stlplaceHMIN looked cheap these days, should we jump in and buy it? I have both MR and HMIN, and as a matter of fact, I bought some more HMIN after its disappointing earning report. My mistake. You may think because HMIN has been to $49, and now it’s trading $29.50, isn’t a big discount? Yes or No. I hope HMIN won’t go much lower because it is my largest holding now (I’m looking for opportunities to exit).
The policy makers in China found the silver bullet finanlly, the Shanghai composite index dropped 280 points or 6.5% today May 30, as seen from this news from Bloomberg. This is the biggest drop in a day since Feb 27 (9% drop). The policy makers have warned the investors (or more accurately speculators) for a while, the head of central bank said some words during an international meeting (remember the vice chairman of people’s congress, Mr. Chen’s similar words late last year?); two interest rate hikes; three bank reserve rate hikes. But the new investors seemed ignoring all those warnings, as we have seen from the record account openings since March. We have 100 million accounts in China now. Let me quote some words regarding the “bubble” (I was told this was said by Buffet, but have not verified the source):
That’s the stock trading 印花税 in Chinese. It was only a week ago somebody from department of finance denied the “rumor”, now they ate their own words. They raised rate from 0.1% to 0.3% for stock trade.
I don’t know how the market will react to this. Will it blush off like it did on May 21 amid the raise of interest rate? We shall see.
Seriously, I think the goverment could put those money (I mean increased stamp tax revenue) into education, and health care, that will be a wonderful thing. We all want a harmonious society, don’t we?
You know I am kidding, do you? We all know the bubble is there, but how much bubble do we got? Is bubble going to burst very soon? These are the questions the investors (more accurately speculators) in China should ask.
In my mind, there are fundamental reasons for this rising of Chinese equity values: over liquidity (too much money, too little stocks); improvement of company fundamentals including rapid growth; Gu Gai (the stock reform which remove cloud from the floating shares), etc.
The following picture was taken at Barbela, a popular Pizza place in Shanghai. One nice feature of Barbela is they offer the same quality food as Pizza Hut, but at half the price. No wonder people will form a long wait line at Barbela during weekends. As you may know, Pizza Hut was (and still is) a very popular place in China, it’s not the good old Pizza Hut you see in the US.
I’m sorry being a flip-flopper here, because I was bullish on its stock until last Thursday. But like many things in life, I think sometimes it’s worthwhile to have a second look, this is especially true on investment. It’s no good to hold on a stock “no matter what”, or “fall in love with a stock or a company”, because we don’t want to throw away our hard earned money. At least I don’t.
I heard about this thing first from reading Home Inns’ IPO prospectus. Don’t know how big a deal it is. But it was ineresting to see Home Inns’ (Rujia) being mentioned again in this list. I did not see the Jinjiang (2006.HK) being mentioned here, a bit surprised.
Think that as a “best hotel” award, if you will. This Golden Pillow thing is a bit of Chinese English.
When I was in Shanghai in March, I watched a special program on China-CBN (Di Yi Cai Jing) talking about “school for migrant workers’ kids”. Not surprisringly, the schools’ condition usually are much inferior to same level schools attended by “city kids”. The Shanghai Municipal Goverment gave 60 m Yuan this year for the “migrant kids’ school”. This is nice, but not too enough to cover all the kids, because they are millions of migrants workers in Shanghai, and I believe there are at least one million kids attending those schools (so roughly 60 Yuan per kid).
This is a part of the deals reached during Ms. Wu Yi and Mr. Paulson’s talk today. Here is an excerpt from MSN.
“Under the agreement announced Wednesday, starting this year, U.S. carriers will be able to operate 13 new daily flights to China within five years. One new flight will be awarded this year and one in 2008, four new flights will be awarded in 2009, three more in 2010, and two each in 2011 and 2012.”
I also found the following very interesting, from Financial Times.
His name is “Dai Tou Da Ge”, here is his blog at Netease (163.com). According to many sources, his blog was more popular than Ms. Xu Jinglei’s blog at Sina, although he only blogged for three months. Not surprisingly his topic is Stock Market. I read his first page, interestingly everyday he started first sentence with “the market did exactly as I expected,…”. I did not verify his claims but it seems many people believed it.
Anyway, I think the music in his blog is pretty good. Oh, that “Si Le Dou Yao Ai” is very popular in Shanghai these days 🙂