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China the monster.


kahuna1

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In reply to: dee27 on Monday 19/12/05 09:44pm

Oxygen booths and respirator/ filtered masks will be the place to invest.only half serious but I cant imagine what unbridled HC emissions of oil and coal will do there over the next 30 years.

Energy.

As for keeping them on the farm.That is a serious issue.Aging parents now only have the one son to look after them and their farms.No money in it and cannot manage that so farming land is going underutilised as the sons go to town for work and wives.

Saw a sad doco on this not so long ago. Tens of millions of bachelors who will inherit a farm without value no one to work it and without a wife or hope for a family.

One child policy has both saved and damned them.

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In reply to: dee27 on Monday 19/12/05 09:44pm

Hi Dee ...

 

Yep I think u are probally right there.

 

Not suggesting the commodity prices go up short term ... I suppose the 25% discount for 2008 and beyond is my point. This is how they are working out the NPV values besides also discounting it as well for resources not yet pruduced to arrive at the present value.

 

Just not sure how correct it is. It is the traditional way of working things out ... and usuing I suppose a 5 year average price for the forward estimates is how they arrive at it. Frustration I suppose is what is driving me ... and its a lagging indicator but given what I presume is reality right now having say todays prices for oil discounted in this case by 33% for 2008 and beyond and then working out net profit if oil is there after costs and then discounting it back at 6% each year to arrive at the present value is the tradional way of doing things ..... but a 33% discount for oil, a 25% for coal and Iron ore.

 

Suppose I am jumping the gun here but in reality just dont see the scope of falls short term for any of the commodities. Oil is special and in fact I see it here or higher as time goes un ... but the supply vs demand equation for copper or nickel or Aluminium or coal and iron ore and gold and urnaium all look very similar.

 

Will be interesting to watch as it unfolds.

 

Motorway ...

 

Look mate ... u like SSI fine.

 

And the amout of actual shares out there for this company ....

27.606 mio quoted on the asx...

 

they did produce a top 20 quoting this number .... which given the following appears to be incorrect and at best misleading given page 3 of the 3B!!

 

then when one reads the 3B for the quoting of these new shares ...

page 2 securities not quoted on the ASX ...

 

9 Number and +class of all

+securities not quoted on ASX

(including the securities in clause 2

if applicable)

2,800,000 Partly paid shares paid

to 1 cent with 49 cents

outstanding

500,000 Partly paid shares paid

to 0.1 cent with 79.9

cents outstanding

32,150,000 Restricted shares

 

There appear to me to be 27.6 + 2.8 +0.5 +32.15 mio = 63.05 million shares.

 

These mystery shares ... 32.15 million of them appear on the last 3B and for the life of me I cant see where they come from ..not that I care given the market cap ... maybe u could dazzle us with what the 32.15 unlisted restriced shares come from.

 

As I said a Chinese fortune cookie

 

at $4.10 it makes a company that is making nothing ...

has 10 million in the bank

valued by the market at $258.5 million.

 

Couldn't be bothered saving the world .... but I did look at your company SSI and spent the time and decided no thanks. Hear this sort of fable so many times ... OCO makes good reading if u want a directly linked to China comparison.

 

So no thanks.

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Oh I found them .... the SSI shares ...

 

So dont bother Moterway.

 

Unquoted securities: 32,150,000 ordinary shares escrowed until 2

November 2007

 

yes the market has the company with a market cap of 258 mio .... boy.

 

Wish u well.

 

Oh and checked the date on the top 20 ....

of course the date is before or at the issue ..... 2/11 .... as opposed to the actual date on the top 20 release on the 8/11.

 

So I suppose ... my mistake about the top 20 being incorrect. Must say it is interesting however the choice of dates .... announcement on Tuesday 8/11 a top twenty list as of the previous Wednesday 2/11. Since the escrow period I am sure appears to be 2 years for this chunk ... I am not sure this even is a correct representation as of 2/11 since the share come out of escrow 2/11/2007 ... I would presume they were issued on the 2/11/2005 funny they dont appear on the top 20 list for that date.

 

The rest ... yikes.

 

All the best

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In reply to: kahuna1 on Monday 19/12/05 09:19pm

Well I wish you well kahuna1

 

And yes I have BHP RIO WPL etc etc...

 

They have been great

 

but not in SSI class

 

the shares you are referring too

 

Where in payment to BW for CEH

 

see in the announcement

 

"to acquire 100% of its

wholly owned subsidiary, China Entertainment Holdings Ltd (ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“CEHÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ), in return for issue of

shares in SSI to Best Winning. This agreement is subject to a number of conditions precedent

and the obtaining of approval from SSI shareholders. As part of the agreement, Best Winning

will also be subscribing for additional shares in SSI for cash at A60 cents per share upon

completion of the agreement. "

 

 

NOTE ... IN return for shares... and then additional shares at .60

 

 

It is all in the announcements

 

In any case anyone is interested ... See you in the SSI thread

 

YES commodities are King

 

I have them on the buying list

 

SSI get a hold hold of the Carmicahel report and tell Us how much to multiply

 

the figures with nation wide expansion ??

 

Or why is tattersall's talking about a JV...( see BRW article )

 

Why have they gone up.... DAYTRADERS ????

 

Why Gilhooly and Matheison on board ??

 

etc etc...

 

 

 

Hey spot... SSI is the best performing stock on the ASX

 

That makes it best performing stock in peoples portfolio or mentioned on a stock forum

 

It is something to learn lessons from ( let's hope rewarding ones for holders )

 

 

Good fortune to all

 

Will leave this thread for commodities

 

and the excitement I hope In the Sino one

 

 

 

motorway

 

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Hi Forevertold ...

 

Thanks ... Be warned ... like everyone I get it wrong sometimes. Badly .... sometimes it happens. So be careful.

 

Motorway ....

YepI here u ... and as I just said sometimes I get it very wrong ... maybe the case here with SSI. Just over the years have had a lot of fun and games with old chinese fortune cookie companies. Learnt my lessons cheap many years ago. So suppose bias against them after seeing over the years a whole host of them fail to deliver.

 

Very wary of them ... and as u know tend to stick to big ones ... even given up to a great extent commenting on smaller ones that seem to be built on a house of straw.

 

Impossible to prove a negative ... and very hard to even convince the faithful.

Waste of my time. Tried saving too many crowds over the years ........ Lum was a classic

Sometimes you get it all wrong ... but most of the time ... 90% u can spot them.

Of course some times I get sucked in with a big story ..... I check for all the signs but boy some of the porkies that can be told.

 

My ditty here on China ... is as all the others who have helped very much a maybe ... one cannot know where the price of oil will be next week let alone next decade.

 

Santa has been very good to me this year with a few loves going nuts ... hopefully 2006 is just as good. Became convinced like most the popular view by every economist and analyist about sharply falling prices as time goes on ... but evidence if we look at oil as a prime example up almost 50% in 12 months. Have economies slowed ? Has inflation spiked ?

 

So when the same argument is wheeled out for the top 10 commodities I think in short they have got it wrong. All different markets and drivers in them ... sure some will come off sharply ... but others like coal which I look at as a leading indicator ... well it isn't which leads me to suspect views about 30% off Iron ore are wrong ... and nickel.

 

As Dee and Geog and a few others have said its probally an in between price correction that we see going forward. But longer term I am not sure it is wise to be discounting prices for commodities looking forward given what in reality is going on.

 

One thing on SS I talked about at length, don't I always :} was the oil market. For over 30 years the forward contracts in the oil market were cheaper than the spot. In other words to buy oil now may have been US$60- but 6 months forward you could buy it for US$55-. The forward price was in discount and it had nothing to do with interest rates or holding. Now this market for the first time ever as one looks forward the price actually rises. In the past everyone was a bear on oil ... its always going to come off ... thats was 1971-2004 !!

 

My main gripe with these low forward numbers being used by analyists for say 2008 oil and a host of other commodies that can be covered forward and hedged for producers ... and are hedged. Oil for example ... analyists and economists predict oil will be US$40- in 2008 and use this number to calculate the NPV of WPL on this basis. Fact is Dec 2008 oil futures are in fact US$59.70. Thats almost a level 50% over what theya re usuing to arrive at an NPV for WPL of AUD$44-46 between the lot of them. Same with Nickel, gold, copper and so on.

 

In fact a spastic could hedge himself for no cost ... none at US$55- in oil. Grant a US$65- oil call and buy a US$55- put for DEC 2008 ... either way at worst u get USD$55- at best US$65-. Slightly exxagerated there ... oil needs to be $1.30 higher for zero cost ....

 

But here we sit ... valuations based on prices 50% below reality. Its worse than that even.

If it costs US$25- to procude the oil at US$40- it leaves US$15- profit which is what they NPV. Big difference Usuing say US$55- for 2008 oil with a profit DOUBLE to start the NPV.

Its why I have been spazzo about WPL all year.

 

Same stuff virtually everywhere. Some like copper I would agree with since the price drops off sharply as the contracts go out. Spot is 216 and 12 months is 180 ... but ones which are hard to find prices on like coal ... what do we go back to ... the 10 year average.

Since China 10 years ago still had a similar population but the GDP inflation adjusted was 46% of what it is now ... well it doesn't make sense given the 2006/7 prices just set.

 

 

Either way BHP,RIO WPL and co are all way way below even current NPV prices usuing these heavily discounted forward commodity prices. Market is really having trouble coming to grips with the 2005 reality. BHP with a predicted 9 billion number this year and still 40% expansion to go across the board ... this year it will be a P/E under 9 if correct and I presume the market will correct BHP's price to say a P/E of 11 so $25.50 ... and we will always be playing catchup.

 

So for me its a buy on corrections and dips.

 

Wait for them .. we had two dooseys this year 7-8% ... and as always they will happen again when we least expect it.

 

Just sell into rallies ... u love the stock ... the higher it goes the less you should love it.

If it goes too high love should turn to hate .... and wait again for the correction.

I even sold my WPL last rally ... too early ... but not this time.

 

WPL ... classic ... market corrects 7.6% ... WPL 19.4% .... 36.25 to 29.20

back to new high ..

 

BHP last correction $22.48 to $19.40 .... 13.7% ... so BHP was positivly strong compared to WPL's demise last correction. Then again ... BHP has failed to break its old high ... WPL on the other hand a new high 5% higher.

 

Time for bed ;}

 

 

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In reply to: kahuna1 on Wednesday 21/12/05 11:25am

 

Another comment from Stratfor.com

 

Geopolitical Diary: Wednesday, Dec. 21, 2005

 

China's National Bureau of Statistics (NBS) on Tuesday unveiled the results of a year long survey and reassessment of the nation's 2004 gross domestic product (GDP). The result: a 16.8 percent upward adjustment, bringing China's total 2004 GDP to some $1.98 trillion, overtaking Italy to become the world's sixth-largest economy. Given that China's GDP growth for 2005 will again exceed 9 percent, this places Beijing in the clear running to overtake France and the United Kingdom to rank fourth in GDP.

 

The news was not unexpected -- The survey has been going on for a year, and the general consensus has been that Beijing was underestimating economic growth, despite the regular reports of rates of 8 percent and 9-plus percent. According to the NBS, 90 percent of the GDP adjustment comes from a reassessment of tertiary industries -- the service sector -- which, according to revised figures, now comprises 40.7 percent of the national GDP -- up from the previous 31.9 percent estimated for 2004. While this is not as high as in other economies, it does soften the traditional view that China is excessively dependent upon foreign trade and investment.

 

Now, as we have said many times before, growth does not equal either sustainability or health. While the new figures do seem to fit more closely with the anecdotal evidence of a growing domestic economy in China, they offer little evidence that China's economy is in any better shape than previously thought. Targeted growth remains a goal, not a practice. Inefficiencies in the deployment of foreign investment monies continues to be the norm, along with redundancies across provinces and cities -- and even as these are addressed, they simply expose the depth of corruption while exacerbating unemployment and the associated social instabilities.

 

For Beijing, the release of new numbers is intended to offer a few points of light. It highlights the growing domestic service economy. It emphasizes the recognition -- and attempted rectification -- of improper and patently false statistics of the past. And it adds a point of pride around which China's government can try to rally patriotism. That will help as Beijing launches the next five-year plan, which officials have already warned will require sacrifice from the wealthy to better distribute wealth among China's 1.2 billion people.

 

But the numbers also create new troubles for China. The 16.8 percent readjustment of the GDP figure suggests China's growth rate has been much faster than originally reported (though as Beijing carries out its reassessment of statistics back through 1994 as planned, the increase may be spread out over 10 years). This is a somewhat ironic problem for a country that, in the past, intentionally tried to exaggerate its growth figures. It now tries to under-report them to avoid giving the impression of a bubble.

 

As usual with China, the release of statistics leaves just as many questions on the table as answers. The reliability of the numbers is still a matter of debate -- and for Beijing, this sort of ambiguity is both bad and good. Moving up the ranks of GDP will bring increased attention to China's trade and fiscal practices. This may increase pressures on trade and currency issues, intensifying international political strains right when China is facing significant internal social strains -- social disruptions have already reached the point where the government is sending the message that the hammer may drop on protesters and instigators. The higher growth rate may also spur a new surge in much-needed investment dollars -- which, however, could easily fuel a new round of inefficient and redundant investments managed by corrupt officials and entrepreneurs.

 

Economic restructuring plans are being overturned as their social impact becomes apparent. Just to keep the people employed, Beijing is finding it necessary to maintain, if not increase, the flow of investment monies to roll over loans and keep inefficient and redundant industries afloat -- something that the current leadership had hoped it was moving beyond. Revised GDP figures do little to prove that the boom times will go on. In the end, the main question remains: How soon and how hard will the Chinese economy hit the wall?

Send questions or comments on this article to analysis@stratfor.com.

 

Merry Xmas

mud

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Blair evokes G8 enlargement as China booms

Source: LONDON, Dec 21 AFP

Published: December 22 2005, 06:35AM

 

British Prime Minister Tony Blair has raised the prospect of the Group of Eight becoming the Group of Nine, or even 10, after a dramatic surge in China's GDP growth figures.

 

In an end-of-year press conference, Blair noted that China and India already play a role at G8 summits - like the one he hosted at the Gleneagles resort in Scotland in July - albeit to a limited extent.

 

"I would find it hard to imagine that you are going to have future G8 summits at which they aren't, in some shape or form, participating," he said. advertisement

 

"The formal structure obviously has to be agreed by all (G8) members."

 

The exclusive club of the world's leading industrial nations currently includes Britain, Canada, France, Germany, Italy, Japan, Russia and the United States.

 

China took another great leap forward yesterday as it upgraded growth estimates by nearly 17 per cent or $US284 billion ($A387.4 billion) for 2004, an unprecedented move that could rank it as the world's fourth-largest economy.

 

With the revision, China officially overtook Italy to rise from seventh to sixth in the global rankings after the United States, Japan, Germany, Britain and France.

 

But political analysts in Beijing said that by now, China was very likely close to fourth place based on its real growth rate, as opposed to official data, and dollar exchange rates.

 

Blair, who visited Beijing and New Delhi in September as part of Britain's turn at the rotating European Union presidency, said he did not believe that China had yet overtaken Britain in the GDP league tables.

 

But he acknowledged: "At some point, I'm afraid, the Chinese economy is going to overtake not just Britain, but Japan and Germany and eventually the United States. That's just the way it is."

 

China's economic growth, he continued, was "the dominant force that is driving everything" in the world, given its hunger for energy and raw materials and its cheap labour.

 

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