2011年8月31日 星期三

China ZhengTong Auto buys rival dealer for $860 million

31 August 2011   FinanceAsia

Nick Ferguson

Hubei-based China ZhengTong Auto Services, the second-biggest BMW dealership on the mainland, is set to pay Rmb5.5 billion ($860 million) for Exactwin, a rival dealer that specialises in selling cars made by Jaguar, Land Rover and Volvo.
The company’s shares were suspended from trading in Hong Kong on August 23, pending an announcement, and resumed yesterday after the company revealed its conditional agreement with Exactwin to buy its entire issued share capital.
Exactwin has automobile dealership outlets spread over Beijing, Tianjin, Fujian, Hunan, Guangdong and Hainan. In total, it operates 31 dealerships authorised by manufacturers, with an average contractual agreement that ranges from one to three years.
“The group is always committed to enhancing the sales of premium vehicle brands, and the acquisition constitutes part of the strategic investments of the group proposed during its listing exercise,” said Wang Kunpeng, chief executive officer of ZhengTong Auto, in the announcement. “Completion of the acquisition will significantly expand the group's network for dealing in premium vehicle brands, contribute to the group's effort to become a core dealer in premium branded vehicles in China and consolidate the group's leadership in the premium vehicle dealership sector in the PRC.”
Wang added that Exactwin’s dealership network will complement ZhengTong's existing network and help to strengthen the business. “We'll spare no effort to maintain our rapid growth as well as our leading position in China's automobile market, trying our best to maximise return for the shareholders.”
ZhengTong listed in Hong Kong in December 2010, when it reportedly secured initial investment from a fund managed by George Soros’s son as well as sovereign wealth funds from both China and Singapore. The company sold its IPO shares at HK$7.30 each and they peaked at more than HK$11 in late July, shortly before the trading suspension.
The company is controlled by billionaire Wang Muqing through Joy Capital, which owned almost three-quarters of the company after its IPO. However, Joy Capital reduced its stake earlier this month, from 72.7% down to 61.54%, prompting a brief sell-off in the company’s shares that has largely been reversed since the resumption of trading.
ZhengTong joined the Hang Seng Composite Index in March this year.
Like other premium car dealers in China, ZhengTong describes itself as a “4S dealership” group — with “4S” apparently standing for “sale, spare parts, service and survey”. The firm focuses on brands such as BMW, Mini and Audi, although it also operates dealerships for luxury brands such as Porsche and middle-market brands such as Nissan and Honda.
In total, the company operates nearly 30 dealerships and one urban exhibition hall, covering both the large, established automobile markets of the affluent regions of China as well as the rapidly developing regions.
At the time of its IPO, investors liked the fact that ZhengTong's business covers three areas with good growth potential: private consumption, which is something Beijing desperately wants to improve; the booming high-end car market; and the 4S shop business also fits with the service industry theme, which is another growth story in China, made attractive by growing household income and increased car ownership.

2011年8月26日 星期五

A Major Opportunity for Oil Bulls


Sometimes, it's better to own the guy who makes stuff rather than the stuff itself. That's the case with oil right now.
Oil bulls bidding Brent crude back up on every rumor of a revival in Col. Moammar Gadhafi's fortunes are missing the bigger picture. U.S. economic data on everything from manufacturing to home sales remain weak—and gasoline demand is following suit. China is battling inflation and Europe is mired in its ongoing fiscal crisis.
Agence France-Presse/Getty Images
Given the risks of a correction in oil prices, better value can be found in the stocks of major oil producers.
Yet Brent crude, at about $110 a barrel, remains 15% above where it began the year. Moreover, Wall Street is forecasting an average price for 2011 of about $106 for the year, according to FactSet Research Systems. Given prices year to date, that implies Brent needs to average just under $95 for the rest of the year, 14% below today's level.
Brent prices clearly don't discount a recession. If they did, they would be closer to, or below, the marginal cost of supply, which Sanford C. Bernstein pegs at $80 to $90 per barrel. Perhaps they reflect hopes of another round of quantitative easing from the Federal Reserve. But a resort to QE3 would signify that the underlying economy—you know, the place where oil actually gets burned—is very weak.
Given the risks of a correction in oil prices, better value can be found in the stocks of major oil producers. They have fallen even more sharply in the recent selloff, with Exxon Mobil off about 10% since the end of June compared with Brent's fall of less than 4%. Remarkably, Exxon, Italy'sEni and France's Total are actually valued lower now than they were at the end of 2008, when the world really did look like it was ending. Since then, Brent has more than doubled.
The stocks of Europe's major oil companies are priced for a long-term Brent price of $75, according to Citi. That provides a cushion against further declines in the commodities markets. In addition, they offer investors high cash payouts in the form of dividend yields and share buybacks that commodities can't compete with. On average, Exxon, ChevronConocoPhillipsRoyal Dutch ShellBP, Eni and Total yield 5.5% on dividends and 9.3% including buybacks, according to Credit Suisse.
What's more, given strong balance sheets in general—Exxon now scores higher than Uncle Sam, at least in the eyes of Standard & Poor's—it would take a prolonged recession with Brent stuck at $70 or below for a year to endanger payouts, reckons brokerage Raymond James.
The cheapest stocks are Eni and Total, in part because of their Italian and French provenance, where sovereign-debt worries reign. Shell, meanwhile, is just exiting from a multiyear period of spending that will fuel output growth of about 3% per year to 2014, according to Credit Suisse. Yet its stock commands less than seven times 2012 earnings and yields 5.3%. That looks safer than relying on further explosions in the desert.

2011年8月21日 星期日

長榮航線大擴編 租機應急

2011.08.22   【經濟日報╱記者丁威/台北報導】




全文網址: 長榮航線大擴編 租機應急 | 財經焦點 | 財經產業 | 聯合新聞網 http://udn.com/NEWS/FINANCE/FIN1/6540983.shtml#ixzz1VhrBXB1o
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鴻海液晶TV出貨 竄至第二

2011.08.22   【經濟日報╱記者張義宮/台北報導】


他認為,鴻海集團未來液晶電視代工將逐步集中在富士康,將奇美電的數量移至富士康,鴻海將擁有SONY 、LGE、VIZIO及夏普等品牌代工,明年成長可期。

全文網址: 鴻海液晶TV出貨 竄至第二 | 科技產業 | 財經產業 | 聯合新聞網 http://udn.com/NEWS/FINANCE/FIN3/6540583.shtml#ixzz1VhoqaAEt
Power By udn.com 

2011年8月20日 星期六

H-P Explores Quitting Computers as Profits Slide


Hewlett-Packard Co., the world's largest personal-computer maker, is exploring a spinoff of its PC business, an about-face that highlights how growth has pivoted from the computers that so long ruled the industry toward software and mobile devices, where H-P has largely failed to compete.
H-P said its board is evaluating strategic options for its PC business, which could include a "full or partial separation." It also will abandon efforts to sell tablets and smartphones that challenged Apple Inc.'s iPad and iPhone.
At the same time, H-P agreed to buy U.K. software firm Autonomy Corp. for about $10.25 billion, seeking to move further into the higher-profit business of analyzing data for corporations.
The technology giant has been in tumult since its former chief executive was ousted a year ago over ethics concerns. Since then, H-P shares have slumped as it has changed over much of its board and senior executives and lowered financial targets three times, most recently on Thursday.
Investors reacted coolly to the news, which emerged during market hours. H-P shares fell 9% to $26.73 in after-hours trading Thursday, after declining 6% to $29.51 at 4 p.m. on the New York Stock Exchange, amid a broad market selloff.
The surprise announcement is a strategic flip-flop for H-P Chief Executive Leo Apotheker, who took over in November. Mr. Apotheker said in a February interview that being in the consumer businesses like PCs gave H-P "an immense competitive advantage."
In an interview Thursday, Mr. Apotheker said "we need to sharpen our focus," and that to do so "you need to take significant action."

Even without its PC unit, H-P would be one of the world's largest tech companies. While the PC division was H-P's largest unit last quarter, with $9.59 billion in revenue, the company's tech-services division, which runs corporate computer systems, brought in $9.1 billion. The company would also remain one of the largest makers of server, networking and data-storage systems, as well as the world's biggest printer company.Mr. Apotheker said he had been analyzing market data and trends and talking with directors and advisers for some time about how to shift H-P. He concluded that "to be successful in the consumer device business we would have had to invest a lot of capital and I believe we can invest it in better places," specifically H-P's units that target businesses. He cited the deal for Autonomy as an example.
H-P's printer division had $6.09 billion in revenue and made an $892 million profit last quarter. The printer business has high profit margins due to the expensive ink that H-P sells for printer refills.
As part of its restructuring, H-P said was it was taking a $1 billion restructuring charge to shut down its tablet and smartphone operations. The company acquired an operating system for those devices last year with the $1.2 billion purchase of Palm Inc.
H-P earlier this year introduced its TouchPad tablet, but it hasn't sold well. In the interview, Mr. Apotheker said he wasn't happy with the performance of H-P's tablet and smartphones. "We want to make sure that none of our actions are an impediment," he said.
Associated Press
The move away from PCs is a strategic flip-flop for CEO Leo Apotheker.
H-P's PC unit still makes a profit, including $567 million in the quarter ended July 31, but it is a low-margin business. Revenue has also been declining recently, including a 3% year-over-year decline in the July period.
"It certainly shakes things up," said Tim Ghriskey, the co-founder of $2 billion fund Solaris Group, which holds H-P shares. Mr. Ghriskey said he was waiting for H-P to make some kind of strategic shift since "the stock wasn't going anywhere."
H-P's spinoff plan comes nearly a decade after H-P struck a contentious $25 billion deal to merge with rival Compaq Computer Corp. to propel it to the top of the PC industry. It also comes seven years after rival International Business Machines Corp. sold its PC business to Chinese company Lenovo Group Ltd.
The H-P plan also marks the second time the company has looked to divest a core business to keep up with the changing tech industry. H-P in 1999 spun off its measurement-device unit—which included technologies that were the genesis of the company and core to its success—into a firm known as Agilent Technologies Inc.
Since then, H-P has repeatedly tried to remake itself with big acquisitions, including Compaq. In 2008, H-P bought Electronic Data Systems Corp. for $13.9 billion to compete with IBM's tech-services division. It bought 3Com Corp. last year to take on Cisco Systems Inc.'s network-equipment business, and acquired Palm last year.
Despite the deals, H-P remained reliant on its old-line PC and printer businesses for about half of its revenue.
Spinning out the computer business will improve H-P's overall profit margins, even though it would cut the company's revenue by roughly a third. The personal systems group had an operating margin of 5.4% in 2010, compared with 11.7% operating margin for the entire company, according to Brian Marshall, an analyst at Gleacher & Co.
Mr. Apotheker's predecessor, Mark Hurd, had said he was committed to staying in the PC industry, and Mr. Apotheker, the former CEO of software giant SAP AG, said earlier this year he would push forward with that strategy. After Mr. Hurd left, H-P executives said repeatedly that the company's strategy was on the right track.
Hewlett-Packard said it is exploring a spinoff of its PC business as the technology giant lowered its financial targets for the third time this year. Dennis Berman has details on The News Hub.
Initially, said a person familiar with the matter, Mr. Apotheker wanted to keep all of H-P's businesses together and use the company's cash to buy its way into new areas like software. But, that person said, it soon became clear that H-P didn't have the war chest to compete with rivals like Oracle Corp. and IBM.
While H-P is the world's biggest computer maker, it is reliant on Microsoft Corp.'s Windows software and the Palm mobile software at a time when Apple's Mac OS X software has been the fastest growing PC operating system and Google Inc.'s Android is the fastest-growing smartphone system.
It became clear over the past few months that the only way achieve Mr. Apotheker's goal of adding software products for businesses was to find a way to get rid of the company's PC arm and use the cash to buy into new areas, said the person familiar with the matter.
Facing low margins and low growth in the PC businesses, Mr. Apotheker decided there would be no sacred cows and it would be best to get out of the computer business, people familiar with the matter said.
His goal is to reposition H-P into an enterprise business and move away from consumer products, the people said.
A $1 billion investment disclosed in May by New York hedge-fund manager John Paulson in H-P was also a "wake up call" for the company, one of the people said. Mr. Paulson told H-P executives that the company had to make moves to unlock shareholder value, the person added.
While H-P will pursue a spinoff, it will also be open to other potential offers if they are more attractive, people familiar with the matter said. The company said it expects the process to last 12 to 18 months.
After Bloomberg News reported H-P's moves Thursday, the company received about a dozen calls from private equity firms expressing interest, the people said.
Meanwhile, the boards of H-P and Autonomy approved H-P's purchase. Autonomy's revenue rose 18% to $870 million in 2010, and is expected to top $1 billion this year. The company makes software that helps firms keep track of their ever-growing streams of data, including emails, phone calls and other documents. H-P has been trying to move further into business software for years, but its attempts haven't had a big impact on the company's bottom line.
H-P Thursday reported revenue of $31.2 billion for its fiscal third quarter, up 1% from a year earlier, but down 2% when adjusted for effects of currency. Profit was $1.9 billion, up 9% from a year earlier.
H-P was advised by Barclays Capital, Perella Weinberg Partners and law firms Gibson, Dunn & Crutcher, Skadden, Arps, Slate, Meagher & Flom and Freshfields Bruckhaus Deringer.
Autonomy was advised by Qatalyst Partners, Citigroup, Goldman Sachs Group, Bank of America Merrill Lynch, UBS AG, J.P. Morgan Chase & Co. and law firm Slaughter & May.
—Ian Sherr
contributed to this article.

Write to Ben Worthen at ben.worthen@wsj.com, Justin Scheck at justin.scheck@wsj.com and Gina Chon at gina.chon@wsj.com

Read more: http://online.wsj.com/article/SB10001424053111903596904576516403053718850.html#ixzz1VauWJMbJ

2011年8月19日 星期五

Chinese machinery makers seek $5 billion from Hong Kong listings

18 August 2011   FinanceAsia

Lillian Liu 

Two Chinese machinery makers are going ahead with their Hong Kong listing plans despite lingering concerns over the current volatile market.
Sany Heavy Industry and its domestic rival XCMG Construction Machinery, both listed on the A-share market, are seeking a Hong Kong listing in the coming two months. Sany has filed a listing application to the Hong Kong stock exchange for an initial public offering of up to $3 billion, while XCMG is aiming to raise up to $2 billion, according to sources.
The two deals, along with the Citic Securities’ estimated $3 billion IPO andNew China Life’s $4 billion offering, which are also scheduled to take place in the coming two months, will absorb more than $10 billion of liquidity in Hong Kong’s capital market.
There are concerns that by coming to the market at the same time, the two companies will stretch investors’ appetite, especially as there are already many machinery stocks in Hong Kong for investors to choose from.
There are currently 23 industrial machinery companies listed in Hong Kong. The biggest debut to date came from Shanghai Electric, which raised $648 million from its IPO in 2005, according to data from Dealogic. Last February, International Mining Machinery, a Chinese maker of mining equipment,raised $327 million from its IPO in the city.
Sany Heavy Industry had said last year that it was planning a Hong Kong listing. The company makes engineering machinery for construction use and is the Shanghai-listed arm of Sany Group.
Sany Heavy Equipment International, another group company, which makes coal mining equipment, is also listed in Hong Kong. It raised $309 million from a share sale arranged by HSBC and Standard Chartered in 2009.
Sany Heavy Industry has hired BoA Merrill Lynch, Citi and Citic Securities to manage the transaction.
XCMG, which makes construction machinery, is said to be targeting up to $2 billion in an offering arranged by BNP Paribas, CICC, Credit Suisse, HSBC, Macquarie and Morgan Stanley.
Sany Heavy Industry, which is based in central China’s Hunan province, posted a net profit of Rmb5.9 billion ($899 million) for the first half of 2011, which was a 106% jump year-on-year, according to a filing to the Shanghai stock exchange.
The company said the significant increase in revenue in the first half was due to the higher domestic demand for construction machinery from the building of affordable housing infrastructure.
XCMG was founded in 1989 in East China’s Jiangsu province and is now the leading player in the country’s construction machinery industry, and is among the top 10 in the world. Its products are sold to Japan, South Korea, Southeast Asia, US and Europe, the group said on its company website. XCMG reported a growth of 61% year-on-year in net profit for the first half of this year.

2011年8月18日 星期四

Global recession is last thing Asia needs right now

17 August 2011   FinanceAsia

Lara Wozniak      
Recent price action has been brutal. Exactly what have Asia’s equity markets priced in?

It’s been a difficult few weeks, and Asia’s equity markets have finally started singing from the same ‘growth negative’ hymn sheet, long voiced by the region’s more cautious local currency bond markets.
Thus, in a relatively short space of time, Asian equity markets have migrated aggressively from pricing in a soft patch in developed markets, to a slowdown, to a recession. The ensuing re-pricing has been vicious, with the fall in equity markets from August 4 through August 11 being, by my reckoning, the biggest six-day sell-off since the MSCI Asia ex-Japan was launched in January 1989.
At about minus 1.5% standard deviations below the mean, trailing valuations are at levels last seen during the Lehman crisis, Sars and the Asia Crisis. In other words, markets are pricing an economic slowdown similar to some of the most difficult periods in the region’s recent financial history.
For those that believe growth will recover in the second half of 2011, evidently the sell-off represents an outstanding buying opportunity. We have met with a number of clients with such views and quite reasonably, they point out that the consensus economic forecasts still remain positive for 2011 and 2012, and that as yet; there has been no economic data print that confirms a recession is underway.
Conversely, there are clients that believe the US and core Europe are facing difficult headwinds, possibly recessionary, and that Asia’s markets are accurately pricing in the prospect of substantially weaker economic activity. This group are comfortable sitting on the sidelines, unwilling to catch a falling knife, and waiting for signs of the market to bottom.
Regardless of which camp investors prefer — as the Lehman situation showed us only too well — volatility can generate unintended economic consequences to the extent it negatively impacts sentiment and expectations.
How’s that?
Well, for example, negative sentiment pushes down the share price of Bank X, let’s say, to the extent that its solvency is questioned, thereby further affecting sentiment towards the financial sector, and further embedding the negative growth loop. The consequences can be even more dangerous and dramatic as the onset of a classic economic recession.
No better was this evident than following the failure of Lehman Brothers on September 15, 2008. Until that day, financial assets were reasonably well correlated and reasonably stable. At the point Lehman filed for Chapter 11 protection, however, markets collapsed and economies followed soon after.
So if global growth were to slip into recession, how would Asia fare?
In the event global output were to contract — caused either by organically slowing growth or triggered by event risk such as a sovereign and/or corporate default — Asia would not escape unscathed; indeed, it would probably be hit disproportionately harder in the initial stages as its typically smaller, more responsive economies (and high beta risk assets) rapidly adjusted to the new growth outlook.
However, we suggest to clients that Asia should be able to withstand the worst of the global economic downdraft, for the following reasons:
One, steady growth in local domestic demand both insulates and cushions the region from volatilities in developed markets. Indeed, the proportion of Asia’s exports to the US/European community has been steadily declining since 2000 and, as of mid-2011, accounted for a fifth of total exports. We expect this trend to continue as intra-regional trade slowly but surely takes hold.
Two, in much the same way it did in 2008, the sharp fall in global growth expectations will likely lead to lower commodity prices. And lower commodity prices should provide central banks with additional flexibility to cut rates given the historically close relationship between inflation and oil prices. While growth will decelerate from current levels, nevertheless, the key point here is that lower interest rates should additionally support Asia’s terms of trade and thus profit margins.
Three, lower commodity prices should further improve the degree of policy flexibility Asian governments and central banks already enjoy — certainly when compared to their counterparts in the west. China, for example, has raised rates five times since October 2010 and could just as easily lower them — although whether that would be the correct course of action is open to question. And although Asia’s average debt metrics are somewhat higher than pre-Lehman levels and interest rates lower, nevertheless, authorities still have room to cut interest rates, ease bank reserve requirements, and/or roll out targeted stimulative spending packages as necessary.
Finally, as the latest round of quarterly earnings make clear, Asian banks are in good health, with strong levels of liquidity, capital and asset quality. For example, Asian banks have negligible exposure to European peripheral debt and should be able to weather the prospect of a second financial crisis in the same way they did the US subprime crisis. Importantly, net loan-deposit ratios remain under 100% for every banking sector in the region (even Korea), which means they are not exposed to volatile wholesale markets for funding purposes.
But while Asia might be better able resist the worst effects of a global financial crisis (GFC) part two; it would be a mistake to assume it would emerge entirely undamaged from the experience. China, for example, is still dealing with the consequences of its first post-GFC stimulus package, which in 2008 was equivalent to more than twice the size of the US’s quantitative easing programme as a proportion of GDP.
Among other things, these consequences include still-rising non-performing loans in the banking system due to the unfettered lending binge, occasional food riots, a property bubble and 10 months of interest-rates hikes required to combat inflation — which (in year-on-year terms) has still yet to peak.
For all these sorts of reasons, a recession in developed markets is precisely not what China — or Asia — needs at the moment. And while they have the reserves and surpluses to deal with it today, it will inevitably come at a future cost — possibly to materialise in the form of impaired credit metrics.
What is your near-term view towards the markets? How are you positioned?
While corporate performance, specifically profits, almost always drive markets over the long term, headline macro uncertainties tend prevail over the near to medium term. And so it remains today. In fact, while eurozone solvency and US growth risks rightly dominate Asia’s investor perceptions, local earnings growth remains okay.
For example, although only 55% of the MXASJ [the MSCI AC Asia ex-Japan index] have reported second-quarter 2011 earnings, 63% of companies have exceeded analyst expectations — the highest ‘beat ratio’ recorded over the past 21 quarters, save the third quarter of 2009. And this compares to an average beat ratio of 52% since the second quarter of 2006.
On reasonably strong earnings and almost zero price appreciation since January 2010, the MXASJ’s trailing price-to-earnings ratio is now 11.5 times. As I mentioned, only during the Asia Crisis in 1998 and the Lehman Crisis in 2008 has the measure been lower. Note the index’s 35-year median is 16 times.
Similar valuations are reflected in 10-year cyclically adjusted price-to-earnings ratios (Capes) which are at or close to their historical medians. In particular, Capes in north Asian markets continue to display lower average valuations than those of the south.
So for the reasons I articulate, we are underweight Asia ex-Japan equities and have been so since mid-May. Within the equity complex we are overweight north Asia and have exposure to the defensive sectors.
Despite dramatic, recent price declines, we are not ready to adjust our underweight. A reasonable amount of bad news has been priced into equity valuations — nevertheless, until we get clarity on the soft patch-versus-recession debate, we remain defensive.
And away from equities, how are you positioned towards bonds?
In fact, the macro developments described may be regarded as positive for Asia’s domestic debt market; for the following reasons:
Firstly, moderating inflation and a likely shift to a neutral monetary policy — precipitated by slowing growth — suggests a stable to positive yield outlook. For example, the central banks of both Indonesia and Korea recently delayed their decision to hike rates during August to the fourth quarter of 2011 and possibly beyond. I’m guessing we’ll get more of these on-hold type decisions across Asia going forward.
Secondly, the recent use of exchange-rate appreciation as a monetary tool supports currency stability (if not currency gains). Indeed, Asia’s currency complex is proving resilient — the J.P. Morgan ADXY Index barely moved throughout the equity sell-down in August. However, my sense is that export and commodity currencies will remain under pressure (Australian dollar, New Zealand dollar, won) while domestically oriented currencies will generally out-perform (baht, Indian rupee, Malaysian ringgit).
Lastly, low levels of interest rates in developed markets underscore Asia’s superior carry profile of approximately 4%.
Thus, we continue to highlight Asia’s local currency bonds as an important part of a diversified portfolio. It is our view that among Asia’s publicly traded securities, the asset class displays an attractive risk-adjusted return profile, comparing well to the type of return metrics posted by global commodity, fixed income and equity markets.
And finally, what is your advice to clients now?
In these volatile times we continue to recommend clients concentrate on our core investment themes: portfolio diversity, correctly valued investment opportunities and an on-going quest for yield.
Most importantly, focus your core portfolio on yield: local currency bonds, US dollar-denominated high-grade fixed income, income-oriented mutual funds and dividend stocks with a preference for defensive sectors.
Try to find assets at the right price. In addition to Asia’s generous dividend yield stocks, we also like stocks with outright cheap valuations, particularly those in the following sectors: consumer staples, consumer discretionary, utilities, telecoms and healthcare. As I suggest above, we continue to prefer the more defensive markets of north Asia.
Long-short hedge funds should also perform well in these markets. We suggest a switch into those names in step with market moves, while staying sufficiently flexible to respond to changing dynamics. We would also observe that, over the past six weeks, Asian hedge funds have done a reasonable job of protecting downside risk while generating alpha across asset classes.
Finally, trading markets are still in a range which we suggest playing — particularly the FX market. I continue to recommend clients diversify their portfolio into a mix of currencies.

2011年8月16日 星期二

Looking for the bottom

Aug 9th 2011, THE ECONOMIST

HOW does one tell when markets are cheap? Regular readers will know that this blogger has been gloomy for a while but the trick is to have some cash available so one can follow the old rule of being greedy when others are fearful. The Vix index of volatility has reached 48, the kind of levels that indicate panic. Hedge funds say there is unusually high volume for August and that there are signs of capitulation in the financial stocks, perhaps as value investors exit the sector.
Wall Street presents a problem for the cheapness argument. Ignore the historic or prospective p/e (much beloved by analysts and CNBC) since they won't mean much of the economy weakens. The best measure is the cyclically-adjusted p/e ratio which averages profits over a decade and pointed to market tops in 1929 and 2000, as well as the early 1980s. According to Professor Shiller, the ratio was 20.7 at the end of last week, whicn makes it around 19.5 after yesterday's fall. That is still above the long-term average of 16.4. The dividend yield is between 2 and 2.5%, on the FT's various measures; even adding 0.5-1% for buy-backs doesn't make that look cheap.
Things are more hopeful in Europe. for the continent as a whole, Andrew Lapthorne reckons the cyclically-adjusted p/e is 12.4; that is still 20% above the 2008 low but it still a lot more attractive than the US. Remember also that many European companies have prospered by selling to emerging markets.
In Britain, the dividend yield on the All-Share is a full percentage point above the yield on gilts. In other words, the market is pricing in future dividend cuts. The crossover between these yields was a good buying point in 2003 but didn't stop the markets from falling further in 2008. One needs also to remember that the dividend yield was higher than gilt yields throughout the first half of the 20th century; the current situation may be a return to normal or could simply indicate that gilts are very expensive. The old rule of thumb used to be that yield of more than 5% made the market cheap; we are now around 4%. Events in London are hardly conducive to market confidence.
For emerging markets, Morgan Stanley reckons the price-to-book ratio is 1.65. that is below the average of the last 20 years although it's worth noting that prices fell to book in 1998. For what it's worth, MSCI reckons the forward p/e of emerging markets is now in single digits.
So there are certainly signs of value outside the US, although the case is not overwhelming. An alternative view is simply that equity markets are catching up with the message that government bond yields have been sending all year, and that has been implied by central bank policy; the developed world economy is still very weak.
Dylan Grice at Societe Generale is one of the top rated strategists in London who has long argued for an overweight cash and long gold position. He thinks the markets are pushing the central banks to monetise the issue; with the Fed indulging in a third round of QE and the ECB loosening the purse strings to buy unlimited bonds. However, he thinks it may take more of an air of crisis before the authorities finally capitulate; perhaps a big European bank in trouble or if French yields start widening towards Spanish levels.

2011年8月15日 星期一


2011/08/16 10:15 時報資訊

【時報記者張漢綺台北報導】NB代工廠-廣達 (2382) 及鴻海 (2317) 為擺脫毛利率「不三不四」壓力,積極往上游零組件發展,同步鎖定電池市場,其中廣達轉投資-斯丹達,鴻海集團亦擴大投資原瑞,跨足NB電池領域。

況且NB電池組強調客製化生產,以鴻海集團的原瑞及廣達集團的斯丹達目前產能均遠低於新普科 (6121) 及順達科 (3211) ,兩家廠商生產成本難與新普科及順達科競爭,就算原瑞及斯丹達將目標放置電動車電池市場,以目前兩家公司技術,恐還有一段遙遠的路要走,尤其是汽車廠較NB品牌廠更為封閉,想要有斬獲,恐非三年兩載即可看到!
至於各大車廠全力發展的電動車市場,距離可說更遙遠了,由於電動車從電池、整車到充電站等設置都是大工程,各國政府及各大車廠發展至今未有顯著的成果,加上汽車廠較NB更為封閉,即使是新普科已與中國普天合作、順達科與台達電 (2308) 聯手多年,至今都沒有好消息,短期內電動車要取代油電混合車的機率甚低,因此斯丹達及原瑞想在此領域有斬獲,恐非三年兩載即可看到。