HK & China - Market Direction 01 (May08 - Oct08)

[winston]

HK is relatively ok compared to Shanghai..

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China stocks plunge 5 percent on airline sell-off

SHANGHAI, China (AP) -- China's key Shanghai Composite Index fell 5.3 percent Monday in a broad sell-off led by airlines, refiners and other large capitalized shares. Analysts said the selling reflected disappointment over a lack of new market support from the government.

The benchmark Shanghai index shed 130.74 points to close at 2,319.87.

It was the lack of any significant market-moving news, rather than any one development, that left investors discouraged, said Zhai Peng, a strategist at Guotai Junan Securities in Shanghai.

Online comments seen Monday that summarized a weekend discussion between government regulators and reporters for state-run media suggested the authorities "would not take any move to save the poor market," Zhai said.

"Obviously, the market was very disappointed with this," Zhai said. "This is far below investors' expectations."

Airlines, which reported falling passenger traffic last month partly due to visa restrictions related to the Olympics, were among the biggest decliners. China Southern Airlines dropped 9.9 percent to 5.27 yuan. Rivals Air China and China Eastern Airlines plunged by the 10 percent daily limit to 6.18 yuan and 5.02 yuan, respectively.

A rebound in oil prices also hit refiners.

Shanghai's biggest listed share, PetroChina, dropped 4 percent to 13.31 yuan, while China Petroleum & Chemical Corp. slumped 6 percent to 10.02 yuan.

Aluminum Corp. of China lost 8.8 percent to 9.43 yuan. China Oilfield Services sank 7.9 percent to 16.42 yuan.

The market has also suffered from liquidity strains as billions of newly tradable shares have begun trading this month, analysts say.

That pressure was seen in the relatively modest performance by China Southern Locomotive, whose 3 billion shares began trading Monday in Shanghai after an initial public offering that, along with a dual listing in Hong Kong, raised nearly US$1.5 billion.

China Southern Locomotive's shares peaked at 83 percent above their IPO price of 2.18 yuan in early trading but later fell back, closing at 3.45 yuan -- a gain of 58 percent. The closing price was 10.6 percent below the opening price of 3.86 yuan

Winston's comments: 83% above IPO price is modest performance ??

[Chiron]

SSE target 2000? Me just plucking a number, a whole number. Foreigners not allowed in A shares, hence almost all are local PRC only. And I believe alot of the retailers are not TA savvy, unlike US, hence TA may not be too applicable to SSE?

IMHO

[winston]

1) Foreigners not allowed in A shares, hence almost all are local PRC only.
2) And I believe alot of the retailers are not TA savvy, unlike US, hence TA may not be too applicable to SSE?

1) The Foreign Institutional Investors have QFII quotas to invest in SSE

2) The big players on SSE are now the local fund managers and they know their TA. The retail investors are lying very low in the SSE.

So the SSE is actually controlled by the BBs now, hence the volatility in the market.

[Chiron]

Thanxs , W. Me still hv much to learn from you and the sifus here

[winston]

S&P lowers year-end estimates for Hang Seng, HSCEI, Shanghai Composite indices

BEIJING (XFN-ASIA) - Standard and Poor's Equity Research said it has lowered its year-end targets for the Hang Seng Index, HSCEI (Hang Seng China Enterprises Index) and Shanghai Composite after cutting 2008 earnings per share estimates on 21 companies by about 20 pct.

S&P's forecast for the Hang Seng has been lowered to 23,500 from 24,300, while the HSCEI is seen at 13,400, down from 14,500.

The Shanghai Composite is now expected to end the year at 2,900, against a previous estimate of 3,300, S&P said in a statement.

The Hang Seng Index ended this morning at 20,814.79, while the HSCEI and Shanghai Composite were at 10,928.04 and 2,324.13, respectively.

The rating agency said it also expects China's economic growth to slow due to a lower global growth outlook. China's GDP growth is projected at about 10 pct this year and at least nine pct in 2009, barring any supply shocks, S&P's head of research Lorraine Tan said.

Continued broad economic investment and domestic consumption should help offset anticipated slowdowns in the manufacturing and real estate development segments, S&P said.

[learn2win]

Looks like long term support broken.

[-dol-]

Today, SSE up 1.06% but HSI sold off into the close - except for the power companies, most H-shares also lost ground.

If HSI stays too long below 21,000, could it signal the beginning of a fresh round of declines?

A series of downward revision to earnings might just do the trick...

[winston]

Today, SSE up 1.06% but HSI sold off into the close - except for the power companies, most H-shares also lost ground.

GS upgraded the power companies today.

[winston]

The Olympic Rally in the SSE has finally arrived. Just in time for the closing ceremony

SSE is now up about 4.8% and HSI is now up about 300 points.

SSE may have gone up about the comment yesterday about the RMB 400b fund and HSI may be going up because of short-covering.

May buy a put in HK if it gets too euphoric.

Am playing the A shares thru A50chinatracker and CSI300ETF.

Not comfortable so I'm going to put a trailing stop-loss on my positions.

[winston]

TA KUNG PAO

-- A Lehman Brothers analyst said in a report that China is preparing a string of policies for avoiding market slides in the post-Beijing Games period.