Tuesday, August 28, 2007


Hold Till When?

For those long or very long in China H-shares covered warrants, you should be feeling good. Now, many are asking "hold till when"? You have to monitor the Shanghai and Hongkong markets to get a sense of perspective. You also have your own investing objectives.


Some Pointers
:

a) If your aim is to get 50% or 100% returns, you can get out soon, if not already.

b) If you generally agree with what I have been writing on H-shares' attraction, then you should HOLD TILL the buggers expire. This is because the entire H-shares discount scenario, pouring in of China money into H-shares will play itself out over 6-12 months.

c) The longer term factor in that most will have to requote their shares back to Shanghai can only narrow the discount. We should see some having dual listings in HK and Shanghai. Some may completely leave HK and just list in Shanghai owing to government's directive and its more lucrative to re-sell shares in Shanghai (easier to raise funds and get better valuations).

d) Or, they will more likely use my strategy prediction - keep dual listing, but keep buying free float in HK H-shares, then re-sell for a subsequent second listing in Shanghai.

e) Of course, if the China markets start to look shaky dropping by more than 100 points a day, you may want to take profits and wait for re-entry levels.

I can also sense some holders will want to trade these covered warrants instead of holding to maturity, that's their perogative. The need to time the markets and incur transaction costs may/may not work in your favour. If you bought at 10 sen or lower, just let it ride, you would be amazed at the price at expiry. Then we might be able to say we have a 5-bagger or even a 10-bagger.


4 comments:

yusuf said...

SD

Whats your take on Dialog, Equine and RBLand? Reckon its good? When u reckon this toxic debt scenario will peter off? Will there be a run this week prior to the Budget?

Ronie said...

China H-share warrants.
Considering the confidence with which you called it, and the results today, it must be the call of the year.
What a call.

Salvatore_Dali said...

yusuf,

dialog = overpriced, considering the projects they got... sapcrest, coastal and ramunia the way to go
equine = fortunes tied with connections, if connex go down, the stock is kaput, connex is in icu now
rbland = nta of rbland is 1.80 only, above 2.50 u r paying too much premium for ijm properties injection, might as well wait for requotation after absorption for better entry px, or just go into Talam as next possible exercise
Subprime = thrashed the subject to death, pls re-read old postings
Budget = personal n corp tax cuts definitely, nothing to shout about, all the corridors also announced and strategised to death already, whats new, no budget rally

ronie,
hope u all made some money

Puntamentalist said...

A 10 bagger in CHALCO-C1 yet the pricing of the warrant is less expensive when it was 3 sen.