Friday, December 21, 2007
HONG KONG, Dec 21 (Reuters) - Hong Kong stocks rallied broadly on Friday as stabilising global equity markets lifted investor confidence and fund managers sought to dress up their portfolios before the year-end. Local property developers lifted blue chips as the city's ongoing inflation is expected to boost demand for real estate. Mainland infrastructure plays dominated the day's trade as newcomer China National Materials Co. (1893.HK: Quote, Profile , Research) rallied nearly 24 percent at one point, a day after its strong debut. China Railway(0390.HK: Quote, Profile , Research) was also a star performer, as the world's third-largest construction contractor leapt on talk that it had won a bid for the high-speed Shanghai-to- Beijing railway project. Meanwhile, China's interest rate rise on Thursday was welcome news to investors, as it effectively removed an overhang in the market. "The Christmas rally is finally kicking in," said John Schofield. "The psychology of the market is finally changing and the latest interest rate increase (by China) is good news." "It's been such a bad six to eight weeks ... we'll see a reasonable uptick in the last week of the year." The benchmark Hang Seng Index <.HSI> closed up 2.3 percent, or 609.83 points, to end at 27,626.92, for a weekly gain of 0.2 percent. China Enterprises index of mainland H shares <.HSCE>, or Hong Kong-listed shares in mainland companies, gained 1.6 percent, or 249.03 points, to 15,981.81, up 0.2 percent for the week. Among property shares, Cheung Kong (0001.HK: Quote, Profile, Research) gained 4.5 percent to HK$140.6 and Sun Hung Kai (0016.HK: Quote, Profile , Research) raced up 4.2 percent to HK$160.2. The Hang Seng property sub-index <.HSNP> shot up 4.2 percent. Other large-cap gainers were Sinopec Corp (0386.HK: Quote, Profile , Research)(SNP: Quote, Profile, Research) (600028.SS: Quote, Profile , Research), which leapt 2.3 percent to HK$11.58. The country's No.2 oil and gas producer said it had found gas in northeastern China with 26 billion cubic metres of recoverable reserves. China Life (601628.SS: Quote, Profile , Research) (LFC: Quote, Profile , Research) (2628.HK: Quote, Profile , Research), the country's top life insurer, raced up nearly 3 percent to HK$40.6 and PetroChina (0857.HK: Quote, Profile , Research)(PTR: Quote, Profile, Research)(601857.SS: Quote, Profile , Research) scurried up 2.4 percent to HK$13.84. China Mobile (Hong Kong) Ltd. , (0941.HK: Quote, Profile , Research) (CHL: Quote, Profile , Research), the world's largest wireless telecoms provider, rose 2.2 percent to HK$137.80. ReutersReuters
Saturday, December 22, 2007
Properties fuel HK shares, Sinoma, China Railway leap
China fuel shortage may persist in 2008 -industry
BEIJING, Dec 21 (Reuters) - China may again experience a fuel shortage in 2008 if Beijing maintains a tight lid on domestic oil prices, an industry association said, a situation likely to keep the country's diesel imports high.
The world's second-largest oil market suffered through widespread diesel rationing in October and November, after refineries cut output to stem looses as global crude prices surged above $90 a barrel.
"If refined oil prices are not freed up and crude prices stay high, private refineries will continue to stand and watch, leaving the supply burden on two state companies," the China Petroleum and Chemical Industry Association said on its Web site www.cpcia.org.cn.
"New refining capacity will not be ready immediately, (existing) plants are unable to carry out thorough maintenance, making safe operation the weakest link in the supply chain."
CPCIA has the support of retired top executives of state oil giants Sinopec Corp (0386.HK: Quote, Profile, Research) and PetroChina (0857.HK: Quote, Profile, Research), the Web site shows.
China's independent oil processors, supplying 10 to 15 percent of the country's 7.5 million barrel-per-day market, had cut production drastically, a main factor behind the supply squeeze that eventually forced Beijing to raise pump prices in November, the first increase in 17 months.
State refiners had to boost diesel imports to nearly record levels, second only to the United States, supporting global prices at a time of peak winter demand. (For details see [ID:nSP24624]) (Reporting by Chen Aizhu; Editing by Edmund Klamann)
Reuters
Happy Holidays,
Marketswimmer
Sunday, December 16, 2007
Wall Street vs. Main Street
Wall Street was disappionted at FED's 25 basis point rate cut and investors started dumping their shares, causing 300 points ups and downs on the Dow. But Main street is looking okay, the newly released holiday sales number is good, 1.2% jump which is the best in 6 month. Lehman Brothers reports record net revenues and earning beats the Wall street expectation. So what went wrong? When we are confused, we should look at how the big guys digest the news and how to put their bets.
My computer contracted some kind of virus and haunted me for a week, and I missed the COT report, which basically indicated that the institutional investors (smart money) increased their holding on S and P -- we can see the result in the pre-FED announcement the market was up; at the same time those guy mysteriously bought a lot of call option contract for VIX index -- which prepared them to dump shares after the FED announcement. The headline showed up in the media was Fed only cut interest rate by 0.25, instead of 0.50 the market expected. Did the Smart Money know this ahead of time or their computer was so good that allowed them to calculate the odds for this to happen and formulated the winning strategy accordingly? I don't have the answer to this and your guess is as good as mine. But the fact is the fact, the clue was there, everything happened just like they follow the script. Amazing, isn't it?
A lot of the volatility was caused by the institutional program trading and day traders following suit, so don't worry about them too much.
Oh, another thing, the Smart Money also reduced their short positions on oil (or bought oil contract), predicting that the cold weather would sweep the Mid-West, which let the Oil price jumped at least $5 to plus $90 per barrel.
If you like the data and graphs, please leave your comments and I will post them later.
Here is the table of Commercial positions published on Dec. 7th of 2007:
| Index | Trader Group | 12/2/2007 | 12/7/2007 | Difference | Open-int | Dow | Commercials | 1197 | 2421 | 1224 | 36127 | Nasdaq | Commercials | 7471 | 8359 | 888 | 52715 | Russ | Commercials | 5421 | 4992 | -429 | 38287 | S&P 500 | Commercials | 29720 | 46177 | 16457 | 657039 | Oil | Commercials | -54002 | -45283 | 8719 | 1382526 | VIX | Commercials | 3894 | 12603 | 8709 | 59689 |
Thank you and I am open for discussion on the resutls
Market Swimmer
Saturday, December 8, 2007
CSIQ, a Chinese Solar Company Broke All Time High
CSIQ - a stock I recommended earlier (click Recent Picks), closed at $18.7 yesterday, broke all time high. Any retreat from this level is our buying opportunity.
Now, here is more information on Chinese solar energy companies:
With more than 10% growth per year, China's economy is an unstoppable train. I call it "the money train". The booming Chinese economy makes it heaven for the hyper-growing companies there. We as investors are having a once in a life time opportunity to benefit from these unique global market conditions. Our focus should be on the Chinese stocks, or ADRs traded on Wall Street.Another unique opportunity comes from the global-warming issue. Coupled with high oil prices, global warming makes the renewable stocks a gold mine for investors. Governments all over the world are now willing to subsidize clean energy, and even the UN declared that massive investments should be done. For example, China's energy czar, Chen Deming, said that China needs $265 billion in investments to meet its renewable energy goals for the next 12 years. $265 Billion! The US has a 'twenty in ten' target, China has a 10% target for renewables by 2020, India has a 10% target by 2012, and EU countries have recently signed up to a 20% mandatory target for energy consumption from renewable sources. In 1997, Ernst & Young predicted global investment in renewable energy would reach US$70b by 2006. At the time, this figure was considered ambitious, but in fact, investment in the renewable and clean energy sector reached just over US$100b in 2006 and could rise to over US$750b by 2016 at current rates of growth.
Vertical integration in this context refers to integrating the different steps in the Polysilicon Based Solar Module production process. Module production involves four steps in chain event:
- Use the raw material sand (SiO2) to produce a very pure form of silicon called polysilicon.
- Use polysilicon to produce wafers and ingots.
- Use wafers and ingots to produce solar cells.
- Use solar cells to produce solar modules.
Manufacturers are yet to immerse in vertically integrating the whole process. There are a few getting their feet wet - Trina Solar (TSL), Yingli Green (YGE), Suntech Power (STP) and Canadian Solar (CSIQ).
- Trina produces solar modules from polysilicon and has plans in the offing for very large scale polysilicon manufacturing.
- Yingli also has business plans along similar lines. They are yet to announce any plans to produce polysilicon.
- Suntech is focused on the wafer to module business currently.
- Candian Solar started out focused solely on producing solar modules from cells but since then has expanded to wafer to solar cell production line and has announced plans for a polysilicon to wafer and ingot line.
The table below compares these 4 manufacturers (click to enlarge):
The sophisticated investor should try to enjoy both worlds of opportunity; if you seek cheap Chinese energy stocks, you will enjoy the benefits of fast growing industry (clean energy) in a comfortable economic environment (China). In the renewable stocks sector, there is the solar industry, which enjoys the fastest growth rate, so the sophisticated investor should look for his gold there.
But one should be careful in picking those stocks, since most of them are not as cheap as they used to be only few months ago. To name few: JA Solar (JASO) with expected P/E=56 for the year and f P/E=36 for 2008, Yingli Green Energy (YGE) with expected P/E=81 for the year and f P/E=42 for 2008, or Sunpower (SPWR), investor's favorite, with P/E=89 for the year and f P/E=59 for 2008.
Those are not so cheap, but if you're willing to give your trust to fresh IPOed stocks, you can check Canadian solar (CSIQ) with an expected forward P/E=13 for 2008, or Trina Solar (TSL) with an expected forward P/E=14 for 2008. Oil is now already above $90 and we should see another boom in the Chinese Renewable Stocks.
Enjoy,
Market Swimmer
Sunday, December 2, 2007
Free Investing Training Center Updated
I have updated the Free Educational Center. For more information, please click on the EDUCATION button on the menu bar.
Education Center is a result of cooperation and joint effort from Market Swimmer and Online Trading Academy. We believe you can learn how to trade from the professional traders and acquire many valuable skills which can benefit you from your personal investing and trading.
In this edition, we focus on Forex free training courses, here is an example of related subjects:
Free Online Forex Training Contents
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Market Swimmer
