Whopping Windfall For Chongqing Chauffeur

Whopping Windfall For Chongqing Chauffeur: "Main reference: Story in Sinafinance

AN INVESTOR from Chongqing, a city known for its numbingly hot cuisine, hit a major hot streak of his own, turning 70,000 yuan into two million.

Mr. Hu, a 43-year-old investor from the Southwestern Chinese metropolis, has been a client of Shenyin Wanguo Securities.

As far as A-shares go, most shareholders would be happy with long-term average annual returns of 8-10%, comfortably ahead of inflation and far better than savings accounts would offer."

But Mr. Hu has won for himself the above-mentioned windfall, which over an eight-year period represents a compounded annual growth rate in excess of 50%.

That’s not bad for a former chauffeur who first started tinkering with small-scale share investments to help support his family.

Needless to say, he no longer gets behind a wheel to make money, but only to chauffeur himself and his nouveau riche family around town.

But his investment journey hasn’t always been a smooth ride, as he once lost 65% of his entire capital on bad bets.

However, these days Mr. Hu is sitting pretty, has put on a bit of weight, and looks quite content as if without a care in the world.

He explained that the reason for his easygoing attitude of late is the fact that he hasn’t bought or sold a share in months.

Apparently, his tremendous self-control and ability to know when to quit -- and stay quit -- while ahead is something he learned from first-hand market experience as well as from the market Masters.Mr. Hu first started investing in Chinese equities in 1999, and the following year quit his chauffeuring job with its 1,800 yuan month salary to take care of his 200,000 yuan A-share portfolio at the time.

However, the God of Wealth was not smiling down upon Mr. Hu at the outset, and from a peak level of 2,245 for the benchmark Shanghai Composite Index, Chinese shares began a four-year downward march amid an extended bear market.

During this volatile period, Mr. Hu actually grew his investment by 50% in a short timeframe, but just as soon returned all his winnings to the vagaries of the market.

He said this experience left him with a strong aversion to anything resembling a bear market, despite the apparent bargains abounding.

By 2004, his 200,000 yuan original portfolio had shrunk by 65% to just 70,000, a personal shock which Mr. Hu says helped him come up with a whole new personal investing strategy.

That year of major losses also saw him increasingly turn to others for advice, including a Mr. Li from his brokerage.

Mr. Li gave Mr. Hu an essential reading list of books featuring renowned local and international investors to help cultivate more effective sharebuying techniques and strategies.By employing all these new tricks of the trades, he was able to turn his 70,000 yuan into two million by 2008 for an average ROI of 52%.

“Don’t touch something that shouldn’t be touched,” he said, when asked to sum up the recipe for his success.

The on-and-off bear market for the past five years was something Mr. Hu said he could never have predicted back in 2008, the year he left the market.

He said he continued his “Goldilocks” strategy when he began trading stocks in 2009, not touching anything that seemed too hot or too cold, because they usually assumed that temperature for a reason.

He now has a smaller portfolio and a comfortable savings account, but has hardly tinkered with his shares in almost two years, saying that his readings from the Masters in 2004 taught him lessons in patience that are paying off nearly a decade later.

In 2011, his returns stood at a respectable 15%, thanks he said in large part to his shifting his portfolio focus to new shares and a heavier reliance on corporate bonds.

“In the first half of the year, there was quite a rebound, but it didn’t feel right so I reduced my positions,” he said.Mr. Hu said recent bouncebacks are not at all alluring to him as he sees no stomach in the market for a sustained recovery and little intrinsic unrealized value.

The Chongqing investor is staying put for now, but is keeping one ear to the ground for any signs or sounds of stampeding bulls.

He says his main concern is holding onto what he has – his portfolio’s value, his bank account, but more importantly – the health and welfare of his wife and child.

Not getting overexcited amid market fluctuations is key to his success, he adds.

From his humble life as a low-paid chauffeur a decade ago, he now lives a comfortable family life with annual expenses of around 60,000 yuan.

“Now, maintaining this lifestyle and paying my bills is my primary concern,” he said.

“For those friends of mine who say they’ve had enough, I tell them to just look themselves in the mirror and honestly admit your own strengths and weaknesses, and then act accordingly.

“Even more importantly, I remind them that to expect overnight success in the stock market is to invite even faster failure.”

But he said that the most important lesson he could give them is that financial success is not just picking and rejecting the right shares, but also having the discipline and wisdom to know how to handle your finances once you’ve built up a sizeable nest egg.

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How I Shrunk 450K Yuan to 50K

How I Shrunk 450K Yuan to 50K:
Main reference: Story in Sinafinance

I TURNED A nearly half million yuan portfolio into just 50,000 yuan.
I first started buying shares in 2007 when the Shanghai Composite Index was in very alluring territory north of 5,800 points (it’s currently hovering at around 1,950).

All of my own money and my family’s money found its way into the market fund I set up at the time, some 450,000 yuan worth, which also included money earned from the recent sale of our family-owned shop.

So what did I buy back then?

It’s a laundry list of virtual volatility, including some of the most unstable picks these past several years that one could randomly throw his hard-earned money at.

I was heavily exposed to China Vanke (SZA: 000002), Air China (SHA: 601111), China Nonferro Metal (SZA: 000758), Western Mining (SHA: 601168), Yunnan Copper (SZA: 000878), Guangji Pharmaceutical (SZA: 000952), Dongfang Electric (SHA: 600875), Angang Iron & Steel (SZA: 000898), Wuhan Iron & Steel (SHA: 600005), Shanghai Datun Energy(SHA: 600508), Guangzhou Development Group (SZA: 600098), Sinopec (SHA: 600028) andChina Construction Bank (SHA: 601939).

As you can see, it’s a commodities-heavy list, and we all know how volatile steel prices in particular can be, with sharp fluctuations in iron ore and shipping costs playing havoc with bottom linesAlso, Vanke is China's top residential developer and thus often captive to macroeconomic controls while Air China is victimized by economic downturns during which leisure and business travel crawls to a halt.

To make a long story short, in 2008 came the Wall Street Crash and in the following year, out went my money – a perfectly respectable 450,000 yuan portfolio shriveled down to under 50,000.

At that time, I must admit I spent more time thinking of ways to end my life than I did brainstorming strategies to get my money back.

The very thought of throwing away my life’s savings in such a way still causes me many a sleepless night, even to this day.

In 2009, I began to scrutinize in earnest the relationship between economic policy and share trends and soon noticed that listed brokerages were some of the earliest beneficiaries of new pro-growth policies from on high.

So I approached willing lenders, hat in hand, and managed to put together 50,000 yuan. I dumped it almost completely into A-share listed securities firms.

High on my list were Haitong Securities (SHA: 600837) and Citic Securities (SHA: 600030) as I appreciated their relatively stable incomes and business growth.

At the same time, I made many calls to Haitong, which so happened to also be my own brokerage, and you can imagine what they told me over and over again.

They urged me to keep buying of course!

In late 2007, Haitong’s shares were flirting with 70 yuan, but dropped off the map when Wall Street collapsed the following year.

I had bought in at around 18 yuan in late 2009 and the shares are currently just under 10 yuan.

I’ve held onto them for nearly four years now and I am tired of running and am staying put.

I don’t trust the economy when buying stocks.

After all, look at the US with its record high Dow and 2% GDP growth!

What good is China’s 8% GDP if we’re stuck with this A-share market?

The only consolation I can take from my Haitong shareholding position is that it hasn’t seen a major rise or fall in four years, so I’ll just have to keep waiting it out to try and recoup my capital.

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Why China's Economy May Be Heading for a Crash

Why China's Economy May Be Heading for a Crash: ""They launched $2.5 trillion worth of stimulus in 2008-11," explained Bill Smead, CEO and CIO of Smead Capital Management and a long-term China bear. "Most of that went to special purpose vehicles to build rail, bridges, airports, condo buildings, you name it."
Many of those projects were built with the sole purpose of showing strong economic growth and not to generate economic rent, Smead said. "

Gordon Chang, author of "The Coming Collapse of China," said China may only be growing 2 or 3 percent and if you strip out all the construction going into ghost cities and "high-speed rail lines to nowhere," the economy may not be growing at all.

He looks at electricity usage as a better indicator of growth than the official Chinese statistics.

"China claimed 7.7 percent growth for the first quarter," he told CNBC this month. "But when you look at electricity, by far the most reliable economic indicator of Chinese economic activity, that grew 2.9 percent in Q1. When you consider that the growth of GDP is historically 85 percent of the growth of electricity, you're talking 2.5 percent (growth)."

And many of those loans used to finance the construction of those ghost cities and idle train lines may never get repaid. Instead, banks continue to roll over these loans—many made to state-owned companies. 

(Read More: Will the Reprieve for China's Lenders Last?)

If the banks were to stop rolling over those bad debts, it could create a capital hole in the banking system and force the government into a costly recapitalization of the banks.

Two things could mitigate the damage, say investing pros—high reserve ratio requirements and China's massive foreign exchange reserves.

David Riedel of Riedel Research Group, told CNBC that while investors need to "worry about the health of the banking sector," the Chinese government's 20 percent reserve requirement for the banks and $3 trillion of foreign exchange reserves are "two strong pillars of support."

But using the foreign exchange reserves to recapitalize the banks could have nasty unintended consequences. Smead said they'd have to convert their U.S. Treasury holdings to yuan and "explosively increase the money supply."

That could torpedo the currency and stoke inflation, Smead said, creating a major crisis.

China Bears

For some international investors, China uncertainty has been reason to avoid the country's equities altogether. Rajiv Jain, manager of the Virtus Foreign Opportunities Fund, told attendees at the Morningstar investment conference earlier in the month that he was "very concerned about the risk coming from China's shadow banking system."

In his first-quarter investment commentary, Jain wrote, "In our view this level of (China) credit growth is unsustainable. There is bound to be a significant contraction in credit and, with it, GDP." He added that the risks are systemic.

That has him thinking defensively about China and investing in companies that do most of their business domestically, Indian banks for instance, and downplaying commodities-related companies that rely on demand from China.

"If a debt-induced economic downturn takes hold in China, it inevitably will have a negative effect on commodity prices as marginal demand slackens or even falls," Jain wrote. "Lower commodity prices would lead to lower income and reduced investment in exporting countries."

Those countries include Indonesia, Malaysia, Brazil, Canada and Australia. 

(Read More: Commodities Traders Call End of 'Supercycle')

China Opportunities?

Not everyone shares this pessimism. "We're still of the view that China muddles through," said Todd Henry, emerging markets equity portfolio specialist at T.Rowe Price. "They'll post decent growth, but the trajectory of growth will be lower" as credit growth slows. 

That's not a ringing endorsement. Henry acknowledged the misallocation of capital and potential problems lurking in the financial system. But he doesn't see systemic risk.

Richard Gao, a portfolio manager at Matthews Asia, wrote in a note, "We believe that a widespread banking crisis seems unlikely for China, but we have nonetheless taken a cautious approach and typically are underweight in Chinese financials, especially banks, in our portfolios."

Michael Kurtz, global head of equity strategy at Nomura, also told CNBC attempts to rein in credit are "very useful in terms of getting the Chinese economy back on a more sustainable footing as we look out over the medium to long term." 

It may even be positive for the country's financial institutions down the line.

"We do think that medium to long term as China begins to actually crack down on the abuses of easy money and begins to apply harder budget constraints at the margin, it could underpin a longer-term re-rating of the sector," Kurtz said. "We're finally starting to see the banks acknowledge the true status of the underlying balance sheets." 

T. Rowe is underweight China financials. The stocks are not yet cheap enough to make them comfortable with the risks that may be lurking on their balance sheets, Henry said. T. Rowe prefers the consumer, Internet and environmental themes in China.

BIll Stone of PNC Asset Management also told CNBC that things didn't seem to be falling apart in China and that the recent volatility may be creating future opportunities. "There will be an opportunity in mobile," he said, "Mobile e-commerce in China will certainly be worth watching here going forward."

Is It 2007 or 1979 in China?

Garry Evans, global Head of equity strategy at HSBC, draws the comparison between China in 2013 and the U.S. in 1979 when Fed Chairman Paul Volcker became Fed chairman and took to breaking inflation. 

The Chinese government is focused on reform, Evans said. "Markets will want to wait and see whether these reforms happen in China."

T. Rowe's Henry said that Chinese officials' attempts to shift the economy from one driven by government investment to domestic consumption will be a "delicate balance." 

"The risk is they don't get this right and it becomes mismanaged," Henry said. "Our view, they've done a good job in terms of managing the economy.

Smead takes a dimmer view, saying China in 2013 is more like the U.S. in 2007-08 when the global financial crisis hit. While he runs a long-only U.S. fund, China is his chief worry and that has him avoiding U.S. energy, resource and industrial companies that depend on China growth.

"It's probably late 2007-08 in China," Smead said. "It's a physical impossibility for economy to be growing as it is" unless credit continues to expand sharply.

He predicts a deep recession or depression that could last four years as it deals with the fallout from the credit binge.

Either way, HSBC's Evans said, "You have to expect Chinese equities to be quite volatile and quite weak."

—By CNBC's Justin Menza. Follow him on Twitter @JustinMenza.

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SMRT predicted to suffer weekly earnings impact of $2m amidst haze | Singapore Business Review

SMRT predicted to suffer weekly earnings impact of $2m amidst haze | Singapore Business Review:

SMRT predicted to suffer weekly earnings impact of $2m amidst haze

ComfortDelGro will also suffer.

According to Maybank Kim Eng, for the land transport stocks, analysts estimate SMRT and ComfortDelGro would suffer a weekly earnings impact of SGD2m and SGD1.4m (or 2.0% and 0.5% of annual profit) respectively for every 15% reduction in fare revenue.

"SIA and SIAEC too would be exposed as Singapore is their main operating base, but it is not possible to assess the impact on aviation stock earnings, as there
are too many moving parts. Inbound traffic could be hit but this could be compensated for by more outbound traffic," Maybank Kim Eng said.

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Has Gold Entered a Long Term Bear Market?

Has Gold Entered a Long Term Bear Market?: "Gold, which is trading at its lowest level in nearly 3 years, is in the midst of a long term bear market, and investors should look for an opportunity to exit positions in the precious metal, experts told CNBC.
"It's a long term bear market. If you bought into it today, don't expect it's going to do much. And if you own some and get a rally, get rid of it," said Dennis Gartman, editor of The Gartman Letter, a daily commentary on financial markets. "

"Seeing the panic and devastation in gold, some say gold will probably never be as popular as it was in last 2 years," he said. 

(Read More: Gold Bears Out in Force After Fed)

Reflecting this bearish sentiment, Societe Generale last week downgraded its fourth quarter forecast for gold prices this year to $1,200 an ounce from $1,375, citing a "paradigm shift" in investor attitude towards gold resulting from the recent dramatic sell-off in April and the prospect of the U.S. Federal Reserve tapering its bond buying program later this year.

Swiss investment bank UBS also slashed its 12-month gold forecast to $1,050 from $1,750, warning that gold's appeal as an inflation hedge is at risk of becoming "obsolete" on Fed tapering plans.

Look at Gold's History

In order to determine the floor for gold, historical charts could provide a good indication, said Jacobs of Chart Prophet Capital.

According to Jacobs, the current gold bubble that began to inflate in 1999 is actually part of a larger bubble that started in 1968. Prices rose from $250 in 1999 to over $1,900 an ounce in 2011 - a 600 percent gain. 

He has identified $700 as target for gold based on long term historical average prices and previous support levels. $680 is the low hit in 2008 during the global financial crisis. 

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Japan’s Fad-Loving Consumer Threatens to Derail Sony’s Phone Ambitions

Japan’s Fad-Loving Consumer Threatens to Derail Sony’s Phone Ambitions:

Sony's Xperia Z smartphone, which went on sale in February, has already sold almost a million units by some estimates. But NTT DoCoMo, Japan's largest mobile carrier, will soon stop selling it.

The Xperia Z has not even hit the United States market yet: T-Mobile says the model will make its debut on its network in the coming weeks.

But it is already has-been in Japan. DoCoMo has turned its attention to a new phone, the Sony Xperia A — a model with fewer features that has not won the stellar praise showered on the Z.

"It's time for a new model," said Mai Kariya, a DoCoMo representative in Tokyo. "We're finished with the Xperia Z, and now focusing on the Xperia A."

As Sony banks on smartphones to turn around its struggling electronics business, it faces an increasingly bothersome obstacle at home: the demands of Japan's powerful cellphone carriers, which remain obsessed with constant model updates.

(Read More: Sony to Assess Spin-Off Plan; Cuts Targets for Cameras, Smartphones)

For years, Japan's three largest mobile network companies have pressed phone makers here to update their handsets every three or four months, providing Japanese consumers a dazzling array of newfangled phones and features each season. Phones with digital TV broadcast receivers were once all the rage; a phone without it was never going to sell. Then it was thumbprint scans; you'd be hard pressed to find those on many phones today. The same is true of swiveling screens, and to a lesser extent, electronic wallets.

The fast-paced cycle is commonplace in Japanese marketing. Manufacturers deliver short runs of seasonal products to create buzz, analysts say. Pepsi Japan, for example, brings out limited-edition drinks each year: Salty Watermelon Pepsi or Pepsi Ice Cucumber. Nestle's KitKat candy bar has cycled through an eye-popping array of limited editions in Japan: green tea, pumpkin, strawberry cheesecake, wasabi and soybean to name only a few. Even Japan's best-selling pop group, AKB48, rotates through a cast of 67 members and on New Year's Day released 16 versions of new and repackaged records.

"This is the worst of Japanese companies' excessive obsession with the new," said Yuichi Kogure, an associate professor in information technology policy at Aomori Public University and the author of several books on Japan's cellphone industry. "But now the mobile phone makers are exhausted."

Sony's Xperia Z got caught in this marketing buzz saw. DoCoMo started selling the Xperia Z in Japan on Feb. 9 as part of the carrier's spring 2013 collection, replacing the Xperia AX of the winter 2012 collection. Barely a month later, on March 15, DoCoMo announced its summer 2013 collection of 11 new phones, with the Xperia Z replaced by the Xperia A, which went on sale last month.

The constant feature roulette has helped carriers lure customers away from rival networks. But it taxes the research and development resources of Japan's phone makers, who must meet the constant demands from carriers for new high-end features and frequent handset renewals.

Phone manufacturers here have found it impossible to achieve the economies of scale that would justify the high development costs and the slim profit margins. Because separate teams of designers at each handset maker race to build handsets from the ground up for each separate carrier, few phone makers have been able to develop a coherent global product strategy, analysts say.

(Read More: Sony CEO Asks for Shareholders' Patience on Spinoff Plan)

The unique pace of the Japanese cellphone market largely cuts it off from the rest of the world, making it difficult for a single manufacturer to make and market phones for both the Japanese and global markets, said Kenji E. Kushida, an expert on Japan's information and communications technologies at Stanford."The Japanese market became somewhat like the Galápagos Islands. It had great biodiversity, but was so weak to outside species," Mr. Kushida said.

He points to Vodafone, which moved into the Japanese cellphone market in the early 2000s. The British phone maker tried to synchronize its Japanese product lineup to match its "global standard" handsets sold in other markets. But Japanese consumers were unimpressed by what struck them at the time as overly simple handsets that appeared to take a step backward in functionality.

Vodafone's Japanese market share started to slide, and in 2006, it sold its operations here to SoftBank.

Not every maker succumbs to this whirligig and, not surprisingly, those that don't aren't Japanese. Apple has announced a new iPhone model roughly once a year. Its iPhone 5 came out in September, and the company is not expected to introduce a new model until the fall. Samsung Electronics is focusing its resources on its sleek Galaxy S4 smartphone, which went on sale in April, a full year after its predecessor the Galaxy S3.

The scattershot efforts by Japanese handset designers could not compete with a single blockbuster product like Apple's iPhone, Mr. Kushida said. It turned out that Japanese consumers didn't want a new phone each season after all, he said, but one very well-designed one.

(Read More: Sony Gets a Corporate Reboot at E3 Gaming Show)

Since its release in 2008, the iPhone has been a best seller in Japan, becoming the most popular handset here. In 2012, the iPhone led all handsets with an overall 15 percent market share, ahead of former market leaders Sharp and Fujitsu, according to data provider IDC Japan.

Looking at smartphones only, Apple's dominance in Japan is even stronger: for the first three months of 2013, Apple's mobile platform market share came to 49.2 percent, compared with Android's 45.8 percent, according to Kantar WorldPanel, which tracks mobile phone sales in major markets.

Sony's Xperia Z, which runs on the Android operating system, was shaping up to be Japan's greatest challenger to the iPhone as well as to another global blockbuster, Samsung's Galaxy series. The Xperia Z won rave reviews for its sleek aluminum case, sharp five-inch display, fast-capture camera and high-definition video.

The Xperia Z has topped sales charts, selling at least 630,000 units in Japan in its first 10 weeks, according to the data provider, GfK Japan. DoCoMo had said that it aimed to sell about a million units in Japan, and analysts agree that sales here are now approaching that number. Sony's chief executive, Kazuo Hirai, has repeatedly promoted the Xperia Z's strong sales in Japan as one of the few bright spots in its money-losing electronics sector.

More From The New York Times:

Sony's Bread and Butter? It's Not Electronics
Sony Pondering Spinoff Proposal From a Big Investor
Sony Rebuffs New Call to Sell Entertainment Unit

Still, production of the Xperia Z has ceased for the Japanese market, and the model will no longer be available in Japan once stock runs out at retail stores across the country, both Sony and NTT DoCoMo said. "The Japanese market operates on a far quicker life cycle than markets overseas," said Yu Tominaga, a Sony spokesman in Tokyo. "Demand changes fast here, but we are set up to respond to that," he said.

(Read More: Consoles Still the 'Ultimate Gaming Experience': Sony Exec)

The big question is whether Sony can develop a coherent global smartphone strategy without being distracted by the ever-changing needs of its home market. A lot rides on Sony's gaining on its archrivals, Apple and Samsung, in the fast-growing smartphone market with the new Xperia A, which has been topping sales charts here since it went on sale in mid May.

Sony is starting to shift its focus beyond Japan's shores. On Tuesday in China it announced the Xperia Z Ultra, which Sony bills as the slimmest large-screen handset on the market. The company said it wasn't sure when that model might sell in Japan.

If Sony can score more successes overseas and gain market share there, it could start shifting the lopsided power dynamics between Japan's carriers and handset makers, analysts say. A wave of consolidation has shrunk the number of Japanese cellphone manufacturers to five, from 11 five years ago, bolstering the influence of the survivors. For its latest summer season, NTT DoCoMo gave top billing to smartphones from Sony and Samsung, breaking its tendency to give all manufacturers equal play to keep them competing.

And despite DoCoMo's many demands, solid support from a carrier with more than 60 million subscribers in a nation of 127 million people can be a boon. DoCoMo has been offering steep discounts on the Xperia A, and is advertising the model heavily in Japan's crowded subways and on television on behalf of Sony. That blitz has helped Sony more than double its share to 36 percent in the four weeks to early June, according to BCN, beating Samsung at 13 percent, and even Apple, whose share for that period dropped to 25 percent.

Still, Sony remains far behind Samsung in the global smartphone market. Sony shipped 30 million smartphones last year, compared with Samsung's 218 million, according to data compiled by Bloomberg. Apple shipped about 137 million iPhones.

"I think more people here are starting to realize that the way its mobile phone industry works is unsustainable," Mr. Kogure said. "And manufacturers like Sony have long realized that they can't remain beholden to the whims of the Japanese market."

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Rout Puts Gold on Pace for Largest Quarterly Loss in Decades

Rout Puts Gold on Pace for Largest Quarterly Loss in Decades: "Gold futures prices are on track for their largest quarterly loss since at least 1974, down 23 percent in the past three months. Similarly, silver has plunged 34 percent in the same period—its largest loss in at least 50 years."

Ticker Company Price % Chg. YTD Mkt Cap (USD Bil.) ABX Barrick Gold 15.02 -57 15 GG Goldcorp 22.64 -38 18.4 NEM Newmont Mining 27.47 -41 13.5 AEM Agnico-Eagle Mines 25.72 -51 4.4 BVN Compania De Minas Buenaventura 13.78 -62 3.8 FNV Franco Nev 32.45 -43 4.7 GFI Gold Fields 4.83 -55 3.6 RGLD Royal Gold Inc 39.09 -52 2.5 NGD New Gold Inc 5.76 -48 2.7 AUQ AuRico Gold Inc 4.16 -49 1.2 Bullion traded at a new three-year low of $1,223 on Wednesday, as investors sold the metal ahead of the Fed scaling back its aggressive asset-purchase program later this year. For the month, the yellow metal is down 11 percent, or its largest decline since September 2011. And from its October high of $1,798.1, gold is down 32 percent. The recent selloff in gold is putting a halt to a 12-year winning streak in which it rose 513 percent. The current loss this year is the biggest since 1981, when gold fell 33 percent. While gold is in free fall, many gold miners are getting hit the hardest. The market capitalization for 10 of the largest gold stocks stands at about $70 billion. That's about a third of the value of the total market cap of AT&T. —By CNBC's Giovanny Moreano. Follow him on Twitter: @g

Ticker	Company	Price	% Chg. YTD	Mkt Cap (USD Bil.)
ABX	Barrick Gold	15.02	-57	15
GG	Goldcorp	22.64	-38	18.4
NEM	Newmont Mining	27.47	-41	13.5
AEM	Agnico-Eagle Mines	25.72	-51	4.4
BVN	Compania De Minas Buenaventura	13.78	-62	3.8
FNV	Franco Nev	32.45	-43	4.7
GFI	Gold Fields	4.83	-55	3.6
RGLD	Royal Gold Inc	39.09	-52	2.5
NGD	New Gold Inc	5.76	-48	2.7
AUQ	AuRico Gold Inc	4.16	-49	1.2

Bullion traded at a new three-year low of $1,223 on Wednesday, as investors sold the metal ahead of the Fed scaling back its aggressive asset-purchase program later this year.

For the month, the yellow metal is down 11 percent, or its largest decline since September 2011. And from its October high of $1,798.1, gold is down 32 percent.

The recent selloff in gold is putting a halt to a 12-year winning streak in which it rose 513 percent. The current loss this year is the biggest since 1981, when gold fell 33 percent.

While gold is in free fall, many gold miners are getting hit the hardest. The market capitalization for 10 of the largest gold stocks stands at about $70 billion. That's about a third of the value of the total market cap of AT&T.

—By CNBC's Giovanny Moreano. Follow him on Twitter: 

@giovannymoreano

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Goldman Sees No Rebound for Chinese Stocks

Goldman Sees No Rebound for Chinese Stocks:

The Chinese central bank's efforts to soothe investor fears over a liquidity squeeze in the world's second largest economy had little impact with the country's stock market falling as much as 1.7 percent on Wednesday.

Following wild swings in the benchmarkShanghai Composite index that fell as much as 5.7 percent during the trading session on Tuesday, the People's Bank of China (PBOC) sought to reassure investors saying it has provided cash to some financial institutions facing temporary shortages and would maintain stability in the money market.

This was the PBOC's first significant announcement addressing volatility in inter-bank lending rates that began in mid-June. The central bank has largely taken a backseat amid the cash crunch advising banks to instead control lending.

Goldman Sachs strategists say while the central bank has somewhat alleviated the liquidity situation in the short run, this is unlikely to drive a turnaround in the slumping stock market.

(Read More: China Doing the Right Thing Taming Credit, Moody's Says)

"We see few near-term positive catalysts to drive a sustainable or meaningful rebound. Tight liquidity conditions may continue for some time, unfavorable funds flow from rising U.S. rates, and investors may hesitate to buy aggressively, given economic uncertainties," they wrote in a report late Tuesday, forecasting range bound trading in the market going forward.

China's 7-day interbank lending rate - a key indicator of market liquidity - eased to 7.2 percent from the 7.5 percent close a day earlier. However, it remains well above the one-year average of around 3 percent.

Lack of clarity over the government's reform agenda may also be a deterrent for investors, Goldman strategists added.

(Read More: China Stock Meltdown to Get Worse?)

"The new leadership's reform conviction is becoming more clear, but investors remain skeptical over the medium to longer-term plans, which may only be clarified at the Third Plenary Session in October," they said. 

China's new leaders have pledged to reform capital markets, the currency and fight corruption as the economy shifts from an investment-led to a more consumption driven growth model.

The Shanghai Composite is the worst performing market in the region, down 15 percent year-to-date, and currently trading at its lowest levels since 2009. Concerns over a shaky economic recovery and financial instability have weighed on stocks in the recent months. 

(Read More: Even the Resilient Yuan Is Feeling China's Pain)

Goldman, however, believes that going forward Chinese equities could limit further downside given record low valuations which could attract some investors. 

Countering this argument, Peter Elston, head of Asia Pacific strategy at Aberdeen Asset Management who recommends staying clear of Chinese equities said, "You could argue valuations are looking quite reasonable at over 1 times book value, but I know my boss would say he wouldn't even pay 1 times book for most companies in China."

"It's very hard to know anything about what's going on either within the economy or within the banks themselves, they are very opaque in terms of where they lend. How can you feel like investing in China or suggest that you know what's going on?"

By CNBC's Ansuya Harjani

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Sony launches water-resistant smart watch and smartphone with 6.4-inch screen | TechHive

Sony launches water-resistant smart watch and smartphone with 6.4-inch screen | TechHive:

Sony has launched the SmartWatch 2, an update of its Android-based watch, while the competition still seems largely to be in development mode. The company is also hoping to attract users that want a smartphone with a really big screen with the 6.4-inch Xperia Z Ultra.

Smart watches have been in the spotlight recently, with reports that Apple, Google and Samsung are all working on products. But Sony is already offering a third-generation device in this category with the SmartWatch 2, the company said on Tuesday at the Mobile Asia Expo in Shanghai.

The SmartWatch 2’s water- and dust-resistant body is made of aluminium and has integrated support for NFC. The watch has a 1.6-inch screen with 220 x 176 pixel resolution, a slight improvement over the previous SmartWatch, which had a 1.3-inch screen with a 128 x 128 pixel resolution, and Sony also promises improved battery life. The SmartWatch was preceded by the Sony Ericsson LiveView, which the company described as a wearable wireless micro-display.

Sony pitches the SmartWatch 2 as a second screen for Android-based smartphones. Compatibility has been improved over the previous generation, and the device should be compatible with most smartphones based on Google’s OS, according to Sony. It serves as a multi-functional watch, Android app interface and phone remote control. On the screen users can read email, text messages and calendar reminders. It is also integrated with social networks such as Facebook and Twitter. A new SDK will soon be available for app developers, with added support and new features for the SmartWatch 2.

The SmartWatch 2 will start shipping in September, Sony said, without elaborating on price.

Recently, Sony launched the Open SmartWatch Project, which will make it possible for developers to create and install alternative software on the already-released SmartWatch. Sony didn’t say whether the SmartWatch 2 will become part of the program.

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‘It’s the Bottom’ for Stocks: Gartman

‘It’s the Bottom’ for Stocks: Gartman: ""Yesterday's lows better hold, and I think that they probably shall," he said. "I was really quite impressed by the ability of the stock market to accept a uniquely bad GDP report, second revision of a report that was due six months ago, and it took it very well."

(Read More: Futures Hold Gains After GDP Report)

Gartman also revealed a bit more detail about his positioning.

"Heretofore, I've been long of stock and short of gold, and I've been long of the stock market and perhaps every once in a while trading crude oil against it, but this is the first time I've actually stepped up to own stock indices outright long," he said.

"I got lucky and bought, I think it looks like, the day of the lows," he said. "I wish that I'd had enough presence of mind to have bought in the middle of the night, Monday night and Tuesday morning, but I bought Tuesday morning."

(Read More: Gold's Decline Is Feeding on Itself, Pros Say)

Gartman reiterated that he saw a near-term bottom for stocks.

"It's the bottom for this run, and it should hold," he added. "If the bottom doesn't hold, I'll go to the sidelines."

For the past week and a half, Gartman's trade was long stocks, long crude and short gold in U.S. dollar terms.

(Read More: Why You Should Still Own Gold: Pro)

"I think gold can rally $25, $30 from here, but it is a bear market in gold in dollar terms," he added. "Stay away from it. I think If you own some and you get a rally, get rid of it. It is a long-term bear market."

Gartman, who bought S&P futures at 1,575, noted his timing."

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Goldman Sachs: We Were Wrong, but Stocks Will Rally

Goldman Sachs: We Were Wrong, but Stocks Will Rally: "I think that equities are still the only asset class that offers a reasonable enough valuation and fundamentals to generate a decent return over the medium term," he told CNBC Tuesday.
Oppenheimer told CNBC that the sell-off in equities alongside bonds had come as a surprise, with Goldman Sachs reiterating several buy recommendations this year for equities. Oppenheimer himself penned a report titled "The Long Good Buy; The Case for Equities" last year describing stocks as a once-in-a-lifetime opportunity."
We didn't anticipate this particular transition that we are seeing at the moment. What we did believe is that at some point bond yields would rise. We felt that the initial stages of bond yields rising would be actually be accompanied by rising equity prices because both would reflect an increase in growth expectation." he said, adding that investors are currently deciding which assets have become overvalued and this move lower will be temporary.We believe the next phase for equities will really be driven by fundamental profit growth as opposed to valuation expansion.""With mounting threats of QE exit and a China slowdown, the outstanding rally in equity markets might come to an end," Vincent Cassot, a derivatives strategist at Societe Generale said in a research note on Monday.
"We advise investors who still see some upside potential to engage in an active stock replacement program - selling stocks and replacing them with calls. It will allow them to secure the gain and keep some upside exposure while leveraging the cheap volatility environment."

"The stronger the correction, the sooner it is likely to end. From an economic standpoint, investing in equities is likely to prove worthwhile again only towards the end of the third quarter of 2013]," the bank said in a research note on Friday.

"But as the exact timing is impossible to predict and expected returns are disproportionately high one year ahead, investors who wish to purchase equities should react sooner rather than later. As interest rates remain low, the hunt for yield continues and the growing demand for equities means that corrections are likely to be frequent but short-lived."

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Guess Who Was Buying Amid the June Sell-Off

Guess Who Was Buying Amid the June Sell-Off: "Paul O'Connell of State Street Associates, who also developed the index, added: "While the prospect of an end to quantitative easing in the U.S. has caused a spike in bond yields and a sell-off in equities, institutional investors have viewed this as an opportunity to add equity risk at the expense of bond holdings.""

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Even the Resilient Yuan Is Feeling China's Pain

Even the Resilient Yuan Is Feeling China's Pain: ""We have been looking for a correction lower in the yuan for a few reasons," said Mitul Kotecha, head of global currency research at Credit Agricole in Hong Kong. "Its upward move had looked overly rapid at a time when other Asian currencies were weakening. Also, economic growth has been weakening and that has added a weakening bias to the currency.""

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Chinese index plunge brings down Dow | Boston Herald

Chinese index plunge brings down Dow | Boston Herald: "Stocks fell yesterday, thanks to uncertainty in the Chinese economy and Fed policies.

The Dow Jones industrial average lost 140 points yesterday, largely in response to a 5 percent loss in the Shanghai Composite Index, the index’s biggest loss in four years.

China’s latest economic indicators showed that the world’s largest economy is slowing down. This comes on the heels of a rough week last week when Ben Bernanke, chairman of the Federal Reserve Bank, said the bond buy-back programs could come to an end in the near future."

The rising bond yields are a signal from investors that they are not confident in the Fed’s policies and decisions.

When interest rates rise, “people believe the feds can’t get the job done,” said Christine Armstrong, senior vice president at Morgan Stanley. If the Fed cannot prevent another extended economic downturn, “it could be the beginning of a long-term trend that could be really bad.”

The performance of the stock market in the coming months largely will depend on the policy decisions made by the Fed, Armstrong said.

“The guys in charge have to be pretty firm,” she said.

Adding to domestic concerns is uncertainty in China’s economy, the world’s largest. The Shanghai Composite Index plunged yesterday.

“China really has kept us out of a global recession the past few years,” Armstrong said. “If they sneeze, the whole world could get pneumonia.”

The Dow, which finished at 14,659.56 points, is down 5.7 percent from its all-time high last month.

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New man takes over train ops at SMRT | AsiaOne Ride

New man takes over train ops at SMRT | AsiaOne Ride:

SMRT has a new man helming its entire train operations.

The transport operator announced yesterday that it has appointed its senior vice-president for maintenance and engineering, Mr Lee Ling Wee, as its new executive vice-president for trains.

Mr Lee, 47, took over from Mr Khoo Hean Siang on Monday. Mr Khoo, 65, has retired after serving SMRT for more than 25 years.

He will take charge of all train operations, engineering and maintenance for the North-South, East-West and Circle Lines and for Bukit Panjang LRT.

Mr Lee, who joined SMRT in May this year, was previously head of the air engineering and logistics department at the Republic of Singapore Air Force. He is planning a restructuring of the trains division that includes placing maintenance teams in the units overseeing the North-South and East-West lines and Circle Line.

Previously, SMRT had a separate maintenance unit. SMRT said this will allow each group to "flag and address all maintenance-related issues with immediacy".

A new systems and engineering group has also been created.

It will be headed by Mr Ng Bor Kiat, 56, who was director of corporate development with the Ministry of the Environment and Water Resources. SMRT will also form a new inspectorate to conduct system-wide "checks and balances" on the train group.

With Mr Lee's appointment, the bulk of senior management under former chief executive Saw Phaik Hwa has been replaced.

Mr Lee expressed his belief that the realignment would help SMRT rise to the challenges "posed by a growth in population, an increase in ridership, and an ageing rail infrastructure".

Get a copy of The Straits Times or go to straitstimes.com for more stories.

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US Stocks Seen Higher on Fed Officials' Comments

US Stocks Seen Higher on Fed Officials' Comments: ""I'm not in favor of going from wild turkey to cold turkey overnight," Fisher, a voting member of the Federal Open Market Committee (FOMC) next year, said in a speech"
Plus, Minneapolis Fed President Narayana Kocherlakota said markets were wrong to view the central bank as having become more hawkish on the need to tighten monetary policy. Kocherlakota, who will also be a voting member of the FOMC next year, emphasized that policy will remain accommodative "for a considerable time" after the end of quantitative easing.
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Exit From the Bond Market Is Turning Into a Stampede

Exit From the Bond Market Is Turning Into a Stampede:

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Is Meltdown in China Stocks About to Get Worse?

Is Meltdown in China Stocks About to Get Worse?: "After the market close, the China central bank sought to reassure markets, saying that the seasonal factors leading to tight liquidity will fade and that the bank will guide market rates to reasonable levels."
The seven-day repo rate - a gauge of the availability of funds in the interbank market - saw wild swings on Tuesday, trading between 6 percent and 16 percent, according to trading firm IG Markets, much higher than the one-year average of around 3 percent."At the end of the day, valuations will always play a part, if it gets to a certain level where it becomes ridiculously cheap the QFII's [Qualified Foreign Institutional Investor] will increase their weightings on Chinese equities. And on top of that you have the government holdings and pension funds that will support the market also if they want to," said Tay of UBS.

"I don't' think it will collapse," he added.

Chen Jiahe, analyst at Cinda Securities, in fact, advocates picking up Chinese stocks right now.

(Read More: Mobius: China's Problems as Big as US Subprime)

"The market is overacting I believe it is an excellent opportunity to pick up blue chip companies. Frankly, the Chinese economy is still healthy and valuations are still cheap. This is time for bottom fishing in the long term," Chen said, noting that A-shares are trading at the cheapest price to book ratio on record at 1.3

By CNBC's Ansuya Harjani

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Is China Right to Brush Aside Credit Squeeze?

Is China Right to Brush Aside Credit Squeeze?: ""We think the PBOC [People's Bank of China] is doing the right thing, to prick a bubble before it's too late," Kelvin Chan, "

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Bond Fund Returns Could Shock Jittery Investors

Bond Fund Returns Could Shock Jittery Investors: "Corporate bonds, which till then had gained 0.72% for the year based on the Barclays investment-grade index, have now lost 3.74% in 2013 - a staggering 450bp U-turn in just four weeks."
The first-ever bonds from Apple, for example - US$17 billion issued at the end of April - have shed nearly three-quarters of a billion dollars in value since then.
'via Blog this'"This is not going to be a situation where people will look back and think: wow, it was the end of the cycle, we should have sold," said Ashish Shah, head of global credit investment at AllianceBernstein.

"This is a buying opportunity."

Dr. Doom? Marc Faber Sees Stock Buying Opportunity

Dr. Doom? Marc Faber Sees Stock Buying Opportunity: ""New highs in emerging markets and in high yield bonds are out of the question and if it happened in the S&P, which I don't believe, it would be driven by very few stocks. Longer term the market is far from oversold it still has considerable downside risk everywhere," he said."
He said that if he looked around as a trader, he would rather buy the U.S. ten-year treasury "which is very oversold, where everyone is bearish and where sentiment is terrible" rather than the S&P "where everyone is still relatively optimistic."
"Treasury bonds, gold and equity markets are oversold in the near-term and they can rebound for the next ten days or even the next month," Faber, the author of "The Gloom, Boom & Doom Report," said on Tuesday.
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Chinese Buyers Flee Hong Kong for Overseas Property Markets

Chinese Buyers Flee Hong Kong for Overseas Property Markets: "Cash-rich mainland Chinese, who some in Hong Kong blame for pushing property prices to record highs, have fled the city's real estate market, scared off by cooling measures that have sent them scouring overseas for better options."

"We can only see pictures of the project now so that's why we have to go to London to take a look at the environment of the building," said Christina Chen, who flew with her husband from Shanghai to Hong Kong to check out plans of a development at London's Olympic Park before flying there herself to see it.

"The return on investment is much higher in London than in China and Hong Kong," she said in a room at the Landmark Mandarin Oriental, a popular choice for property exhibitors.

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