer stocks listed in the city for its JF Hong Kong Fund and JF Greater China Fund, according to Emerson Yip, who manages the two funds. He’s betting that policies to bolster an economy that grew at an annualized 6.8 percent in the fourth quarter, the weakest pace since 2001, will bear fruit.
China “will do its best to come close to 8 percent,” Yip told reporters in Hong Kong today. “If in the second half of this year, the world economy continues to stay in a rut, the Chinese authorities will implement additional measures to try to come close to this 8 percent target.”
. . .
He declined to name the stocks that he was buying. China Mobile Ltd., China Life Insurance Co., and Industrial and Commercial Bank of China Ltd. are among the top 10 holdings of Yip’s funds, according to JPMorgan Funds’ latest monthly report.
/more: http://www.bloomberg.com/apps/news?pid=new...id=aU3AxpST6qnA
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