wow..it was really quite some time ago..dun worry..guess timing is the only thing we can play with now.
me too but not holding this counter, am holding my sinotel @ 0.65(yet now trading ard 0.4x)...sian half also..
i still monitoring this counter...thinking to load too as is quite a good price now.
yummygd ( Date: 21-Feb-2010 09:54) Posted:
i bought at 1.11 like when it was tradingaround 1.08- 1.11 long long time ago and was stupid of not letting go when it was at 1.3 sigh stupid now paying for it with time i guess.
star-trader ( Date: 19-Feb-2010 21:27) Posted:
Sometimes it is about timing and the news.. One question to ask..Have you ever bought when the market is chasing against the price?
Have you ever wonder why the stocks drop at a certain level and rebounded back? Let's take an example today on Genting. It dropped till 0.9. BB Collected from 0.905 to 0.93 when the market global news are bad and contra players losing on fear and sell to them. BB will sell the next day or "slowly release" at 0.935, 0.94 or even higher when they found an opportunity to sell higher. When retail investors bought from BBs, they get caught from the high price individually but BB able to sell high and buy low.. So think about it, how many of you got caught at the range of 1.00 - 1.10 ? :) Let's say A bought 2 lots, B bought 3lots, all add-up together were the one that sold by BBs for the past week!
P/S: Don't feel sad or embarassed if you been to this situation as when I first learned to trade, I got caught into this situation as well.With right market news and right candlesticks for direction with right method, you will be able to ride along... all the best...
i bought at 0.58 den when it fell again i bought at 0.51 again den now in total mine is sitting at 0.545 per share. have faith and just waiting for mei mei to grow up and can be marry off haha
gibson ( Date: 20-Feb-2010 00:18) Posted:
registered to just give my 2cts on this stock, i (foolishly) bought high at 0.58 but not too worried. checked back on historical prices - similar situation occured in 2007. i guess what comes up must come down and vice versa? This stock will go back up, just hold onto it for the long term.
what goes up must come down, otherwise how the fund mgrs make money? they use bad news to push the stock down in order to accumulate to push it back up again right?
at the moment if you are thinking of buying this stock just do a proper TA or seek advice on it. RSI and stochs indicates its oversold. but no buying up volume, momentum etc possible to go down further.. but seems stable at ard 40c since the massive selling off
i bought at 1.11 like when it was tradingaround 1.08- 1.11 long long time ago and was stupid of not letting go when it was at 1.3 sigh stupid now paying for it with time i guess.
star-trader ( Date: 19-Feb-2010 21:27) Posted:
Sometimes it is about timing and the news.. One question to ask..Have you ever bought when the market is chasing against the price?
Have you ever wonder why the stocks drop at a certain level and rebounded back? Let's take an example today on Genting. It dropped till 0.9. BB Collected from 0.905 to 0.93 when the market global news are bad and contra players losing on fear and sell to them. BB will sell the next day or "slowly release" at 0.935, 0.94 or even higher when they found an opportunity to sell higher. When retail investors bought from BBs, they get caught from the high price individually but BB able to sell high and buy low.. So think about it, how many of you got caught at the range of 1.00 - 1.10 ? :) Let's say A bought 2 lots, B bought 3lots, all add-up together were the one that sold by BBs for the past week!
P/S: Don't feel sad or embarassed if you been to this situation as when I first learned to trade, I got caught into this situation as well.With right market news and right candlesticks for direction with right method, you will be able to ride along... all the best...
registered to just give my 2cts on this stock, i (foolishly) bought high at 0.58 but not too worried. checked back on historical prices - similar situation occured in 2007. i guess what comes up must come down and vice versa? This stock will go back up, just hold onto it for the long term.
what goes up must come down, otherwise how the fund mgrs make money? they use bad news to push the stock down in order to accumulate to push it back up again right?
at the moment if you are thinking of buying this stock just do a proper TA or seek advice on it. RSI and stochs indicates its oversold. but no buying up volume, momentum etc possible to go down further.. but seems stable at ard 40c since the massive selling off
Agree. 0.42 is turning out to be a very strong support. Fingers crossed this "floor" holds out when the China market reopens next week. Ms Ying has been very heavily abused since we stepped into 2010. Cheers
Alligator ( Date: 19-Feb-2010 17:17) Posted:
relax lah
it ended with only one bit down, 1% down in such a broad sell down market....
i think it is getting close to the 'floor'
yummygd ( Date: 19-Feb-2010 17:08) Posted:
ok trading ended so what is the damage for ying li??pls someone inform i dare not log in haha
Strange we're discussing Citigroup here but it has a very very very strong support at 3.15, it's recent placement price. If you read the US websites, plenty of hedge funds have loaded up between 3.15-3.4 based on its strong global positioning. They are looking at a $5 price target at this stock. The reason it's taking so so long to move up is because the US Govt has not stated when they will divest their holding into the market. Also the slow pace in which it's releasing its unwanted assets leaves its balance sheet very convoluted and very hard to predict what the future holds for this stock. It also doesn't help when analysts like Meredith Whitney keeps whacking the big US banks. MY personal view is that 3.2 is a safe entry point but this is a speculative play with plenty of twists still in the tale. Cheers
pharoah88 ( Date: 19-Feb-2010 17:27) Posted:
What Happened to CitiGroup's past Grand Glory????
Banks are supposed to be Xtremely Profitable because they Create Money for Loans with Pen & Paper.
lOOks like there are NOT ENOUGH business in US TODAY for CitiGroup to make a PROFIT!!!!
Then WHY are the Foreign Funds going back to US????
WHY US government is selling GOLD????
WHAT is brewing in the US????
Alligator ( Date: 19-Feb-2010 17:03) Posted:
citi ha? read this from their website
For Immediate Release Citigroup Inc. (NYSE: C) January 19, 2010 CITIGROUP REPORTS 2009 FULL YEAR MANAGED REVENUES1 OF $91.1 BILLION AND EXPENSES OF $47.8 BILLION FULL YEAR 2009 NET LOSS OF $1.6 BILLION FOURTH QUARTER NET LOSS OF $7.6 BILLION ($0.33 PER SHARE); $1.4 BILLION ($0.06 PER SHARE) EXCLUDING THE IMPACT OF TARP REPAYMENT AND EXIT OF LOSSSHARING AGREEMENT NET CREDIT LOSSES LOWER FOR SECOND CONSECUTIVE QUARTER TIER 1 CAPITAL RATIO OF 11.7% AND TIER 1 COMMON RATIO2 OF 9.6% TIER 1 COMMON OF $104.6 BILLION AND ALLOWANCE FOR LOAN LOSSES OF $36.0 BILLION CITICORP 2009 NET INCOME OF $14.7 BILLION, UP FROM $6.1 BILLION IN 2008 CITI HOLDINGS ASSETS DOWN $168 BILLION OR 23% IN 2009, AND $351 BILLION FROM PEAK LEVELS New York – Citigroup today reported a full year 2009 net loss of $1.6 billion, or $0.80 per share. Managed revenues were $91.1 billion for the year. The fourth quarter 2009 net loss was $7.6 billion, or $0.33 per share. Excluding the $6.2 billion after-tax loss associated with TARP repayment and exiting the loss-sharing agreement, the fourth quarter net loss was $1.4 billion or $0.06 per share. The provision for loan losses3 in the fourth quarter was $8.2 billion, down 36% from the prior year and 10% from the prior quarter. “We have made enormous progress in 2009,” said Vikram Pandit, Chief Executive Officer of Citigroup. “It was our responsibility to get our own house in order. We greatly improved Citi’s capital strength, reduced the size and scope of the company, and refocused our business strategy to take advantage of our unmatched global network. We created Citi Holdings to rationalize non-strategic businesses, totally overhauled risk management, cut costs by over $13 billion annually, reduced headcount by 100,000, and reduced assets by $500 billion from peak levels. And to take advantage of all these changes, we assembled a talented new management team focused on the new Citicorp franchise to move us forward. “We also completed the repayment of $20 billion invested in the company by the U.S. government through the Troubled Asset Relief Program (TARP) and exited the loss-sharing agreement with the government,” said Mr. Pandit. “As we enter 2010, we are strongly capitalized, significantly more efficient, and are executing on a clear
Sometimes it is about timing and the news.. One question to ask..Have you ever bought when the market is chasing against the price?
Have you ever wonder why the stocks drop at a certain level and rebounded back? Let's take an example today on Genting. It dropped till 0.9. BB Collected from 0.905 to 0.93 when the market global news are bad and contra players losing on fear and sell to them. BB will sell the next day or "slowly release" at 0.935, 0.94 or even higher when they found an opportunity to sell higher. When retail investors bought from BBs, they get caught from the high price individually but BB able to sell high and buy low.. So think about it, how many of you got caught at the range of 1.00 - 1.10 ? :) Let's say A bought 2 lots, B bought 3lots, all add-up together were the one that sold by BBs for the past week!
P/S: Don't feel sad or embarassed if you been to this situation as when I first learned to trade, I got caught into this situation as well.With right market news and right candlesticks for direction with right method, you will be able to ride along... all the best...
It was an illusion of "Is there?" and "Is NOT there?" and Back to "Is there?".
This type of magic shows is very good for SGX and GST and brokers.
yummygd ( Date: 19-Feb-2010 17:19) Posted:
thanks dude. thats good news indeed. think the bears decided to play with genting instead....after bleeding right now hitting my left haha. oh well.. at least my baby Ying Li is not bleeding that much today.thank god for small mercy.
Banks are supposed to be Xtremely Profitable because they Create Money for Loans with Pen & Paper.
lOOks like there are NOT ENOUGH business in US TODAY for CitiGroup to make a PROFIT!!!!
Then WHY are the Foreign Funds going back to US????
WHY US government is selling GOLD????
WHAT is brewing in the US????
Alligator ( Date: 19-Feb-2010 17:03) Posted:
citi ha? read this from their website
For Immediate Release Citigroup Inc. (NYSE: C) January 19, 2010 CITIGROUP REPORTS 2009 FULL YEAR MANAGED REVENUES1 OF $91.1 BILLION AND EXPENSES OF $47.8 BILLION FULL YEAR 2009 NET LOSS OF $1.6 BILLION FOURTH QUARTER NET LOSS OF $7.6 BILLION ($0.33 PER SHARE); $1.4 BILLION ($0.06 PER SHARE) EXCLUDING THE IMPACT OF TARP REPAYMENT AND EXIT OF LOSSSHARING AGREEMENT NET CREDIT LOSSES LOWER FOR SECOND CONSECUTIVE QUARTER TIER 1 CAPITAL RATIO OF 11.7% AND TIER 1 COMMON RATIO2 OF 9.6% TIER 1 COMMON OF $104.6 BILLION AND ALLOWANCE FOR LOAN LOSSES OF $36.0 BILLION CITICORP 2009 NET INCOME OF $14.7 BILLION, UP FROM $6.1 BILLION IN 2008 CITI HOLDINGS ASSETS DOWN $168 BILLION OR 23% IN 2009, AND $351 BILLION FROM PEAK LEVELS New York – Citigroup today reported a full year 2009 net loss of $1.6 billion, or $0.80 per share. Managed revenues were $91.1 billion for the year. The fourth quarter 2009 net loss was $7.6 billion, or $0.33 per share. Excluding the $6.2 billion after-tax loss associated with TARP repayment and exiting the loss-sharing agreement, the fourth quarter net loss was $1.4 billion or $0.06 per share. The provision for loan losses3 in the fourth quarter was $8.2 billion, down 36% from the prior year and 10% from the prior quarter. “We have made enormous progress in 2009,” said Vikram Pandit, Chief Executive Officer of Citigroup. “It was our responsibility to get our own house in order. We greatly improved Citi’s capital strength, reduced the size and scope of the company, and refocused our business strategy to take advantage of our unmatched global network. We created Citi Holdings to rationalize non-strategic businesses, totally overhauled risk management, cut costs by over $13 billion annually, reduced headcount by 100,000, and reduced assets by $500 billion from peak levels. And to take advantage of all these changes, we assembled a talented new management team focused on the new Citicorp franchise to move us forward. “We also completed the repayment of $20 billion invested in the company by the U.S. government through the Troubled Asset Relief Program (TARP) and exited the loss-sharing agreement with the government,” said Mr. Pandit. “As we enter 2010, we are strongly capitalized, significantly more efficient, and are executing on a clear
thanks dude. thats good news indeed. think the bears decided to play with genting instead....after bleeding right now hitting my left haha. oh well.. at least my baby Ying Li is not bleeding that much today.thank god for small mercy.
For Immediate Release Citigroup Inc. (NYSE: C) January 19, 2010 CITIGROUP REPORTS 2009 FULL YEAR MANAGED REVENUES1 OF $91.1 BILLION AND EXPENSES OF $47.8 BILLION FULL YEAR 2009 NET LOSS OF $1.6 BILLION FOURTH QUARTER NET LOSS OF $7.6 BILLION ($0.33 PER SHARE); $1.4 BILLION ($0.06 PER SHARE) EXCLUDING THE IMPACT OF TARP REPAYMENT AND EXIT OF LOSSSHARING AGREEMENT NET CREDIT LOSSES LOWER FOR SECOND CONSECUTIVE QUARTER TIER 1 CAPITAL RATIO OF 11.7% AND TIER 1 COMMON RATIO2 OF 9.6% TIER 1 COMMON OF $104.6 BILLION AND ALLOWANCE FOR LOAN LOSSES OF $36.0 BILLION CITICORP 2009 NET INCOME OF $14.7 BILLION, UP FROM $6.1 BILLION IN 2008 CITI HOLDINGS ASSETS DOWN $168 BILLION OR 23% IN 2009, AND $351 BILLION FROM PEAK LEVELS New York – Citigroup today reported a full year 2009 net loss of $1.6 billion, or $0.80 per share. Managed revenues were $91.1 billion for the year. The fourth quarter 2009 net loss was $7.6 billion, or $0.33 per share. Excluding the $6.2 billion after-tax loss associated with TARP repayment and exiting the loss-sharing agreement, the fourth quarter net loss was $1.4 billion or $0.06 per share. The provision for loan losses3 in the fourth quarter was $8.2 billion, down 36% from the prior year and 10% from the prior quarter. “We have made enormous progress in 2009,” said Vikram Pandit, Chief Executive Officer of Citigroup. “It was our responsibility to get our own house in order. We greatly improved Citi’s capital strength, reduced the size and scope of the company, and refocused our business strategy to take advantage of our unmatched global network. We created Citi Holdings to rationalize non-strategic businesses, totally overhauled risk management, cut costs by over $13 billion annually, reduced headcount by 100,000, and reduced assets by $500 billion from peak levels. And to take advantage of all these changes, we assembled a talented new management team focused on the new Citicorp franchise to move us forward. “We also completed the repayment of $20 billion invested in the company by the U.S. government through the Troubled Asset Relief Program (TARP) and exited the loss-sharing agreement with the government,” said Mr. Pandit. “As we enter 2010, we are strongly capitalized, significantly more efficient, and are executing on a clear
Temasek always make the wrong decision ,,anyway they have plenty of money to burn.
I support Citigroup
pharoah88 ( Date: 19-Feb-2010 16:06) Posted:
Temasek sold CitiGroup and bought into China Construction Bank [CCB] in 2009.
Q U O T E:
Bank Shares
Hong Kong-listed Industrial & Commercial Bank of China Ltd., the world’s largest bank by market capitalization, has dropped 13 percent this year. China Construction Bank Corp., the second-largest, has fallen 11 percent. Both are based in Beijing. Hong Kong’s benchmark Hang Seng Index has declined 7.3 percent over the same period. Hang Seng Index has declined 7.3 percent over the same period.
U N Q U O T E
FearValueGreed ( Date: 14-Feb-2010 10:08) Posted:
Gong Xi Fa Cai for those who can buy at ten cents.
Feb. 12 (Bloomberg) -- Jack Rodman, who has made a career of selling soured property loans from Los Angeles to Tokyo, sees a crash looming in China. He keeps a slide show on his computer of empty office buildings in Beijing, his home since 2002. The tally: 55, with another dozen candidates.
“I took these pictures to try to impress upon these people the massive amount of oversupply,” said Rodman, 63, president of Global Distressed Solutions LLC, which advises private equity and hedge funds on Chinese property and banking. Rodman figures about half of the city’s commercial space is vacant, more than was leased in Germany’s five biggest office markets in 2009.
Beijing’s office vacancy rate of 22.4 percent in the third quarter of last year was the ninth-highest of 103 markets tracked by CB Richard Ellis Group Inc., a real estate broker. Those figures don’t include many buildings about to open, such as the city’s tallest, the 6.6-billion yuan ($966 million) 74- story China World Tower 3.
Empty buildings are sprouting across China as companies with access to some of the $1.4 trillion in new loans last year build skyscrapers. Former Morgan Stanley chief Asia economist Andy Xie and hedge fund manager James Chanos say the country’s property market is in a bubble.
“There’s a monumental property bubble and fixed-asset investment bubble that China has underway right now,” Chanos said in a Jan. 25 Bloomberg Television interview. “And deflating that gently will be difficult at best.”
Third Costliest
Investor concerns have spread beyond real estate. Among 15 major Asian markets, the benchmark Shanghai Composite Index is valued third-highest relative to estimates for this year’s earnings, after Japan and India, even after falling 8 percent this year.
A glut of factories in China is “wreaking far-reaching damage on the global economy,” stoking trade tensions and raising the risk of bad loans, the European Union Chamber of Commerce in China said in November.
More than 60 percent of investors surveyed by Bloomberg on Jan. 19 said they viewed China as a bubble, and three in 10 said it posed the greatest downside risk. The quarterly poll interviewed a random sample of 873 Bloomberg subscribers and had a margin of error of 3.3 percentage points.
Digesting the debt from a popped property bubble may slash bank lending and drag growth lower for years in an economy that Nomura Holdings Inc., Japan’s biggest brokerage, says will provide more than a third of world growth in 2010.
Japanese Comparison
The risks are so great that a decade of little or no growth, as Japan experienced in the 1990s, can’t be dismissed, said Patrick Chovanec, an associate professor in the School of Economics and Management at Beijing’s Tsinghua University, ranked China’s top university by the Times newspaper in London.
The Nikkei 225 Stock Average surged sixfold and commercial property prices in metropolitan Tokyo rose fourfold before the bubble burst in 1990. The Nikkei trades at about a quarter of its December 1989 peak.
“You have state-owned enterprises using borrowed funds from the stimulus bidding up the price of land -- not even desirable plots of land -- in Beijing to astronomical rates,” Chovanec said. “At the same time you have 30 percent-plus vacancy rates and slumping rents in commercial property so it’s just a case of when you recognize the losses -- or don’t.”
China’s lending surged to 1.39 trillion yuan in January, more than in the previous three months combined. Property prices in 70 cities climbed 9.5 percent from a year earlier, the most in 21 months.
Reasonable Control
Policy makers are starting to rein in the loans that helped fuel the property boom. Banks should “strictly” follow real estate lending policies, the China Banking Regulatory Commission said on its Web site on Jan. 27. It called for banks to “reasonably control” lending growth.
The People’s Bank of China today ordered banks to set aside more deposits as reserves for the second time in a month to help cool expansion in lending. The requirement will increase 50 basis points effective Feb. 25, the central bank said on its Web site. The current level is 16 percent for big banks and 14 percent for smaller ones.
“The liquidity bubble last year went to the property market,” said Taizo Ishida, San Francisco-based lead manager for the $212-million Matthews Asia Pacific Fund, in a phone interview. “I was in Shanghai and Shenzhen three weeks ago and the prices were just eye-popping, just really amazing. Generally I’m not buying Chinese stocks.”
‘Dubai Times 1,000’
Chanos, founder of New York-based Kynikos Associates Ltd., predicted that China could be “Dubai times 100 or 1,000.” Real estate prices there have fallen almost 50 percent from their 2008 peak as the emirate struggles under at least $80 billion of debt. The economy may shrink 0.4 percent this year, Shuaa Capital, the biggest U.A.E. investment bank, says.
The commercial property space under construction in China at the end of November was the equivalent of 6,800 Burj Khalifas -- the 160-story Dubai skyscraper that’s the world’s tallest.
It’s difficult to determine how exposed Chinese banks are to real estate debt because loans booked to some state-owned companies as industrial lending may have been used to invest in property, say Xie and Charlene Chu, who analyzes Chinese banks for London-based Fitch Ratings Ltd. in Beijing.
A drop in the property market may be accompanied by a surge in nonperforming loans. The Shanghai office of the banking regulatory commission said on Feb. 4 that a 10 percent fall in property values would triple the ratio of delinquent mortgages there.
Bank Shares
Hong Kong-listed Industrial & Commercial Bank of China Ltd., the world’s largest bank by market capitalization, has dropped 13 percent this year. China Construction Bank Corp., the second-largest, has fallen 11 percent. Both are based in Beijing. Hong Kong’s benchmark Hang Seng Index has declined 7.3 percent over the same period.
Fund manager Joseph Zeng says he has a contrarian view on China’s banks, on the grounds that rising interest rates this year will benefit their net interest margins.
“For us, non-performing loans are not expected to be a big issue until 2013, the peak of the current economic cycle,” said Zeng, head of Greenwoods Asset Management Ltd.’s Hong Kong office, in a phone interview. He declined to say what he is buying. Greenwoods has more than $500 million under management.
China has firepower to deal with a crisis. The nation has the world’s largest foreign exchange reserves, at $2.4 trillion, and government debt of only about 20 percent of GDP last year, according to the International Monetary Fund. That compares with 85 percent in India and the U.S. and 219 percent in Japan.
Own-Use Excluded
CB Richard Ellis doesn’t count empty office buildings bought by banks and insurance companies when calculating vacancy rates, since some of the space is for the owners’ use. The Los Angeles-based company said in a report that vacancy rates are starting to fall and rents to rise for the best office buildings as China’s fast economic growth buoys demand.
Gross domestic product expanded 10.7 percent in the fourth quarter from a year before, a two-year-high, after the government introduced a $586-billion stimulus package.
“In many cases when you look at these buildings and say, that’s never going to be fully occupied, somehow 12 to 18 months later the building is full,” said Chris Brooke, CB Richard Ellis’s Beijing-based president and chief executive officer for Asia.
Overcapacity may be looming in manufacturing as well. China’s investments in new factories and properties surged 67 percent last year to 15.2 trillion yuan, more than Russia’s gross domestic product. Excess steel capacity may have reached about 132 million tons in 2009, more than the 87.5 million tons from Japan, the world’s second-biggest producer. The Beijing- based EU Chamber of Commerce report said a “looming deluge” of extra cement capacity is being built.
Balance Sheet Deterioration
While neither Xie nor Chu see nonperforming loan ratios reaching the level of a decade ago, when they made up 40 percent of total lending, they say banks will see deterioration in their balance sheets.
“A lot of people will lose a lot of money, but the banks will probably not go down like in the 1990s,” Xie said in a phone interview. “Of course there will be a lot of bad debts. There will be a lot of mortgages gone bad I think.”
Rodman displays the slide show to private equity and hedge fund clients brought in by banks such as Goldman Sachs Group Inc. at his office in eastern Beijing.
“China is the only place in the world that despite having more empty buildings than the rest of the world has yet to reflect those valuations on their balance sheet,” Rodman said.
Empty Buildings
Gazing south from the building that houses the Beijing headquarters of Goldman Sachs, UBS AG and JPMorgan Chase & Co., one of the first structures in the field of vision is a 17-story office tower at No. 9 Financial Street. Empty.
Farther along are the two 18-story towers of the Bank of Communications Co. complex. Dirt is gathering at the doors and the lobby is now a bicycle parking lot. A spokeswoman for the Shanghai-based lender didn’t return phone calls and e-mails.
The supply of office buildings will continue to grow. Jones Lang LaSalle Inc., a Chicago-based real-estate company, estimates that about 1.2 million square meters (12.9 million square feet) of office space in Beijing will come on line this year, adding to the total stock of 9.2 million square meters.
The city government is driving growth regardless of the market. Financial Street Holding Co., whose biggest shareholder is the local municipal district, plans to build 1 million square meters of additional office space starting this year, and is talking to potential clients such as JPMorgan, said Lydia Wang, the company’s head of investor relations.
Doubling the CBD
Across town, the district government is seeking to double the size of the city’s Central Business District, which already has the highest vacancy rate ever recorded in Beijing. It was 35 percent at the end of 2009, according to Jones Lang LaSalle.
For its part, Beijing-based Financial Street Holdings has “100 percent” of its properties, which include the Ritz Carlton hotel and a shopping mall, rented out, Wang said. The empty buildings along Finance Street don’t belong to the company, which is 26.6 percent owned by the district government.
Zhong Rongming, deputy general manager of the Beijing- based China World Trade Center Co., which built China World Tower 3, said the company is “optimistic about 2010 prospects” given China’s accelerating economic growth. He said the new tower will include tenants such as Mitsui & Co. and the Asian Development Bank.
One new addition to Finance Street may give real estate boosters cause for concern. No. 8 Finance Street will be the headquarters for China Huarong Asset Management Corp.
so is it good or bad??? I dare not log into poems to look at the stocks haha
pharoah88 ( Date: 19-Feb-2010 16:06) Posted:
Temasek sold CitiGroup and bought into China Construction Bank [CCB] in 2009.
Q U O T E:
Bank Shares
Hong Kong-listed Industrial & Commercial Bank of China Ltd., the world’s largest bank by market capitalization, has dropped 13 percent this year. China Construction Bank Corp., the second-largest, has fallen 11 percent. Both are based in Beijing. Hong Kong’s benchmark Hang Seng Index has declined 7.3 percent over the same period. Hang Seng Index has declined 7.3 percent over the same period.
U N Q U O T E
FearValueGreed ( Date: 14-Feb-2010 10:08) Posted:
Gong Xi Fa Cai for those who can buy at ten cents.
Feb. 12 (Bloomberg) -- Jack Rodman, who has made a career of selling soured property loans from Los Angeles to Tokyo, sees a crash looming in China. He keeps a slide show on his computer of empty office buildings in Beijing, his home since 2002. The tally: 55, with another dozen candidates.
“I took these pictures to try to impress upon these people the massive amount of oversupply,” said Rodman, 63, president of Global Distressed Solutions LLC, which advises private equity and hedge funds on Chinese property and banking. Rodman figures about half of the city’s commercial space is vacant, more than was leased in Germany’s five biggest office markets in 2009.
Beijing’s office vacancy rate of 22.4 percent in the third quarter of last year was the ninth-highest of 103 markets tracked by CB Richard Ellis Group Inc., a real estate broker. Those figures don’t include many buildings about to open, such as the city’s tallest, the 6.6-billion yuan ($966 million) 74- story China World Tower 3.
Empty buildings are sprouting across China as companies with access to some of the $1.4 trillion in new loans last year build skyscrapers. Former Morgan Stanley chief Asia economist Andy Xie and hedge fund manager James Chanos say the country’s property market is in a bubble.
“There’s a monumental property bubble and fixed-asset investment bubble that China has underway right now,” Chanos said in a Jan. 25 Bloomberg Television interview. “And deflating that gently will be difficult at best.”
Third Costliest
Investor concerns have spread beyond real estate. Among 15 major Asian markets, the benchmark Shanghai Composite Index is valued third-highest relative to estimates for this year’s earnings, after Japan and India, even after falling 8 percent this year.
A glut of factories in China is “wreaking far-reaching damage on the global economy,” stoking trade tensions and raising the risk of bad loans, the European Union Chamber of Commerce in China said in November.
More than 60 percent of investors surveyed by Bloomberg on Jan. 19 said they viewed China as a bubble, and three in 10 said it posed the greatest downside risk. The quarterly poll interviewed a random sample of 873 Bloomberg subscribers and had a margin of error of 3.3 percentage points.
Digesting the debt from a popped property bubble may slash bank lending and drag growth lower for years in an economy that Nomura Holdings Inc., Japan’s biggest brokerage, says will provide more than a third of world growth in 2010.
Japanese Comparison
The risks are so great that a decade of little or no growth, as Japan experienced in the 1990s, can’t be dismissed, said Patrick Chovanec, an associate professor in the School of Economics and Management at Beijing’s Tsinghua University, ranked China’s top university by the Times newspaper in London.
The Nikkei 225 Stock Average surged sixfold and commercial property prices in metropolitan Tokyo rose fourfold before the bubble burst in 1990. The Nikkei trades at about a quarter of its December 1989 peak.
“You have state-owned enterprises using borrowed funds from the stimulus bidding up the price of land -- not even desirable plots of land -- in Beijing to astronomical rates,” Chovanec said. “At the same time you have 30 percent-plus vacancy rates and slumping rents in commercial property so it’s just a case of when you recognize the losses -- or don’t.”
China’s lending surged to 1.39 trillion yuan in January, more than in the previous three months combined. Property prices in 70 cities climbed 9.5 percent from a year earlier, the most in 21 months.
Reasonable Control
Policy makers are starting to rein in the loans that helped fuel the property boom. Banks should “strictly” follow real estate lending policies, the China Banking Regulatory Commission said on its Web site on Jan. 27. It called for banks to “reasonably control” lending growth.
The People’s Bank of China today ordered banks to set aside more deposits as reserves for the second time in a month to help cool expansion in lending. The requirement will increase 50 basis points effective Feb. 25, the central bank said on its Web site. The current level is 16 percent for big banks and 14 percent for smaller ones.
“The liquidity bubble last year went to the property market,” said Taizo Ishida, San Francisco-based lead manager for the $212-million Matthews Asia Pacific Fund, in a phone interview. “I was in Shanghai and Shenzhen three weeks ago and the prices were just eye-popping, just really amazing. Generally I’m not buying Chinese stocks.”
‘Dubai Times 1,000’
Chanos, founder of New York-based Kynikos Associates Ltd., predicted that China could be “Dubai times 100 or 1,000.” Real estate prices there have fallen almost 50 percent from their 2008 peak as the emirate struggles under at least $80 billion of debt. The economy may shrink 0.4 percent this year, Shuaa Capital, the biggest U.A.E. investment bank, says.
The commercial property space under construction in China at the end of November was the equivalent of 6,800 Burj Khalifas -- the 160-story Dubai skyscraper that’s the world’s tallest.
It’s difficult to determine how exposed Chinese banks are to real estate debt because loans booked to some state-owned companies as industrial lending may have been used to invest in property, say Xie and Charlene Chu, who analyzes Chinese banks for London-based Fitch Ratings Ltd. in Beijing.
A drop in the property market may be accompanied by a surge in nonperforming loans. The Shanghai office of the banking regulatory commission said on Feb. 4 that a 10 percent fall in property values would triple the ratio of delinquent mortgages there.
Bank Shares
Hong Kong-listed Industrial & Commercial Bank of China Ltd., the world’s largest bank by market capitalization, has dropped 13 percent this year. China Construction Bank Corp., the second-largest, has fallen 11 percent. Both are based in Beijing. Hong Kong’s benchmark Hang Seng Index has declined 7.3 percent over the same period.
Fund manager Joseph Zeng says he has a contrarian view on China’s banks, on the grounds that rising interest rates this year will benefit their net interest margins.
“For us, non-performing loans are not expected to be a big issue until 2013, the peak of the current economic cycle,” said Zeng, head of Greenwoods Asset Management Ltd.’s Hong Kong office, in a phone interview. He declined to say what he is buying. Greenwoods has more than $500 million under management.
China has firepower to deal with a crisis. The nation has the world’s largest foreign exchange reserves, at $2.4 trillion, and government debt of only about 20 percent of GDP last year, according to the International Monetary Fund. That compares with 85 percent in India and the U.S. and 219 percent in Japan.
Own-Use Excluded
CB Richard Ellis doesn’t count empty office buildings bought by banks and insurance companies when calculating vacancy rates, since some of the space is for the owners’ use. The Los Angeles-based company said in a report that vacancy rates are starting to fall and rents to rise for the best office buildings as China’s fast economic growth buoys demand.
Gross domestic product expanded 10.7 percent in the fourth quarter from a year before, a two-year-high, after the government introduced a $586-billion stimulus package.
“In many cases when you look at these buildings and say, that’s never going to be fully occupied, somehow 12 to 18 months later the building is full,” said Chris Brooke, CB Richard Ellis’s Beijing-based president and chief executive officer for Asia.
Overcapacity may be looming in manufacturing as well. China’s investments in new factories and properties surged 67 percent last year to 15.2 trillion yuan, more than Russia’s gross domestic product. Excess steel capacity may have reached about 132 million tons in 2009, more than the 87.5 million tons from Japan, the world’s second-biggest producer. The Beijing- based EU Chamber of Commerce report said a “looming deluge” of extra cement capacity is being built.
Balance Sheet Deterioration
While neither Xie nor Chu see nonperforming loan ratios reaching the level of a decade ago, when they made up 40 percent of total lending, they say banks will see deterioration in their balance sheets.
“A lot of people will lose a lot of money, but the banks will probably not go down like in the 1990s,” Xie said in a phone interview. “Of course there will be a lot of bad debts. There will be a lot of mortgages gone bad I think.”
Rodman displays the slide show to private equity and hedge fund clients brought in by banks such as Goldman Sachs Group Inc. at his office in eastern Beijing.
“China is the only place in the world that despite having more empty buildings than the rest of the world has yet to reflect those valuations on their balance sheet,” Rodman said.
Empty Buildings
Gazing south from the building that houses the Beijing headquarters of Goldman Sachs, UBS AG and JPMorgan Chase & Co., one of the first structures in the field of vision is a 17-story office tower at No. 9 Financial Street. Empty.
Farther along are the two 18-story towers of the Bank of Communications Co. complex. Dirt is gathering at the doors and the lobby is now a bicycle parking lot. A spokeswoman for the Shanghai-based lender didn’t return phone calls and e-mails.
The supply of office buildings will continue to grow. Jones Lang LaSalle Inc., a Chicago-based real-estate company, estimates that about 1.2 million square meters (12.9 million square feet) of office space in Beijing will come on line this year, adding to the total stock of 9.2 million square meters.
The city government is driving growth regardless of the market. Financial Street Holding Co., whose biggest shareholder is the local municipal district, plans to build 1 million square meters of additional office space starting this year, and is talking to potential clients such as JPMorgan, said Lydia Wang, the company’s head of investor relations.
Doubling the CBD
Across town, the district government is seeking to double the size of the city’s Central Business District, which already has the highest vacancy rate ever recorded in Beijing. It was 35 percent at the end of 2009, according to Jones Lang LaSalle.
For its part, Beijing-based Financial Street Holdings has “100 percent” of its properties, which include the Ritz Carlton hotel and a shopping mall, rented out, Wang said. The empty buildings along Finance Street don’t belong to the company, which is 26.6 percent owned by the district government.
Zhong Rongming, deputy general manager of the Beijing- based China World Trade Center Co., which built China World Tower 3, said the company is “optimistic about 2010 prospects” given China’s accelerating economic growth. He said the new tower will include tenants such as Mitsui & Co. and the Asian Development Bank.
One new addition to Finance Street may give real estate boosters cause for concern. No. 8 Finance Street will be the headquarters for China Huarong Asset Management Corp.
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