Summary
Hang Seng Index 18,487.65 (Change: +212.62/1.163%)
Range: 18,360.71 - 18,519.69
Turnover HKD32.82B
Hang Seng Index
Why does turnover continue to shrink day-over-day? Especially with so much capital coming into the market? Those questions keeps bothering me. And because of those nagging issues, I still don't see HSI jumping massively, rather I see it go up and down and up and down in the near run.
But having said that, things are definitely looking good at the moment. Today head of HKMA, Joseph Yam again said that they will be injecting more funds into their reserve to maintain the USD peg. That's two consecutive days in a row now, and hence capital continues to keep liquidity in the market. But how long can this persist? How about this, I believe we can still see positive upside until around July 3-5, when the super hyped and 420x oversubscribed IPO Ba Wang comes onto the market. Like Jackie Chan in his ridiculous commercials comments, trading activity should "ba-huang huang" and soar in secondary trading. Also with the release of so much capital that frozen-up, the following few days should also drift nicely.
Yesterday the US finally closed up, catching up with world indices after four days of dropping. Ironically, negative news on unemployment and decline in GDP was overlooked, and doesn't seem to be having an impact on Asia either. Neither did the news out of UK that British Banks will still be experiencing some trouble in the coming months. But evidiently, HSBC is getting some selling pressue at HK$65, down HK$0.85 (-1.29%).
For the third consecutive day, HSI has gone up above 20-day average, gaining everything that was lost last week. As I mentioned in my earlier blogs, HSI should continue to close up above 18,000, and prior to end of June as managers close their 2H books.
China Construction Bank (0939.HK)
Closing at HK$6.10, CCB has gone up far beyond my expected HK$6.00. News today that loans in June may have surpassed initial expectations brings positive optimism again. Perhaps this will be my first time I am starting to get concerned. Although long-term wise (over the next year), I still see CCB HK$6.70+, in the near-term (over the next month), growth should be limited (possibly only another ~1-2%) before a mild correction.
GOME Electrical Appliances (0493.HK)
Closing at HK$1.90, it's gone down quite a bit from it's high of HK$2.32 a couple of days ago. I don't see it jumping substantially in the short-term, but to hover around HK$1.80-1.99. I still remain very optimistic though, seeing its price to rise as high as HK$2.50 over the next year. If you think about it, at HK$1.90 you're really paying for HK$1.71 a share after subscribing to new shares (Remember: every 100 shares has the right to buy 18 new shares at HK$0.64). A price appreciation to HK$2.00 is a good 17% gain, HK$2.50 an even better gain of 46.2%.
Showing posts with label China Construction Bank. Show all posts
Showing posts with label China Construction Bank. Show all posts
Friday, June 26, 2009
Monday, June 22, 2009
Monday, 22 June 2009 (After Market Post)
Summary
Hang Seng Index 18,059.55 (Change: +138.15/0.77%)
Range: 17,906.39 - 18,398.92
Turnover ~HKD62.685B.
Hang Seng Index
I got ahead of myself earlier this afternoon. I take back everything I said. HSI lacked the momentum to keep it's position, eventually closing slightly above 18,000. Below 10-day and 20-day moving average, and starting the week with low turnover again. Tomorrow, HSI should close back in the red, below 18,000.
Could it possibly be because of capital flowing into the IPOs? Possibly, I'm not going to rule that out. But considering how low the capitalization is by aggregate, I don't think it would really impact the market that much.
China Construction Bank (0939.HK)
Lagged a bit again today, only up HK$0.05 (+0.87%), with average Chinese banking stocks jumping ~2% (Bank of China, 3988.HK), to ~4.85% (Bank of Communications, 3328.HK). Reports that personal loans in China may have risen as much as RMB6.5 trillion, a positive sign for credit and lending.
One stock that I also recommend looking into more closely is GOME Appliances (0493.HK), a stock that has been suspending for the past seven months as a result of investigations into its CEO's corruption and market manipulation charges. Things seem to be clearing up and possibly released for trading again soon. And guess what, it's missed the rally we've all been watching, and as investors continue to seek out underpriced securities, this one looks to catch up. Will give this one some more thought.
Hang Seng Index 18,059.55 (Change: +138.15/0.77%)
Range: 17,906.39 - 18,398.92
Turnover ~HKD62.685B.
Hang Seng Index
I got ahead of myself earlier this afternoon. I take back everything I said. HSI lacked the momentum to keep it's position, eventually closing slightly above 18,000. Below 10-day and 20-day moving average, and starting the week with low turnover again. Tomorrow, HSI should close back in the red, below 18,000.
Could it possibly be because of capital flowing into the IPOs? Possibly, I'm not going to rule that out. But considering how low the capitalization is by aggregate, I don't think it would really impact the market that much.
China Construction Bank (0939.HK)
Lagged a bit again today, only up HK$0.05 (+0.87%), with average Chinese banking stocks jumping ~2% (Bank of China, 3988.HK), to ~4.85% (Bank of Communications, 3328.HK). Reports that personal loans in China may have risen as much as RMB6.5 trillion, a positive sign for credit and lending.
One stock that I also recommend looking into more closely is GOME Appliances (0493.HK), a stock that has been suspending for the past seven months as a result of investigations into its CEO's corruption and market manipulation charges. Things seem to be clearing up and possibly released for trading again soon. And guess what, it's missed the rally we've all been watching, and as investors continue to seek out underpriced securities, this one looks to catch up. Will give this one some more thought.
Monday, 22 June 2009 (Mid-day Post)
Summary
Hang Seng Index 18,373.080 (Change: +452.15/2.52%)
Range: 17,906.39 - 18,398.92
Turnover HKD37.117B.
Hang Seng Index
What a way to start-off a Monday. The market initially opened -14 points, but almost within minutes, driven from positive IPO opening prices and benefiting news from China, led by property and Chinese banking stocks, HSI continued to drive upwards. Turnover slightly higher, though still below May's rallying daily average.
What's the good news from China? Well earlier during the past weekend Grandpa Wen publically stated on state media that China's stimulus have been working, China's economy is showing signs of recovery and that the central government will continue to ease credit policy to support economic growth. Quite honestly, it's not anything we don't know about yet, but I guess even the slightess release of gas from Grandpa Wen or Grandpa Hu can really trigger market rallies.
So, after the ~1,000 correction last week, in a short 2.5 hours, HSI recovered the 18,000 mark; pushing up above the 10-day and 20-day moving average. Considering this is the last full week of trading for June, also the first half of 2009, I'd expect the HSI to continue rallying, ending the week quite possibly at the 19,000 mark. Why? 1H09 results will be better for the aggregate of portfolios, though not the absolute driver of the market, it's definitely a contributor. Post June though, I'd be more careful.
China Construction Bank (0939.HK)
News also came out of China today that personal loans rose after a period of laggard news. All Chinese banks rose across the board today, with CMB leading the way. Though CCB initially lagged the rally (actually dropping slightly at first), it eventually followed-suit, closing mid-day at HK$5.89, reaching a high of HK$5.92. Closing the day at HK$6.00 is very possible, though if not, technicals are pointing to it, and I'm definite it will before the week closes off.
New IPOs for Today
Hype, hype, hype! With three more IPOs out for subscription in the pipeline, the two new ones today definitely added to the hype with their wicked first day performance. IPOs have been rallying recently, and on average have lasted over a week with continued price appreciation. In the past month, IPOs have closed up anywhere up 60% to 270% above their initial prices.
1. China Metal Recycling (0773.HK), as the name suggests, they collect items from refrigerators to kettles, etc. to recycle and reprocess the metal. Quite interesting with an environmental-focus. IPO price was set at HK$5.18, which it's price opened at HK$6.30 (+21.62%), and closed mid-day at HK$6.44 (+24.32%)
2. Hing Lee (0396.HK), is a simple household furniture production company, which amongst the two, has the lowest market cap. IPO price was set at HK$1.02, but opened at $1.30 (+27.45%), and closed mid-day at HK$1.46 (+43.14%).
Surprisingly, both of these IPO subscriptions lacked any major hype or news. But after their performance, and after three months of market rally, I'm pretty sure relatively more capital will flow into the coming three IPOs. I wanted to talk a bit about the most hyped of the three:
Ba Wang International (1338.HK). I mentioned briefly about this one last week, the one with Jackie Chan as its spokes-person. Surprisingly, its also the one that's building the most hype. Ba Wang specializes in herbal-base shampoo and hair products, often called the herbal "Proctor & Gamble" of China. That name alone raises an eyebrow of interest. In China, it ranks fourth in most commonly purchased shampoo products:
1. Rejoice (by P&G)
2. Pantene (also by P&G)
3. Head & Shoulders (again by P&G)
4. Ba Wang (finally not P&G)
Being in the consumer products business, Ba Wang spends a massive amount on advertising and marketing. But that aside, it does maintain quite impressive gross margins at 63.9%. It also accounts for ~40% of the "herbal-based" consumer products market in China. At IPO prices set to HK$1.95 - HK$2.38 a share, the price is approximately 13x - 18x earnings, more or less around the 13x that P&G trades at (although that's in the US market).
Simply also put, Ba Wang will be the first shampoo based company, and one of the very few Chinese-based consumer products company to list in Hong Kong. Given that today's the first day its open for subscription, I shall monitor the IPO loan progress, which serves to act as a very good indicator on its popularity.
Hang Seng Index 18,373.080 (Change: +452.15/2.52%)
Range: 17,906.39 - 18,398.92
Turnover HKD37.117B.
Hang Seng Index
What a way to start-off a Monday. The market initially opened -14 points, but almost within minutes, driven from positive IPO opening prices and benefiting news from China, led by property and Chinese banking stocks, HSI continued to drive upwards. Turnover slightly higher, though still below May's rallying daily average.
What's the good news from China? Well earlier during the past weekend Grandpa Wen publically stated on state media that China's stimulus have been working, China's economy is showing signs of recovery and that the central government will continue to ease credit policy to support economic growth. Quite honestly, it's not anything we don't know about yet, but I guess even the slightess release of gas from Grandpa Wen or Grandpa Hu can really trigger market rallies.
So, after the ~1,000 correction last week, in a short 2.5 hours, HSI recovered the 18,000 mark; pushing up above the 10-day and 20-day moving average. Considering this is the last full week of trading for June, also the first half of 2009, I'd expect the HSI to continue rallying, ending the week quite possibly at the 19,000 mark. Why? 1H09 results will be better for the aggregate of portfolios, though not the absolute driver of the market, it's definitely a contributor. Post June though, I'd be more careful.
China Construction Bank (0939.HK)
News also came out of China today that personal loans rose after a period of laggard news. All Chinese banks rose across the board today, with CMB leading the way. Though CCB initially lagged the rally (actually dropping slightly at first), it eventually followed-suit, closing mid-day at HK$5.89, reaching a high of HK$5.92. Closing the day at HK$6.00 is very possible, though if not, technicals are pointing to it, and I'm definite it will before the week closes off.
New IPOs for Today
Hype, hype, hype! With three more IPOs out for subscription in the pipeline, the two new ones today definitely added to the hype with their wicked first day performance. IPOs have been rallying recently, and on average have lasted over a week with continued price appreciation. In the past month, IPOs have closed up anywhere up 60% to 270% above their initial prices.
1. China Metal Recycling (0773.HK), as the name suggests, they collect items from refrigerators to kettles, etc. to recycle and reprocess the metal. Quite interesting with an environmental-focus. IPO price was set at HK$5.18, which it's price opened at HK$6.30 (+21.62%), and closed mid-day at HK$6.44 (+24.32%)
2. Hing Lee (0396.HK), is a simple household furniture production company, which amongst the two, has the lowest market cap. IPO price was set at HK$1.02, but opened at $1.30 (+27.45%), and closed mid-day at HK$1.46 (+43.14%).
Surprisingly, both of these IPO subscriptions lacked any major hype or news. But after their performance, and after three months of market rally, I'm pretty sure relatively more capital will flow into the coming three IPOs. I wanted to talk a bit about the most hyped of the three:
Ba Wang International (1338.HK). I mentioned briefly about this one last week, the one with Jackie Chan as its spokes-person. Surprisingly, its also the one that's building the most hype. Ba Wang specializes in herbal-base shampoo and hair products, often called the herbal "Proctor & Gamble" of China. That name alone raises an eyebrow of interest. In China, it ranks fourth in most commonly purchased shampoo products:
1. Rejoice (by P&G)
2. Pantene (also by P&G)
3. Head & Shoulders (again by P&G)
4. Ba Wang (finally not P&G)
Being in the consumer products business, Ba Wang spends a massive amount on advertising and marketing. But that aside, it does maintain quite impressive gross margins at 63.9%. It also accounts for ~40% of the "herbal-based" consumer products market in China. At IPO prices set to HK$1.95 - HK$2.38 a share, the price is approximately 13x - 18x earnings, more or less around the 13x that P&G trades at (although that's in the US market).
Simply also put, Ba Wang will be the first shampoo based company, and one of the very few Chinese-based consumer products company to list in Hong Kong. Given that today's the first day its open for subscription, I shall monitor the IPO loan progress, which serves to act as a very good indicator on its popularity.
Friday, June 19, 2009
Friday, 19 June 2009 (After Market Post)
Summary
Hang Seng Index 17,920.930 (Change: +144.27/0.81%)
Range: 17,759.86 - 18,015.11
Turnover HKD62.906B.
Hang Seng Index
Would have preferred it if HSI closed above 18,000. It did break through a few times during the day, but failed to keep the momentum, closing eventually just under 80 points shy.
Breaking the first of a consecutive 4-day decline, I suppose investors are taking a sigh of relief as we enter into the weekend. I must emphasize that it may have to be a brief sigh, considering that today was not all that great of news. Momentum continued to be weak, while turnover fell again, closing the week just under HKD63B. The market still seems to lack direction and continues to hover around 17,700 and 18,000. I fear to believe that if HSI does not break through 18,000, together with continued low turnover, HSI may experience a further decline, possibly to the next resistence mark at the 50-day moving average, 16,843. (As of today, HSI's 10-day and 20-day moving averages stands at 18,398 and 18,138).
More negative news also comes from short trading activity. Today the amount jumped another 24.9% to HK$3.607B, accounting for 5.73% of total market turnover. Unless we see a strong change in direction from the US tonight, I fear another day in the red on Monday (and quite possibly the week), following suit the first two Monday's of the month.
China Construction Bank (0939.HK)
I just feel a bit obligated to mention briefly about this favorite of mine. Unfortunately, it did not close at the HK$5.60 mark that I suggested yesterday, but rallied again today, closing up HK$0.21 (3.79%) at HK$5.75. I did mention about the positive earnings expectations in my previous blog, so I'll mention a few other points:
1. Momentum continues to be strong (as is volatility), with turnover being at HKD7.091B, accounting for almost 11.3% of total turnover for the market.
2. FTSE Xinhua Index (新华富时指数) adjusted CCB to a larger proportional weighting, from 3.8% to 8.3%. As a result managers may need to follow-suit by increasing their funds' proportional share.
3. Relative to CCB A-shares, it is interesting to point out that A-shares also closed up another 4 cents to RMB5.91 (0.68%). To date, over the past month A-shares have rallied 28.2% while H-shares have only jumped 15.93%. Month-to-date, figures come to 25.48% and 10.79%, respectively. For the past three months, since the rally, H-shares have traded on an average premium to A-shares (after RMB/HKD conversion) at about 16.92% (YTD: 14.26%). As at today's close, this premium stands at only at 10.31%. Possibly room for another ~4-6% price appreciation.
4. CCB remains relatively lagged compared to HSI and HSCEI performance, with HSI and HSCEI up 36.48% and 35.94%, respectively, over the past three months, while CCB remains up only 30.98%. Possibly room for another ~4-5% price appreciation.
Evidently, I still have very positive views on CCB, targeting atleast the price of HK$6.00 before I decide to exit. However, with that said, it's also worth noting that with the market's overall lack of direction, together with a possible correction, CCB's price may very well follow suit. On top of that, of the short trade plays today, CCB also took part with ~HK$197.92 bet.
New IPOs for June
With the recent market rally, evidently comes the hype of new IPOs trying to ride the waves. In the pipeline before the month ends are:
1. 361 Degrees International Limited (01361.HK), a sporting apparel company in China, often compared to the country's two large players Anta (02020.HK) and Li Ning (02331.HK). Target IPO price in the range of HK$3.15 - 4.35 per share.
2. China Qinfa Group Limited (00866.HK), a coal-producing company in China, not state-controlled, but also not owning any coal mines either. Target IPO price in the range of HK$2.00 - 2.52 per share.
Going to look into these and talk more about my thoughts. One other IPO not yet open to the public yet is Ba Wang Herbal Shampoo, which recently launched pretty massive advertising campaigns (quiet lame) with Jackie Chan (thumbs down) as their spokes-person. So far, this one seems to be the market's favorite. Will add to this one as well.
Happy weekend.
Hang Seng Index 17,920.930 (Change: +144.27/0.81%)
Range: 17,759.86 - 18,015.11
Turnover HKD62.906B.
Hang Seng Index
Would have preferred it if HSI closed above 18,000. It did break through a few times during the day, but failed to keep the momentum, closing eventually just under 80 points shy.
Breaking the first of a consecutive 4-day decline, I suppose investors are taking a sigh of relief as we enter into the weekend. I must emphasize that it may have to be a brief sigh, considering that today was not all that great of news. Momentum continued to be weak, while turnover fell again, closing the week just under HKD63B. The market still seems to lack direction and continues to hover around 17,700 and 18,000. I fear to believe that if HSI does not break through 18,000, together with continued low turnover, HSI may experience a further decline, possibly to the next resistence mark at the 50-day moving average, 16,843. (As of today, HSI's 10-day and 20-day moving averages stands at 18,398 and 18,138).
More negative news also comes from short trading activity. Today the amount jumped another 24.9% to HK$3.607B, accounting for 5.73% of total market turnover. Unless we see a strong change in direction from the US tonight, I fear another day in the red on Monday (and quite possibly the week), following suit the first two Monday's of the month.
China Construction Bank (0939.HK)
I just feel a bit obligated to mention briefly about this favorite of mine. Unfortunately, it did not close at the HK$5.60 mark that I suggested yesterday, but rallied again today, closing up HK$0.21 (3.79%) at HK$5.75. I did mention about the positive earnings expectations in my previous blog, so I'll mention a few other points:
1. Momentum continues to be strong (as is volatility), with turnover being at HKD7.091B, accounting for almost 11.3% of total turnover for the market.
2. FTSE Xinhua Index (新华富时指数) adjusted CCB to a larger proportional weighting, from 3.8% to 8.3%. As a result managers may need to follow-suit by increasing their funds' proportional share.
3. Relative to CCB A-shares, it is interesting to point out that A-shares also closed up another 4 cents to RMB5.91 (0.68%). To date, over the past month A-shares have rallied 28.2% while H-shares have only jumped 15.93%. Month-to-date, figures come to 25.48% and 10.79%, respectively. For the past three months, since the rally, H-shares have traded on an average premium to A-shares (after RMB/HKD conversion) at about 16.92% (YTD: 14.26%). As at today's close, this premium stands at only at 10.31%. Possibly room for another ~4-6% price appreciation.
4. CCB remains relatively lagged compared to HSI and HSCEI performance, with HSI and HSCEI up 36.48% and 35.94%, respectively, over the past three months, while CCB remains up only 30.98%. Possibly room for another ~4-5% price appreciation.
Evidently, I still have very positive views on CCB, targeting atleast the price of HK$6.00 before I decide to exit. However, with that said, it's also worth noting that with the market's overall lack of direction, together with a possible correction, CCB's price may very well follow suit. On top of that, of the short trade plays today, CCB also took part with ~HK$197.92 bet.
New IPOs for June
With the recent market rally, evidently comes the hype of new IPOs trying to ride the waves. In the pipeline before the month ends are:
1. 361 Degrees International Limited (01361.HK), a sporting apparel company in China, often compared to the country's two large players Anta (02020.HK) and Li Ning (02331.HK). Target IPO price in the range of HK$3.15 - 4.35 per share.
2. China Qinfa Group Limited (00866.HK), a coal-producing company in China, not state-controlled, but also not owning any coal mines either. Target IPO price in the range of HK$2.00 - 2.52 per share.
Going to look into these and talk more about my thoughts. One other IPO not yet open to the public yet is Ba Wang Herbal Shampoo, which recently launched pretty massive advertising campaigns (quiet lame) with Jackie Chan (thumbs down) as their spokes-person. So far, this one seems to be the market's favorite. Will add to this one as well.
Happy weekend.
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