Markets Tumble again on European Debt Woes

03-Oct-2011 | Reggie | Asia Banks Europe Government

Following their Asian counterparts, North American markets took quite the tumble on the first day of October, a notoriously bad month for stocks.  The Hang Seng was hit the hardest with a 4.4% drop while the TSX and Dow Jones dropped 3.2% and 2.4% respectively.  This decline put the TSX into official bear market territory now that the index is off more than 20% from its April high.  Once again, the European debt troubles are front and center of the blame. 

 

Greece once again failed to meet its target set for spending cuts for both this year and next.  Failure to meet the deficit target set means Greece is far less likely to receive any additional bailout funds which have prevented the country from claiming bankruptcy thus far.  That said, many are predicting that the next round of funds will be paid out to Greece in order to give the policy makers more time to formulate a plan. 

 

Accompanying the bad news, Bill Gross the world’s biggest bond manager outlined in his monthly investment outlook that a recession is becoming quite likely at this point. “Sovereign balance sheets resemble an overweight diabetic on the verge of a heart attack.” 

 

Making things worse, consumer spending in the US is likely to fall in the future thanks to declining wages for the US work force.  Consumer spending has been a huge proponent of the world’s largest economy.  With spending on the decline, the writing could be on the wall for growth in the United States.

 

These headlines, combined with others have investors throughout the world on their heels as they hope to avoid huge losses like those we saw in 2008 and a full out recession.  The one ray of hope in the news for today was that China’s service industry managed to expand faster than expected last month.  If the Chinese economy manages to stay afloat throughout this European crisis, there is a good chance the rest of the world can remain afloat.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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China continues to pump the Brakes

11-Feb-2011 | Reggie | Asia Canadian Investing Commodities Real Estate

State capitalism in the People’s Republic of China means that what China wants for their economy they can get.  Right now they want to slow things down and keep inflation under control.  The latest policies instituted by the government are designed to do just that.

As China continues on its path of growth, millions of people are joining the ranks of middle class.  The country is rapidly moving towards all our urbanization as people flock away from villages and farms towards cities in search of higher paying construction, industrial, and technological jobs.  As billions of dollars get created and spread to the general Chinese population the inevitable surge in demand for consumer products and the new found ability to own property has resulted in sky rocketing prices.

In order to put a stop to these rapidly rising prices, China has been busy.  They have been busy mass producing housing to increase the supply of low-rent housing available, as well as adding new taxes and restrictions to curb the purchasing of properties by real estate speculators.  Interest rates of been increased again and again.  With these deterrents all in place, it shouldn’t be long before prices correct.

With the Chinese economy being largely state controlled, its hard to say what exactly the fallout of the decision will be.  If panic selling were to set it, it could certainly set forth a domino affect that would surely be felt here in North America.  However, the Chinese economy has been incredibly resilient when it comes to growth.  If the government wants more construction it will get it, and if the government wants to slow things down, it will eventually get that too.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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China backs out of Quadra FNX Deal

17-Jun-2010 | kate | Asia Commodities Mining

China has backed out of their billion dollar joint project with Quadra FNX mining, citing fears of calling prices in the commodity industry. In the past two months, the price of copper has fallen over 20%.

China is the world’s largest consumer of copper which drove their desire for a 10% stake in Quadra’s for 152 million as well as jointly developing the Frank and Sierra Gorda projects in Chile, before the project was put in place. China was expected to have a 10% stake in the two billion dollar project.

China’s concerns are surprising to many in the industry given that Chile reputation as one of the world’s most mining friendly countries.  While China has pulled out of the Chile project they are still an aggressive buyer of resource projects in challenging locations such as Africa and Afghanistan.

On the news, Quadra (QUX) shares have slipped touching a low of $11.85 during today’s trading period. CEO Paul Blyth says that the company is in a better position today to finance the Sierra Gold on their own after merging with FNX, but they are still interested in looking for partners.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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Google Stands tall against the Commies

24-Mar-2010 | Reggie | Asia Government

Amazingly and quite surprisingly, the Worlds largest Search Engine among many other things has decided to take a stand against the Worlds most populist country and fastest growing economy.  Although Google’s Chinese business is currently a pretty small piece of the pie ($600 million out of the total $24 billion or 2.5%) the potential of growth in the Chinese market is extreme.  The move is sending a message that Google is only willing to bend so far when it comes to compromising their moral code.

“Don’t be evil” has been the unofficial Google mantra that Google themselves incorporated into the very heart of their business.  The mantra is meant to keep Google on the righteous path and avoid making poor decisions on the prospect of short term gains.  Instead Google can grow and preserve an image of honesty and moral upstanding.  Taking a stance against China will do just that as Google shut down the Google.CN page and began directing traffic to the Hong Kong page where the stringent censorship laws do not apply.

I think that the positive attention Google is receiving from this move is one of the main reasons the stock is down less than 2% on this news.  People seem to genuinely appreciate the move and message that Google is sending and shows how much value is placed on not being “evil.”  It will also be interesting to see how other foreign companies react to Google’s message.  It is probably only a matter of time until China shuts down access to the unrestricted Google HK site, but for now Chinese surfers have full access to the world wide web.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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Quadra Mining and State Grid of China strike a deal

08-Mar-2010 | Reggie | Asia Commodities Mining

Quadra Mining has been one of our favourite mining stocks for quite some time.  They have consistently put up solid growth with very little debit all while trading at a significant discount to its peers.  They have executed their expansion and growth plans almost perfectly.  Combining the operating prowess of Quadra with the brute size, strength, and wealth of State Grid could make for some very exciting results.

For those of us unaware, State Grid is the worlds largest public utility company and one of the worlds biggest consumers of Copper.  The deal is Quadra and State Grid will work together to develop and operate Quadra’s mining projects located in Chile.  The Globe and Mail states that the deal “comes amid expectations of a copper shortage in China.”  Whether there is actually a shortage, is a whole other story, but nonetheless the deal with State Grid should provide Quadra with long term demand for the ore it produces.  State Grid uses the copper primarily in the construction of their power grids.

The mines in Chile Quadra has been working on are quite large.  Large enough where costs were estimated to be in the neighborhood of $2 billion and produce between 250 and 400 million pounds annually over 25 years.  The deal with State Grid ensures that Quadra will be able to go ahead with the development of the project without much shareholder dilution.  With funding from State Grid, is it estimated the projects will be up and running by 2013.  This is truly exciting news for Quadra and eliminates a major hurdle from their path to continued growth and becoming a world power of the mining community.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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