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China Asset Prices, Bubble Early Warning Operations Simulation Analysis (OSA) ??????????????????????????QFII/QDII?? ?????????

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Title: China Asset Prices, Bubble Early Warning Operations Simulation Analysis (OSA) ??????????????????????????QFII/QDII?? ?????????


1
China Asset Prices, Bubble Early Warning
Operations Simulation Analysis (OSA)
??????????????????????????QFII/QDII?? ?????????
  • Monetary, Economic, Fiscal Policy, WTO Impact on
    China Macro-economic Control and Capital Market
    Asset Prices Bubble Earning Warning Simulation,
    Value Investing
  • By Dr Warren Huang, ( ?????) OSA ????? website
    www.osawh.com
  • wh3928_at_yahoo.com/ osawhh_at_citiz.net
  • ?????????,?????? 2003?12?20?

2
??
  • 1. ??????(OSA)???????????????
  • 2. ????????????????? ??????????
  • 3. ??????????????? ??????????
  • 4. ?????? ???????H/ ADR ???????????(OSA)??
  • 5. ???????? ??????????????????????????A
    .????,????????????????????????????
  • B. ????????????????????????
  • C. ???,????????????????????????
  • 6.?????????????????? ?????????????
  • 7.???????????????????? ?????????????
  • 8 ?????????????????????? ???????????
  • 9.?????????????????????????????
  • 10????????????? ????????????????
  • 11.???????????????????????????????
  • 12.???????????/?????????? ???????????
  • ??????????????????? ???????????

3
??????(OSA)???????????????
  • Dr. Huang developed global strategic management
    for Mobil US board of directors dreams in global
    value chain profit optimization
  • He inspired by Prof Nash turning numbers into
    equation wining the Nobel Prize.
  • Prof/Dr Huang extensive information knowledge
    base development Out of 1972 -1980 ( daily Wall
    Street Journals, Business Week trading data,
    market and economic analysts, technical analysis
    and Monte Carlo, statistical analysis fail to
    tracking economic cycles.
  • He Trained thousands Taiwan, Tsinghua, Tunghai,
    Fudan, Peking, Zechiang, Dalian University
    students, applied his Ph.D thesis Moon-landing
    guidance and control to challenge the unknown
    future in thousands structural dynamic models
    developed out of
  • 12 years information knowledge base, He
    patented Improve Process by OSA in US and 82
    countries, 1980, pioneered two master hands
    controlling global economic cycles and capital
    market prices , through monetary policy tracking
    published thousands articles on Taiwans
    government, banking, finance, daily news papers,
    journal accurately tracking Taiwan, Japan, Hong
    Kong, US daily results since 1985 and supporting
    state enterprises, banking, finance strategic
    reform, change management, thousands CEO,
    executives training workshops making his dream
    of impossible mission of challenging the unknown
    futures come true.
  • Dr Huang helping 30 million China, Taiwan
    investors, banking finance, enterprises
  • personal and corporate dream come true
    through thousands nationwide TV, radio lectures
    and banking, securities CEO, executives workshops
    since 1994 and www.osawh.com website (visited
    by million global government, central banks, TOP
    banking, finance, enterprises executives ,
    universities since 1998).

4
Monetary policy, WTO impact on inflation, GDP
growth ???????????????
  • Excessive money supply, rising commodity, asset
    prices and depreciate currency push inflation and
    GDP higher

export
Macro-economic inflation and GDP growth
Consumer demand
Monetary policy
currency
Commodity prices
Business demand
Foreign direct investment
5
Monetary, economic, fiscal policy impact on
China macro-economic control and daily capital
market asset prices since 1989
  • Dr. Huang accurately predicted on Intl economic
    conference in Shenzhen, 1988, that China will
    facing credit tightening in 1989-1990 to curb
    the inflation.
  • He accurately predicted in July 10, 1994 to Wall
    Street Journal and Wuhan Guotai, Wanguo CEO that
    Shangha A index will soared to 800 from 333 in
    Aug.1994.(WSJ published late July China B share
    rebound,
  • Shanghai A rebound to 820 in Aug-Oct, 1994)
  • He was invited by Wanguo, Guotai and banking CEO
    to offer lecture to thousands investors, traders,
    money manager predicted Shanghai A will be traded
    600-800 during 1994-1996 due to macro-economic
    control, results published on Wuhan securities
    news Oct. 31, and Beijin Financial Times 1994
  • He accurately predicted in Wuhan stock
    information journal Feb. 1995 that Shanghai A
    will rebound from 540 to 800. It did on May 18
    soared from 590 to 920 and plunged to 580 in
    three days, recommended buy Shanghai
    Petrochemical at one dollar soared to 8 in Aug.
  • He accurately predicted June 20, 1995 on Beijin
    Central Peoples radio one hour interview, and
    Financial Times, Economic Daily news, Commercial
    Times that Shanghai A will soar from 600 to 800
    in Aug.1995.
  • Predicted on Wuhan securities news March 3, 1996,
    that China Peoples Bank will cut interest rate,
    stock market go to bull markets, Shanghai A break
    1600.
  • Spoke to Shanghai Eastern radio and Shanghai
    stock exchange, Dec. 16, 1996
  • to predict Shanghai A will rebound from
    1000 to 1700 in 1997 after 10 price limit.
  • Predicted to Beijin Peoples Bank finance
    staff July 2001 that China stock bubble burst
    plunge to 1600 from 2200, Yunyue will plunge from
    100 to 50, ST stocks down 50 .
  • Predicted May 2003 on website that China
    housing, auto bubble burst, stocks will plunge
    30-50 , Shanghai A will plunge from 1650 to
    1350, facing credit tightening May

6
Enterprises reform, privatization MBO and IPO
Prices
  • Maximize corporate/plant wide operating profit
    margin through cost reduction and products,
    market innovation develop, implemented by goal,
    mission, performance oriented strategic (top
    management), and executive Operations Simulation
    Analysis teams
  • MBO/IPO prices F (listed market investor
    sentiment,and corporate profit margin)
  • F (Shanghai/Shenzhen index, corporate
    profit margin)

7
Inflation, interest rate, Government, corporate
bond yield simulation
  • Asset, commodity prices, excessive money supply
    led to inflation, credit tightening
  • Led to rising interest rates and bond yields

currency
Consumer spending
Interest rates, bond yield
Inflation rates
Money supply growth
currency
oil,commodity, asset prices
8
Global currency and RMB market forces mechanism
simulation
  • WWW.osawh.com/currency.html tracking trade
    surplus/deficit, interest rate spread impact on
    daily 40 currencies and last 12 years RMB ( 3 to
    12) since 1998

Integrating into Black-Schole for derivatives
prices hedging
US trade deficit
Daily US dollar, RMB global exchange rates
futures prices
your country trade surplus/deficit
Interest rate spread between US and yours
9
China Housing prices, bubbles,wealth mechanism
simulation
  • Housing prices are fueled by money supply,
    excessive credit, stock markets wealth gain

Housing prices bubble, wealth Housing stock
prices simulation
Money supply growth
Mortgage interest rate
Stock market wealth
Stock index changes
MBS credit derivatives
10
Asian Stock indices prices futures and trading
volume simulation
  • www.osawh.com/prod03.html tracking 40 stock
    indices, wealth, prices are generated from money
    supply, lower interest rates and stock price,
    wealth gain, hot money inflow, US investor
    sentiments

Integrate into Black-Schole For derivatives
prices, hedging
Money supply growth Consumer spending
China Shanghai/Shenzhen, A, B, Henseng,
H-Share,Nikkei, Taiwan Index, Singapore ST H
stock index, Seoul futures, Investor sentiment ,
trading volume
Interest rate/inflation rate
currency
US investor sentiment
NY Dow Jones/Nasdaq stock index
11
Information industry post bubble burst recovery
simulation
  • IT industries benefited by consumer, business
    spending rebound, but hurt by price war due to
    excessive capacity, but China IT and high tech
    hardware and software suffered by sharp foreign
    competition

IT industry chips, PC, telecommunication Demand
and spot prices , profit margin, stock prices,
derivatives
IT industry business spending
Consumer spending
IT industry excess capacity and Products,
market innovation
12
Auto and steel demand, prices mechanism simulation
  • China auto, steel, facing credit tightening (
    will feel full impact early next year) and sharp
    price war competition among GM, Ford, Toyota,
    Benz and partners, drag auto, steel demand and
    prices, profits, stock prices.

Consumer spending
Auto demand , utility Asset Backed
Securitization , stock prices mechanism
simulation
Auto loan interest rate
Steel prices, import duty, energy prices
13
China Oil petrochemicals demand, prices
performance simulation
  • China oil upstream/downstream are well
    positioned, fully integrated follow Dr. Huang1991
    speech to SINOPEC, Beijin on globalization,
    integration strategy
  • CNOOC, SINOPEC, PetroChina stock prices doubled
    , but downstream suffered by soaring oil
    prices)since Dr. Huang recommendation in Beijin
    workshops 2001, Taipei, 2002

Consumer spending
Oils, heating oil, gasoline , petrochemical,
plastics prices Profit margin, stocks simulation
Currency
Gasoline, heating oil, petrochemical
feedstock Prices, costs
14
Reform and merger/acquisition performance
simulation
  • Stock prices plunged more than 50-90 gained in
    pre-merger speculation due to post merger
    integration performances,

Pre and post merger profit margin and
stock Prices simulation
Pre-merger, reform goal setting targeting
Post merger profit margin
Investor sentiments
Post merger integration performance
15
Corporate governance bubble burst early warning
simulation
  • Tracking cost and financial accounting and
    investors sentiment speculation bubbles for
    scandals early warning in China Guanxia, ST stocks

Production and sales tracking
Strategic and execution corporate governance
OSA teams tracking financial accounting stock
prices
Cost accounting bubble tracking
financial accounting earning tracking Balance
sheet and off-balance sheet Derivatives, IPO,
merger activities tracking
Investor sentiments, stock index
16
Banking Securities insurance riskearly warning
simulation
  • China assets bubbles tracking, early warning for
    government regulation

Equities market asset Bubble price
Banking nonperformance credit default Consumer,
business credit, market risks Resulted market
bubble burst risks simulation
Housing market asset Prices bubble
Industrial sectors Asset bubbles
Business, consumer demand Sentiment bubble
17
Causes, onset, recovery of Financial ,currency
energy banking, bubble burst crisis and NPL loan
  • Excessive money supply and hot money inflow
    resulted inflation, currency
  • plunge, rate hike and stocks, properties prices
    plunge and NPL loan

Excess money supply Consumer spending
Strong Export growth
All leading to financial, currency, bubble
burst Crisis, recovery will begin until trade
surplus And currency rebound, interest rate cuts,
stock prices rebound www.osawh.com/riskm.html
Excess foreign capital Inflow resulted currency
appreciation
Runaway inflation and interest rate hike Stock
prices and consumer demand plunge
Export decline and currency plunge
NPL Loan
18
Strategic QFII and QDII investment risk
management early warning
  • Two master hands controlling China and global
    economy and industrial sectors profitability and
    stock prices for QFII/QDII asset allocation,
    wealth management investment strategy, risk
    control avoid chasing the markets trillion
    dollars loss

Domestic and global market prices And risks
simulation
Money supply, interest rates
Currency exchange rates
Investors sentiments
Industrial sectors asset prices bubble, profit
margin simulation
19
China economic and capital market outlook,
opportunities, challenges
  • China economy benefited by 56 billion DFI and 30
    growth in export, 345 billion foreign reserve,
    facing uneven development, widening wealth gap
    between rich coastal region and rural poor,
    excessive loan demand in auto, steel, housing (24
    growth) and falling manufacturing prices,
    forced China Peoples Bank raised bank reserve
    ratio to 7 , cut 150 billion from loan
  • RMB facing appreciation pressure, will be
    gradually switch to managed float in the future,
    coastal area benefit by DFI facing housing
    bubbledemand and price will peaking out, while
    rural house stop decline
  • Consumer and business spending will be slowed
    down with money supply peaking out at 21 to 18
    , to cool asset bubbles, resulted inflation
  • IT and industry benefited by US, Asian demand
    and prices rebound, however facing severe
    competition
  • Auto industry benefited by domestic demand, will
    slowdownfacing price war, tariff cut, sharp
    competition among GM, BENZ, Toyota and Ford
  • Banking sector still facing mounting
    nonperformance loan and credit tightening
  • Oil/petrochemicals, transportation sectors hurt
    by soaring oil prices, benefited by increased
    demand and prices rebound, profit margin
  • Shanghai, Shenzhen stocks will be traded in 20
    range 1250-1550

20
Hong Kong Economy, Capital Market outlook,
challenges, opportunities
  • Hong Kong is recovery from SARS and export slump,
    getting out on recession, but still in deflation,
    due to China opening tourists to Hong Kong and
    free trade zone and US economic recovery, getting
    out of SARS threat resulted hot money speculation
    on stock market rebound 50 led to money
    supply growth and GDP creeping up to 2.5
  • However consumer, retail and housing,
    construction is still weak drag by high
    unemployment at 8.5
  • Banking sectors benefited by expanding tourist,
    stock market rebound, but still weak consumer
    load demand due to high unemployment
  • Properties, construction sectors demand is weak,
    despite recover from SARS housing prices down 70
    return to 1991 level, with no sign in near term
    rebound
  • Manufacturing sector facing high oil, feedstock
    prices, falling prices, fail to compete with
    China competition Benefited by
    increased demand and prices rebound, profit
    margin
  • Henseng index will be benefited by improved US,
    Asian recovery , export
  • Boost , but hurt by peaking out China demand
    resulted money supply growth expansion to 3. 5
    and US stock market Dow moving above 10,000,
    However, export growth is limited
  • Henseng index is overheated, will be traded
    10,000-14,500 next year

21
Conclusions and recommendations
  • OSA simulators predicted 6 month ahead the
    monetary, economic, fiscal policy, WTO impact on
    macro-economic, capital market asset prices to
    achieve sustainable profit growth and prices
    stability
  • Monetary , economic, fiscal policy, WTO impact on
    China capital markets asset prices simulation,
    early warning is the key to sustainable profit
    growth supporting strategic China banking,
    finance, enterprises reform.
  • Monetary , economic, fiscal policy, WTO impact on
    China capital markets asset prices simulation,
    early warning avoided trillion dollar market loss
    due to current
  • Chasing the markets, speculation on technical
    charts, market, business, economic data. It
    provide QFII, QDII rational, reliable decision
    investment and risk management decision tools in
    asset allocation, wealth management
  • Thousand strategic structural dynamic OSA models
    tracking China and global economic and daily
    capital market asset prices supporting China and
    global capital market decision makers through
    in-house workshops, corporate memberships and
    full banking, finance, enterprises reform, change
    management OSA program

22
Tokyo Nikkei Stock index futureSimulation
  • Monetary policy and US economy impact on Japan
    Nikkei index

Daily Yen exchange rate
Yen
23
Conclutions and Recommendation
  • OSA simulators predicted 6 month ahead the
    monetary, economic, fiscal policy, WTO impact on
    macro-economic control, capital market asset
    prices to achieve sustainable profit growth and
    prices stability
  • Monetary , economic, fiscal policy, WTO impact on
    China capital markets asset prices simulation,
    early warning is the key to sustainable profit
    growth supporting strategic China banking,
    finance, enterprises reform.
  • Monetary , economic, fiscal policy, WTO impact on
    China capital markets asset prices simulation,
    early warning avoided trillion dollar market loss
    due to current
  • Chasing the markets, speculation on technical
    charts, market, business, economic data. It
    provide QFII, QDII rational, reliable decision
    investment and risk management decision tools in
    asset allocation, wealth management
  • Thousand strategic structural dynamic OSA models
    tracking China and global economic and daily
    capital market asset prices supporting China and
    global capital market decision makers through
    in-house workshops, corporate memberships and
    full banking, finance, enterprises reform, change
    management OSA program
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