Went down to the Philippines over the 1 July - 4 July weekend.

I can't believe that the Philippines was the richest country in Asia back in the 60's! But at least things seem to be getting better. We deserve a chance to make good after all the bad luck we have had in leaders. Went to the Greenbelt area on Thursday night. Loads of people spending money. A middle class is steadily building up. Given a few more years of good luck (a few more near misses by the numerous typhoons that always seem to hit Luzon) and some help from outside (more call centres, please!) and therw ould be enough momentum.

Meanwhile back in HKG, there was supposed to be 600,000 people on the streets demonstrating. That's 1 in 10 of the entire population. Of all the people I talked to, none went to the demonstration. Hmmm!

There's something interesting here. HKG is supposed to be the most undemocractic place in Asia but the richest! The Philippines is the most democractic (after all its political system is a copy of the US which is the most democractic in the world) but it is the poorest!

Democracy is a great thing but the population must be ready for it. It wasn't so long ago that in the US blacks did not have the right to vote, and before that women. India was granted full democracy but it took them a long time to get the system to work properly. There is something to be said for taking things one step at a time. There is a saying "Feeling the stones as you cross the river".

After all, we set 21 years as the age of majority when young people get the vote. Why not 18? Because they are not ready for it!!! Enough said.

After yesterday's 300 over points rise, today was comparatively quiet.

China's premier Wen Jia Bo said that the administrative measures are working and should bring the Chinese economy to a soft landing. This is read as meaning that interest rates will not need to be increased (at least not in the near future, and not drastically). The market cheered and up she went.

If you remember, the whole thing started with the rumour that the People's Bank of China had submitted a plan to increase rates to the State Council. Of course, when this was denied, the market paid no attention because the original comment that the economy was overheating and administrative measures were needed came from Wen himself. It took another comment from him to reverse the effects.

Does this mean that from now on, only Wen's comments are to be believed? This is a problem with a command economy. He who commands the economy, commands attention. The china watchers will only believe one man. He's going to be very busy making pronouncements on all matters large and small.

The HKEx has given a waiver to Hutchison (#13) to include the Indian telecoms assets in the spinoff of the telecoms business even though that will be spunoff within 3 years of the new listing. I am looking for Hutchison and Cheung Kong (#1) to provide some leadership next week.

The market was under pressure all day from the opening, and finished down 78 to 12,082.

Cheung Kong (#1) was down 0.75 to 56.75. Hutchison (#13) closed 52.00 down 0.25.

Sinopec (#386) was down 0.075 to 2.775 and China Telecom (#728) closed 2.525 down 0.05. China shares were all down even though the administrative measures to cool down the economy appears to be taking effect and there may not be a need to increase interest rates.

CSCL (#2866) which started trading yesterday was down again to 2.55 from the ipo price of 3.175 due in part to Citicorps "sell" call with a target price of 2.30. Thanks Citibank!

The market was up 111 today to close at 12,161 mainly because of easing fears of sharp interest rate increases in the US (based on Alan Greenspan's testimony). Also, China has come out and said that it would use administrative procedures to cool the economy rather than increase interest rates.

Cheung Kong (#1) opened higher at 58.75 but retreated to close at 57.50. Hutchison (#13) did better to close up 0.75 to close at 52.25.

Sinopec (#386) and China Telecom (#728) closed unchanged.

The market was steady in the morning but was unhappy with the results of the land auction. The price paid was 48% above the initial bid but within the top of the range predicted by analysts. The problem was it was not bought by Cheung Kong (#1)or Hutchison (#13)or any one of Li Ka Shing's companies.

You may recall that after the previous auction, the market was very blase even though the price paid was way above expectations. That is, it was blase until Cheung Kong owned up to buying it. Then it exploded.

After yesterday's more than 300 point drop, today was a shoo-in.

The market opened up and went on to over 100 points up in the morning. But by lunch time, it was down 6 points. Not much to worry about, right? Wrong!

After lunch, it went from bad to worst. Losing over 300 at one point. We managed to close just above 12,000. Whew!

To what do we owe all this? Worries about interest rates going up in China. There was a rumour that a plan to increase interest rates was submitted to the State Council. Tonight, the central bank denied the rumours.

What happens tomorrow? It's anybody's guess!

A day late and a dollar short? Market down 72 to 12,267 at 10:47am.

China telecom (#728) up $0.075 to $2.70. The EGM yesterday passed all the resolutions clearing the way to acquire the new business from the parent. We are seeing buying in 1.2m blocks at the offer price. The 1.2m is significant because that is the maximum size block that can be entered in the HKEx's AMS3 system (600 lots of 2,000 shares each) in each transaction.

Cheung Kong (#1) and Hutchison (#13) were under a little pressure early this morning because the HKEx apparently nixed Hutchison's request for a waiver to spin off the Indian telecoms business within 2 years of including it in the currently proposed listing of telecoms assets. The Indian assets are needed to make the currently proposed listing to make it look good. Let's see how this plays out.

Sinopec (#386) down $0.025 on lower oil prices. Hmm. It's own costs should be lower too!

Market was up yesterday and today on the back of renewed rumours that QDII has been approved. The blue chips did very well yesterday, and good this morning. However, the market gave back most of the gains in the lated afternoon.

I still like Sinopec (#386) which is still trying to break through $3.00 and China Telecom (#728) which looks like finally going above $2.60 after the placements at $2.30.

Hutchison (#13) is trying to spin off their telecoms business. This has to be good for the stock as it will no longer be directly weighed down by 3G. What's good for Hutchison will also be good for Cheung Kong (#1).

What happened? The HSI was down 350 at one point after lunch; down 271 for the day bring it below 12,000 (actually 11,929) again. Banks and property stocks took the hit.

Oil prices, the problems in Iraq were all given as reasons.

Nothing to do but listen to some good music: Sweet Dreams Are Made Of This by The Eurythmics. Another day another dollar.

At the swimming pool. 

HSI down 92 today to 12,105 after going up 6 days in a row. Time to take a breather?

Cheung Kong (#1) closed 57.75.
Sinopec (#386) closed 2.95.
China Telecom (#728) closed 2.40.

Not much direction today as the US market was closed for Veterans' Day yesterday. Who knows what tomorrow brings? Sounds familiar? One of may favourite songs.

We closed over 12,000 on the HSI today thanks mainly to HSBC (#5) 115.50. 'H' shares did very well on the back of the oil shares. Sinopec (#386) is apparently building a pipeline in Shenzhen.

Cheung Kong (#1) bears watching. At $58.75, it is trading at price/nav of 0.77. If it trades near nav it should be at least $76. However, remember, the nav is valued at last year's prices. At today's prices, it should be nearer $100.

China Telecom (#728) is trading at 1.44 times nav. A radio commentator suggested that it is therefore not a good buy as the price is higher than nav. That's assuming the assets will only earn 1.44 times its costs which is unlikely. One would assume that the assets will be earning profits for many years to come.

Property development companies basically buy raw land, convert it, and sell the developed apartments. Therefore, once the assets have been sold, there is no future profits stream other than interest income. That's why property development companies are valued based on nav. They must keep buying land for development in order to generate future profits.

Hello! We were up over 400 yesterday and expected a consolidation today' which we are now seeing. Down 32 at the time of writing although it had been up single digit at some time in the morning.

China Telecom (#728) finally placed 5.8 billion shares at HKD2.30 a slight discount to the market close in the morning of HKD2.375. All the shares were snapped up and more were made available. Still a slight overhang as they had registered 8 billion shares. At 7.7 pe it is a good buy.

What a difference a day makes? One of my favourite songs by Laura Fygi.

The HSI is up 344 on HkD9.5 billion volume. Not a bad way to start the day. Caught a lot of people by surprise. Most did not expect the market to recover until after June. Just goes to show.

What a day! yesterday we were down >300 on the HSI. Looked to have been brought on by the hardline comments by Beijing on Taiwan over the weekend. Nerves are frayed.

There has been an outflow of hot money over the past 2 weeks, more as a result of USD strengthening on expetced higher rates than anything else.

Call me a conspiracy theorist but you won't see the big firms touting this market until the big china IPO's are ready in the 3rd quarter. How else are they going to sell the IPO's otherwise. The current low valuations are great for negotiating lower pe's for the IPO's.

You can buy China Telecom (#728) for 7x pe, and Sinopec (#386) for 10x pe. By the way, I hold these in my personal portfolio.