Before I give a plausible answer, may I ask my readers a question- What are the new driving forces that had changed our market for the last couple of days? We might able to figure out some bearish factors but they are hardly new to us. Threats of persistent high oil prices, inflation and weak dollars have all been with us for some time. Then why the stock market dived deeply this week.
The answer is simple-the market sentiment. Most people are traded on sentiments rather than on fundamental. How long this bearish sentiment could last is hard to say but if the investors shy the marke,it might continue to drift lower. My personal view is the bottom is not too far from now. The P/E now is about 18 for H shares and 15 for blue chips are good levels to buy for the long term investment. It is apparent that the Central Banks are likely to firm up their interest rates in the near future to control the inflation, resulting in a tight credit environment that could hurt the stock market. I can agree no more of this basic inverse relationship between interest rates and the stock market but these impacts are just temporarily. In the long run the Stock Market is self-adjusted following the intrinsic value of the individual companies. As long as the corporations can create positive values after inflation to the shareholders, then the stocks are worth to buy. For conservative investors, I always advise not to put all your eggs in one basket. Try to use average buying approach to minimize the costs and the risks.
If we can remember what were the Hang Seng Index when the level of our one month interest rates say 7% in the 90s or near 0% during the period of SARS, Then you know how to park your money.
For comments please to: schan033@gmail.com
6/11/2008
What is the fair level for oil prices
Back to the drawing board, the simple demand and supply theory is easily to be understood by all but in real world how to justify the right price, it is always not an easy game to play. What we can see the veggie sold on the super market or the equity shares listed in the stock market are just reflecting of the fair prices rather than the right prices. Same concept can be applied to the oil prices. There are always price distortions created by asymmetrical information that can be obtained in a fair and transparent way. The speculators are using the missing gap to make their nice profit.
Last week, Jim Roger, the king of commodities, said the oil price could go up to 150 to 200 towards end of this year. Also, Alexei Miller, the CEO of Russian oil company Gazprom told reporters at an event in France yesterday that he expects the price to rise to $250 a barrel by 2009. Based on their stunning predictions, do you want join the bandwagon. If you say yes, I will advise you to bring along your safety belt. I cannot rule out of any outcome, but to reach 250, it is a very remote possibility. We might see 150 a barrel later on but to sustain above this level is not easy. I would say the recent price behavior is just resulting from speculation rather than genuine demand pull.
As some of you may aware, inflation has already caused social unrest in certain countries, oil prices are no longer simply entertainment shots on the TV screen rather they are topics high in the agenda of respective Governments. If the recent reports that there are no substantial shift of real supply of demand of oil is right, the gradual stronger dollar could soon let the fair prices of oil settled around 100 to 120 level for not too long from now unless dollar are unable to find their way to move northwards.
Last week, Jim Roger, the king of commodities, said the oil price could go up to 150 to 200 towards end of this year. Also, Alexei Miller, the CEO of Russian oil company Gazprom told reporters at an event in France yesterday that he expects the price to rise to $250 a barrel by 2009. Based on their stunning predictions, do you want join the bandwagon. If you say yes, I will advise you to bring along your safety belt. I cannot rule out of any outcome, but to reach 250, it is a very remote possibility. We might see 150 a barrel later on but to sustain above this level is not easy. I would say the recent price behavior is just resulting from speculation rather than genuine demand pull.
As some of you may aware, inflation has already caused social unrest in certain countries, oil prices are no longer simply entertainment shots on the TV screen rather they are topics high in the agenda of respective Governments. If the recent reports that there are no substantial shift of real supply of demand of oil is right, the gradual stronger dollar could soon let the fair prices of oil settled around 100 to 120 level for not too long from now unless dollar are unable to find their way to move northwards.
6/10/2008
What a nice pay to be "politically stupid"??
The current controversy on the issue of the Under Secretary and the political Assistant could hardly come to an end even with the line up of the Under Secretary & the Political Assistant and the apology from the Chief Executive in front of the cameras yesterday. The average citizen like me has already put a question mark on the capabilities of our Government Officials in this current affair.
Put the passport and right of abode aside, just on the pay, it is hard to convince oneself that it could not affect the morale and the mentality of the senior civil servants and the legislators. I expect there will be a lot of silent conflicts behind the scene which could lower the overall efficiency of the Government. Though I am coming from the private sector and have never put my hand or foot into any political affairs in Hong Kong, I do understand a simple concept of equality and opportunity. Mr. Lam Sui Lun said that most of the appointees are coming from good academic background by either graduating from top universities in UK and US and worth the price to pay out from the public coffer. Does it mean academic background is equal to ability?- I have serious doubt of it. I tend to agree good academic background could stand a good chance to perform better later on, but does it mean we need to pay such a high remuneration at the very beginning to one who are without the actual experiences on the job and the future performances are yet to be seen. I wonder what is the future bench mark of the performance of these appointees??? Could the Government let us know??? Also,I have an impression these appointments are based on the close relationships with certain officials rather than going through an unbiased process of selection.
I understand the motive of the appointment of the second tier of Undersecretary and the political assistant is to help to sell policies to the public and legislators in an effective and promising way. The political selling strategy is to let the second tier to pit the field fist and if the lobbying fails, the first tier then comes into play. As such, the game hopefully could last a bit longer with a higher successful rate. It sounds logical but the real stumbling block is ignored. In fact, the real issue is coming from the relationship between the Legco, Execo and the Administration. The increase of the number of tiers or even the incumbents are selected from the big political camps from the Legco, in my opinion, could not help to improve in the current political environment that can save the hazzle of the Government. How to improve, will inform you later on.......
As said before, in the past up to end of May I was an advocate of the pro-government camp but now put I have second thought in the upcoming Legco election in Autumn.
Put the passport and right of abode aside, just on the pay, it is hard to convince oneself that it could not affect the morale and the mentality of the senior civil servants and the legislators. I expect there will be a lot of silent conflicts behind the scene which could lower the overall efficiency of the Government. Though I am coming from the private sector and have never put my hand or foot into any political affairs in Hong Kong, I do understand a simple concept of equality and opportunity. Mr. Lam Sui Lun said that most of the appointees are coming from good academic background by either graduating from top universities in UK and US and worth the price to pay out from the public coffer. Does it mean academic background is equal to ability?- I have serious doubt of it. I tend to agree good academic background could stand a good chance to perform better later on, but does it mean we need to pay such a high remuneration at the very beginning to one who are without the actual experiences on the job and the future performances are yet to be seen. I wonder what is the future bench mark of the performance of these appointees??? Could the Government let us know??? Also,I have an impression these appointments are based on the close relationships with certain officials rather than going through an unbiased process of selection.
I understand the motive of the appointment of the second tier of Undersecretary and the political assistant is to help to sell policies to the public and legislators in an effective and promising way. The political selling strategy is to let the second tier to pit the field fist and if the lobbying fails, the first tier then comes into play. As such, the game hopefully could last a bit longer with a higher successful rate. It sounds logical but the real stumbling block is ignored. In fact, the real issue is coming from the relationship between the Legco, Execo and the Administration. The increase of the number of tiers or even the incumbents are selected from the big political camps from the Legco, in my opinion, could not help to improve in the current political environment that can save the hazzle of the Government. How to improve, will inform you later on.......
As said before, in the past up to end of May I was an advocate of the pro-government camp but now put I have second thought in the upcoming Legco election in Autumn.
6/05/2008
What is going to happen between 4 to 4.10 in HK stock market
HIghly likely we will not see much changes. The market is going to behave normally.
As there are so many eyes that are now ready to spot on any single movement of the trading, the crocodiles are going to take their naps.
As there are so many eyes that are now ready to spot on any single movement of the trading, the crocodiles are going to take their naps.
What on earth the citizens have to pay for something uncertain
This is my first time to write on blog, hope I can bring something interesting and new to the readers in the future. At least for the first day, it is just a test of water.
I am quite of an upset to the Tsang's Government and their latest moves of appointing the newly officials.
The faces on the TV can tell how happy are the newly appointed Bureau undersecretaries and political assistants outside the chief secretary's residence in Mid-Levels after a gathering with journalists. It is far from expected of the officials who hired them initially think these new appointees could help them to relieve part of the tough challenges of facing the public have to face the music first and have to take up the early fights for their babies in the cradles.
Worse enough, not to mentioning of double allegiances on the passport issues, according to the latest public opinion, without any yet to be proved performance, the pay is far too high than most expected. When to compare with the Legco members who are almost burnt out from their looks, are big contrasts in terms of pays and experiences, stand alone of their long contributions to the society. After all, the recruitment and the pay to each appointee are far too opaque for the public to scrutinize. Personally, I do not think money is the big attractions to these new comers. What they can get in the social status and future prospects are outweighing the money return on the equation of the formula. It is true that Mr. Chan Tak Lam said that a political appointment cannot be easily quantified, but why there is such a big pay gap between the Legco members and these new born appointees.
I have long been a loyal follower of the pro-government camp political parties but I think I will change my mind after this incident in the next legco election. We should need someone in the Legco who can really help us to monitor and provide a stronger balance and check to the Executive Council and the Government. At least not to lavishly spend the hard earn money of the average citizen which can be of better use for other purposes. I hope others can follow my same thought too.
I am quite of an upset to the Tsang's Government and their latest moves of appointing the newly officials.
The faces on the TV can tell how happy are the newly appointed Bureau undersecretaries and political assistants outside the chief secretary's residence in Mid-Levels after a gathering with journalists. It is far from expected of the officials who hired them initially think these new appointees could help them to relieve part of the tough challenges of facing the public have to face the music first and have to take up the early fights for their babies in the cradles.
Worse enough, not to mentioning of double allegiances on the passport issues, according to the latest public opinion, without any yet to be proved performance, the pay is far too high than most expected. When to compare with the Legco members who are almost burnt out from their looks, are big contrasts in terms of pays and experiences, stand alone of their long contributions to the society. After all, the recruitment and the pay to each appointee are far too opaque for the public to scrutinize. Personally, I do not think money is the big attractions to these new comers. What they can get in the social status and future prospects are outweighing the money return on the equation of the formula. It is true that Mr. Chan Tak Lam said that a political appointment cannot be easily quantified, but why there is such a big pay gap between the Legco members and these new born appointees.
I have long been a loyal follower of the pro-government camp political parties but I think I will change my mind after this incident in the next legco election. We should need someone in the Legco who can really help us to monitor and provide a stronger balance and check to the Executive Council and the Government. At least not to lavishly spend the hard earn money of the average citizen which can be of better use for other purposes. I hope others can follow my same thought too.
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