Saturday, 20 June 2009

How Traders Killed Value Investing

Want to know why GM stock is above zero? Look to hedge funds and short-term trading

Investors Looking at Overseas Properties, Prompted by Low Prices, Bubbly Domestic Market

A frothy market in China makes both developers and investors interested in real estate nervous. But with overseas property markets often quite undervalued, Chinese investors are heading offshore to take advantage of fire sale prices.

Time to buy selectively

In our report “Time for a Pause” dated 8 June, we stated the FSSTI was likely to correct after meeting resistance at the 38% retracement level at near 2400. We also said the index was extremely overbought.

We have now seen the pullback, not just for the FSSTI but also for the Hang Seng Index, which we had also highlighted. Both indices show corrective structures- patterns that indicate that the move is a regular pullback and not a trend reversal. We also believe that Thursday*s price action marked the tail-end of the correction for both indices or the first leg of the corrective structure.

The attached chart shows the FSSTI correcting towards the apex of a prior wave iv move in a 3-legged zigzag structure. We believe the support will hold at between 2190 and 2237. If the FSSTI rises past 2260, there is scope for a minimum 62% retracement of the pullback. We had recommended investors take profit on some stocks such as City Dev, Wing Tai, Straits Asia Resources, SGX and First Resources. We recommend a re-entry on these stocks.

Porn film ‘Deep Throat’ was big concern to FBI

Newly released files show expansive probe aimed at halting cultural shift

More dams along Yellow River at risk of collapsing

Fragile state blamed on shoddy construction and embezzlement of funds

China’s anti-graft drive soars to new heights

Liaoning governor now under a cloud, deputy relieved of duties

Citi: Oei had net open position of US$6.8b

Defendant argues tycoon’s charges in suit against bank were ‘contrived afterthoughts’

Oei’s Obama assassination fears

Court papers give an insight into tycoon’s dealings, show how he lost millions in the past year

Beauty China auditors troubled by trade receivables

Beauty China’s joint auditors Grant Thornton and HLB Hodgson Impey Cheng steered clear of expressing an opinion on the group’s financial statements for the year ended Dec 31, 2008, after they were unable to verify the recoverability of outstanding trade receivables and found significant uncertainties facing its going-concern status.

China allows IPOs to resume after 9-month suspension

Regulators yesterday lifted a nine-month ban on Chinese initial public stock offerings after markets rebounded in recent months from the plunge that prompted the moratorium.

Steel mills seek accord on spot iron ore price

The China Iron and Steel Association (Cisa) will ask steelmakers to agree on a price for spot iron ore to avoid a bidding war, should long-term contract talks fail with the world’s largest suppliers.

Brilliance dives after BMW purchases ruled out

Shares of Brilliance China Automotive Holdings, which has a joint venture with Bayerische Motoren Werke, fell 8.93 per cent yesterday after the government told state media it had no plans to buy BMW cars for official use.

China May Release Direct Power Sale Rules Soon – Source

The rules will allow approved industrial users to buy electricity directly from power generators and require power transmission firms to clearly lay out their transmission charges.

High Hopes for Hummer’s Curious Suitor

Some mysteries about a Chengdu company’s offer to buy GM’s Hummer vehicle have been answered. But questions remain.

How China must change

In spite being a Communist bureaucrat in his entire political career, Zhao demonstrated a clear and concise understanding of the inherent weaknesses of a one-party system. In comparison, Prime Minister Lee recently proclaimed that a one-party state is the only viable political system for Singapore.

Beijing learns to use the internet to log into and act on the pulse of a nation

Exactly one year ago, President Hu Jintao engaged in his first online chat with the mainland’s netizens and in a speech the same day urged officials “to pay attention to the internet and find new ways of leading public opinion”.

1b yuan Olympics profit excludes venues’ construction cost

The mainland says it made an operating profit of 1 billion yuan (HK$1.13 billion) hosting the Beijing Olympics - but the figure excludes the construction cost for the venues, a long-awaited National Audit Office report said yesterday.

Thursday, 18 June 2009

Legal experts worried by decision to free waitress

Hotel waitress Deng Yujiao has walked out of a courtroom in Hubei a free woman after killing an official, but she is paying a price and so is the country’s rule of law, warned mainland lawyers and rights groups.

‘Freelance army’ to help police Web in Beijing

Authorities in the capital to set up pilot team of 10,000 new censors

16 held over exam cheating

Sixteen people from seven provinces have been detained following the busting of a group producing hi-tech equipment for the lucrative exam-cheating market.

16 held over exam cheating

Sixteen people from seven provinces have been detained following the busting of a group producing hi-tech equipment for the lucrative exam-cheating market.

Shanghai unveils liberalised rules for new residents

Shanghai formally opened its doors to outsiders yesterday, releasing details of new rules that allow them to become permanent residents.

Wednesday, 17 June 2009

‘Buy China’ requirement

CHINA has imposed a requirement for its stimulus projects to use domestically made goods - a move that could strain ties with trading partners after Beijing criticised Washington’s ‘Buy American’ stimulus conditions.

China’s urban population surges to 607 million

China’s urban population has surged to 607 million, almost level with the rural population, said the latest report released by a central government think-tank.

China A-share IPOs to Resume by June 25: Source

A brokerage official told Caijing that he views Sichuan Expressway Co. (HK 0107) as the best candidate for first listing.

Combine Will to spin off unit for Kosdaq listing

China-based Combine Will International Holdings, which is listed on the Singapore Exchange (SGX) mainboard, is planning to spin off its moulds and tooling segment through a listing on the Korean Securities Dealers Automated Quotations (Kosdaq).

Free wireless surfing for another 4 years

Access speeds will be doubled to one Mbps, more services rolled out

Jet Li buys $20m Binjai Rise bungalow

Spurred to set up his charitable foundation after a narrow escape from the 2004 tsunami. He moved his family to Singapore in 2007 for his children's education

Stocks in for a dip despite liquidity rush

In just 14 weeks, half the funds that exited Asia in the 16 months to March are back

Judiciary’s ‘Instruction’ System On Trial

China’s lower courts routinely seek pre-verdict instructions from higher courts. It’s a system now getting close scrutiny.

QFII funds turn cautious after market surge

Foreign institutional investors did not open a single new brokerage account on the mainland’s stock exchanges last month, according to China Securities Depository and Clearing.

Why no one wants regime change in North Korea

The reason is simple. No matter how much neighbouring governments might despise and fear the loathsome North Korean regime, no one wants to pick up the economic bill if it collapses, forcing an early reunification with South Korea.

Analysts divided on whether recovery is well under way

Encouraging data may not be sustainable, economists warn

Roubini: Emerging Markets Will End Dollar’s Reign

The influence of emerging markets in the world economy will continue to expand and ultimately contribute to ending the dollar’s reign as global reserve currency, economist Nouriel Roubini said on Tuesday.

It’s No Bull: Bears Are Still In Control of the Stock Market

Pay no attention to that 35 percent gain in the past three months – this is still every bit of a bear market, no matter what traditional definitions say.

Tuesday, 16 June 2009

More Pain Ahead For US Economy: Roubini, Shiller

A rebound in key U.S. economic indicators masks an underlying malaise that will likely hamstring growth for many years and keep housing and banks in a rut, several top economists said Monday.

Earnings Could Rebound Sharply: Goldman’s Cohen

Risk aversion has eased, while inventory rebuilding and new business spending bode well for an economic recovery that could provide a dramatic surge in corporate profits by year end, Goldman Sachs senior investment strategist Abby Joseph Cohen said Monday.

Commodity Rally: Reality or Illusion

In sum, we believe the recent rally of commodity prices is partly a correction of overshooting, helped partially by updated economic data, but most importantly, a result from excess liquidity that has weighed on the dollar and brewed expectation for inflation. Whether or not the rally will persist depends on whether central banks will continue the monetary largess or tighten the tap.

Monday, 15 June 2009

Asia Tiger’s UK waste management site to start operations in July

Mainboard-listed Asia Tiger Group says that its investment in Think Environmental Limited, a UK-based waste management company, will begin operation of a waste management site this July. The site will process up to 75,000 tonnes of commercial waste annually and is expected to generate revenues of about $10.7 million a year.

Porsche Says China to Pass Germany as No. 2 Market in 3 Years

Porsche SE said China may pass Germany as its second-biggest market within three years on rising wages and demand for the $260,000 Panamera sports sedan.

Blowing a big bubble in emerging markets?

Fed’s credit expansion plan may be sowing the seeds for the next crisis

High-end brands bump into cultural challenge in China

China may become the world’s biggest luxury market in some years but cultural challenges to win customers’ hearts for certain types of products remain, industry executives said. Champagne house Taittinger said it could make high-end sparkling wine in China but the market was not ready for it yet, while Lamborghini said the country’s tradition of luxury chauffeurs, bigger than sports driving, made expansion there a challenge.

Four qualities of a good CEO

Experts single out common traits of effective leaders

Players see revival of IPO market this year

But main wave of offerings could come to market only next year

China banks now eye Western targets

Non-performing loans will not be problem in China, its bankers insist

Be aware of what could cause the trend to bend

The view for the week ahead therefore remains the same as it’s been for many weeks now - liquidity and momentum are in the bulls’ favour, but investors should stay alert for signs that could cause the trend to bend because there are actually many if you look hard enough.

Part II: Cities Rush into Debt -- and Possible Peril

Recent bond sales easily raised billions for cities in eastern provinces such as Anhui and Zhejiang. Repaying will be harder.

Mainlanders flouting HK birth policy

Local doctors linked to baby service

‘Optimism in property market won’t last’

Analysts point to over-supply and weak rental demand

China May Be First and Last out of Recession

China may be the last one to say goodbye to the recession, because it has to make “difficult adjustments” to transform its economy from exports-driven to domestic consumption-oriented.