Thursday, 02 October 2014 18:07

Tech analysis - progress report

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First of all, apologies for not publishing the progress report last month. We’ve been working on developing a better way to present the performance, and after some deliberation, have come up with an efficient (lazy?) way to do so. Instead of showing the performance of calls that were made in…
Thursday, 02 October 2014 16:31

A few days of rough selling...time for a bounce?

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Chinese companies traded in the US had another awful trading session on Wednesday, with the majority of listed names ending the day decidedly lower. Wednesday’s slide marked the third day in a row of red ink for US-listed China stocks, and by the end of trading had fallen about 13% from recent highs set in early September. (Note, we’re referring to the teach-heavy PowerShares Golden Dragon ETF; but the iShares FTSE China ETF, which includes Hong Kong stocks, was also lower.) After such a powerful move down, some investors are likely wondering what triggered the move, and what may be…
Wednesday, 01 October 2014 16:22

Home prices lower in September, falling faster MoM

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Private survey data covering real estate prices in 100 cities across China showed that new home prices continued to fall in September. According to the China Real Estate Index System (CREIS), the price for a new home in China was down about -1% vs. August, and was higher than prices a year ago by only 1.1%. The price slide in September was the largest monthly fall since prices started to roll over in May, and seems to show that thus far, supporting measures weren’t working (i.e. lifting purchasing restrictions, a popular topic in recent headlines).   Prices in major cities…
Wednesday, 01 October 2014 10:53

Eco data - September PMI 51.1

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The official September PMI was 51.1 (source, Chinese), flat vs. last month, and barely edged out expectations of 51.0. HSBC/Markit also released the final reading for September, which was 50.2, revised lower from the 50.5 flash, and was also flat vs. last month.  On balance, PMI was benign, it pointed to tepid manufacturing growth, something which may detract from the popular argument that China needs to apply stimulus to keep its economy growing. Policymakers have been making some incremental changes (early moves to support real estate), and this latest report doesn’t seem to add significant reason to increase those efforts.…
Tuesday, 30 September 2014 13:18

China Finance Online (JRJC) Q2 FY2014 Results

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China Finance Online (JRJC) released Q2 FY2014 results which included revenue of 20.6 million USD and a net loss of -12.4 million USD. The company’s stock has been grabbing some headlines recently, after skyrocketing nearly 150% following the announcement of a new service offering aimed at providing more integrated stock trading platform for Chinese investors. Note that Q2 ended July 30, so results do not reflect any impact of the recently announced initiatives. On balance, the results appeared somewhat disappointing, with an EPADS of -0.29 USD, lower both YoY and QoQ. A closer look at the results shows that the…
Saturday, 27 September 2014 21:11

Week in review - Sep 26, 2014

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The move lower for most Chinese stocks traded in the US marked the third week in a row of losses, and have nearly erased all of the earlier YTD gains. Domestic US stocks weren’t too much better, with the S&P 500 and NASDAQ moving lower on a cocktail of military action in the Middle East, some soft eco data, and the prospects of the Fed ending ZIRP. (Zero Interest Rate Policy, it is fun to say, but when it comes to an end will definitely bring volatility to stocks as “risk” comes back into the equation.) For US-listed China stocks,…
Thursday, 25 September 2014 17:29

Internet finance in China - what's next?

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Internet finance has been a hot topic in FY2014, with it coming up in conversations about China’s banking reform efforts, Internet companies trying to expand ever larger, and the all-things-mobile nature of recent technology trends. At the heart of the matter is the issue of providing value-added services to keep customers looking for better ways to manage their money. Although much of the discussion has centered on Alibaba’s hit Yu’e Bao money market fund, recent developments point to a possible renewed interest in China’s stock market, a place where non-Chinese investors may be able to find some new opportunities.  …
Thursday, 25 September 2014 17:20

VIPShop (VIPS) outlook positive

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VIPS looking good, add it to your cart VIPS is ticking all of our boxes save a CCI buy signal. The stock may be set to resume the long uptrend from February to mid-August. If you pay attention to trend regression channels, the stock has not moved more than one…
Thursday, 25 September 2014 17:16

New Oriental Education (EDU) needs a time-out

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Initiating with a bearish outlook Nobody likes summer school, and New Oriental Education & Technology (EDU) has had a rough go if it recently, and clawed its way back up in late August. All of our indicators are negative, and the Bollinger bands are pretty narrow. With that background, the…
Tuesday, 23 September 2014 10:10

Eco data - HSBC September 2014 Flash PMI 50.5

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 The HBSC/Markit Flash China Manufacturing PMI was 50.5 for September (source), beating expectations of 50.0 (or 50.2, depending on who you ask). The rebound was unexpected vs. last month’s 50.2 final reading, largely in part due to the weakening data released since last month (August Industrial production was awful). On balance, the flash figure was moderately encouraging, defying what the street was baking in: more evidence of a struggling economy. Oddly enough, the stronger than expected data could put a dent in the bull case. If the economy can limp along on its own, policymakers may be less inclined to…
Monday, 22 September 2014 21:03

PowerShares Golden China (PGJ) sputtering

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PowerShares Golden Dragon…losing…power… We previously had this rated as attractive, and then pretty much most of the US-listed Chinese stocks fell out of bed last week. Was it the Alibaba-effect (selling everything else to get in the name), or maybe the recent eco data that has been the cause? Doesn’t…
Saturday, 20 September 2014 15:55

Week in review - Sep 19, 2014

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OK, let’s get this out of the way: Alibaba IPOed this week, shattering more than a few records in the process. The stock didn’t open until mid-day, and jumped almost 50% before closing with a +38% gain. And volume of course was incredible, with over 270 million shares trading hands. But for the rest of the Chinese stocks traded on the NYSE and Nasdaq, the week wasn’t so rosy. After data released last weekend pointed to a slowing Chinese economy (Industrial production was notably soft), investors were in sell-mode for most of the week. The PowerShares Golden China ETF (PGJ)…
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