Market review 18 Nov 07

I was really tied up for the past one week, not able to monitor the market. Sometime, it is good also, because as fundamental investor, you shouldn't really keep watching stock price. As it would prompt you to execute unnecessary buy/sell order.

Last Friday, STI close 36.63 points lower. Fears have slowly taken control, there is more fear of the yen carry trade unwinding starts again. At Friday close, US manage to close higher, I think it would provide an opportunity for rebound and it would head lower again. How ironic the thing is! Just as the market recover quickly from sub prime fear, and now the fear has taken control again as predicted.

I think this would persist for a while. Waiting for clearer direction now, before committing fresh capital into the market. Meanwhile, if a good stock is selling at good price, might consider to pick up some.

Lucky enough, I didn't manage to get the China New Town ipo and it got clocked down to 0.69. I would monitor the progress, if it is selling at a good discounted price, it would be worth to pick up and hold for long term. But, short term volatility would likely persist.

Another surprise is the fresh call of capital by China Hongxing. The earning is growing very well for the past few years. Look at the current balance sheet strength, they are actually raise the fund to expand the number of store. However, the aggressive roll out would increase the risk and the dilution of new share (18% of current share base) would cause the share price to drift lower in the coming period.