Friday, November 16, 2007

Bought HSBC - my first bluechip

STI dropped 36 pts (1.05%) to close at 3440 with a volume of 1.82 billion transacted. Candlestick shows a reversal pattern, coupled with the low volume and sitting on EMA200, we should be heading for another rebound at least on Monday. Of course, this depends on how well Dow behaves.

I entered HSBC listed at HKSE, 1 lot at HKD 137. Their 1 lot is equivalent to 400 shares. I'm not so sure about the charges involved besides the contract value, so I need to ask my broker to enlighten me on this issue. At a little more than SGD10,000, it's the most expensive buy ever to date. Expensive is very subjective - one must question expensive to what?

Price vs value, it's easy to look at price but impossible to look at value. At most, we can estimate the value of a stock whereas the market price can be seen from quotes. I admit I'm not a pro at FA but by just looking at certain key ratios like PE, yield and EPS, HSBC seems to be a steal at SGD25 per share. The other comparable local bank is DBS, but it's still worlds apart. I'll do a more detailed analysis when I'm ready. Buying it is just a start.

Quite a lot of unanswered questions:

1. What is the transaction cost of buying HK shares? I understand besides usual clearing fee etc, there's also a charge for storing the scriptless shares under Poems (I'm using that) per month. Blah blah...

2. What's the transaction cost of getting the dividend in cash and in script? HSBC practice giving out dividend in the form of cash, new shares script and a combination. Still not sure what the procedure is like.

3. What is the exchange rate they used to convert the HKD transactions to SGD?

I'll ask my broker to give me some detailed answers.

Singpost hit my target of 1.10 and rebounded. Very strange buying/selling taking place over at singpost. There's still no announcement to why the trading volume suddenly doubles these few days. Strange indeed.

Still hope to get rid of 3 holdings: CSC, Yongnam and GK Goh, then I'll be set for the bear anytime. It'll free up a lot of my capital that I can use to purchase more HSBC or keep as cash. Should I take the 2k losses? I'll think about it over the weekend.

Dow futures at +43 now. One big event that can catalyst the new year rally - that China finalised the date for the thru-train buying of HK shares by their citizens. Will open up a flood of liquidity that will enter HK markets. STI will follow and lead us to 4300 :) haha, my wishful thinking.

Have a great weekend!