Day 109 Stock market strategy adjustment and daily highlights

Stock market strategy adjustment and daily highlights

Today’s stock market provides a good return for me, and there are several things that I would like to mention. These factors dramatically affected the share value, so I will need to be aware of them in the future. The reason for me to write this daily report is related with summarization and skill improvement. I will highlight those possible inducements for the increase in price of my holding stocks. Consequently, I will be able to acknowledge them in the future and respond with proper investment decisions.

My financial investment structure contains three stocks: Ping An Insurance Group(sh.601318), China United Telecommunications Co. Ltd.（sh.600050） and China Minmetals Rare Earth Co., Ltd.（sz.000831）. All of them increased in today’s trading, and I will provide a brief analysis for them respectively. The Ping An Insurance Group(sh.601318) sharply raised in the middle of the day followed by a closing price at 86.14 CNY, which resulted a 5.77% increase from opening. The major reason behind this increase is the corporation controlled bank Ping An experience a impressive 10% increase today. We must recognize that this 10% was caused by the recent announcement of the dividend payment. The Ping An bank is going to distribute 1.65（after tax） for every 10 shares, and today is the register ownership day. We have learnt two things in this movement. Firstly, there are many investors tend to purchase shares before dividend distribution, but most of them are likely to sell it after ownership registration. Secondly, the increase in share price of a related body corporate may also promote the holding company/ subsidiary’s share price. We further develop the idea which company’s share price can be closely related. For instance, the supplier, the competitor or the supplement industry.

On the other hand, the China United Telecommunications Co. Ltd.（sh.600050） closed with a minor 1.5% increase. However, as one of the oligopoly corporations in the Chinese telecom service market, the corporation maintained a 288.57 billion operating revenue and 3.98 billion net profits last year. Which is more than 10 times than the industrial average. Therefore, the consistent increase shows the trend of expectable return in the future. This stock emphasized the importance of a stabilizer in our investment portfolio. Normally, it should be the stock of the monopoly leader in the industry, hence there will not be much fluctuation on the share price. In addition, the extent of the business may carry out potential increases subsequently. Since the company’s performance will largely influence the buyer’s confidence. We also need to realize the continuously two days large single outflow at 58.71 million CNY. It might indicate the financial institutions are withdrawing from the stock. At last, the China Minmetals Rare Earth Co., Ltd.（sz.000831）after the sharp fall on yesterday, the price was pushed back at a 5.33% increase. It is worth mentioning that the single extreme large purchase comprises 64.81% of turnover rate. This is probably the signal of completion of adjustment, thus we can predict the stock will confront with a long trend of the increase next week. Although the annual report for prvious financial year indicates a drastic loss from last year, the stock price did not react for it. The cause of the reduction in price yesterday was the owner’s investment scheme. We learnt to figure it out by the statistic of large and extreme large inflow/outflow of funds. Moreover, I now understand that the financial index can only partially affect the share price movement. What really matters is the flow of main source fund and the confidence brought by the policy or industry prediction. Besides from the adjustment made by the owners, the Ministry of Industry and Information Technology of the People's Republic of China announced the first minmetals production plan in 2015. The corporation was anticipated to benefit from it, hence it was another major contributor to the increase.

In conclusion, this week’s investment ends up with a 5% return, which is decent. For the next week, we can expect more growth and hopefully the new issued share will not have too much impact over the fund in the main market.