Join our investing community

Chindia

Discussion in 'General Investing Discussion' started by Nigel Ward, 30th May, 2007.

  1. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    The above came from an email received from InvestSmart touting some Macbank funds. Ignoring the sale job, how does one take advantage of this once in a millenium event?
     
  2. Tropo

    Tropo Well-Known Member

    Joined:
    17th Aug, 2005
    Posts:
    3,394
    Location:
    NSW
    BEIJING (XFN-ASIA) - The Ministry of Public Security has warned investors to beware of a rise in illegal activities related to the booming stock markets.
    The police authority said in a statement that some swindlers are inducing investors to buy fake initial offerings or shares in unlisted companies while others are peddling bogus stock investment schemes via phone calls or web sites.
    Some investors are using money siphoned from corporate or government funds, or cheating banks by investing in stocks with loans acquired for other purposes, said the ministry.
    China's markets have risen by 60 pct since the start of the year and have drawn in huge amounts of investments from individual retail investors.
    The Ministry of Finance announced earlier today that stamp duty on A and B shares would be raised to 0.3 pct from 0.1 pct, in an obvious move to deflate the market bubble.
    ***********************************************
    Shanghai stock market going 35% down seen as healthy move by some, in money it will mean wipe of more than USD trillion...free market and capitalism may cause the Chinese regime to realize that mountains of trade surplus will not be enough to bail the Chinese people from financial disaster and riots as Western names suggest...
    Every one of three urban household in China took out part or all of saving to jump into stock market. Some are extremely greedy by leveraged home equity or misappropriated the purpose of loan to speculate in the market.
    Lacked of financial education in general population of retail investors is the key to cause the bubble.
    Many are just blindly buying at any price with rumors of 'any major crash will be bailed out prior to 08 Games'

    PS - Nigel, you may have only 12+ months left (approx) to make 'BIG' in China, so you better be quick :p
     
  3. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    Thanks Tropo. I think the best way to make BIG in China may well be to just invest in companies servicing the Chinese economy... Stonger for longer eh?
     
  4. Tropo

    Tropo Well-Known Member

    Joined:
    17th Aug, 2005
    Posts:
    3,394
    Location:
    NSW
    This may be a good idea....
    My Italian mate told me once, that three best businesses ever invented are:
    food
    shelter
    and....prostitution.
    I tend to agree with him mainly on the third option :D :D
     
  5. Redwing

    Redwing Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    476
    Location:
    PERTH..WA
    I heard that if China matched western consumersim we'd need 6 Earths to keep up, also that if we shut down all cars, factories etc in Australia that China would replace our pollutants within 8 months :confused: ...Put both China's growth and western consumerism in perspective as well as this post

     
  6. Rod_WA

    Rod_WA Well-Known Member

    Joined:
    18th May, 2007
    Posts:
    324
    Location:
    Inglewood, WA
    I thought it was simple - BHP and RIO. Maybe FMG and AGO for a punt.
     
  7. Redwing

    Redwing Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    476
    Location:
    PERTH..WA
    FMG has been going silly of late..turning A. FORREST into one of WA's few Triple Billionaires and still nothing out of the ground yet, it amazes me what this stock is doing compared to BHP :eek:
     
  8. KevinH

    KevinH Well-Known Member

    Joined:
    6th Nov, 2005
    Posts:
    101
    Learn Hindu and Mandarin for starters.

    Take advantage locally onshore in Aus.
    All this export demand is creating huge demands for quality housing in Aus especially in regional Aus.
    Build houses to satisfy this demand.
    Everywhere I go in regional Aus I notice acute shortages of housing.
    It will go for years and years.

    The fear is that the US falls over and China stalls.
    The reality is that China and India will just start trading with each other and amongst other tiger asian nations.

    Trading with the US is just opportunistic to suck them dry of their T bonds.

    Kevin
     
  9. Rod_WA

    Rod_WA Well-Known Member

    Joined:
    18th May, 2007
    Posts:
    324
    Location:
    Inglewood, WA
    I don't hold FMG, and agree with you to a certain extent, but they do now have long term contracts that validate the current price. But BHP and RIO are a very obvious diversified way to exploit 'Chindia'.

    Alternatively, AMP Capital's China Growth Fund (AGF on the ASX) has the only Australian license to invest directly into Chinese listed shares. Check it out.
     
  10. KevinH

    KevinH Well-Known Member

    Joined:
    6th Nov, 2005
    Posts:
    101
    Hard to figure out if its froth and bubble or for real !!

    The US bondholders and their chinese partners must either be doing a ramp job on the shares, or they know something we don't !!

    How can they be worth more than BHP with not an ounce or ore out of the ground yet ?
    And the first shipment for May 2008 looks impossible...

    Certainly what we see on the ground in Pt Hedland would make you question the schedule of the project.
     
  11. KevinH

    KevinH Well-Known Member

    Joined:
    6th Nov, 2005
    Posts:
    101
    So how has it been performing ?
    I need to allocate some smsf money into some funds this week and am being told that there is not much value in the share market atm.
     
  12. Rod_WA

    Rod_WA Well-Known Member

    Joined:
    18th May, 2007
    Posts:
    324
    Location:
    Inglewood, WA
    I haven't been following it closely. It's only been listed since the start of the year, and:

    From AMP Capital Investors Home page - Investing. It's what we do

    What are the Fund’s investment objectives?
    The Fund’s investment objectives are:
    * to achieve long term capital growth, with a focus on investing in China A shares, and
    * to outperform the S&P/CITIC 300 Total Return index (expressed in Australian dollars).
    The objectives do not include the payment of regular income to investors.


    The lack of income removes it from my regular watchlists, because I'm geared and can't legitimately invest into non-income assets.
     
  13. KevinH

    KevinH Well-Known Member

    Joined:
    6th Nov, 2005
    Posts:
    101
    Had a look at the chart.
    Looks volatile as all heck....

    Anything else worth looking at Rod ??
    I think I'm just going to add some BHP and WPL into the fund on any pullback in the share price.... its a smsf fund after all.

    What do Atlas Iron do ? Seem to have gone for an almighty run of late !
     
  14. Rod_WA

    Rod_WA Well-Known Member

    Joined:
    18th May, 2007
    Posts:
    324
    Location:
    Inglewood, WA
    Volatile indeed, but it could well return 20%pa for ten years. I certainly would never make a large exposure to such a venture - the political risks alone are substantial - but 5% of a portfolio would not be unreasonable for a bit of 'cream'. It could be very lucrative, but it would be crazy to be too vulnerable to it.

    Iron ore is going to feed 'Chindia' for two decades. My small-cap iron ore pick is Atlas Iron (AGO). They are very likely to be shipping iron ore out of WA to China before FMG (at AGO's 88c vs FMG's $38 I see plenty of upside! - just remember that FMG was a 8c stock five years ago!). And the MD David Flanagan seems to have his feet firmly on the ground.

    But please, do your research, and don't believe someone typing in an internet forum.

    For mine, the best investment for learning about Chindia would be a subcription to the Eureka Report - which has been talking Chindia since the first issue in August 2005 - and read all you can from Charlie Aitken. After all, they do have a Financial Services License - I don't.
     
  15. KevinH

    KevinH Well-Known Member

    Joined:
    6th Nov, 2005
    Posts:
    101
    Good stuff Rod.

    I read China Inc recently and have visited the great mother country ( all chinese ppl over the world look to China as their mother country even if they have never visited) a few yrs ago.

    There is no denying so many ppl aspiring what we take for granted... and that is what will continue to drive the global economy for many yrs to come.

    I'm going to give AGO a go.

    Ta
    Kevin
     
  16. Rod_WA

    Rod_WA Well-Known Member

    Joined:
    18th May, 2007
    Posts:
    324
    Location:
    Inglewood, WA
    Sorry, missed the 'What do Atlas Iron do?' bit. They are a small-cap iron ore explorer in the Pilbara, who have significant hematite resources adjacent to existing infrastructure. AGO is also leading a consortium of smaller explorers in lobbying for improved public access infrastructure in Port Hedland.
    The rise over the last week has something to do with a large magnetite resource they have, and coincides with increasing awareness of the potential value of magnetite (vs hematite). (sorry, I'm not a geologist either!)
    But - unlike many small explorers, who seem to hope to snaffle a tenement or two, AGO has high quality core drilling results and is moving to production. I like them because they are soon to be a mining company - actually digging stuff and shipping it - rather than just sticking pegs in the ground. They don't have a flamboyant marketer as a CEO/MD.
     
  17. KevinH

    KevinH Well-Known Member

    Joined:
    6th Nov, 2005
    Posts:
    101
    Thats my country. I should pay more attention to whats going on in the backyard.

    I spoke to a buddy from RIO last week to get some feedback as to what is happening project wise in the future.
    He said they have reserves they know are in the ground that they will not bother proving up for at least 30 yrs.
    Why waste good drilling time and expense for something they will not mine for another 30 yrs at the earliest.

    Program is to open one new mine every year for the forseeable future.
    Tonnages to ship are mind boggling.
    Proposal for a new port between Karratha and Cape Lambert to increase shipments.

    Then theres WPL, BHP, FMG all with similar stories.
    Its like a never ending story in the Pilbara,....

    I don't like AGO's chances of better public access in Hedland though.
    The place is a bottleneck as it is, with very little available land to expand. Lots of swamps and native title issues I believe.
     
  18. Rod_WA

    Rod_WA Well-Known Member

    Joined:
    18th May, 2007
    Posts:
    324
    Location:
    Inglewood, WA
    Keep this in mind, though: the shares have had a wee run in the last week, and I don't know which way they're heading Tuesday. You kind of have to close your eyes and hold on tight.

    It's a small-cap ($130mil or something like that), so you want to keep your exposure to this quite small.
    If it helps, my resources exposure as a ratio goes as
    BHP $8 / RIO $5 / WPL $3 / AGO $1.50
    and I feel very comfortable with this.
     
  19. KevinH

    KevinH Well-Known Member

    Joined:
    6th Nov, 2005
    Posts:
    101
    Its OK.. I just got out of CQT and its play money with regard to the shares.

    Will have lots of capital coming out of property over the next 12 to 18 months and a lot of it ( to the age limit maximum) will go into the smsf in lieu of salary as well as salary sacrifice so it need to go both into the market as well as probably into some property projects via widely held trust structure.

    Currently around 95% in property and I feel the need to diversify a bit.
     
  20. Rod_WA

    Rod_WA Well-Known Member

    Joined:
    18th May, 2007
    Posts:
    324
    Location:
    Inglewood, WA
    This is what drew me to AGO first, the fact that the MD got off his backside and met with the local indigenous people and signed a native title agreement.

    Check out 'Iron ore boom's as strong as Atlas' at
    Atlas Iron Limited: Investor Relations
     

    Attached Files: