Asia Morning Analyircs: 120510 : Determining the moves

Dear readers

Despite a slight pre mature call for a day technical rebound, which came through on the Monday session, it is noticeable that we have had the party, people celebrated over it, and we are back to business. The question looming over market at the moment is, why did the. ecb pour out so much money, when this is a situation of a begger who is already in debt, is borrowing money to solve its problem?

Reflecting on this, market certainly took the bailout negatively and considered this is socialising risk amongst the region. Interesting enough, market, again, is demonstrating pockets of strength that is supporting levels and provide a buffer for further downside.

It must be noted the strength on the US front looks promising, as job outlooks
are improving. Consumer and manufacturers are leading the US out of the bottom. However, it also appears state government and local governments are also struggling to finance their budget.

On the china front, things aren't looking too good either given the high Level of risk aversion due to the inflation outlook and overheating concerns.

Gauging the direction at the moment will be more important as market will head into pockets. For near term, we may expect increasing volatility but a lack of direction.

GFA remains to be a seller in medium term over the outlook of the global economy.

To keep it short for today, if you wish to discussion any issues, or queries relating to our views, please feel free to contact us on gfainvestment@gmail.com.

Ongy out.

Asia Morning Analytics : 100510 EURO SAVIOUR

Dear readers

An eventful weekend with everyone spending time with your mother whilst the EU ministers ploughing through possible measures to contain their contagion problem that is inflicting pressure amongst the globe. Ending with EU ministers target to inject money into the system as an attempt to stabilise the currency. And its debt market, this will certainly become the highlight for the week!

Although our call for technical rebound seems premature last week, the bounce clearly is coming by this week, with the euro's attempt to save its last minute contagion. A question we should ask, however, is the credilbility of such plans, and would merely pumping cash into the system will achieve the desired effects? This will certainly depend on the model being used and the measures employed to avert this crisis alone.

Given the highly likely tech bounce today, a quick snap and run opportunity is present. However, GFA maintains a short to medium term bearish outlook for the EU foldout. Pending on those questions being answered, it is highly likely the contagion may continue as the structural issue of the problem yet remains unresolved.

As at this stage, it does appear the larger EU countries will be the loser for the whole game, as a mean to stabilise the region.

Anyway, to keep it short today, GFA maintains a buy rating on heavily punished stocks on a relative basis. Port related stocks are also attractive.

Ongy out.

Asia Morning Analytics 060510 : A more violent reaction than anticipated

Dear readers

Market has been generally acting in the way we anticipated in the medium term, as we cpuld clearly see the market is trending down over contagion fears and continual debt problems. I note that we have been aware of this problem, and has continually pressed on looking for exits. We have also previously mentioned this time round, the adjustment may be steeper to the february slide caused by the same jittery. The only thing that has not played out as nicely as predicted came down to our techincal rebound analysis and market continued to punch thru important levels to take the market lower.

We remain and reiterate our previous view today, and add that we are still looking for signs of technical rebound. It should be noted the previous positive announcements in recent weeks may not be reflected by the global fears.

To keep it short today, we will continue to recoomend over technical short squeezes as a counter force may keep the mkt alive today.

Ongy out.

Asia Morning Analytics 040510 : Welcome the technical Rebound

Dear readers

Morning and would like to commend on the market's movement overnight. With the VIX down more than 8% overnight, it provides indication the current problems in front of us may be receding. This certainly promotes risk appetite and could look at potential short squeezes this session.

This more or less confirms our view of a technical rebound this week, given the high level of correlation for the markets. Please note that I do continue to pose a medium bearish trend over the market as implications from the events at hand do suggest further worries ahead od us.

As for the technical rebound opportunity, believe the best way to capitalise will be identifying relatively high beta stocks. May also look for cheap vaLuation, such as Gome and export related industries.

Again, trying to make it short recently, so if you would like to obtain our opinion over specific stocks, please feel free to contact us on gfainvestment@gmail.com.

Happy trading!

Ongy out.

Asia Morning Analytics : A technical bounce!!!

Dear readers

As previously discussed, I continue to maintain a bearish view over the next month and has been claiming for a gradual decline. The situation has been murky, and all events are playing out against the market.

However, we may have a turnaround event over the weekend which may spark a technical rebound from current level - the /reek authority has accepted the EU changes to the plan, thus allowing a bailout package to go thru. This is certainly a hoorah event for the market in the near term, as we will see risk appetite to return for a bit. I anticipate the short squeeze on the euro may take the euro back towards the high end of march, looking at 1.34 as a cap.

However, remain to see that various global events maintain to keep a lid on further growth, as we continue to be trapped rangebound from the start of the year. Near term problems to highlight will continue to be sovereign problems, dubai world's repayment issue, and government measrues within the asia region.

The diversion in political measures start to raise alarms as the recovery base may not be as strong as one think. Given the bipolar nature of these policies, it may hamper the delicate recovery in front of us.

Cureently maintain bullish view on gold and oil, as they may provide near term hedging opportunity. How the market has been playing out also continue to support their advancement.

May consider to sell into this rally, or pick up thede hedging instruments. Just like the theme for the day, advise investors to look at this tech rebounding days ahead.

Again, trying to keep it short today, shall there be any needs to further discuss, please do not hesitate to contact gfainvestment@gmail.com. We are more than welcome to answer your questions or respond to your query!

Ongy out.

Asia Morning Analytics 290410: A continued murky situation

Dear readers

As previously mentioned, we have anticipated jittery markets from mid april when we believe valuations started to strap the market. With last night 4pain receiving its downgrade, this provides our continual bearish tone on global markets. We view the optimism led by FOMC and HP last night will be short lived as we may anticipate the EU region may spark a real risk for contagion for sovereign risk.

However, we are in a position looking on bets off the table as the current situation may force EU policy makers to coordinate some more efforts to talk the market out of trouble at the moment. We may expect some short squeezes today that may lift the market up on a day ahead basis.

The issue is Asia do also post its own problems, in addition to the global sovereign risks. This helps putting a bearish view on the market.

As previous article mentioned, we continue to maintain the view that the market will struggle up for period up to may end. We anticipate a gradual decline here for roughly a 5% - 10% mark.

Trying to make it short today, however should you wish to continue to discuss, please contact gfainvestment@gmail.com.

Ongy out.

270410 Asia Morning Analytics: A cloudy moment

Morning readers

Looking ahead for performance today, overnight's move clearly suggests a short squeeze from us frisay afternoon that took its optimism into monday's asia squeeze. However, we should remaiN extremely cautious at this point in time!

Overnight development clearly points to the fact that sec has done it's homework to pin down gs's deal. Thus this will remain one big question to the stability of market! This is extremely evident by the cds spread jump on the financial industry.

On this note, would like to make today's post short. Looking ahead, I remain to hold a bearish tone over near term moves.

Ongy out.

Asia Morning Analytics : The Begining Of a Bearish Tone

Morning readers

I'm proud to see the calls coming together so nicely from yesterday, as I have previously continued to note that the market may be in for a nicer and heavier breather.

Overnight certainly saw the typical bad news riding on early, and good news such as your labor stat, housing stat and earnings that are performing so well to bode the US mkt up from falling 1.3% to flat.

However, I note here this bearish down slope will be much slower and gradual than the jan-feb fall. We will continue to see pocket of anomalies that will bode mkt for a day or two before resuming down hill.

Given the overnight performance, we may expect hsi to stage a light rebound, still trapped in the 21000-21500 zone. I remain to reiterate here, these rallies should be sold into to lock profits or create shorts.

- remain to see this breather to stop around 20000 mark, given the amount of uncertainty in greece and is downgrade, and a possible contagion.

To better confirm this view, the action today will reveal our hypothesis. As long as the mkt is decent on the volume and finish relatively flat, it would further indicate our view is coming together.

That's it for today, happy trading!

Ongy out.

220410 Asia Morning Analytics : A out of steam runs?

Dear Readers

Apologies over the lack of blog recently due to restructuring issues. We will be announcing the new layout of the dailies and weeklies within the next two weeks.

As to begin a new page from the restructure, I thought it would be nice to comment on our recent success in calling the feb low run up which yielded a 30% runs on export names such as cosco and our internal consumption plays on GE (3308.hk) and nwds (825.hk) which both yielded roughly 10 - 15% runs. Least not forget our gome (493.hk) and haier (1169.hk) call that yielded an extraordinary 30 - 50% return to th top. Most stock reached or neared our target price before turning around in the past few days.

Leading on from here, it is worth noting that many of these plays have fallen back nearing late feb level. Moreover, the earnings support from us mkt is also not exactly boding the mkt up. This could be seen thru the currency leads, which tends to see a break down, snd the fact that the market is not reacting too much to the good news. This appears to be a sign of the mamarket is running out of steam and needs to cool off a bit.

Hence, the theme today, suggests you that the reasoning to hold risk is becoming more and more inattractive. This favours the bears to come back in and take control of the mkt for a while.

This is also evident as the mkt is experiencing sector rotation whilst capital is trying to get out of hk.

(Herefore, I recoomend defensive plays in the coming week and try and sell into this rally.

Happy trading!
Ongy.

Asia Afternoon Analytic: 010310: Asia up... Europe up... BUT Europe is messed up financially?

Evening everyone,

First and foremost I'd like to apologise for the lack of a thematic this week, we have been wrapped up here recently, and second of all the lack of coverage on friday and this morning.

Well Asia made broad based gains today as US GDP was revised upwards... another key point to note was Chicago PMI data was up 1.1 points. Interestingly the market responded positively despite a drop in Employment, Production and Orders. We do suspect the main cause of this would be due to the increase in backlog which potentially marks this negative february data as a one off event due to the recently harsh winter. So we can expect a resumption in positive data for March as the US weathers the effects of the snow storm and the backlog is turned into actual production which will in turn generate employment and orders. To support this, the ports sector in the HSI demonstrated strong performance, though we have no material reason at this point in time we do expect it to be based on bullish trade expectations.

What does suprise us at the moment is how Asia remained up for most of the day as bearish sentiment began to appear in Europe. Even more unexpected was the strong increase in European Bourses across the region. This was despite major risk aversion on the currency spectrum predominatly with a flight from the British Pound as a low interest rate outlook, political and balance sheet concerns have begun to materialize. UK Banks also began a rout, led by the poorer results of HSBC which we expect to carry over to Hong Kong and potentially lead a global banking sector rout today as the greater cost of bad debt and provisions are not expected to be mutually exclusive to HSBC alone. We do suspect rising bad debt in China especially and feel HSBC may have made additional provisions for this given China's rapid monetary expansion in the past year.

Bringing back the focus to Asia GFA targets HKD4.2 for GDI, we also expect Huadian's results to be positive and carry over to the rest of the power sector tomorrow during which period we may encourage a sell on all power stocks for the time being. Be on the look out for opportunities in banking as the contagion from the HSBC results spread giving decent opportunities. We can expect copper stocks to continue their rally due to the massive earthquake that recently affected Chile one of the world's largest copper producers to be hit.

Asia Morning Analytic: 260210: Further Concerns Materialising

Morning readers,

First of all, apologize for the missing daily yesterday. A quick glance over last night's movement is mainly the concern over Moody's downgrade on Greece, whilst the US posted relatively negative data as Durable Orders ex transportation fell, and continuous jobless claims saw a rise, sparking concerns over a jobless recovery. The combination of all these factors saw the market begain with a strong 2% drop which tapered off over the session as Euro saw bargain hunters coming into supporting the market.

The significant event overnight with Greece is significantly important, as we have earlier discussed that Greece's premier's plan may only hinder the inevitable, whilst on a greater realm, the unity of the euro continues to be under challenged.

We remain to believe market to be in a range trading mode, though the macro concerns may start to tilt the market back towards a negative tone, despite corporate fundamentals showing improvement.

We see a broadbase selloff today, as we have indicated throughout the past few post over continuous caution. Again, reiterating a break below 20,000 will remerge bears, whilst a break above 20,800 may see further gains on HSI.

Anticipating further bank hits today, whilst commodities to be hard hit from a strengthening dollar. Consumers space may continue to suffer from valuation, thought GFA believes they remain on the buying list for 2010, and that any dips poses buying opportunity. Also, export-related sector may go down due to negative US leads that suggests a slower rate of growth in G2 that dampens export demands.

ongy out.

Asia Morning Analytic: 240210: Materialising Concerns...

Morning readers,

As per close up last night, HSI did maintain a relatively bullish sentiment carrying into Europe. However, given weaker business index in Germany and weaker consumer confidence in US, our mainstream bad news seems to be kicking back into the market. On top of such, Greece and sovereign problems remain lingering on the market, whilst Chinese continuing suprising tightening despite a lower January CPI by hiking discount rate surely puts further constraints on the bullish side for the market, with which, we believe, has been shrugged off by the market.

As we have been reiterating, we are mildly bullish on HSI for a break over 20,800 indicates further gains for the short term, however, we remain to believe a cap on such level will be the biggest barrier to the index's advancement.

Looking ahead of today, Dive2Blue has provided a decently commentary over today's outlook. We remain the same bias as per last night, as dollar continued to strength throughout the overnight session, gauging for risk aversion and profit taking after the previous 5 session of up days.

We are looking for a floor on HSI nearing 20,300, and again, a break below 20,000 may point to further downside, gauging for a 1-2% retreat today. GFA again, reiterates caution nearing ahead, though believe reporting season may provide support on the market.

ongy out.

Asia Afternoon Analytic: 230210

Afternoon readers,

My first wrap up in a while so bear with me on this as i get reacquianted.

Overall the Asian market remained surpisingly resilient, reversing losses made earlier in the day with the HSI closing up 1.21% with volume returning late in the afternoon. We do feel that the market today did not coincide with our expectations due to the late bouncer which although positive worries us given the current dip in the US (DOW: -0.74%) and European markets due to dampened consumer sentiments. This will translate into declines in Chinese export related stocks, predominately ports, container, and paper tomorrow. We do feel that if the dip is strong enough that taking this as an opportunity to enter positions in these industries could be beneficial given our stand on US inventory recovery.

The morning started out choppy with lower US and European markets as China raised the discount and temporarily negative sentiment based on Parkson's weaker than expected earnings the previous day.

Dubai World led a flurry of positive sentiment as the Emirate of Dubai pumped in more funds into the company. This was followed by a broad based late bouncer in Asia which drove the market back into the green.

As for our position analysis for today:

GE: +0.54%, indicating a floor towards the Chinese consumption sector after Parkson's poor results
GDI: +1.55%, we still see value in this stock potentially hitting 4.2 in the near future due to exposure to two sectors we are bullish on: Water & Retail
Power exposure: Our power exposure remained flat today, we are considering exiting this exposure due to the on coming potential negative impacts of coal price increases in the near future.

Based on the current US and European sentiments, expect a broadbased gap down in Asia tomorrow, we do expect the utilities sector to remain relatively resilient on this with the export sector being the most heavily hit.

Dive2Blue out.

Asia Afternoon Analytic: 220210

Afternoon Readers,

A bit late for a wrap up, but let's do a quick one for snapshot.

Overall, market reverted the over reaction on friday, setting HSI to bounce off Friday's low, as bears scrambles to cover shorts. However, actions became very quiet throughout the day as volume remained sluggish throughout the day.

The overall bouncer took the general market up, however, special mention goes to consumer stocks that took an early lead, with GE (3308.HK) reaching a high at +7%, and NWDS finishing + 7%. However, Parkson's result took the sector down, as not meeting consensus result made it sank 6.5%.

Export-related stocks all took a general hike up, with Foxconn (2038.HK) up 6%, and NDP and LMP up 3-4%. Ports related stocks all took a general 3-4% up as well.

Would continue to eye these sectors as near term bullishness remains intact from a global recovery, whilst China inflation remains low is an general support for slower rate hikes, which will remain supportive for the market. Would also continue to eye for chinese banks, as recent punishment seems to have also priced in further RRR hikes, though this development needs closer monitoring after Chinese resuming trade.

ongy out.

Asia Morning Analytic: 230210: A Sideway Market

Morning readers,

Overnight choppy as S&P and Dow traded sideways, ending lower with commodities losing strength whilst banks gain. Remaining worries over Greece and Dubai linges on the market with Euro holding below 1.36, whilst dollar showing strength to hit commodities and various other risky currencies. This may demonstrate profit taking on US counterpart, as investors leave for the sideline for further directions.

Adding to the worries, it seems as though muni bonds are now on the spot light for credit issues as regional government finds it difficult to support its raising. This issue shall be more closely examined in our weekly thematic.

On an overall picture, we are remaining to see this macro uncertainty overhang, though reports supporting the market situation, that is generating this sideway market. GFA remains to issue caution over this market, though, as per yesterday's morning analytic, tilts our bias for near term upside for the asian bourse as reporting season begins in Asia which may find support. GFA also sees some profit takers to emerge today given a weak oversea lead, and some weak results that we saw last night - Parkson Retail Group.

On this note, actions on HSI today may remain slow, as volume did not return as per expected yesterday. We anticipate relatively flattish day, with more consolidation on the market. We are looking for a near term range from 20,000-21,000 with a break above 20,800 being significantly near term bullish signal.

GFA reiterates to favour consumption and export plays.

ongy out.

Asia Morning Analytic: 220210: Macro Concerns v Recovery, a balancing approach

Morning readers,

Last Friday seeing the Fed hiking discount rate by 0.25% suprised and jittered the market as a measure for Fed to signal the beginning of tightening cycle, sending Asia down on further profit taking. However, our weekly thematic theme on this issue believes such a tightening should be viewed as a benefit to the US financial system, as oppose a signal of tightening, which, as per Bernanke on US' Friday session, claimed that Fed rates will remain not be hiked for a 'prolong period'.

Continual market jittery over PIIGS and Dubai World's credit problems are also easing, causing much less attention on the market. The EU guarantee on Greece worries looks credible for the moment being, whilst Dubai World has also laid down timelines to propose to creditors in March over the restructuring of its $22 billion debt that shall be due in May. These developments provides the market some breathing air, whilst welcoming the upcoming reporting seasons in Asia, which may further provide support for the market in the near term. This is also bolstered by continual strength in US, with a improving job market shown my a lowering continuing jobless claims to 4563K and initial jobless claims,down to 442K for end of Jan, a suprising retail sales jump beating expectation, finishing on +0.5% mom (+0.6% ex Autos mom), and an increase in import price index, + 1.4% mom and + 11.5% yoy, an increase in IP, +0.9% mom, an increase in PPI +1.4% mom (+4.6% yoy), that all beaten consensus forecast, and a CPI that came below expectation +0.2% mom and +2.6%yoy, that points to inflation being a low threat at the moment which is welcoming for the markets. This may also allow us to anticipate our call, under GFA thematic: A shifting engine, to look for a continue recovery in manufacturing and capex in US that points to an intact global recovery.

Having said that, however, GFA remains to be weary over macro concerns, as concrete measures have not been implemented, and merely been delayed as solutions are currently being worked out. Would remain to be cautious over developments in EU, and a lesser extent, the credit troubles in Dubai that may be the spark of a sovereign credit contagion. Moreover, EU's development are also revealing weakness in its unity as fiscal creavity are being shown to hold the bloc together - this may continue to jitter markets over the collapse of the euro, which would be our thematic for this coming week.

Leading to this point, looking at overnight lead from Friday, we believe the Friday session in Asia was an overreaction to Fed's movement. Profit taking activities would be on halt as the underlying mainstream news are tilting back towards the positive end, which were all shrugged off earlier due to the macro uncertainty. Bargain hunters on the sidelines may actively enter the morning session, pushing market back towards its last week highs, especially with China resuming trade today that will see a normalisation of volume. However, remain to see 20,800 as the main psychological cap for the bulls, but GFA poses a more positive tone to the near market actions, looking at a range of 20,000 to 21,000, given reporting seasons in China may further bolster market on the upside.

On this note, GFA remains to be bullish over our export and consumption plays, with the reasoning stated in our GFA thematic: The relative safe heaven. We anticipate consumption names, such as Golden Eagle (3308.HK), NWDS (825.HK) [TP: 16.00], Gome (493.HK)[TP:3.00], Haier (1169.HK) [TP: 4.50], Lianhua (980.HK) [TP:25.00] and Jinkelong (814.HK)[TP: 7.50] to remain outpacing the market, whilst export-related names with more US exposure such as Cosco Pacific (1199.HK)[TP: 12.80], CHMI (144.HK) [TP: 30.50], NDP (2689.HK)[TP:11.00], LMP (2314.HK) [TP:5.25] to be the main beneficiary over a strengthening US economy. Chinese banks remain to be on our radar as we believe NIM will improve as Chinese authorities begin its OFR hikes and that the recent 20% plunge due to RRR tightening has already priced in such capital issue. Would suggest accumulating Chinese banks should it dip further below. GFA top pick in the sector being ICBC (1398.HK) [TP: 6.00] with a pick up near 5.40.

As for HSI, would believe market should at least recover to 20,200 - 20,300 level after the sell off on Friday, especially with China resuming trading today. However, main cap on asian market remains to be issue on policy overhang, whilst a delayed effect on macro concern will post some investors on the sidelines. GFA remains short term bullish on the market, looking for a clean break on 20,800 to 21,000.

ongy out.

Asia Afternoon Analytic: 190210

Afternoon readers,

Our call today was spot with the additional comment after the daily's release showing that US raising discount rates caused a turmoil on the market. We saw HSI taking down, again, further than we thought - an extra 1% further, down 2.59%,experiencing a broadbase sell-off, which is the hardest hit amongst its asian peers. Hardest hit stocks came from the commodity space due to the dollar strength, whilst Chinese bank and properties also took hit, with ICBC down 3% and a broadbase selloff on the properties space. This may be a result of continual tightening impacting on the market. On the consumer space,Espirit took a strong hit, whilst papers, supermarket and department stores also took a strong hit down, possibly on valuation. This demonstrates market remains jittery over recent macro developments and investors are looking to exit after 5% run up from feb 11 lows, whilst fx continues to be a good lead for market movements.

From this note, we again, reiterate a greater caution for jittery market, as a break below 20,000 reignites the bearish trend down towards 18,000 that we have previously been describing. However, a broadbase selloff that was stronger than its asian peers may look for a rebound in near term above 20,000. Would advise this run as an opportunity to exit the market and wait on the sideline as HSI will remain to trade sideway in a volatile manner, looking at a range of 19800 - 20,800.

Would also comment on market being very macro-driven at the moment, and that it is extremely sensitive to the developments in EMEA and the suprise move by the Fed last night after markets. Near term, all eyes on US tonight to see how market reacts to US tightening for further leads. Closing off today, would continue to issue GREAT CAUTION over upcoming market behaviour.

ongy out.

Asia Morning Analytic: 190210: Greater Caution!

Morning readers,

Overnight had mixed signals, as Walmart and Daimler under performed its reporting, sending the futures dipping early in the session, however, ended the day up with commodities rising and strong manufacturing data pointing to restocking and capital purchases from business themes that leads US recovery, as per our GFA thematics - A shifting engine has closely discussed on. Though the strength looks uneven, as initial jobless claims rose, whilst some corporates and sectors look as though tough conditions remains ahead.

Despite such positiveness sentiment coming across from overseas, would remain to issue greater caution as current break from selloff may merely be a bear rally, given macro uncertainty level is, again, rising. This is caused by:

1. Greece may be increasing finding difficulty to finance its 53 billion euro raising for its budget needs, whilst facing 16 billion euro bond redemption in May. Further, Merkel, Germany's PM, has claimed that "not a single euro" should go to help Greece, which points, again, to the credibility of a Greece bailout, as no concrete measures have been implemented since the Euro summit. Further the problem, the exact number may possibly be enlarged given GS's involvement with the swap arrangements. Notably, CDS spread has also increased last night by 10.5 bps, which points to increasing jittery woeing in the Euro region, waiting to be unleashed, unless contained.

2. UK has also reported its first deficit since 1993. This demonstrates a deteriorating fiscal position that may translate to further difficulty in the Euro region, and points to a slower recovery.

3. Dodd will be unveiling the financial overhaul plan next week - the Vockler rule to break up 'too big to fail' financial institutions. This may also weigh on the market, if the plan obtains approval from the senate.

On this note, we expect HSI, again, to trade relatively flat to negative cue today, beginning with a slight positive cue due to US optimism, ranging between 20,400 to 20,600. Would remain to see HSI to have a solid break up from 20,500 to continue its positive momentum, though a break down to 20,400 may demonstrate further weakness. Though may also expect continual profit taking these few days, as market uncertainty may cause investors to leave the table, which could be led by dollar strength, shown on the FX market as I currently write.

Continue to see consumer sector to be the outperformer, though heavily beaten down commodities, banks and properties may poise for further rebounds. Though expect such rebound to be capped by macro uncertainty.
GFA top pick for the day is NWDS (825.HK) on relative value and CNY sales play.

ongy out.

Asia Afternoon Analytic: 180210

Afternoon readers,

A brief wrap up again, due to the sluggish trade today, which do not points too much to the direction. Notably, however, futures down 0.8% as oppose to cash down 0.54%, showing some weakness in the market. Though, should be added market may continue to be range bounding due to lack of catalyst as holiday mood prevails.

As for our prediction this morning, market reacted similar to our expectation, with the morning trade ending down 0.1%, whilst widened in the afternoon trade to 0.54%, slightly more than our expectation. The clear profit taker, as per expected, came from the commodity field, whilst banks also retreated and properties also took a notch down. These are clearly profit takers after the market rebounded by more than 5% after past 4 sessions.

As for looking ahead, all eyes is pointing towards again, the Greece issues, whilst eyeing the dollar movement may provide more leads coming ahead. Several corporates is also reporting today, like Walmart and Daimler that may point to how the market reacts.

ongy out.

Asia Morning Analytic: 180210: The Calm Before The Storm II?

Mornining readers,

Overnight news was great, with all indices across the market edging up, however, the dollar also went up as the Fed minute revealed a continual expectation on a gradual recovery for the US. Dollar index went up 1%, weighing down all other currencies. Should be noted this is merely a mild sign of risk aversion, and as oppose, it is demonstrating strength in the US economy. This is also evident as commodities platform did not weigh down much after such a dollar rally, with crude and gold at little change. News stream continues to be relatively strong, with HP raising outlooks and beat estimates, whilst strong housing data, import data and IP data points to suppor the recovery. However, renewed concerns over start of US tightening cycle and Greece turmoil is still effecting the market, weighing on sentiments.

GFA remains to issue caution over the recent rally, though it is very likely a play over corporate reporting will generally be supportive on the market in the near term. Weighing both side of macro news and reporting, we expect market to continue trading sideways in the 20,000-20,800 range possibly for the remainder of this month, and the next. We may see more consolidation on the market, whilst riding out the negative macro situation to find new motion upwards. However, caution is issued based on macro situation may turn sour very quickly, given the sovereign and credit risk in EMEA looks relatively unstable at the moment. This is evident with Moody downgrading the 4 billion Euro hybrid securities from Greek banks that helps turn for safety flights.

We expect HSI today to trade relatively flat to a slight skew to the negative, as investors may continue to lock in profit after the past 4 session rallies that took the index up 6.5%. HSI may also continue to consolidate on sector rotations as investors may seek further safe haven to ride through this uncertainty time. Expecting commodity space to see clear profit taking, whilst a broad base slowdown and slow trade today is anticipated. We target HSI to finish nearing -0.3% - 0%.

ongy out.

Asia Afternoon Analytic: 170210

Afternoon readers,

A quick wrap up for tonight - we saw HSI running high, as much as 2.05% early in the morning, whilst tapered off in the afternoon, finishing around 1.5% up.

This has slightly outperformed our expectation for the day, though the sector movements were closely in line to our expectation. One thing worth noticing was that Chinese Banks shrugged off the 50bps RRR hike on Friday afternoon, whilst commodity space shot up as per expectation with a rebound across the commodity field.

Looking ahead, there should be further upside cosolidation, but it should be noted that sluggish trade today do not bode well for gauging sentiments. Should remain to anticipate slower markets given holiday mood still persist.

ongy out.

Asia Morning Analytic: 170210 The Calm Before A Storm?

Morning readers,

Hope you all enjoyed a nice CNY break, and would like to take this opportunity to wish you all a prosperous year of the tiger!

Tuning into the markets, it is interesting to take note of the development over the holidays -

1. Greece problem has reigned in more confidence over the ability that Greece may contain its deficit problem as a result of a concerted effort by EU to "credibly" guarantee its ballooning debt. However, it should remain to be noted that cautious approach should be taken on process such problem because no concrete measures have been actually in placed if Greece do turn in for help, despite Greece PM continued to reiterate that Greece do not need any external help. Moreover, it is notable that euro has been extending its falls despite the bucking of trend last night, which allows one to further turn into the deeper implications of the issue, especially given the recent detail over the swap agreements that has been done to delay interest payments on the Greek authorities behalf. There are several issues with this specific problem that will be further pinpointed, which would be detailed by the post on our GFA thematics: GFA: The PIIGS outlook.

2. A lesser but equally notable problem about sovereign risk and corporate risk problem is again highlighted by the development in Dubai World. Despite the recent bailout by Abu Dhabi, Dubai World is cranking up problems with their debt again as it fails to draw up concrete measures over how the debt will be faciliated in the current moments. This may, again, draw up global turmoil as it dents risk sentiment after the fallout in Europe over the past week.

3. Another suprising RRR hike of another 50 bps by the Chinese authorities leading into the CNY holiday was certainly not friendly to the global environment. Chinese authorities looking into reigning in exploding liquidity in 2009 may continue to pressure the markets. However, this movement have more or less seem to be priced in by the market as the news did not significantly dampen sentiment on Friday night. However, GFA remains to be cautious over this move, especially given Jan CPI data came out nicely below forecast at +1.5%, as this may signal Chinese authorities to stay on the tightening schedule ahead of the market's prediction.

4. On a brighter note, economic data coming out from the US, whilst corporate reports for Q409 has been spectacular to lift up markets. Notable ones are Barclay's report last night, with profit nearing doubling on a yoy basis. Whilst on the other hand, economic data such as retail sales and manufacturing index in Jan came out nicely in the US to support a continual and gradual US recovery, whilst the Japan GDP growth in Q4 also exploded to boost market sentiment on Monday.

5. Moreover, we are seeing on the FICC field that yields across the globe has stablised in comparison to early last week when Greece was in the focus. Risk sentiment has also returned as we see risky currencies taking a strong rebound from its earlier dips, with AUD and NZD being the outperformer these few days. Oil prices and other commodities have also bounced back hard, with oil prices up 10% from low of 69.95, whilst gold up 7.6% from lows of 1040's, thanks to a dollar retreat that demonstrates tension easing in the markets.

From these developments, it may be possible to see leads in HSI this morning to take positive cues over the recent developments, as risk sentiment has picked up over the last few days as the market has been given a lot more breathing space than that of mid- Jan to early Feb. Likely to see the commodities platform to outperform, lifting the market above the critical 20500 MA50 level, which may show near term upside to the market, whilst a general recovery across all other sectors as risk appetite returns. However, any gain may be capped by the RRR hikes that continues to weigh down local markets, which leads us to believe that continuing macro uncertainties and turmoils, and a 'fundamental catching up' story may produce what we see now as "the calm before a storm?"

GFA anticipates the HSI to be range trading between 20,000-20,800 in the near term, with a break under 20,000 further indicate weakness, whilst a break above 20,800 may provide indication that the correction phase is over. GFA looks for HSI to finish nearing the top end today as risk sentiment has dramatically improved from last week, aiming to see +0.5 - +0.7% on the market today.

GFA remains a buyer of banks on further dips, as for the reasons pointed out in GFA thematics: Chinese New Year Outlook, whilst seeing consumer sector continues as a outperformer. GFA is also a buyer of export-related sectors, which would be later discussed in details in our upcoming weekly thematics.

Thats about it for the morning wrap!

Happy trading!

ongy out.

GFA: Global Economic Theme: Chinese New Year

Morning everyone,

Sorry about the long MIA... been very occupied with lots of stuff to post anything, I do believe that ongy has been doing that for a while now:P

Anyway I would like to start my first post of the Chinese New Year (Yes, it's a new year! Forget January 1st) with our view on the global economic themes which we believe should fall into three general categories:

1. The Asia/China Story: As we know China has already begun it's economic tightening through reserve ratio hikes of over , new regulation on property loans and term note rate hikes. The Government has yet to touch the OPR, but this can be expected to change. However, we do feel that the OPR in China will be a measure of last resort by the Government as China is still in the midst of recovery and the US and Europe have yet to recover. We do expect the rest of Asia to raise rates in line with China/US depending on the flow of events, though most likely a US rate hike will have a stronger pull. The continued tightening in China can be expected to continue and will lead to slower economic growth which we feel is positive in the long run especially as these policies are targetting the concerns of property and asset bubbles in China, the biggest beneficiary from these rate hikes we feel will be Chinese Banks who have already lent out historically large amounts of loans.

2. The European Story: Contrary to popular news and belief that Europe is alright... we do see a different outcome. The recent events in Greece have already highlighted the weakness in the European economy with Portugal, Spain and Italy following closely behind. Debt/GDP ratios are expected to increase significantly in these countries by 2011 according to offical EU estimates with most EU nations entertaining large budget deficits due to bailouts conducted in the past year. The EU debt/GDP ratio, currently at 78% is expected to increase even further in 2011 placing Europe in a similar situation as the US with large debt. A closer analysis of these numbers will be followed soon to determine how much is owed to the taxpayer. A bailout of Greece is entirely possible; however, we do feel this would jepordize the position of the Euro as a whole, a point which we feel Germany has recognized through its recent reluctance to bail out Greece. CDS spreads across the Eurozone have spiked as a result of these events. We feel that Europe will continue to weaken as a "sovereign debt crisis" begins to emerge calling out not only the PIIGS nations but also more significantly the UK where debt levels are continuing to balloon.

3. The US story: Not everything we see is bleak however. Looking forward, we feel that the US has passed to worst of the crisis (unless Obama does something insane like make the US protectionist... which is all but impossible, cause he does have leanings towards the unions). We stongly feel that the US economy can be expected to strenghten with the indicators to look out for being "inventories" the rationalle? Well inventories have been consistently declining while the inventory-to-sales ratio has reach historical lows potentially indicating a period of restocking. While looking at this number, US CAPEX has been low and has allowed industrial capacity to decline for the 2nd time in history while corporate cash flows remain high. As companies begin restocking, we believe that this will lead to higher CAPEX spending and industrial capacity growth WHICH should translate into... EMPLOYMENT... a key indicator to increased consumer spending! Recently employment growth has been slow, as employee productivity increases. We feel that there will be a limit to how much employee productivity can increase before employment has to pick up again, and that there isn't long to go especially as restocking in the US becomes a major theme. Hence, we view that the US is geared for growth in the next few months.

The biggest risk at the moment we see is the growing risk of sovereign default in the EU which could spill over to the rest of the world, especially countries that have acquired large fiscal deficits. As this would kill liquidity in the economy.

It's a messy post at the moment, but WIP:D will clean up the post, get some charts and more concreate numbers up in the coming week.

Dive2Blue out.

Asia Morning Analytics 120210: All Eyes On Europe

Morning readers,

All eyes on EU last night, as the Greece bail-out plan develops. Not that nice of a day for EU bourse as comments are mixed and lacks clarity, though it may signal the bail-out would occur if it becomes necessary. Euro's decline last night may suggest and reflect two things, one being speculators continue to test the validity of such bail out, and the other being a pricing in of Euro if such bail out occurs.

Though notably, S&P and FTSE ended on a positive note, aided by such increasing credibility of a bail-out plan that helps slowing contamination fears. Moreover, initial jobless claims fell more than expected, pointing to a US recovery story being intact. Such overseas lead boosts sentiments to carry across for Asia.

However, it should be noted that Hang Seng and China will be on its last trading day before CNY holidays, hence, volume should remain relatively low, whilst any movement today will be rather minimal. The critical levels to look for would be the 20,000 mark, and expecting HSI to finish today between 20,200 - 20,500 as the near term range. Anything below 20,000 may signal bearish trend coming back into play.

Again, would reiterate previous buy lists over the couple of days, and the chinese banks should be on the radar at the moment, given yesterday's nice CPI data (+1.5% vs. consensus +2.0%) may provide initial support for a slowdown in tightening cycle from Chinese authorities.

That's about it today, and would like to wish you all a happy CNY.

Happy trading.

ongy out.

Asia Morning Analytic: 110210: Greece unfolding

Morning reader,


As per previously said, the market is tightly driven by policy and macro situation at the moment, and with Bernanke's speech countering Greece-related upheaval over sentiment, US took a dip yesterday, which was clearly shown through our currency leads last night.

However, if sentiment could be gauged by our currency leads right now, then one must consider looking into the near-term bullish side from the market, as we are seeing risky currencies up by 50bps in the last few hours, and continues to rise as I'm writing, and, thus, would consider to take this chance to sell into rally, or take a quick profit on these near term runs.

Would take this opportunity to look at hard beaten stocks, and consumer sector looks to be the best pick. Would reiterate buy on Golden Eagle (3308.HK) at 13.00, NWDS (825.HK) at 6.40, Gome (493.HK) at 2.20 and Haier at 3.60. Auto are also considered into the list, with Brilliance (1114.HK) being our top pick.

Would again, like to reiterate our caution on banking and property sector, but on valuation, chinese banks are increasing attractive at current levels. Would consider start accumulating on further dips. Top pick remains to be ICBC (1198.HK) and BOC (3988.HK).

Estimate HSI may take 20,000 today as sentiment improves, would consider HSI may up within 0.5%, with 20,000 being a significant psychological barrier. Near term, we may see HSI to range trade narrowly between 19,500-20,000 as macro situation plays out with its policies, as we remain to be in the mist of cloud of fundamental catch up.

Happy trading!

ongy out.

100210 Asia Close

Afternoon.

Today's trade ran pretty close to prediction, with HSI running up 0.8%. A broad based recovery over HSI, seeing Autos rebounding, with Geely being the exempler, up 14%.

Aftermarket actions should be closely monitored with regards to how the Greece situation plays out. Should there be any changes to the tone, sentiments may collapse on this note. Could maintain to describe the current situation to be closely tied with policy and macro situation.

However, the positive flows coming out of China should provide support that China's recovery may not derail from the recent monetary finetuning. Bottom up analysis may continue to indicate logistics and export to be superior, whilst consumption sector will continue to be upbeating. Would leave a comment that any dips from here becomes strong buying opportunities for these sectors. Our top picks remain to be COSCO (1199.HK), Golden Eagle (3308.HK), NWDS (825.HK), and Jinkelong (814.HK).

Happy trading.

ongy out.

Asia Morning Analytics: 100210 The PIGS

Morning,

Flows went well last night, as German's came out to speak after Europe market on the possibility to aid Greece's deficit troubles and Greece PM provided new measures to overcome the problem at hands. It calmed markets down, with US seeing a rebound over the matter, whilst Euro shot up 1.4% overnight.
Despite so, we stress on cautious as the whole deal over bail out may be slightly complicated by regulations within EU, whilst implication of a bail out may potentially causes moral hazard for other PIGS region.

Having a day ahead outlook, since HSI regained 19800 after the recent slump, we may be looking at a narrow range market these few days ahead of CNY holidays. Positive flows this morning from US inventory data and Japanese machinery orders may provide support to the market, though market jittery may continue over the Europe region. We may see HSI to range bound between 19500 -20000 in the coming few days ahead of CNY.

Chinese Banks and consumer sector continues to look attractive given recent sell off, whilst export plays also looks attractive on fundamental basis. We remain buy on ICBC, CCB, BOC, Golden Eagle, Lianhua, Gome and Haier. It should also be noted that autos have now corrected from recent highs, and may pose to be good re-entry points on sales outlook.

Thats it for today.

Happy trading!

ongy out.

Asia Morning Analytics: 090210 Asia Morning Wrap

Morning readers,

Exciting days lately, with global markets going hyped with a consecutively going down towards the 10% mark for various markets. Last night played out exactly the way thought, with FTSE down 3% and Dows down 1.04%.

Near term, we may continue to expect market to be dragged on by several factors - on the global front, Greece deficit worries may continue to linger on, and should be considered as the beginning of the deficit problems unless ECB or IMF steps in to provide some support for Greece to stop the contagion effect. It should be noted that Portugal and Spain CDS spread has also pushed up last night, which indicates further worries over this issue. Though we believe the worries should be calm down with some measures within the coming few days as some authority will step in to calm markets, the issue itself may seem more complicated than it is, and investors should continue to be wary over this problem. This will definitely continue to dampen risk sentiments in near terms.

On the other hand, Asia's, especially China, continue stimulus withdrawl effect may also continue to weigh on markets. On this note, meeting a policy market, we should be wary over how everything is played out - especially the banking and financial sector. However, the recent punishment on the bank looks towards to be 'enough' with Asian banks not overly worried over deficit problems in Europe, whilst stimulus withdrawl effect looks towards the ending side. Would start to rate ICBC (1398.HK), CCB (939.HK) and BOC (3988.HK) on the watch list for any near term strong rebounds.

It should also be noted that Asian consumer sector has been recently hit hard by valuation, with most down 20% from top. The recent hit should be considered as opportunities to buy on dips, as consumption driven recovery in China will continue to take a significant portion of growth this year. Would continue to maintain buy on Gome (493.HK) @ 2.40, Haier (1169.HK) @ 3.5, Lianhua (980.HK) @ 20.50, Golden Eagle (3308.HK) @ 12.00, especially across CNY.

Export driven recovery may also be noticeable, with US beginning to restock. Despite the magnitude of such restocking phase being questionable, we are also a buyer of ports play, when risk sentiment improves.

Near term target for HSI should be 19200, though the whole correction phase may continue to linger on towards 18000 level. We should anticipate HSI to fall around 1% - 1.5% today.

Thats it for the day.

Happy trading!

ongy out.

Asia Morning Analytics: 250110 Asia Morning Wrap

Morning readers,

Friday was some day for Hang Seng! But what's more interesting was the development on US on Friday, as we saw S&P falling another 2%, marking one of the sharpest drops over several weeks now. Market continues to set in a bearish tone, with stimulus withdrawl over China and Obama's amazing plan to take down excessive risks from banks.

Now Friday was a big hit on the market, with across the board sell-off. Notably, however, is that high valuation stocks in the consumer sector got hit the hardest, suggesting institutionals may be off the table for a while. I continue to issue caution over recent development, though, this may be the "double-dip" that we have been looking for over a year ago.

The market currently is heavily clouded by policies and recent economic developments, however, the data coming out has been relatively positive. Therefore, to a certain level, we may welcome such policy changes, though the downside risk remains to be the delicacy of the market remains intact.

We believe this may be the "catch-up" with the fundamentals as we saw the market rallying at an amazing speed last year. Hence, this may be a healthy pullback, and investors will jump on board as policy overhang fades out.

On this note, we continue to look at consumer plays, whilst a sector rotation may remain intact, as we look for lower beta plays during this downturn to perserve capital. Today should be a day looking for overreaction, and day trading opportunities.

ongy out.

Asia Morning Analytic: Asia 210110 Morning Wrap

Morning readers,

Must make a remark over the speed of stimulus withdrawl in China is amazing - a result of fearing inflation climbing at record highs. However, as, per earlier discussed in GFA 2010 Outlook, we do anticipate a volatile year. Given the pre-emptive moves the Chinese are doing, this may provide some strong indications that the Chinese believes the growth is becoming more sustainable, amid skyrocketing credit growth which poses risks of increasing bad loans.

On a general outlook, we may welcome such measures, but in the short term, we may anticipate increasing volatility as both fundamentals and technical buyers may see value in the market, however, the data and news stream is pointing to the downside. We continue to expect the market to end between 21300-21800 prior to CNY, but a big level to look out for is a break on 21000.

Overnight cues were taken from Asia, as China's increasing likelihood of a early withdrawl may hint a global slowdown on its recovery. Therefore, this morning, we may look for extended falls from stimulus worries. I believe upcoming reporting seasons in Asia may provide support for the market, though we may be treadding waters over the next few sessions.

However, with the dollar gaining strongly overnight, we may see further falls on commodities, though, may also pose chances to enter on such dips.

Again, we maintain our view to favour utilities and consumer stocks as oppose to the interest-rate sensitive, and high beta stocks. We also maintain a short term negative view on H-share banks, but regard this as stocking up opportunity over earnings report.

ongy out.

Asia Morning Analytics: 200110 Asia Opening

Morning all,

Overnight cues from the States bodes well, with healthcare and tech firms leading the market up 1% across the exchanges. Dollar rose, whilst treasury yields were up 2 basis point, suggesting the return of risk appetite over earnings.

Despite the dollar index moved up, commodities in general took an upward direction, with crude rebound from lows of 76s back to 78s. Gold was little changed from Asia, holding the 1130 levels real well. Such a move suggests some decoupling of the dollar correlation, and should be monitored closely.

Looking ahead for HSI today, would anticipate further recovery, looking to finish relatively strong around 21700-21800 mark, taking another 0.5% gains from yesterday.

Beaten down commodities stocks may stage for a rebound, and top pick would be sinopec (386.hk) @ 6.60, targeting 7.00 exit. Also, anticipate further recovery on various commodity stocks, such as Zijin (2899.hk) and Jiangxi Copper (358.hk) @ $18.00, targeting for $19.00.

Banks may continue a bit of a chaser run, though would not advice to chase for short term gains. However, as medium term investments, all three H-share banks looks attractive on valuation, with buys for ICBC (1398.hk) @ $6.00, CCB (939.hk) @ $ 6.20, as policy overhang fades.

Consumer names remains to be favoured, with NWDS (825.hk) @ 7.30 and Golden Eagle (3308.hk) @ 14.80, whilst Lianhua (980.hk) looks a bit overpriced and due for profit taking, However, Beijing Jinkelong (814.hk) looks good if a small retreat comes around.

Ports may be chasing on laggard, with Dalian (2880.hk) @ 3.32 and Tianjin Development (3382.hk) @ $2.60, targeting $3.00.

ongy out.

Asia 190110 Closing Wrap up

Afternoon all,

Pretty spot on today with the technical rebound with sentiment improving as late rebound took HSI up 0.9%.
Bank took a rebound in the late session, though it failed to hit our entry point at 5.80 and 6.00 for ICBC and CCB respectively. However, both took a strong up, leading the rebound, as ICBC went up 3.07% and CCB up 4.05%.

Properities also staged a late rebound, with Great Eagle, Agile and Greentown China up between 3-5%, leading HSI up finishing 0.9%.

Consumer stock also took a great start for the session, but failed to hold gains, with Golden Eagle up 1.31%, whilst NWDS down 2.52%. However, both had great intra-vol that saw more than 5% movement.

Ports significantly outperformed in the late session, with Cosco and CHMI up 4% respectively. Whilst the autos did a great job from technical buyings.

However, must note that despite commodities are up, the market traded it as non-event, with mostly taking a hit down 1%.

Looking at the late actions on the market, sentiment seems to have improved, as policy overhang seems to be done for a while. Taking leads from action, we may look at further rebound on HSI for the coming few days.

ongy out.

Asia Morning Analytics: 190110 Asia Open

Morning,

Given US closed with Martin Luther King Holiday, lead will not be as strong, as Asia will take some cues over the developments from Europe. We may also takes some cue from the currency market, which shows a slight decline on the dollar against a broadbase of currencies.

Highlighting key development includes:

1. Europe gained over M&A buys with Cadbury up 1.3% and International Power Plc up 5.1%.
2. Crude and commodities poised for a small rebound, with UK's house index posing a stronger number and Pounds gained over risk appetite.
3. However, PIGS sovereign credit problems remains unresolved, and continue to be on the spotlight, posing downside risks on the market in the longer term.

On the Asia side of development,  NDRC's approval over continual support on strategic emerging industries seems to provide further guidelines over what the government wants to pursue over the near term.  Whilst according to PBOC, Shanghai's personal consumption loan has reached 481.39 billion, reaching a historical high.

In terms of day view ahead for HSI, would continue to see some technical buying support, despite ending with negative sentiments from previous session. May look into a further technical buying from the commodities sector from the crude recovery, whilst bank may continue to it's technical buying on valuation. ICBC (1398.hk) and CCB (939.hk) poised to continue its technical buying on dips. Look for purchase at around 5.80 and 6.00 respectively.

We remain to believe that consumer name plays for a CNY sales will continue its run. We like names such as lianhua (980.hk), NWDS (825.hk) at 7.38 , Golden Eagle (3308.hk) at 14.90. We also like Gome (493.hk), looking for a breakout play above 3.00, whilst Haier (1169.hk) at 4.40 as these industries remain to be supportive for CNY, looking for 15-20% upside.

We may look for a HSI rebound today, recovering lost grounds from yesterday, aiming for a 0.5% - 1% rebound, targeting the HSI range between 21500-21800.

ongy out.

180110 Asia Close Wrap up

Afternoon all,

HSI saw a technical rebound in the morning, with overall market being punted upwards, close to flat. Chinese Banks took the lead, with ICBC and CCB both up 2%.  A broad market recovery came in the morning, with steel, oil and auto saw a rebound upwards. Properties also led the rebound, with Agile outperforming by 3.60%.

However, afternoon sentiment changed, as the market took its way back down, closing down 0.9%. CNOOC (883.hk) and Sinopec (386.HK) ended down 1.95% and 0.61% respectively, whilst steel were mixed, with magang (323.hk) closing flat up, whilst angang (347.hk) down 2.73%. Autos took a technical rebound, with Dongfeng (489.hk) up 2.24%, and brilliance (1114.hk) up 2.38%, however, Geely (175.hk) down 1%.

Moreover, consumer names were mixed, with mengniu (2319.hk) and ausnutria (1717.hk) down 1.46% and 1.47% respectively  , and paper segment is heavily shorted, with ND Paper (2689.hk) down 4.13% and Lee & Man Paper (2314.hk) down 5.12%. Textiles were also down on negative US consumer sentiment, with Esprit (330.hk) down 2.75%, and Giordano (709.hk) down 3.15%.

Power sector didnt perform well as we expected, with a broad base decline of 0.5 - 1%. However,
our prediction on sector rotation came through for particular segments of the calls, with China Water Affairs Group (855.HK) and Beijing Enterprise Waters Group (371.HK) taking the lead, up 6.06% and 5.51% respectively. Intra-day volatility on the consumer names also took off, with Foxconn (2038.hk) had an intra-day volatility of 10%, but ending down 0.18%, whilst golden eagle (3308.hk) took off intraday volatility with 5%, ending up 0.26%. Lianhua (980.hk) had a run, ending up 5.20%.

From the way it closed, we may see that sentiment remains negative, and warns for caution over near term downside movement for HSI. We may lower our weekly range towards CNY to 21000 - 21500. We remain to consider consumer names and utilities, though today's bank bargain hunting may provide signs that policy overhang may be close to finishing its run.

ongy out.

Asia Morning Analytics: 180110 Asia Opening

Morning,

Running a bit late this morning, so a quick recap over friday's move. Clearly leads don't bode well for Asia, with JP discussing problems with their bad loan issues, whilst commodities generally took a hit from general sentiment. Risk aversion returned on friday, with the S&P 500 lowered more than 1%.

Looking ahead, we believes there are increasing volatility to the market, given the amount of negative pipeline of data, whilst authorities looking to contain stimulus. Though, one may look on the bright side that given the amount of measures in place already, the pace of stimulus withdrawl may slow down.

We remain to believe that HSI shall be trading narrowly, looking to consolidate within the range of 21800-22300. We may expect HSI to lower less than our US counterpart today, within 0.5% range due to continual technical buyings on support after a weekly down last 5 sessions.

Again, sector rotation is our main theme. We may look into consumer names, utilities, and telcos.

Asia Morning Analytics: 150110 Asia Morning Wrap

Morning all,

A bit of a delay today with our views, but with Intel's earnings beating cosensus, we saw overnight market to be up a notch. However, note must be taken to the fact that retail sales data slowed and initial jobless claim was hitting walls to point to the fact that the recovery over in US might be slowing. Thus, this may provide more room for the rates to remain low in the states, whilst dollar to resume its fall.

Taking cues from overseas market, we may anticipate today to have a overall flat day. Again, sector rotation will be the main theme, with utilities and consumer staples to outperform the market. We may also see the commodities stabilising after sharp falls the past two session, with technical buyings coming in.

Again, we reiterate banking and properties sector remain to be uncertain with government actions pounding the sector hard. We remain to be seller in the short term, and looking for dips on consumers and utilities.

Despite ports been the star since the year started, we may see some profit-taking after the poor US data which may hint export recovery may not be as rapid as one would think.

We may also look at buying commodities on the dip because of a dollar correlation hedge buying, and the fact that inflation issues are beginning to float across the globe.

Would also like to point out a further note should be examined over the Greek issues, as sovereign credit rating is, again, on its hind legs, which may result in echo credit collapses.

ongy out.

Asia Morning Analytics: 140110 Asia Morning Wrap

Morning all,

Overnight bodes well with earnings beating estimates for several companies, with S&P 500 ending +0.83%, Nasdaq up +1.12%. Crude tanked over report showing inventory increase, whilst gold recovered some loss, ending back at 1138. Dollar showed signs of weakness, as UK hints to raise rates before the Feds.

Interesting to note overnight, S&P lowered California debt raing to A-, again, revealing our earlier predictions over sovereign credit problems. With now the globe funding its stimulus on building on more debt, especially for the US, sovereign credit, therefore, clearly presents problems. If this situation worsens, especially in the US, we may see a new round of the dollar crashing due to sovereign problems, and less severely, because fed hiking rates may be out of the question for a while. Such play turns out true, commodities, again, will be in the lights for hedge buys. However, as noted from GFA outlook 2010 part 2, China's suprise stimulus exit may become a great risk for such a commodity story.

As for the Asia side, we may see some broad base recovery today from yesterday's over reacted move, however, would maintain to be a seller on banks, insurance and property plays due to overhang of policy measures in the near term. We also see sector rotation coming into play from our seller list into interest rate non-sensitive sectors, namely, the defensives such as utility, consumer staples and the gambling stocks. Would also anticipate HSI to trade range bound until CNY between 22000 - 22300.

GFA maintains to be a buyer of consumer names on dips.

ongy out.

GFA: 2010 Outlook Part 2

Hi all,

A bit late for a morning wrap, so going to post some comments over 13 Jan's mid day moves.

HSI down 2.3% in midday, with commodities, properties and china banks most hard hit, though we see a broadbase fall on the market. Overnight, we had poor results from Alcoa whilst Chinese authorities accelerates the stimulus exits b raising the RRR by 50 bps, after guiding the weekly bill rate up 40 bps. Such a move was unexpected, and leads to our part 1 of the analysis that policy risks are kicking into 2010 to create a volatile year.

Despite all these, one must note that Chinese economy may seem to have started picking up strongly the recovery trend to a sustainable level, after seeing import and export surging early last week. This points to the export-led recovery might be on the way, whilst internal consumption will, again, remain to be the focus theme for the rest of the year.

One, however, must note that the unexpected stimulus exit from Chinese side may post query to the recovery ahead of us. The main question being - DID THEY DO IT TOO EARLY?, especially they are the leading engine of digging the globe out of recession after GFC.

With a pipeline of bad data and unexpected moves, we may anticipate near term volatility to escalate, whilst sentiment will certainly be hurt. Would be a buyer on dips on inflation-beneficial stocks, such as consumer stocks, gold and oil.

happy trading.

ongy out.

GFA: 2010 Outlook Part 1

Hi all,

Apologize over lack of updates recently, and also, would like to take this opportunity to wish our readers a happy new year and a prosperous 2010!

GFA decided to use this opportunity to provide our view of 2010, and discuss over thematic plays in 2010.

Our core theme remains to be driven by the "Asia Pacific-led" growth for 2010, though we believe that a rebalancing of portfolio will be increasely likely, especially if US and EU unexpectedly raises rates and outlook in mid-2010, ahead of what many expects, which may trigger the liquidity-driven growth in Asia Pacific to recede. Moreover, there are increasing risks for stimulus-exits which could trigger another volatile year for 2010. We see a reverse V from mid 2010, which could trigger what we have previously been mentioning: a sharp correction to catch up with economic fundamentals. Lastly, sovereign risk becomes a significant risk provided that the recently turmoil in Dubai and Greece may trigger sovereign debt crisis, especially with blowing public debts across the globe.

Having said that, we believe stimulus efforts to remain supportive for growth because infrastructure-led stimulus will be more effectively implemented in 2010 across the globe, which many also eases, temporarily, the high unemployment problem across the globe. This spells that the metal spaces will be one of the main contributor to the indices for 2010. However, one should continue to monitor for excess capacity, especially in China metal mills names.

This may also translate to upper-end demand for iron ore and coking coal producers, and hence, we are bullish over iron ore producers in ASX. We like names such as Fortescue (FMG.AX), Centennial Coal (CEY.AX), Gloucester Goal (GCL.AX), as we expect the next round of iron ore talk to increase prices by 10-15%.

Our second theme remains to follow the stimulus beneficiaries, especially in China. We like the Chinese efforts to expand internal demand through various initiatives from the government. Hence, we remain to be a buyer of consumer space in China and HK. We remain to like names such as Haier (1669.HK), and Gome (493.HK) due to the electronic tax incentives and higher end price caps approved by the government. We are also a buyer of end-stream consumers, such as department stores and supermarket chains.

This ends our part 1 of our analysis.

Happy trading!

ongy out.