HK’s HSI will soon be loaded with chinese tech stocks so big chance for some upswing profits.
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I bought some tencent on HK stock exchange , sure hope my timing isn’t off. I will hold it on the premise that the big will keep getting bigger.
Still deliberating on the airline stocks. I think they will return to growth, but when will the stock turn.
Buh bye.
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Don’t invest in dodgy Chinese stocks .
Unluckin.
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(Bloomberg Opinion) – Now that the world’s largest central banks are buying trillions of dollars of bonds, emerging markets reckon they can experiment, too. From Colombia to South Africa, developing nations are launching their own quantitative easing programs to stem the fallout from the coronavirus outbreak. But can these economies, known for capital flight and vulnerable currencies, pull it off?
Indonesia, with its current-account and fiscal deficits, has turned out to be a surprising forerunner in Asia. In late March, the government tapped the central bank to buy sovereign bonds directly in the primary market, a practice shunned for two decades. This would help fund a fiscal deficit that’s expanded to 5.1% from its long-established cap of 3%.
A large global investor base has boosted Indonesia’s confidence. In early April, when credit markets were still jittery, the nation raised $4.3 billion from its first so-called pandemic bond, which included a 50-year tranche — the longest-dated dollar debt issued in Asia. Last week, state-owned construction contractor PT Hutama Karya Persero sold a $600 million 10-year dollar bond that was fully guaranteed by Jakarta, another first. This bond was six times oversubscribed. Foreigners, who own about 30% of government debt, gobbled it up.
But barely two months into this new experiment, investors are sitting on the sidelines, even when the rupiah-denominated 10-year sovereign offers a real yield of 5%.
Most wouldn’t dare buy these bonds naked, or without hedging rupiah exposure first. Bank Indonesia has tried hard to stabilize the currency, setting up a $60 billion swap line with the Federal Reserve, while negotiating another with China, its largest trading partner. It has also expanded the domestic non-deliverable forward market, allowing local businesses to meet their dollar needs. On Tuesday, the central bank kept its benchmark rate unchanged for the second month, surprising most economists. Nonetheless, the cost of hedging remains elevated, exceeding the domestic bond yield.
The rupiah’s hedging cost remains high in part because foreign demand is strong. A back test shows why. Over the last decade, long-term investors buying domestic sovereign bonds with a rupiah hedge would generate 4.8% annualized returns, analysis conducted by JPMorgan Chase & Co. shows.(2) Buying without the hedge only improves returns by 1 percentage point, but almost doubles the risk. The best strategy is to hedge when the bond yield exceed rupiah forwards’ implied yield, and sit out otherwise, which is what’s happening now.
In other words, to entice foreigners back, Bank Indonesia needs to somehow bring down the cost of rupiah hedging first. That’s a tall order.
Take a look at Jakarta’s fiscal books, and all investors see is potential for a lot of money printing. As a result of the expanded deficit, the domestic sovereign bond supply will increase by almost 90%, forcing Bank Indonesia to buy another 350 trillion to 400 trillion rupiah ($23.6 billion to $26.9 billion) before the end of the year, estimates Goldman Sachs Group Inc. That would double the central bank’s holdings of such debt.
And this is just an estimate based on earlier rosy forecasts. The government said Monday its 2020 deficit would widen to 6.2% from 5.1% previously. New expenses could still spring up. For instance, an $8.6 billion bailout plan is now in the works to help struggling state-owned companies. Under President Joko Widodo’s first term, many fell to junk territory and balance sheets deteriorated as businesses financed big infrastructure projects. Already, lawmakers are berating the central bank for not printing money fast enough.
Developed nations are lucky. Thanks to the dollar’s reserve currency status, the Federal Reserve managed to rapidly expand its balance sheet to one-third of gross domestic product from around 20% at the end of 2019. Nonetheless, traders still worry that the U.S. government’s rapid debt build-up will spook foreigners, who own roughly a quarter of Treasuries.
Emerging markets don’t have the luxury of pursuing their own QE. During the taper tantrum of 2013, the rupiah lost 15% of its value in just three months after former Fed Chairman Ben Bernanke floated the idea of ending bond purchases that May. Indonesia’s 10-year sovereign yield jumped as much as 3 percentage points. This wound is still fresh for investors and the threat of capital flight is real.
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Luckin down 37% today.
UNH Short-Term Chart (2017 – 2020)
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The first quarter slide cut through 2019 support before bottoming out at a two-year low, while the subsequent bounce carved a V-shaped pattern that stalled just two points under the February peak on April 17. Price action in the past five weeks has been constructive, with the stock carving a small rectangular trading range on top of the 50- and 200-day exponential moving averages (EMAs). A rally above $304 would set off buying signals in this configuration, raising the odds for a cup and handle breakout.
The on-balance volume (OBV) accumulation-distribution indicator topped out ahead of price in November 2018 and entered a distribution phase that bottomed out at an 18-month low in April 2019. Subsequent buying power failed to clear resistance in January 2020, setting the stage for a downdraft that held well above OBV’s 2018 low. It has now returned to the 2020 high with price and is perfectly placed to post new highs during a breakout.
The Bottom Line
UnitedHealth stock looks ready to clear 2018 resistance in an uptrend that could eventually reach $500.
I bought UNH last year, and if it goes to $500, I’ll be very very happy.
Do TW stocks shut down after popping 8%?
Top newsletters:
These four stocks are tied for being the most recommended right now by those newsletters:
• Walt Disney DIS, +4.85%
• FedEx FDX, +1.93%
• IBM IBM, +0.90%
• JPMorgan Chase JPM, +3.00%
I own JPM, bought it b4 the fall, added to it. Long term position, 5 year plan, love it and lock it in the attic.
The China-based search-engine company Baidu is considering delisting its American depositary receipts (ticker: BIDU) from Nasdaq to focus trading in its shares to an exchange closer to its home market, according to a report from Reuters.
The development comes amid a growing debate in Washington about the trading and regulation of the shares of China-based companies on U.S. stock exchanges. The Senate this week passed a bill—the Holding Foreign Companies Accountable Act—that would require Chinese companies to prove they aren’t owned or controlled by a foreign government. The bill also would require those companies to submit an audit reviewable by the Public Company Accounting Oversight Board. The bill hasn’t yet been taken up in the House.
Nasdaq declined to comment.
China Daily reports today that Baidu CEO Robin Li says he is “not so worried” about the new U.S. legislation, and that the company is internally discussing potential relisting options, including Hong Kong.
Love this graph. Value investor vs. the “Buy The Dip, the Fed will bail us all out and trades are free anyway” crowd.
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I wouldn’t buy it for the long term…but it could be worthwhile to consider to trade as most investors consider this as good news and they are so cheap right now.
Thanks for the tip 
Good luck. FEdex is a good short term bet. I worry about online shopping though when 30 million people are out of work for 6 months, which is worst case scenerio. However, there’s no good case to really measure it against.
I stuck with JPM. Word out today is that banks may be “asked” by the feds to suspend or cut dividends, much like the socio/legal moratorium on stock buybacks now that many banks are following. JPM said, nah, we good, but we’ll let you know. That inspires me.
My small banks are looking lively. Good upward momentum on below average shares traded. SNV is delish until $30 I’m told. Up 8% again today. It’s yo-yoing but the trend is up and up quick.
OKE has given me 25% since March. May sell soon, hopefully b4 the third stroke of the W falls. Could give me a mortgage payment or a car payment depending on timing.
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It looks like I was right. 22% gain so far as it bounces back from an overreaction. I will put a limit order to sell at $10 and gain around a cool 200 from this. I’m not going to be rich, but it’s a nice start.
I like snatch and grab trades. 1000 bucks gets ya 200. OK. I’ll take it.
That’s a hard no from me. lol But more power to you. What are paying per trade?
With many national banks printing 24/7/365 now due to the pandemic the prominent stock markets will be benefiting big time in the next few years fuelling an even bigger bubble so be cautious and ready to sell at the right time for your sake and future.
I use trading212 and it’s free. They kind of try to get you to do CFD on the platform to make money.
Well, banks don’t print money, but I appreciate the sentiment. The hold up in the loan process IMO will be banks not wanting to lend at such low rates. It’ll take months for people to get loans…unless there’s immediate government harassment. When rates go up though, the money will start to flow.
It’s the Feds game, and right now, it’s little bank time.
I’m on TDAmeritrade. Usually it’s $7, but I think they suspended it for now. Hope so!
CFD? Are they like Certificates of Deposits/guaranteed income at low rates?
