Monday, January 27, 2014

There's Wind & Water In My Stocks

The CLSA feng shui chart has garnered a wide following thanks to its uncanny predictions. Just Have a look at last year's chart prediction ... it was pretty close.

CLSA, Asia’s leading independent brokerage and investment group, today launches its 20th annual CLSA Feng Shui Index – a tongue-in-cheek financial forecast for the coming Year of the Wood Horse, with a focus on the Hang Seng Index, key market sectors, world leaders and celebrities, and each of the 12 Chinese zodiac signs. All based on little more than a whisper of wind (feng) and a babble of water (shui).
How do we see the bourse under the influence of the Horse? We conclude that this Pony is un toro in toto - pure bull from teeth to tail. Its fortune chart may not be the best balanced, but it is full of Fire - the intrinsic element that’s widely regarded as the driver of investor sentiment.
This is especially so for the Hang Seng Index, as Fire is also its “lucky element”. We uncovered so many unexpected connections, coincidences and links between the HSI and this Wood Horse that we discern a definite Casablanca connection - ‘the beginning of a beautiful friendship’. And one that should be very rewarding. Our “pure bull” forecast sees the index hit 28,105.
Positive, powerful and race-paced - there’s much to like about the Horse. It’s also well positioned: At No.7 in the zodiac, the Horse kicks off the second half of the 12-year cycle. Traditionally, the vital force or energy known as qi is considered to be spent or stale half-way through a cycle - the Horse heralds the arrival of the so-called second wind - a burst of invigorating fresh qi.
Once again, this year’s CLSA Feng Shui Index features a month-by-month guide to the HSI, the outlook for key sectors, four-sphere forecasts for each zodiac sign, our popular Hong Kong property guide, and fates of some famous faces – the likes of US Fed chair apparent Janet Yellen, Japan’s Shinzo Abe, Alibaba’s Jack Ma Yun and futbol capital Rio de Janeiro.
Our Sector-selector Element Detector suggests we’ll see the best performances from businesses associated with Wood (retail, soft commodities, plantations . . . plantations?) and also Fire (the likes of internet, tech, telecoms, some oil & gas and power suppliers).
Among the zodiac signs, the Horse favours TigersSheep (Goats) and Dogs. Those that may be in for a more challenging ride are RatsCows and Rabbits. But then pluck beats luck every time. Kung hei fat choi! And may the Horse be with you.
Stock market investors are set to ride high in the year of the galloping "wooden horse" as the Hang Seng Index soars to 28,105, brokerage CLSA said in its yearly tongue-in-check forecast for the coming lunar new year.
The HSI closed at 23,082 yesterday. So, according to CLSA's Feng Shui Index 2014 forecast, it will climb more than 5,000 points in a little more than 11 months.

"Horses are brave and honest. They bring energy and drive to the market," said Emily Lam Tim-yi, an institutional saleswoman at CLSA.

The brokerage said the Year of the Horse will be "full of fire" that "could take up the lead and drive up market sentiment in the first half ... with the exception of April when the horse will lack fire."

After peaking in July, a lack of fire will precipitate a dip in the local equity market in August and September and it will stay volatile until the end of the year, said CLSA analyst Mariana Kou Chun-yin.

According to the Feng Shui Index 2014 forecast, sectors related to wood and fire will outperform.

"They include retail, media, soft commodities, internet and tech and oil and gas industries," said Lam. "But stay away from the metal and earth elements including the autos, banking, building and property and resources sectors."

She added: "Gaming and hotel stocks, which have jumped significantly this year, will shed their luster a bit."

Coincidentally, Casino operator Galaxy Entertainment Group (0027) - the best performing blue chip last year - drop

ped 5.5 percent yesterday after a JPMorgan Chase recommended investors trim their exposure to Macau gaming companies.

CLSA also warned investors not to venture too far into property stocks.

"We should be ready for the elbow of evil this year," warned Jackson Hui Lap-yin, research associate of the property team.

CLSA earlier forecast local home prices will drop 10 percent this year and 5 percent next year.

Hui said an "evil shroud" will cover the northwestern part of the New Territories and eastern part of Hong Kong island.

And the outlook for property in Yuen Long and Long Ping is "filled with horror" as more land supplies are expected there.

Quarry Bay, Tai Koo Shing, Siu Sai Wan, Sheung Wan and Kennedy Town - where home prices have surged in the past few years - may see them fall.

And properties in Lung Kwu Tan, Tuen Mun, Pok Fu Lam, Mount Davis and Aberdeen will offer lukewarm return.

But last year's forecasts for the soon-to-be-concluded Year of the Snake have been somewhat off the mark.

CLSA said last year that it expected the HSI to rise to as high as 26,000 points. But the index rose as high as 24,111 points.

But Kou took the discrepancies in her stride, saying the brokerage has been issuing the Feng Shui Index forecasts for more than 20 years and it is inevitable that in some years, they will be slightly off.

The 2014 chart IS SURPRISINGLY POSITIVE considering the many headwinds that experts are predicting for 2014. Naturally we all do wish that the wind and water forces will be greater than the feeble minds of mere mortals.


Interesting Facts

Only 22 Countries Were Never Invaded By The British
40 Maps That Will Help You Make Sense of the World - The Only 22 Countries in the World Britain Has Not Invaded (not shown Sao Tome and Principe)

40 Maps That Will Help You Make Sense of the World - Paid Maternal Leave Around the World

Driving On The Left/Right Side
40 Maps That Will Help You Make Sense of the World - Worldwide Driving Orientation by Country

40 Maps That Will Help You Make Sense of the World - The World’s Busiest Air Routes in 2012

Most Common Surnames In Europe (and they had the gall to laugh at the Nguyens and Kims)
40 Maps That Will Help You Make Sense of the World - The Most Common Surnames in Europe by Country

Saturday, January 18, 2014

Wednesday, January 15, 2014

How To Tell Whether An Expat Is Working In HK, Singapore or Malaysia

I think this is ripe for a repost. The first two categories (HK and Singapore was from the site .... So I think I better add my contribution for expats in Malaysia.

Accidentally stumbled across a site for expats in Asia. They have a satirical write up on their welcome landing page. Its funny. The site is

You know you are a Singapore Expat when:

You forget what chewing gum tastes like. You wear winter clothes indoors and summer clothes outdoors. You think a bus is incomplete without a TV. You say handphone, not cellphone. You order warm water because too much ice water is bad for you. No matter what you're doing at the moment, you'd rather be shopping You are certain that Holland Village has very few Dutch people and is a place for hippie bohemian artist types and overpaid yuppies. Your idea of a good night out consists of having dinner at a hawker centre and then eating again. Durian and belachan no longer stink. You justify every argument with the phrase "in order for us to be competitive in the 21st century". Most of these acronyms make sense to you: NUS, NTU, ERP, SDU, PAP, MRT LKY, GCT, PRC, TIBS, SBS, SMS, JB, JBJ, AMK, AYE, PIE, ECP, ISD, ISA, CPF, CHIJMES, SPG, CWO.

You get annoyed if you don't see a sign telling you how long your wait's going to be for a bus, a train, or the expressway. You think everything should be 'topped up'. You think there is nothing wrong with putting chilli sauce on everything you eat. You think US$1 million is reasonable for a smallish condo, but S$5 for a plate of fried noodles is a rip off.

You know you are an expat in HK when:

You have developed a taste for mooncakes. Your building's security guard is 4x older than the building itself. All your clothes are tailor-made or come from Giordano. You are not surprised to see an 85 year old lady pushing tons of garbage / cardboard boxes up the street. You believe shopping and eating are the only forms of entertainment. You have become a shameless-name-dropper. You have a MontBlanc pen clipped to your shirt pocket. You believe the HK Jockey Club is an honourable philanthropic organisation.

You can tell who is Andy Lau, Jacky Cheung and Hacken Lee.
You believe you are really tall when you are only 5' 8". You get offended when people admire your chopsticks skills. You speak enough Cantonese to make your colleagues laugh their heads off. You bring a coat and scarf to fight hypothermia in supermarkets, buses, ferries and cinemas. You are not surprised to find footprints on the edge of toilet bowls. You use the word "Ayyiiieeeaahh" to convey surprise, pain or anger. You are always looking forward to the next Typhoon 8. You think US$2m is a reasonable price for a flat but HK$40 for a plate of noodles is a ripoff.

Here is my contribution: 

You know you are an expat in Malaysia:

You think double parking is not really that unconscionable if you are within earshot of honking. Everytime you have to visit a government department, you have to take the whole bloody day off. You are so glad to have AirAsia so that you can go to Phuket, Krabi, Bali, Bangkok, KK, Penang for the weekend cheaply. You envy the salary packages of fellow expats in HK and Singapore but laugh at their expenses. You worship the sun, but even so, you do not wish to be out in the streets between 11am-3pm. You cannot believe the locals do not use sunblock. You thought OZ was slack, but secretly welcomes the most number of public holidays in a single country on earth. You go to the beach but can't bring yourself to swim in it.

You only meet up with friends at Mont Kiara or Ampang. You have never been to Kepong or Gombak. You are not sure if all the girls at Beach Club are really girls. You think the locals drive like failed F1 drivers. You think all Malaysians drive their cars without installing indicator lights. You think crossing the road is Malaysia's national sport. You think Malaysian food is the cheapest and the tastiest in the world. You snigger quietly at how low the rates are for 5-star Malaysian hotels. You think US$25,000 for a locally made car is the biggest ripoff in the world. You couldn't bring yourself to buy a new car at local prices, even though you can afford to, so you end up driving a 5 year old third hand deadbeat.

p/s photos: Rozita Che Wan

Saturday, January 11, 2014

Soros Shorting China?

Bloomberg:  George Soros probably shouldn't expect any warm invitations to Beijing - not with the much-reviled short seller warning of a giant Chinese crash.

The billionaire first shook a major government in September 1992, when he led an attack on the British pound. For his role in humiliating London and forcing John Major's government to exit the European exchange-rate mechanism - essentially the euro - Soros reportedly netted $US2 billion.

If Xi doesn't act now, Soros could make way more than $US2 billion when things go awry. Add a zero. ubprime debt crisis as well. Here in Asia, his legend has loomed large since 1997, when then-Malaysian Prime Minister Mahathir Mohamad accused him, bizarrely, of heading a Jewish conspiracy to spark an Asian crisis.
Now Soros has his eye on China. In a January 2 op-ed for Project Syndicate, Soros didn't say whether he's shorting China. But he did connect the dots in a way that can't make President Xi Jinping happy. To Soros, the main risk facing the world isn't the euro, the US Congress or a Japanese asset bubble, but a Chinese debt disaster that's unfolding in plain sight.

“There is an unresolved self-contradiction in China’s current policies: restarting the furnaces also reignites exponential debt growth, which cannot be sustained for much longer than a couple of years," Soros wrote.

Xi would be negligent to ignore Soros's warnings. He's hardly alone: Peking University professor Michael Pettis and Jim Chanos of Kynikos Associates have been beating this drum for years. Silvercrest Asset Management's Patrick Chovanec worries about a “shadow” Chinese balance sheet that would be keeping policy makers awake around the globe, if Beijing's obsessive opacity weren't concealing the problem.

China would never admit to basing policy on outsiders' warnings. Still, it's interesting to see the flurry of official Chinese moves this week aimed at reining in the shadow banking sector. On Monday, for example, China’s Cabinet imposed new controls on the multitrillion-dollar sector, targeted off-the-books loans, and promised to beef up enforcement of current rules.
I'm thinking we need to call this industry what it really is: China's answer to Enron. The Houston-based Enron's real business wasn’t energy and commodities, but book-cooking. The same holds true for China's shadow-banking entities. They are the fuel Beijing uses "to restart the furnaces," without attracting the notice of Moody's, Standard & Poor's or the US Treasury Department.

China's financial system is the ultimate black box. You don't have to be a genius to conclude that when JPMorgan Chase estimates shadow banking to be 69 percent of China’s 2012 gross domestic product, it's a wildly conservative guess. I wouldn't quite add a zero, but if China fudges trade and other run-of-the-mill data, you can imagine the lengths to which it goes to hide the magnitude of its credit bubble.

"There are some eerie resemblances with the financial conditions that prevailed in the US in the years preceding the crash of 2008," Soros wrote.  "But there is a significant difference. In the US, financial markets tend to dominate politics; in China, the state orols the state-owned enterprises." He added: "How and when this contradiction will be resolved will have profound consequences for China and the world."

The problem, as economist Stephen Roach sees it, is China's propensity for thinking that slogans are sufficient. Thewns the banks and the bulk of the economy, and the Communist Party contre is an inherent disconnect between lofty pledges of economic reform, sustainable growth and public accountability, and Xi's repeated assurances that China can grow north of 7 per cent a year.

China can either restructure its economy or grow rapidly - it can't do both. Bottom line, the higher China's growth rate, the less retooling that's going on and the more debt the nation is amassing behind the scenes.

The need to restructure applies to Beijing, too. The untold part of last year's Bo Xilai story was that he was merely the vanguard of ambitious local officials looking to build the next Shanghai. Bo's greater Chongqing area comes pretty close, boasting a population bigger than Shanghai's and a skyline that rivals New York's.

The way such regional leaders win Beijing's attention is rapid growth. That means all around China, far from Beijing's view, are dozens of nascent super cities all borrowing like mad to deliver big GDP numbers.

They're generated by massive projects to build highways, bridges, international airports, five-star hotels, universities, splashy art and sports centres, apartment villages, shopping arcades to welcome Gucci and Chanel and, of course, record-breaking skyscrapers.

People haven't make lots of money betting against China. But Soros is absolutely right that there's a worrisome disconnect between China's pledges to move away from excessive investment and overborrowing and toward a services-based economy without sacrificing rapid growth.

If Xi doesn't act now, Soros could make way more than $US2 billion when things go awry and savage the global economy. Add a zero.

Read more:

Wednesday, January 01, 2014

3 Interesting Charts/Surveys

Chart #1

How can any society or any government succeed when most of its institutions are held in such low regard by its citizens? In this revealing Gallup poll, even a seemingly developed and advanced nation like USA have issues that they have to grapple with. The now oft-used "trust deficit" is sorely lacking in Malaysia. I wonder how a similar survey in Malaysia would yield.

"The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt!" (55BC)
- Marcus Tullius Cicero (106-43BC)

americans confidence

Chart #2

This chart was initiated by a hunters' association, which they try to bring clarity to opposition groups on hunting. The causes for birds' fatalities are mind boggling.
What's interesting is the source of the graphic-- the National Shooting Sports Foundation, a weapons industry association-- and the reason that the NSSF put it together:  to fend off criticism of lead ammunition, which is fatally ingested by a lot of raptors and waterbirds and is threatening to drive the California Condor back into extinction in the wild. Alternatives to lead exist, but, owing to low production of them, they're currently somewhat more expensive.
What's striking about the pie chart is how big a slice of it consists of predation by free-roaming cats. A large new peer-reviewed study published in 2013 estimates the number of North American birds killed by cats at well over one billion per year.  Bells on collars don't help. Neutering feral cats doesn't work. Keeping cats indoors helps.
Chart #3

As global markets cheer share prices, lets look at the sobering situation in Europe. Much of it is still in pain. However, if you look on the flip side, a substantive improvement in employment going forward may reverse the figures on the chart, which is to say when things turn, they could present a lot of upside still to the economy.
cowen ecb graph
Tyler Cowen's graph comes by way of the blog Sober Look. It measures year-over-year loan growth to households adjusted for sales and securitization. Or, to put it more simply, it shows credit remains a huge problem in the Eurozone. "Here is one reason why the eurozone is not out of the woods" Cowen said over e-mail.. 

Margin Valuation Prices As Price Targets

What a novel idea... the supposedly latest share margin valuation prices for glove stocks MAY actually present itself as a ready-easy targ...