Top holding in Asia/Europe 11/16/10

1. China Mobile (0941/CHL)
2. China Life (2628/LFC)
3. China Construction Bank (0939)
4. Total SA (TOT)
5. Shiu On Land (0272)

Market Fall: global stock market fall because of the following worries:

• Slow economy growth (every once a while, such worry came back)
• Inflation risk (will it come? No & Yes!! No, cuz consumer product index keep at around 2.0% and even in China, it is only 4.9%; Yes, commodity price rise like crazy. So it came and it will come, but in a non-tradition format – not in consumer product)
• Interest rate will rise (in China) (in order to balance between money supply, consumer product price and keep the borrowing / assets ratio low to prevent a potential bubble, I think a reasonable rise in interest is healthy to the economy. Under this interest rate rising expectation, China Life should be the biggest gainer cuz it will lower its insurance reserve liabilities.
• Default risk of the European PIIGS bonds
• To me, those worry are understandable but I think the true reason is a reasonable stock market adjustment. We should see the market stabilized at this point where S&P 500 at around 1170 and Hang Seng at around 23,000.

I’ve switched Exxon Mobil to Total SA, a France based integrated oil & gas company, cuz I want to increase my investment in Euro zone to have a more diversify portfolio while I think Total SA’s value is being more understated compare to Exxon Mobil.

Top holding in Canada 11/09/10

1. Manulife Financial (MFC)
2. TD Bank (TD)
3. Imperial Oil (IMO)
4. Shoppers Drug Mart (SC)
5. Trans Canada Pipeline (TRP)

• C$ is at par, but I don’t think it will rise further beyond $1.02, as overnight interest rate will most likely keep at 1.0% and the higher the C$ will hurt international trade between US & Canada;
• Wewill have the Shoppers Drug Mart’s 3q10 result this week;
• Manulife Financial: 3q10 result is $1.1B lower than Bilibala’s expectation, cuz it wrote off $1B goodwill in related to its USA insurance business (no way I can’t guessitmate this kind of management decision. It is non-recurring, so, who cares!!). Overall, as interest rate start rising thx to the QE 2.0, Manulife’s performance for future quarters should look better.
  Manulife has 3 major shift in its business model:
  1. diversify by expand its asset management business;
  2. de-equity risk by increase hedge & reinsurance to 50%;
  3. de-interest rate risk by higher duration of its bond holdings.
  From a risk management view, I think it will provide a much smoother quarter to quarter results. However, from a business view, this is not a smart move:
  1. as we all know interest rate will go up eventually, instead of go down
  2. equity market will go up when it was at the bottom (in 2009)
  why should anyone earn less just to smooth things out? Just follow the crowd? Anyway…..

Top holding in USA 11/09/10

1. Google Inc. (GOOG)
2. Wells Fargo Financial (WFC)
3. Exxon Mobil (XOM)
4. General Electric (GE)
5. American Express (AXP)

These days, after I moved to my new home, I did lots of home renovation: major appliances, lighting, windows, kitchen, wall, water system, flooring, gardening etc etc…… I think as house market become more stable now, those companies’ performance will improve. Based on my shopping experience these days, I found Home Depot’s services are better than Lowe’s & Rona.

Top holding in Aisa/Europe 11/09/10

1. China Mobile (0941/CHL)
2. China Life (2628/LFC)
3. China Construction Bank (0939)
4. Shiu On Land (0272)
5. HSBC (0005/HBC)

China Mobile: 3q10 revenue up 7.8% vs 3q09; earnings up 3.9%, ARPU down 4% to $72, # of customers up 11% to 569M. China Mobile still hold its dominate position in China’s telecommunication industry has 70.5% market share. However, growth definitely slow down from double digit to low single digit. To me, China Mobile’s current P/E ratio should be at least 14, which means its price should be at least HK$100. As it move to 4G, assuming the growth will go up from 4% to 8%, its value should worth at least HK$129 (in 5 yr).

Top holding in Canada 11/01/10

1. Manulife Financial (MFC)
2. TD Bank (TD)
3. Imperial Oil (IMO)
4. Shoppers Drug Mart (SC)
5. Trans Canada Pipeline (TRP)

• Imperial Oil & Manulife Financial will release its 3q10 results this week.
• Bilibala will sold BYD Ltd. & invest more Manulife Financial today.

Top holding in USA 11/01/10

1. Google Inc. (GOOG)
2. Wells Fargo Financial (WFC)
3. Exxon Mobil (XOM)
4. General Electric (GE)
5. American Express (AXP)

• Exxon Mobil net income up 55% mainly thx to oil price rise (bad for all drivers) and refinery margin increased, oil supply & demand kind of reach an equilibrium point, on the other hand, as USA, UK & Japan’s QE2.0 (print more $$) project, oil price should rise back to US$100 per bbl as what I predict 2 years ago. If so, Exxon Mobil should have room to rise back to US$75.
• General Electric net income up 29% while revenue down 5% mainly on energy infrastructure segment (that’s why stock price down cuz ppl focus on their revenue). Revenue down reflect the global capital expenditures on corporate infrastructure down during and after financial crisis, but as one will notice, GE’s profit margin continue to rise means, GE’s products & services are more profitable in a dollar to dollar basis and this trend has continue for the past two 2 years. I still need to complete the trend analysis.

Top holding in Asia/Europe 11/01/10

1. China Mobile (0941/CHL)
2. China Life (2628/LFC)
3. China Construction Bank (0939)
4. Shiu On Land (0272)
5. HSBC (0005/HBC)

• China Life: premium up 23% vs 3q09, total assets up 4.0% vs 2q10 while equity up 7.7% vs 2q10, as Shang Hang A stock break through 3k pt & interest rate up 25 bps, I think China Life will continue to increase shareholders equity value in 4q10 and so on, regardless of how much the reported net income is. In terms of stock value, I think today’s price is quite reasonable, not in big sales.
• China Construction Bank: results look awesome!! I still haven’t completed the trend analysis, will let all u know. It rise 13% from the day I came back to Canada, price over book rise to 2.43 and estimate price over earning rise to 10.1. um…………..still look reasonable but not in big sales.
• Bilibala will sold BYD Ltd. (not a wise decision to invest at 1st place, not cuz it is not good, but cuz I am not that familiar about the company plus I am worry commodity & labour cost will rise at least 10% per year which will hurt BYD’s earning) & invest more Shiu On Land today.