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)…
Friday, 19 September 2014 23:06

Ctrip.com (CTRP) stalls, moving lower?

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Ctrip.com – looking like this flight might be getting cancelled Multiple indicators have turned negative and our short term EMA poised to plunge through the mid-term EMA. It appears that the only reason it hasn’t continued in lawn dart mode was the violation of the lower Bollinger band on the…
Thursday, 18 September 2014 10:28

Eco data - Residential home prices for August 2014

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China’s National Bureau of Statistics released its home price data for August (source, in Chinese), which showed continued deterioration in the domestic housing market. New home prices fell in 68 of the 70 cities surveyed on a month-on-month basis, and more cities were also reporting price declines vs. last year. The drop in new home prices vs. July accelerated, with the average MoM drop of -1.1%, picking up speed vs. the -0.9% sequential decline last month. New home prices vs. a year ago were higher on average by about +0.5%, a marked decline vs. July’s average YoY gain of +2.4%.…
Thursday, 18 September 2014 10:28

Hollysys (HOLI) - may be losing steam, outlook negative

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After a short pop, Hollysys heading lower After a couple of large moves and a slight uptick in volume since the low volume a week ago, HOLI looks like it is headed south again. Our unpublished trend indicator is picking up steam as stochastic is in a bearish environment and…
The National Bureau of Statistics released its monthly data for August which included industrial production, fixed asset investment, investment in real estate development, and retail sales, all of which were consecutively lower for the second month in a row. The standout was undoubtedly industrial production, which fell off a cliff to a +6.9% YoY pace, the lowest reading since mid-2009. After the shock of an awful industrial production print, other takeaways were retail sales showing an accelerating slowdown, as well as continued cooling in real estate development and fixed asset investments. Unlike last month’s data which seemed to conflict with…
Saturday, 13 September 2014 13:39

Week in review - Sep 13, 2014

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Trading in US-listed China stocks this week was anything but boring, as investors were again hit with shaky eco data, and the fear of fraud was thrust back into the spotlight. On the eco data front, there were all kind of tidbits to digest – exports and imports, home sales data, inflation data, and a read on China’s banking system. For a quick recap: exports were decent, imports no, homes sales again very “blah”, inflation was cool (propped up by food prices), and although RMB loan growth snapped back from last month’s low, total system financing was still tight. The…
Friday, 12 September 2014 12:45

Eco data - RMB loans, Money supply for August 2014

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The People’s Bank of China released financing statistics for August, which included both money supply and bank lending data (loan data here, money supply data here, both in Chinese). According to the release, the money supply (M2) was up +12.8% YoY, expanding at increasing rate than both last month and a year ago. Other measures of the money supply also showed expansion; M1 grew +5.7% YoY (also faster than last month and a year ago), and M0 was up +5.6% YoY. The M2 growth rate missed the +13.5% consensus estimate, as did M1 (+6.8% expected), with M0 growth matching the…
Thursday, 11 September 2014 11:20

Eco data - Inflation data for August 2014

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China’s official inflation data for August showed continuing weakness in both consumer and producer prices. The official CPI was +2.0% YoY, coming in cooler than the expected +2.2%, and PPI slipped to -1.2% YoY, down from the -0.9% pace last month but better than the -1.4% expected. The official release for CPI is here (Chinese), and PPI here (also Chinese). A look at the main drivers behind CPI shows that once again it was basically food prices that were keeping the index relatively buoyant. According to the release, ex-food CPI clocked in a paltry +1.5% whereas food was +3.0% (down…
Thursday, 11 September 2014 08:51

Shanda Games (GAME) deal spread snaps back

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Shanda Games (GAME, profile) recently tanked on news that the group supporting the management buyout was playing musical chairs. The deal had attracted the Carlyle group, who has successfully completed several go-private deals in the past, with recent examples being 7 Days Inn (economy hotel chain), and Focus Media (display advertising). Although a few backers were pulling out, scaring other investors in the stock, the existing consortium was able to find some replacements. Since the September 2 announcement, the stock has bounced back, narrowing the deal spread to levels approaching pre-announcement levels. At the close of trade on Wednesday, the…
Wednesday, 10 September 2014 22:35

500.com (WBAI) prize collections

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500.com (WBAI) recently issued a press release to address stories in the media speculating about the company’s operations. The stories in question mainly focused on the company’s licensing status, tax status, and also how the company uses employee bank accounts to collect sports lottery prizes. The last point seems to be of interest to investors who may have never set foot in China, particularly after the company reiterated its licensing status. To help investors measure the risk of the practice for themselves, we’ve reproduced an excerpt of 500.com’s 424B4 below (emphasis added):   When a user wins a prize, we…
Wednesday, 10 September 2014 18:57

Qihoo 360 (QIHU) House of pain

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Qihoo still can’t find a floor, downgraded This Qihoo 360 Technology (QIHU, profile ) downgrade comes with a cautionary note: there are signs that this short, sharp correction has exhausted itself. The stock has been in a steady move lower following its Q2 earnings release, which although beat on top…
Wednesday, 10 September 2014 18:53

Sohu.com (SOHU) deflating....

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Sohu stumbles on policy change, looking bearish Our tech rating downgrade for Sohu.com Inc. (SOHU, profile ) to -2.25 comes after a sharp recent decline while our longer term readings all point to potential trend continuation as the stock followed the uptrend well inside the regression channel from May to…
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