Saturday, 6 August 2011

S&P downgrade US to AA+ rating

Latest news, S&P downgraded US rating to AA+, one level down from AAA. It is going to unsettle the market for next week. Expect more downside for the stock market. The good part is I didn't really buy a lot these few months, waiting for more opportunity.

After the US debt ceiling soap opera, the purpose of S&P to downgrade US rating is puzzling. What is the difference compare now vs previously? Since the debt ceiling has been raised every time? With the current speed, the QE3 will be out sooner than later. Expect the stock market to bounce by then. Meanwhile, if possible, buy some quality name.

Hong Kong stock market also experienced big drop. Hopefully the stock get de-rated, so I can start establish my position there. The current volatility is interesting for investor to buy cheaply. The double dip word is coming back in the news.

Monday, 1 August 2011

Another S chip going

Today, one of the stock in my portfolio - C&O Pharm announced the general offer by Shionogi & Co. This shows that although the market has so far ignored the good china company, there are people recognise the value.

First, it was Hsu Fu Chi, offer by Nestle. Now, it is Shionogi & Co offer for C&O Pharm. Number of good companies reducing.

Hsu Fu Chi has a good brand name, wide distribution network and low valuation compare to HK peers. It naturally attract company that like to grow in China faster. The same applies to C&O Pharm. Although the result was disappointing, the distribution network is something hard to ignore.

Going by this rate, all the good S chip would be taken private, left with those which offer little growth. I think my next forte will be branch out to HK market in order to gain access to China growth story at its core.