Hong Kong stocks rose, led by commodity and oil producers, after metal and crude prices advanced in the US and European markets.
Aluminum Corp. of China Ltd.（2600）added 0.112%. PetroChina Co.（857）gained 2.489%. Geely （175）, the Chinese carmaker backed by Goldman Sachs Group Inc., rose 5.085%. China Shipping Development Co. （1138）advanced 1.232% after Goldman Sachs recommended investors buy the stock. Shenguan Holdings (Group) Ltd., a manufacturer of edible sausage casings, surged nearly 40%.
The Hang Seng Index (HSI) and the H-share Index rose 168 points and 131 points respectively. The trading volume was $60.4 billion.
Market Analysis
Investors are waiting for news from both China and the US. In China, a series of economic data will be released soon. Data related to bank loan and money supply will be the market focus. In the US, the major companies will release their earnings reports next few days. If the results are better than expected, the DJIA may climb above 10,000-point.
On 05/10, the trading volume was less than HKD50bn. From 06/10 to 09/10, the HSI rose more than 1,000 points. Yesterday, the trading volume was only HKD44bn. Today, the HSI surges. If the trading patterns of this week and last week are quite similar, the HSI is likely to have further upside.
21,929-point will be the short-term barrier, but it is not the end of the rally. For the rest of this year, the target of the HSI is set at 24,000-point unless the US or the Chinese governments withdraw the liquidity from the economy.
HSI and H-share Index（13/10/2009）
Items
HIS
H-Share Index
14-day RSI
57.24
58.79
10 MA
21058.52
12115.91
20 MA
21183.97
12217.09
50 MA
20760.92
11933.08
100 MA
19655.01
11439.81
250 MA
16359.14
9224.18
October Futures
34 points discount
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Portfolio
The performance of the oil price is lagged behind the gold price. CNOOC（883）has been bought at $11.30. Also, technical indicators show Datang Power（991）is strengthening and this stock has been bought at $4.05.
Simulated Investment Portfolio :
Date of Opening: 30/03/2005 Opening Amount: $1,000,000
Stock
Shares/Cash
Buying Price
Closing Price / Selling Price
(13/10)
Gain/ Loss
（883）
40,000 shares
11.30
11.50
+1.77%
（991）
100,000 shares
4.05
4.05
+0.00%
Cash
3,652,315
Portfolio Value (13/10/2009) : $4,517,315
Total Return (from 30/05/2005 to 13/10/2009) : 351.73%
**The stock prices can go down as well as up.
**The above portfolio is a “Stimulated Investment Portfolio”.
**The return figures are not net of transaction fees and stamp duty.
**The above information has not been audited by the SFC.
** Investors should understand and consider the risks before investment.
** I am holding 9,000 shares of CNOOC (883).
BMI Fund Management President Patrick Shum
The author holds SFC license and can provide investment advice.
Disclaimers