Wednesday, November 7, 2007

Ali Baba found treasure with Open Sesame

* Shares in surged 165 percent in their first day of trading in Hong Kong yesterday.
* The IPO was over-subscribed 150-fold
* Investor bullishness in Chinese IPOs despite warnings of a stock market bubble is a business to business (B2B) platform and they provide a website for companies directory, product catalogs, buying trade leads for exporters, importers, manufacturers, etc

My observation:
* The investors are gambling and speculating. There are no longer investment guidelines. Everything is about emotion buying for quick profit and over-optimism about the future.
* Fund managers knows the investment psychology of the Chinese Investors well, they know the chinese investors will push the price up.
* The HK Through Train Scheme, a scheme which allows individual Chinese investors to trade HK stocks directly, looks like a certainty to the HK speculators and fund managers. They want to take profit before the Mainland Chinese investors pump their money in.
* Its okay to invest into China, but with prudence. There are factors that investors ignored in the country. Factors such as High Inflation, Social Problem due to income inequality, slowing US economy, rising oil prices, fuel shortage, etc

1 comment:

Anonymous said...

you look like Ali BABA