Mid week stock analysis
After the drastic fell at last week, the Chinese stock market confronts a two days rise since Monday. As usual, I would like to briefly summarize the situation of my current portfolio holding and provide some forecast for the following market trend.
There are six common stocks that I am currently holding which includes: two new media industry, two nonferrous metal providers, one commercial bank plus one general merchandise supplier. At first, we should observe the information released that will have impact on our portfolio investments. Certainly, the most significant news was the Chinese Central Bank announced the further plan on interest rate reduction of 25%. It will take effect on 11th of May, and it was the third time decrease on interest rate from last year. This should be treated as a positive news on those industries has high leverage bearing, as well as commercial banks. However, the Ping An Bank has not benefited from this news, even combined with the effect of diminished bank reservation requirement. In fact, the bank industry was referred as the last trough in the A class share market, due to their relatively low PE ratio and performance(39 times for Ping An Bank). Thereby we could reasonably predict the growth potential on this industry, especially when the overall stock market is a bull market. Moreover, the nonferrous metal industry has received the government policy support on the tax rate. Where the levy method switched from quantity over price. The international demand of the metals also increased in the first quarter according to LME. As a consequence, the performance of the industry will be enhanced through this quarter. Furthermore, the retail merchandise stock in my portfolio is the Shanghai Bailian Group Co.,Ltd. ,which is the concept stock of Disney. Therefore, the series announcements of the new Disney store, Disney land open date and other relevant information immensely stimulated the stock price. At last, the Bestv New Media Co.,Ltd.’s acquisition on Shanghai Oriental Pearl (Group) Co.,Ltd.had already benefited the share price of these two corporations at a substantial level. The Oriental Peal Co. Ltd. stopped trading last week in order to prepare for the consolidation. Generally, the share price after the merge will experience another upward trend in the first few days. Thus I will maintain the portfolio with both the holding company and the acquired company’s stock, as to pursuing potential capital gain.
In conclusion, we should realize that the information have a distinct impact over performance stock and concept stock. In addition, we need to reveal the potential value of the entity, and therefore, invest on those underestimated stocks.
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