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Hong Kong Stock Market Data 2007

项目	2007年	按年增长%
总市值（年底）	205,365亿元	55%
上市公司（主板）	1,048	7%
股本证券集资	5,585亿元	6%
新上市公司	82	46%
新上市衍生权证	6,312	124%
总成交金额	216,655亿元	159%
平均每日成交	811亿元	160%
单日最高成交	2,105亿元	166%
单月最高成交	34,873亿元	222%
H股成交金额	77,725亿元	206%
衍生权证成交	46,939亿元	162%
所有期货期权合约	8,799万张	105%
所有期货合约	3,272万张	65%
所有期权合约	5,526万张	140%
股票期权合约	4,598万张	154%

Source:香港交易所 & Finet

Tags: Hong Kong, Stock, Stock Market

飞黄腾达第七季之名人篇

我最喜爱的米国reality show飞黄腾达(Apprentice)迎来第七季，地点从LA搬回NYC的Trump Tower。不知是否Donald Trump也受到了次按（Subprime）的影响，这一季没有打算请人，而只是找来14位名人为他们各自喜爱的慈善组织募款，冲冲publicity。就算Tump Org亦遭遇不测（touch wood），也可以看出除了身家以外，Donald Trump的号召力也是超强的。除了有重量级拳王刘易斯的参与外，NYC市长Micheal Bloomberg第一集也出来陪Mr.Trump游街巡察。

比赛首先分成男女两组，而男子组在第一第二集则先下两城。因为他们懂得正确运用他们的名声来募得更多善款，而女子组却迟迟未能意识到她们真正的价值所在。比赛中也不难发现一个道理，就是金钱随名声而来。随便一瓶水可以卖个5k（单位：美元)，一个热狗可以卖到10k，一天光卖这些东西就可以换来50-60k。我就算倾巢而出，一天赚的顶多只能跟他们买瓶水和一个热狗。想想电视机前的观众们心理能平衡吗？先不讲其他国家的观众，就拿米国的老百姓来说。希拉里在竞选中将米国的中产阶级定义为家庭年收入100k，亦就是说夫妻两人各赚50k。看着名人们卖一天的热狗就能赚到他们一年的薪水，看来贫富悬殊无论在哪个国家都是一个让人有点哭笑不得的问题。

算了，还是不要再瞎掰挑起阶级矛盾。讲回Donald Trump，这位地产大亨相信无人不知。他在建的项目中我比较感兴趣的是一个在芝加哥的超大型项目。不知何时我才能存够钱缴首期？做梦！但是另外还要看它究竟建不建得了起来，建起来会不会留着不卖。原因？Subprime咯。我个人认为，米国和英国的房屋市场比较，英国的如果要死的话一定比较难看，但相对的若复苏的话也会比较快。我猜等到recovery period英国可能要两年，米国也许是3-5年。有钱没地方使的人们可以趁火捡些便宜货。为了看清事情本质，我想当个undercover economist，希望今年有空再到米国考察考察……

Tags: Apprentice, Celebrity Apprentice, Donald Trump, Micheal Bloomberg, Real Estate, 飞黄腾达

Portfolio Management 101

There are four general steps in portfolio management (investment) process:

1. Write a Investment Policy Statement
2. Develop an investment strategy
3. Implement the plan by constructing the portfolio and allocating the assets
4. Monitor, update, and rebalance the portfolio

An Investment Policy Statement provides investment discipline by requiring investors to articulate their needs, goals, and risk tolerance, ensuring that goals are realistic, and providing an objective measure of portfolio performance.

Investment objectives should be expressed in terms of both risk and return so that meeting the return objective does not expose the investor to more risk than he is prepared to tolerate.

Risk tolerance depends on an investor’s psychological profile and other personal factors, including family situation, wealth, income, age, and insurance coverage.

Common return objectives are:

• Capital Preservation – minimizing the risk of loss in real term.
• Capital Appreciation – managing real growth in the portfolio to meet some future need.
• Income – meeting specified spending needs.
• Total Return – growing a portfolio through capital appreciation and reinvested income.

Investment constraints include:

• Liquidity – for cash spending needs (anticipated and unexpected)
• Time Horizon – when funds will be needed
• Tax – the tax treatments of various accounts, and the investor’s marginal tax bracket
• Legal – restrictions on investments in retirement, personal, and trust accounts
• Unique Needs – constraints because of investor preferences or other factors not already considered

Target allocations to different asset classes can explain approximately 90% of the differences in portfolio returns over time.

Differences in average asset allocations across countries exist due to differences in 1) social factor, 2) demographic, 3) legal constraint, 4) tax laws, and 5) historical inflation rates.

-END-

Tags: Portfolio Management

Alternative Investment 101

Charateristics

Charateristics that generally apply include:

• Lower liquidity than traditional investments
• Accurate market values difficult to determine
• Limited historical performance data

Exchange Traded Funds (ETF)

Special type of fund that invests in a portfolio of stocks or bonds designed to mimic performance of a specified index

Advantage of ETFs

• Efficient method of diversification
• Trade similar to traditional equity investments
• Some ETFs patterned after indexes with active future/ option market and better risk management
• Exact composition is known at all time
• Typically, very efficient operating expense ratio; no load to purchase or redeem shares
• Decreased capital gains tax liability

Disadvantage of ETFs

• Some countries have fewer indexes than U.S. for ETFs to track (results in mid- or low-cap stocks no being well represented)
• Ability to trade intraday may not be significant to investors with longer time horizon
• ETFs with low trading volume may have large bid-ask spreads
• Larger investors may choose to directly invest in an index portfolio, resulting in lower expenses/ lower tax consequences

Valuation of Real Estate Investments

• Valuation method: cost method, sales comparison method, and income method.
• Income method uses a discounted cash flow model similar to that for a perpetuity:

Value = NOI/ Market cap rate

• Net operating income (NOI) equals gross operating income less estimated vacancy, collections, and other operating expenses, (including property taxes, but excluding income taxes). NOI does not include depreciation of financing costs.

-END-

Tags: Alternative Investment, ETF, Real Estate

Hedge Fund Basics

Definition

A Hedge Fund is an investment vehicle that aims to produce the maximum return irrespective of market conditions, normally utilising hedging techniques to eliminated specific risks

Legal Structure

Hedge funds may take several legal forms, including limited partnership and limited companies.

Fee Structures

Fees normally come in two parts:

• Base Fee: A standard asset management charge irrespective of outcome
• Incentive Fee: Additional fee based on performance

Types of Hedge Funds

• Long/Short Funds: Take speculative position on direction market will move in and use leverage to increase gains
• Market Neutral Funds: Aim to offset systemic risk and profit from picking underperforming/ overperforming assets
• Global Macro Funds: Take speculative positions on currency, interest rate and global securities
• Event-driven Funds: Use the principles of traditional hedge funds to take advantage of other mis-priced assets (e.g. merger speculation, bond rating upgrade/ downgrade)
• Fund of Funds: A portfolio of hedge fund investments may be put together to gain the same diversification benefits of traditional portfolio investment.

Fund of Funds Advantages & Disadvantages

Advantages:

• Allow investor with small capital access to this vehicle
• Provides risk diversification
• Avoids exclusion of funds that limit no. of investor
• Uses experts to select funds to invest in

Disadvantages:

• Fees – fund manager and fund-of-funds manager!
• Lack of transparency of what investor invests in

Hedge Fund – Risk

• Illiquidity of assets reduce flexibility
• Potential for mispricing. Investments in esoteric, infrequently traded securities may lead to difficulty determining true value, and causing large margin requirement
• Counterparty credit risk on non-marketable assets
• Settlement errors. Risk of counterparty failure to deliver security as agreed on settlement day.
• Short covering. Risk that managers who short sell as a strategy will have to cover their shorts and repurchase securities at price higher than where they originally sold.
• Margin calls. Can result in forced selling of assets, possibly at a loss, on an already highly leverage position.

-END-

Tags: Hedge fund

Reborn

On the first day of 2008, I made my previous blog disappear forever – I killed it – of course, by mistake – in fact, a very stupid but fatal mistake.

In terms of criminal law, I am sure it should not be classified as ‘murder’, perhaps ‘manslaughter’ at most.

Whatever, I decide to reopen it and start writing some little things happened around my ‘moliu’ life. ‘Moliu’ means boring in Cantonese.

Since my Chinese language ability is deteriorating, just as my health. I probably need to do more practice in both cases. Therefore, the language used in this blog will not be limited to English. Hopefully, wordpress system can support bilingual input…