Day 122 Weekly Trading Highlights

Weekly Trading Highlights

Until today, the weekly trading on the stock market has gone through smoothly. Although the overall market performance was facing a downturn, I managed to catch the essential point of market stimulator. The total return of my investment is 30% for the last 4 weeks, and I would like to conclude the critical factors that affected the price of my investments on this week.

We will stick to the CCP method, which provide a general observation on the capital, confidence and performance of selected stocks. During last 4 days, the stock held on hand were: Shanghai Oriental Pearl (Group) Co. Ltd.（sh.600832）; China Minmetals Rare Earth Co. Ltd.（SZ.000831）; Ping An Bank Co. Ltd.（SZ.000001）; Beijing SL Pharmaceutical Co. Ltd. （SZ.002038） and China United Telecommunications Co. Ltd.（SH. 600050）(Sold).

On the perspective of investor’s confidence, there was several information on the market which affected the share value. The Shanghai Oriental Pearl had announced its consolidation with BesTV New Media Co., Ltd. was approved by IPO. Which leads to a dramatic increase on both companies' share price (30%). In addition, China UTC also experienced a 40% increase due to the market expectation of Chinese telecommunication reconstruction. In contrast, the Ping An Bank’s stock price maintained a depressing pattern, in respect with the government’s request to reduce bank service fee, and the implement of more sophisticated regulation at the source of financing. However, the decrease in bank’s reservation level at 1% plus the expected interest rate adjustment may influence the buyer’s confidence in the industry. Hence result with a potential increase on next week.

The movements of large capital also substantially affect the market. Both Oriental Peal and the China UTC have obtained a series of major funds injection for more than 6 days. On the other hand, the main force capital showed a consistent trend on leaving the bank industry’s stock to pursue more profitable markets.

At last, the performance of China Minmetals Rare Earth Co. Ltd. and China UTC had prompt their market value as well. In the first quarterly report of China Minetals, the net profit had increased by 148.46% compare to the similar period before. Moreover, the China UTC’s accounting reported stated a 4.47% decrease on net profit, but the decrease is lower than the previous prediction. As a consequence, both reports have stimulated the market price.

In conclusion, we may realize the importance of these CCP elements. For beginner investors, the impacts of them on the market are obvious and therefore, easy to catch. We should also be aware that the timeliness of information (the immediate effect of bad news in bank industry, and the delayed impact of the good news) and evaluate the weight of them. Furthermore, as long as the company’s performance is better than the investor’s expectation, the figure is not necessarily to be positive. (UTC’s report).