S-chips make a comeback in Singapore

(17-01-2011, 08:53 PM)SLC81 Wrote: It will be very profitable but you also can lose lot of money if you are late in the game so do remember the 10% cut loss rule

Amen to that.

1)Foreland (in at 13c, divested at 6.5c)
2)China Fibretech (in at 8c, partial divestment at 9.5c)
3)Eratat Lifestyle (in at 14.5c, partial divestment at 25.5c)
4)Timewatch (is this an S-Chip?)

S-Chips are the new CLOB.

Those who never learnt their lessons after getting burnt from CLOB deserved to be burnt again from investing in most S-Chips.

My S-Chips counters are bleeding; and I deserved it for not learning from CLOB. My only consolation is that my position is small relative to my overall portfolio.

So now I just say no to all S-chips. A bit drastic becos I know that even gems exists in S-Chips. But when you can't always trust the books then the level of difficulty increase exponentially. I rem China Milk was a darling and it looks to be strong fundamentally with high margin. It got into some trouble too also rt?? Other so-called gems that ended up with corporate scandal include FerroChina, China Beauty etc.

So I rather be safe than lucky.

Sorry I am a bit suaku. What is CLOB?

Just a thing to add, S-chips are Chinese-run companies with business operations predominantly in mainland China. It may sometimes be easy to associate companies with operations in China but not managed by (China) Chinese. That, imo, is one of the key criterias which is often overlooked.

I got out of China Milk early all thanks to d.o.g. After Investing for a year plus, I fully appreciate d.o.g efforts to criticise and highlight important investment pothole

Although I fell into another pothole after that, I vowed to not touch any stocks with earnings & balance sheet with RMB. Haha

(18-01-2011, 09:35 AM)Blackjack Wrote: Sorry I am a bit suaku. What is CLOB?

Central Limit Order Book. As to the details, perhaps a more experienced forumer can provide them? I was not even investing yet (still schooling) when I heard about the CLOB fiasco.

And yes be discerning when choosing a company to invest in. If you feel uneasy about an entire sector or type of shares (e.g. S-Shares), then it is best to avoid in order to have peaceful nights!

(18-01-2011, 09:35 AM)Blackjack Wrote: Sorry I am a bit suaku. What is CLOB?

Just a thing to add, S-chips are Chinese-run companies with business operations predominantly in mainland China. It may sometimes be easy to associate companies with operations in China but not managed by (China) Chinese. That, imo, is one of the key criterias which is often overlooked.

It is the Malaysian Saga.

http://stocktaleslot.blogspot.com/2006/0...-saga.html

Some S-Chips are like you mentioned. Operating in China but managed locally. I think Sinomem is one of them.

For S-Chips, it is a volatile sector. Some key criterias are a must.

The ability to pay dividends (not from placement/right/IPO funds but from internal profits) barring that, doing a share buy-back if it is trading at a ridiculous valuation.

Investor relations is a must as there is no easy way to obtain information about operating conditions. Some companies which merely IPOs and leaves their stocks to languish leaves much to be desired.

A-Chips (American listed China Companies ) have been caught posting 2 sets of results. One internally and one in the States.

(18-01-2011, 09:59 AM)iisterry Wrote: A-Chips (American listed China Companies ) have been caught posting 2 sets of results. One internally and one in the States.

This is not surprising at all. When I was doing accounting and financial review in Vietnam and China, many companies kept two sets of books, one for internal Management purposes, and one for reporting purposes to the Regulatory Body. Some even had three! The third was for Tax authorities.

Am not THAT experienced, but i don't think the CLOB fiasco should be equated with S-chips. The former fell apart largely because of politics and competing interests in the SG-MY saga. M'sian stocks were stopped from being traded in Sg and the whole un-winding led to much grief. Today, you can buy M'sian stocks, albeit in a slightly different format. Somehow i get the feeling that good M'sian stocks can be rather profitable. The market can be quite vibrant although can't say the same about the supporting administration/governance infrastructure. So be careful, not an inducement here.

S-chips issues have basically been about cooked books and the in-adequacy of auditors and regulators to ensure that the business is bona-fide.

This is not to mean that both may not or do not suffer similar afflictions. Just that the actual incidents were different. Perhaps more experienced investors (to borrow MW's wonderful choice of words) want to comment more.

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(18-01-2011, 10:01 AM)Musicwhiz Wrote:

(18-01-2011, 09:59 AM)iisterry Wrote: A-Chips (American listed China Companies ) have been caught posting 2 sets of results. One internally and one in the States.

This is not surprising at all. When I was doing accounting and financial review in Vietnam and China, many companies kept two sets of books, one for internal Management purposes, and one for reporting purposes to the Regulatory Body. Some even had three! The third was for Tax authorities.

Am not an accountant, but is it wrong per se? After all, there is management accounting and tax accounting. Different books for different views?

(18-01-2011, 10:01 AM)Musicwhiz Wrote: This is not surprising at all. When I was doing accounting and financial review in Vietnam and China, many companies kept two sets of books, one for internal Management purposes, and one for reporting purposes to the Regulatory Body. Some even had three! The third was for Tax authorities.

Is this really true? We always hear jokes about this but I never took it seriously until recently. Guess I am naive.

(18-01-2011, 10:08 AM)mikh Wrote: Am not THAT experienced, but i don't think the CLOB fiasco should be equated with S-chips.

Yes you are right. But my comment about S-Chips as the new CLOB is just limited to the observations that S-Chips are speculated excessively on SGX without much regards for the fundamentals. On any given day, I dare say at least 50% of the top 20 vol counters are S-chips.

It was the same in the CLOB days. CLOB counters were excessively speculated and accounted for the bulk of the trading on SES. I still rem how counters that were linked to this or that M'sia politician (Anwar-linked companies were darlings then) are chased up beyond its fundamentals.

Just like S-chips, there were gems in CLOB counters too. However I think the simple fact remains that most investors who put money in CLOB counters eventually got burned. (In fact I still have 1 CLOB counter in my CDP account!). I'm willing to bet that its probably the same for people who put money into S-Chips counters especially during IPO.

(18-01-2011, 10:32 AM)lonewolf Wrote:

(18-01-2011, 10:08 AM)mikh Wrote: Am not THAT experienced, but i don't think the CLOB fiasco should be equated with S-chips.

Yes you are right. But my comment about S-Chips as the new CLOB is just limited to the observations that S-Chips are speculated excessively on SGX without much regards for the fundamentals. On any given day, I dare say at least 50% of the top 20 vol counters are S-chips.

It was the same in the CLOB days. CLOB counters were excessively speculated and accounted for the bulk of the trading on SES. I still rem how counters that were linked to this or that M'sia politician (Anwar-linked companies were darlings then) are chased up beyond its fundamentals.

Just like S-chips, there were gems in CLOB counters too. However I think the simple fact remains that most investors who put money in CLOB counters eventually got burned. (In fact I still have 1 CLOB counter in my CDP account!). I'm willing to bet that its probably the same for people who put money into S-Chips counters especially during IPO.

Oh, I see what you meant. I got burnt by CLOB and S-chips too.
I reckon many M'sian and Chinese local players continue to chase stocks in similar fashion esp when it gets hot.