Opinion

George Chen

Japan, Australia, if not China?

George Chen
May 17, 2011 02:59 UTC

By George Chen
The opinions expressed are the author’s own.

I am hearing more complaints these days from trader friends about how boring the market is these days. Why boring?

Trading volume is low and there are apparently more risks than opportunities as investors seek clear signals about the central bank’s monetary policy direction and about what global funds think of China for the second half of the year.

With investors uncertain about the outlook for the Shanghai and Hong Kong stock markets, some are beginning to rethink their positions on Japan. Concerns about radiation are easing and I hear more people talking about the big potential for Japan’s market and economy to rebound amid massive reconstruction there. An old and new question then arises: can we bet on the Nikkei, again?

Australia also looks like a good bet to some rich Chinese investors. They say the property market alongside the long beaches in Australia offers profit-taking opportunities over the next few years.

Remember my recent column about many rich Chinese trying to emigrate in the next few years? Australia is always a popular destination. A number of local media reports also indicated some family members of top Chinese leaders already bought nice villas in the resource-rich country whose diplomatic relations with China have been up and down in recent years.

Where China traders meet

George Chen
Apr 4, 2011 03:09 UTC

IPOBy George Chen
The opinions expressed are the author’s own.

My readers on Reuters.com know me as a columnist who regularly writes about China and I also run a Chinese-language column, Mr. Shangkong, about Shanghai where I was born and Hong Kong where I call home now, on Reuters.com.cn, the China portal.

In fact, my day job is not just about writing columns but more about Trading China, a young and energetic Thomson Reuters project. It’s a public holiday in China today and the markets are relatively quiet, so I’d like to share something different in today’s column as I want to talk a bit about Trading China, which comprises Carmen, Joseph and myself.

Since receiving a call about a year ago from my boss North Asia Editor Phil Smith, aka “chart guru” in the Trading China community, I was quickly sent to Dubai to learn about and launch Trading China. Dubai is the place where Sex And The City 2, the movie, was not allowed to be filmed and our sister project Trading Middle East was launched smoothly.

Post-earthquake concept stocks

George Chen
Mar 24, 2011 04:01 UTC

By George Chen
The opinions expressed are the author’s own.

Have you had breakfast or lunch yet? In Hong Kong, I’m guessing few people are choosing sushi these days.

Many restaurants in Hong Kong, even Japanese restaurants, have been quick to distance themselves from the crisis in Japan since the earthquake as concerns about food safety are growing in many Asia-Pacific cities, including Beijing, Seoul and Sydney.

The Japanese authorities announced this week that they would widen a ban on exports of a wide range of food products from areas surrounding the earthquake-hit Fukushima Daiichi nuclear power station. In fact, even before the official ban, the health authorities in China, Hong Kong and South Korea were already monitoring all such imports from Japan.

Japan, in danger and opportunity

George Chen
Mar 14, 2011 03:41 UTC

earthquake

By George Chen
The opinions expressed are the author’s own.

You might consider yourself very smart, powerful or perhaps wealthy, but after watching live coverage on TV of the devastating earthquake and tsunami in Japan on Friday afternoon, what was your reaction? We’re all nobodies in the face of the forces of nature.

On Friday afternoon before the earthquake, the benchmark Shanghai Composite Index showed unexpected signs of recovery but the rebound was unfortunately short-lived. Immediately following the news alert about Japan’s worst earthquake in decades, stock markets from Hong Kong to Shanghai all retreated quickly.

This was a very natural reaction to such a massive natural disaster. Almost the same reaction was seen after the earthquake in China’s Sichuan province in May 2008. When investors feel uncertain and then the market sentiment becomes anxious, they sell. Fair enough – who really is in the mood to trade after seeing such a horrible event?

The least safe stock in China?

George Chen
Jan 7, 2011 04:12 UTC
Is history going to repeat itself? I am talking about the 2008 market crash in China, which was partly triggered by a company’s mega-sized fundraising plan. The company is Ping An Insurance, whose Chinese name literally means “safe” and is China’s No.2 insurer. Ironically, Ping An may be considered one of the most “unsafe” stocks in the market given its bumpy trading track record. Yesterday, shares of Ping An slumped soon after the market opened and many investors cited market rumours about Ping An’s new plan to raise as much as 100 billion yuan (US$15 billion) as the cause of the slump. The buzz spread fast and wide in the market. By midday, a number of brokerages including CITIC Securities issued research notes to clients saying Ping An needed more money to boost its capital base and expand business, in particular after its landmark acquisition of Shenzhen Development Bank, though different brokerages had different views on the potential size of the fundraising. Some said 40 billion yuan would be enough. But still, 40 billion yuan? That’s a ton of money. Read more. In early 2008, Ping An surprisingly announced its 160 billion yuan fund-raising plan, mainly to cover its investment losses abroad and quickly gained massive criticism not only from investors but also from some regulators. In addition to the impact of global financial crisis, Ping An’s 2008 fund-raising plan, which didn’t work out in the end, became a trigger to turn China’s stock market into a bear market from bull-run. To me, it is understandable why many retail investors in China often like to brand Ping An as one of the most “irresponsible” listed companies, though the company claims it has won many corporate governance awards. Late on Thursday, Ping An Insurance (Group) of China Ltd was forced to issue a brief statement, saying it does not have any refinancing plans in the Shanghai stock market, as it shares fell to a three-month low on fundraising rumours. However, the insurer did not say if it intended to raise funds on Hong Kong’s H-share market in the statement posted on the Hong Kong stock exchange. The spokesman for Ping An declined to elaborate further. As you can tell, the buzz about Ping An’s fund-raising is not going to end anytime soon in the market. Ping An is often considered a must-have stock for portfolio reason among institutional investors at home and abroad. The rumor about Ping An’s mega-sized fund-raising plan came amid growing expectations that many other Chinese financial institutions and developers may have to raise more money in 2011, which some investors have already thought of as “a year of fund-raising”. Just few days before the end of 2010, I remember the official China Securities Journal had a front-page article to praise China’s top securities regulator Shang Fulin’s work in 2010, saying under Shang’s leadership, China has become one of the world’s biggest stock market by market value from “little known” in recent years and it also afforded the largest amount of IPO fund-raising in total in the world in the past year. Oops! The editor for the story must forget compare these facts with the other more interesting thing — China is also the worst stock market in terms of its performance among all major economies in 2010. And the reason? I will say we should partly thank those big fund-raisings. And 2011? It seems to be just another year of fund-raising in China’s stock market. One day after the buzz about Ping An’s fund-raising plan, Agricultural Bank of China, one of the country’s Big Four state lenders, also announced its 50 billion yuan bond issuance plan. Minsheng Banking Corp, a leading non-state lender, is also said to raise 3 billion yuan via private placement soon. Hurry up, fund-raisers! The earlier, the better, before you drive the investors mad. I asked my colleague Samuel Shen in Shanghai who stay in touch with China’s top fund managers closely if the new fund-raising buzz about Ping An could trigger the Shanghai index into a bear market. He replied me: “Are we already in a bull market?” He’s right. Then we concluded since 2011 is going to be “the year of rabbit”, maybe “bumpy” is the best word to describe the outlook of the market. What’s your say, my friend?

Ping_An

By George Chen
The opinions expressed are the author’s own.

Is history going to repeat itself? I am talking about the 2008 market crash in China, which was partly triggered by a company’s mega-sized fundraising plan. The company is Ping An Insurance, whose Chinese name literally means “safe” and is China’s No.2 insurer.

Ironically, Ping An may be considered one of the most “unsafe” stocks in the market given its bumpy trading track record. Yesterday, shares of Ping An slumped soon after the market opened and many investors cited market rumours about Ping An’s new plan to raise as much as 100 billion yuan (US$15 billion) as the cause of the slump.

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