i) Continue to promote consumption inside the country

ii) Promote agriculture and increase the living standard of its citizens, particularly the inland western areas

iii) Slow down the increase in real estate price, slowly deflating the asset bubble

Sectors of the week

This should benefit the following sectors:

Consumer (discretionary and staples), Agriculture

 and affect the following sectors negatively:

Banks, Real Estate

Stock picks of the week:

Digital China (861 HK) (IT stock, P/E relatively low - 15 times)

Chaoda (623 HK) (Agriculture stock, low P/E - 7 times)

China Green (904 HK) (Agriculture stock, low P/E - 15 times)

Here is my strategy for HK Stocks this year:

• Subscribe for IPO (particularly for the smaller ones with an inbound consumer focus)
• Policy-driven trading: Follow the news closely. Any policy change will trigger new sells and buys and any of these trends can easily last for a week. A lot of Chinese companies are dependant on the central government’s policy. With the government worrying about a double dip in the middle of this year, more stimulus packages will possibly be rolled out to support certain industry segments and some stimulus packages will be withdrawn to prevent over-heating of some segments.

Happy Trading for 2010 everyone!

I am not surprised that there are lawsuits like this suing investment banks for advising uneducated or illiterate people to buy accumulator products that made them some money at the beginning and lost a big fortune at the end. But what is the most intriguing is how she amassed such a big fortune… HK is really a place where you can make a lot of money…

Thought for the day: after locking up hundreds of tourists in a hotel to boost the tourism industry/in the vain hope of isolating HK from swine flu, we are now the only territory in the world to shut down all schools, ironically at the same time as announcing plans to make HK an education hub by dolling out land to “private universities”. Is the government giving up on our public universities? How can you build a university with only 200,000 sq ft of floor area anyway - equivalent to about 10 floors of the Cheung Kong Centre? Meanwhile HK Disneyland responds to the kindergarten/primary shutdown by launching a special unlimited entry pass for children before the end of June. At least, we thought, there is some entrepreneurialism left in HK, albeit imported. But not so fast - lest we forget, this is the world’s only Government-owned Disneyland. The offer no longer appears on the Disney web site.

It just seems to me that the Hong Kong government has been telling people that they are pushing some industries to grow, but at the end most end up dying… Since the Tung Chee Wa’s era, we have seen: dot com, Chinese medicine, Islamic finance, wine trading, etc. But none of them are really prospering at the moment. Hong Kong government really need to think hard why this is happening. Are the policies too short-sighted? Has the government spent enough resources in promoting these industries? Maybe the environment in HK is really stifling the entrepreneurial spirits that were founded in HK thirty years ago?

On another note, PCCW has declared a special dividend of HKD 1.3 per share. This is good news for minority shareholders as they are actually getting something at the end.

What will minority shareholders gain actually? Share price will probably drop quite a lot when trading is resumed in the next few days.  And I believe the share price will have big upward resistance because of all the negative publicity it has got. And if Richard Li appeals, then this case can drag on for a long time and this will again create upward resistance on the stock. It is a lose-lose situation for Richard Li and minority shareholders.

Fair enough, they have the right to express their opinions. But how is their testimonial relevant to the case? Sure, PCCW share price suffered big drop during the tech bust in 2000 and 2001 and Richard Li was, very likely, responsible for the drop. But then, do they think that PCCW share price would go back up to its max price in 2000 if the privatisation was disallowed? No way! What could they achieve by opposing to the privatisation? Nothing. PCCW share price would probably drop further if PCCW was rejected by the court at the end.

Wake up, people. You should move on. When you bought PCCW, you believed in their management and when they failed, that means that you have made a bad investment decision. Then you should move on and find another company that you believe in. Holding on PCCW for 10 years and hoping that it would bounce back to the level you bought ten years ago just don’t make sense to rational investors.

I have a feeling that the appeal will fail and the PCCW privatisation will be allowed again by the court tomorrow morning (or early next week).

On the other hand, the court has allowed the SFC to appeal the ruling. In essence, the PCCW privatisation probably won’t materialise for at least a short while.

The secret persons probably have some personal grudge on Richard Li? According to Apple Daily, the secret person and the minority shareholders are linked by Long Hair Leung Kwok Hung. Furthermore, it reveals that one of the secret persons is Mr. Chong Wing Cheung, a mentor of “Ah Lek” Chan Pak Cheung. And on radio tonight, some people thought that the boss of the Emperor Group, Yeung Sau Sing, may be one of the secret persons. Maybe the Isabella Leong-Richard Li saga still pisses Mr. Yeung off.