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.