Yanlord Land (Z25.SG) +2.2% at S$2.35 as broad market uptick helping stock retrace part of recent fall from 52-week high of S$2.70 set two weeks ago. Shares under slight pressure in recent sessions as investors lighten positions after sustained strong gains in past months on strong pickup in China home sales (stock +157% since start of 2009, +5.5% since beginning June vs STI''s respective 38.0% gains, 4.4% over same periods). Current gains possibly also driven by expectations of longer-term earnings stability as Yanlord begins construction of CNY4 billion integrated residential, commercial development in Zhuhai in Pearl River Delta region. "Yanlord''s investment properties, once completed, should help generate recurrent rental income to the company, and at the same time allow it to enjoy the long-term capital value appreciation of its urban city-center land bank," says Citigroup. Rates at Buy, S$2.82 target.

 

For reading pleasure only :  (dated 18 May 2009) 

China Forecast Is Too Rosy for Investors: John Wasik (Correct)

Commentary by John F. Wasik

(Corrects investment to $1.2 trillion in 17th paragraph.)

May 18 (Bloomberg) -- For those of us who got scorched staying in U.S. stocks last year, China’s markets look like a surefire way to make up lost ground.

The Shanghai Composite Index has gained about 45 percent this year through May 15. Its cousin Shenzhen Composite Index has soared 60 percent.

Compare that with the 5 percent loss for the Dow Jones Industrial Average this year and it’s not hard to make a case to stampede into Chinese stocks and exchange-traded funds. Yet international exuberance can be misleading as many analysts caution that investors are inflating a bubble.

One optimistic theory suggests that as one of the few countries with economic growth, China will rescue shrinking Western economies with its lending and burgeoning domestic consumer markets, which could become the world’s largest.

A more plausible view is that China will simply follow the lead of the U.S., which is showing “green shoots” of a recovery, according to Federal Reserve Chairman Ben Bernanke.

It’s easy to be conflicted between these two points of view because the future looks so bright for the world’s most populous country, so much so that few financial advisers will steer you away from it as a long-term holding in your portfolio.

Even Goldman Sachs Group Inc. is sanguine over China’s prospects. The firm last month raised its forecast for the country’s economic growth to 8.3 percent from 6 percent.

$586 Billion Stimulus

Analysts cited the positive impact of the Chinese Central Bank cutting its benchmark rate five times since September and the country’s $586 billion stimulus package.

Goldman Sachs’s optimism is at odds with the World Bank forecast for Chinese growth of about 6.5 percent this year. China’s economy expanded 6.1 percent in the first quarter.

While there’s a consensus that China is still expected to have the most robust economy in the world in 2009, it won’t revive Western housing, labor and credit markets.

“As long as we are in a recession, they are going to have problems,” Jim Trippon, publisher of the Houston-based China Stock Digest, said in reference to China.

The perception that the Chinese may be willing to spend more on consumer items and save less -- their personal-savings rate is more than 30 percent -- may be off base as well.

One of the reasons Chinese families save a lot is due to inadequate health care. They don’t have strong social safety nets, so they have to spend heavily for out-of-pocket expenses. Like most families, they are far more likely to spend on medical expenses than on appliances and cars.

Help on Way

Some help is on the way. Part of the Chinese stimulus is currently being spent on their health-care system, which will take years to build.

There are also concerns about China’s financial industry. Chinese banks tripled first-quarter lending to $670 billion and many of these loans may well go bad.

As it stands now, China’s financial relationship with the U.S. is complex, strained and symbiotic. The Chinese buy supertanker-sized portions of U.S. Treasury debt, which in turn finances everything from the Bush-era tax cuts to President Barack Obama’s almost $800 billion stimulus plan.

China has increased its foreign-exchange reserves from about $340 billion in 2003 to almost $2 trillion at the end of March. About $1.2 trillion is invested in the U.S. economy.

Erosion of Value

A weakening dollar and the threat of inflation -- once the U.S. finances all its debt -- erode the value of Chinese holdings. They won’t hold on to U.S. paper forever as America’s currency reflects the crippling $11 trillion national debt and projected $1.8 trillion federal budget deficit.

If the Chinese decide to divest themselves of dollars --and they will over time -- that is bearish for the U.S. economy.

“The People’s Bank will continue to invest carefully,” Zhou Wenzhong, China’s ambassador to the U.S., said this month at a Chicago Council of Global Affairs event. “We hope the economy will pick up and the dollar will remain strong.”

Chinese stocks also have become pricey. The price/earnings ratio for the Shanghai Composite was 26.57 on May 15, almost double what it was for the Standard & Poor’s 500 Index.

Companies may be doing better in China than their U.S. counterparts, but not that much better on a relative basis.

To avoid mutually assured destruction, the Chinese will need to build a domestic economy strong enough to withstand the loss of American exports. Their middle class will also need to expand to much more than one quarter of their population. Some 800 million still live in relative poverty in rural areas.

Don’t be distracted by one country’s returns. Did you also know that stock markets in Brazil, Malaysia, Singapore, Sweden and Vietnam are having good years?

A better wager is to invest in many markets through an exchange-traded fund such as the Vanguard Total World Stock Index Fund, which tracks almost 3,000 stocks around the globe.

This, of course, isn’t a risk-free approach since a few sick countries can always spread an economic pandemic in an interconnected world.

(John F. Wasik, author of “The Cul-de-Sac Syndrome,” is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: John F. Wasik in Chicago at jwasik@bloomberg.net.

Last Updated: May 18, 2009 04:37 EDT

Hi ronleech,

I had gone the route u take now, I too started by following my instinct, listening to friends news, rumours, forum noises except short of using tools as I was too lazy n tot can make easy money using such short-cut but it was a short-cut to misery n I end up very miserable, though at times I do make but net still huge losses, trust me as I speak from my heart n sincerity as I do not wish to see u n newbies repeat the same misery route I had taken.

I m not selling u any koyok, so u need not be apprehensive of my genuine advice.

Remember, logic tells us tat every workman needs tools to do their work, hence, TA is a trader's tool just as satellite navigation is to ships n planes.

However no trading tools is 100% guaranteed, hence, TA is not infallible, thus why I always

advocate newbies to read the 3 golden mantras (do a search on my posting) n remember by heart,

it will stand u in good stead.

For your n fellow newbies convenience, I shall repeat the 3 golden mantras:

1. The trend is your friend., ie dun go against the trend.

2. Plan your trade n trade your plan - ie. look at the chart. search for buy indicators, time your entry but must set stop-loss point.

3.  Cut losses short n let profit runs - we need to max our profits to cover all those losses n make net profit.

Hi ronleech,

No offence intended, just my sincere sharing, trust our own TA analysis, plan our trade n trade our plan, dun listen to all these "friend's news, rumours, blah...blah.. blah...", can be played to "holland".

I m telling u from my personal experiences, end up losssing a lot of money listening to such tips from watever sources, remember, nobody owe us a living, we cant claim our losses from them.

If u are a newbie, click on my nick n read all my sharing, past experience, advice , 3 golden mantras n the thread "Learning TA".

I wish u all the best 

it's penny a penny stock, if can money,maybe a few times,like OSIM!

There is no reason that S-chips would not be up since china economy recover so fast and china stock is entering bullish market.as long as those S-chips fundmental are good!it's a matter of time.maybe this quarter.penny S-chips will be surprising the market!