Regulatory Pain for Alibaba, Tencent may Not Be Over

Global Times: CPC’s disciplinary agency renews anti-corruption drive, to fight new challenges of ‘capital-power collusion’

The Communist Party of China's (CPC) top disciplinary agency pledged to maintain a strong and persistent crackdown on corruption in a communiqué released Thursday, and the document also said the Party will actively handle "the new challenges and new situations" of the anti-corruption campaign, including strengthening investigations and punishment behind the "disorderly expansion of capital" and monopoly of some online platforms, vowing to cut off the collusion between capital and power.

The communiqué also stressed that the corruption behind "disorderly expansion of capital" and monopoly of some online platforms should be investigated and punished, and the ties between political power and capital should be cut off.

Zhu said this is a new challenge which emerged in the past 10 years, as the fast development of China's economy has brought huge changes in social media networks, IT industries and digital economy, and some capitalists have gained unprecedented influence as some of their products have become the key parts of public goods of the nation.

Without strict law-enforcement and legislation that keep up with the times, there will be vast space for corruption and misconduct, and the ambition of some capitalists will expand to gain political power and undermine the socialist nature of our country, said analysts.

"The capital is showing its intention to cross the line," said Wu Xinwen, a professor and expert on Chinese politics at Fudan University in Shanghai, noting that some capitalists are no longer satisfied with only having economic power, but intend to expanding their influence to public media and education to eventually gain political power, and without restrictions and management, the capital could overrun politics and society in China.

Although the lines are drawn differently, U.S. tech companies are also engaged in violation of political and economic norms, the latest being Google's abuse of its ad system.

WeChat Covers Everything

Bloomberg: Life in the People’s Republic of WeChat

In China, 90 percent of internet users connect online through a mobile device, and those people on average spend more than a third of their internet time in WeChat. It’s fundamentally a messaging app, but it also serves many of the functions of PayPal, Yelp, Facebook, Uber, Amazon, Expedia, Slack, Spotify, Tinder, and more. People use WeChat to pay rent, locate parking, invest, make a doctor’s appointment, find a one-night stand, donate to charity. The police in Shenzhen pay rewards through WeChat to people who rat out traffic violators—through WeChat.

Battle Between Wechat Pay and Alipay

FINTS: Online battle upgrade between Wechat Pay and Alibaba

Tencent nearly doubled its mobile-payments share to 20% in 2015 from 11% in 2014, while Alipay’s market share fell to 68% from 82%. Despite the growth, Tencent’s payment business has not gained a profit, while Alibaba’s affiliate Ant Financial Services Group declined to say whether its payment business has been profitable. On the other hand, Tencent stated that it would continue to invest in WeChat Pay since it expects revenue to come in the future.

Consumer Credit Forecast to hit 37 Trillion by 2019

EO: 混战消费金融

consumer credit market will usher in huge opportunities for development. Whether the central bank credit card, consumer finance companies, or to BAJ (Baidu, Ants Financial, Jingdong Finance) as the representative of Internet financial institutions are planning how to win a share of one trillion blue ocean market. 2016 government work report will undoubtedly aggravate the market competition.

"In the nationwide consumer finance company pilot, to encourage financial institutions to innovative consumer credit products." 2016 government work report the case statements. Market from banks is expected, by 2019 China will be the scale of consumer credit more than 37 trillion. However, market participants all, who better to win consumers?

Currency adjusted that might be more like a 50 trillion market.

China Races Ahead In Financial Innovation

Bloomberg: A Hundred Apps Bloom in China as Millions Bank on Their Phones

Financial innovation is bubbling up around the globe, but China is where digital banking, investing, and lending have gone mainstream. Technology companies armed with financial apps are challenging banks and other intermediaries for a market with 1.3 billion people and $7.8 trillion of deposits. Tencent’s WeChat (called Weixin in Chinese), Alibaba’s Alipay arm, and Baidu are leading the way with digital wallets that let consumers manage their money via their phones.

“Financial innovation is being discussed everywhere—in New York, London, San Francisco, Hong Kong,” says Zennon Kapron, managing director of Shanghai-based consulting firm Kapronasia. “But mainland China is where it has gone beyond talk and is really having an impact. What we’re seeing here is the future of global banking.”

...Song Fuqiang, who lives about 370 kilometers (230 miles) from Beijing in Hebei province, owns a textile business and uses Alipay every day. The 31-year-old has even put about 40,000 yuan into Alibaba’s money market fund, Yu’E Bao. “Checks are so outdated, so few people use them,” he says. “I don’t bring money when I go out. I use Alipay to pay for everything.”

The irony is China is probably the least friendly to banking competitors because the industry in mainly state-owned. While these firms may do well, the government will tilt the playing field in favor of the SOEs.

NYT: Disney, Time Warner and Other Media Shares Fall as Investors Worry About TV’s Future

Alibaba and Tencent Battle Over Hongbao

Caixin: Not in Holiday Spirit: Alibaba and Tencent Spar over Virtual Hongbao

Internet giants Tencent Holdings Ltd. and Alibaba Group Holding Ltd. have gotten into tussle over the giving of virtual hongbao, or red envelopes.

Giving hongbao to relatives and friends for Spring Festival, also known as Chinese New Year, is a tradition that most Chinese people enthusiastically follow.

Tencent put a spin on the old custom last year, when it allowed users of its popular WeChat messaging app to send each other virtual hongbao that added real money to their bank accounts.

Alibaba also allowed users of its Alipay payment service to give and receive red envelopes online, but the feature was not nearly as popular as WeChat's. Jack Ma, Alibaba's chairman, said this setback was his firm's "Pearl Harbor moment" and called for better defense of what has been viewed as Alipay's territory – mobile money transfers.

This year the two firms are blocking each others' hongbao on their platforms.

Caixin called WeChat and QQ, and both said their refusal to accept Alipay hongbao was fair because Alibaba has a longstanding policy of not accepting payments from Tencent.
"We hope to have cooperation from a fair and mutually beneficial perspective," a QQ spokesman said.

Why did QQ block Alipay hongbao, Caixin asked?

"We'll talk about this after Alibaba lifts its ban on (Tencent) platforms," the spokesperson said.

WeChat's reply was similar.

Alibaba's websites, including the popular shopping sites Taobao and Tmall, do not allow shoppers to use Tenpay, Tencent's payment system, or WeChat to complete transactions.

WeChat, in return, blocks all Taobao and Tmall links. Stores on WeChat cannot accept payments from Alipay either.

Virtual Credit Card Risks

The PBOC is fleshing out some of their concerns about virtual credit cards. It boils down to this: the tech companies were going to break the model for credit card issuance.

China Blocks Alibaba, Tencent From Offering Virtual Credit Cards

“The PBOC could be worried about payment risks involving QR codes,” said Wang Weidong, an analyst with Shanghai-based consultant IResearch. “As for the credit cards, a lot of the credit risk calculation is based on data provided by Tencent and Alibaba, so the central bank might be worried about their models.”

The central bank could allow such virtual credit cards after it reviews and steps up regulations, Wang said. Li Dongrong, deputy governor of People’s Bank of China, said March 3 the central bank is studying ways to regulate online finance.

They were planning to use new models for credit risk based on the data they collect on their users, and that has the PBOC wanting to review the situation.

“We suspect that there may have been some behind-the-scenes lobbying done by the major banks in the wake of the National People’s Congress,” said Jim Antos, a Hong Kong-based analyst at Mizuho Securities Asia Ltd. “The banking lobby in every country is a powerful force to be reckoned with, and the same is undoubtedly true in China.”

Tencent, led by billionaire Ma Huateng, announced plans to invest at least 10 billion yuan in the nation’s Qianhai economic zone near Hong Kong that was created as a testing ground for more liberal financial policies.

Tech companies are literally racing ahead of the banking sector, they are moving faster than the regulators can handle as evidenced by the PBOC admitting they only learned of virtual credit cards from the news.

What are E-Credit Cards?

E-credit cards are like regular credit cards except they have much lower credit limits and, of course, are not tangible. Instead, they appear to users as features built into the mobile phone apps WeChat and Alipay. They allow users to make purchases on credit and pay later from their bank accounts. The companies are still working out the details about interest rates, expiration dates and the length of payment periods.
WeChat users will see a virtual credit card in the "My Bankcard" section together with other bank cards they have linked to the app. They can check their payment history and other card information by clicking on the e-credit card. The Alipay version is presented in a similar way in its app.

What's in it for China CITIC Bank?

The bank will be responsible for chasing down payments, but the risk from e-credit cards is relatively low compared to conventional cards because owners of virtual cards have predictable shopping patterns, a source from the banking industry said. But then the profitability is also lower than traditional credit card business.

Virtual Credit Cards Paused, Not Stopped in China

ZeroHedge had this up in late evening EST.
Chinese Authorities Halt Virtual Credit Card Payments; Tencent, Yahoo Crashing

This afternoon, 21st Century Business Herald reports that the virtual credit cards are halted, not stopped, because central bank officials only learned about them from the flurry of media stories out in the past few days.

Google Translation:
21 Exclusive decryption: Why is the central bank "pause" Virtual Credit Card?

Core Tip: the 13th central emergency dispatch pause a virtual credit card business, 21st Century Network was informed by officials from the central bank, the central bank had on the public-facing Alipay, Tencent network virtual credit cards issued regarding the ignorant. Alipay and Tencent did not advance to the central filing the relevant circumstances. The central bank is at 15:00 on March 13 more than the document issued to Hangzhou and Shenzhen branches of the central bank, there should not yet been issued to the relevant third party payment agencies.
21st Century Network exclusive report on March 13, the central bank of a 21st century network access to internal documents show, send urgent documents "under the People's Bank of China Bank Payment and Settlement Division comments on the suspension of payments under business Bowes line barcode (QR Code) payments The letter "halt Alipay, Tencent's virtual credit card products, but stopped there barcode (QR Code) payment and other payment services face to face.

The central bank is at 15:00 on March 13 more than the document issued to Hangzhou and Shenzhen branches of the central bank, there should not yet been issued to the relevant third party payment agencies.

Central bank notification said that the line barcode (QR Code) paid to break the traditional business model craft terminal, which is directly related to the level of risk control information security and safety of customer funds. Virtual Credit Card credit card to break the existing business model in implementing customer identification obligation to protect customer information security pending further study.

In the notice requirements of the Central Bank, to immediately suspend the line barcode (QR Code) under payment, virtual credit card related businesses, to take effective measures to ensure the smooth transition of the business during the suspension.

21st Century Network call the first time the central bank, the central bank payment and settlement company officials confirmed this file, said the central bank has issued a document is indeed an emergency suspension of Alipay, Tencent virtual credit card business.

However, the officials repeatedly stressed that the 21st Century Network virtual credit card, the central bank is "pause" rather than "halt", "Pause is your first wait, wait for us to figure out to say."

He further said that for the two-dimensional code, including payment, including innovative business virtual credit card, related to a number of new technologies, new processes and new identification technologies, such as risk assessment, consumer recognition, in the traditional the rule is not covered, the central bank needs to further clear.

The official admitted that the central bank had on the public-facing Alipay, Tencent network virtual credit cards issued without the knowledge of the issue and said that the central bank is also seen media reports to know Alipay, Tencent made a virtual credit card products not previously be reported to the central bank.

The official revealed that the central bank has issued a document requiring payment Bowes before March 31 will be "relevant product details, content management systems, operational processes, institutional cooperation and profit distribution mechanism, customer rights protection mechanisms, emergency response, such as" a written report to the territorial supervision of banks.

The official website revealed the 21 century, the document belongs to the central bank internal documents, according to the principle of territoriality of banking supervision, the central bank is at 15:00 on March 13th more than the document issued to Hangzhou and Shenzhen branches of the central bank, there should also not issued to the relevant third party payment agencies. This information is also confirmed from the side Alipay why Tencent response has not yet been received the message.

Finally, the officials made it clear that the Bank of Internet financial innovation supportive, have been mentioned in the government work report, no doubt, but there will certainly be among the innovation risk, it is also unavoidable. Regulatory responsibility is to encourage innovation, how to maximize the prevention of systemic risk that is ultimately to protect the interests of consumers and the stability of the entire financial system.

Chinese Chat Money Markets See Interest Rates Surge and Then Plunge; Chinese Chat Programs Have Money Market Funds?

First, an introduction to Chinese online funds. If you didn't know, the online marketplace company Alibaba (the Ebay+Amazon+B2B marketplace), Sina (owner of China's Twitter, Weibo), Baidu and WeChat (part of Tencent, which is China's social networking/chat juggernaut) now offer investment funds for users. Alibaba's grew out of allowing customers to use idle cash in their Alipay accounts, a service that is possible thanks to banking and financial sector reforms. Seeing the success of Alibaba's product, competitors have joined the fray.

How successful is Alibaba's Yu E Bao? It launched in June 2013, a mere eight months ago, and one of its funds is now the 14th largest money market fund in the world, with more than $40 billion in assets. Let that sink in for a moment.

Tianhong's Alibaba mutual fund grows to second largest in China

Tianhong Asset Management, the sole partner of online giant Alibaba in the sale of money market funds on the company's e-commerce platform, is on its way to overtaking China Asset Management to become the mainland's biggest mutual fund manager.

But rivals may already be waiting in the wings.

Tianhong's total assets under management now stand at about 260 billion yuan (HK$330.7 billion), and the upstart could soon surpass the industry's long-time leader, China Asset Management - which oversees about 306.1 billion yuan - thanks to the growing popularity of online shopping.

China Asset Management has been the country's biggest asset management firm since 2007.

"Tianhong's success is not the end of innovation but a beginning, to look at the combination of investors and distributors in China and how such an online distribution model could be applied to more specific products," said Howhow Zhang, head of research at Shanghai-based consultancy firm Z-Ben Advisors.

"The success of such an initiative would depend on what kind of scale you could achieve, since this is a low-fee business model."

Tianhong charges only a 0.3 per cent management fee for its money market fund, a fifth of the 1.5 per cent on average that a mainland equity fund manager charges.

In June, Alipay, Alibaba's e-commerce payment platform, and Tianhong developed a new funds and payment platform called Yu E Bao, which translates as leftover treasure, that allows Alipay customers to convert the idle cash in their accounts into units of a money market fund.

By Friday, the fund had grown in size to 250 billion yuan, making it the largest single mutual fund product in China and the 14th-largest money market fund in the world, according to Tianhong.

......"We have over 100 trillion yuan of cash sitting in the Chinese banks generating almost nothing … it would be inevitable to have intermediate internet services in China trying to tap those massive savings," Zhang said.

To put that in perspective, imagine Google or Paypal offered a money market fund that in less than a year, collected more assets than say, Blackrock or Vanguard. Not going to happen in the U.S. due to having deep and developed financial markets, but the speed at which change is happening should give pause to both bulls and bears on China.

Yu E Bao Deals with the Pressure of Being No. 1

Caixin: How do you allocate funds from Yu E Bao?

Wang: About 80 to 90 percent of the money from Yu E Bao accounts will go to interbank deposits and the rest to safe bonds. Interbank deposits are banks' wholesale businesses with each other. The demands are vibrant.
We allocate investments and match maturities based on data analysis. At different stages a bank's ability to take deposits varies. On one hand, there are banks that can only take, say, 10 billion yuan, but we have 11 billion yuan that needs to be taken care of. That is when we hit the limit of their deposit-taking ability. We can deal with other banks or lower the interest rates we charge. On the other hand, a larger size brings greater negotiating power. We can ask for higher interest rates.

We pay the most attention to liquidity management. So far, we have seen a net increase in Yu E Bao investment. That means we face the pressure of finding investment opportunities for new funds every day.

Do you often get higher interest rates from small banks?

That is generally the case, but large banks may offer higher rates if they are caught short of cash. This is a matter of less concern to Yu E Bao because we limit our investments to only 29 banks that are on our white list. We don't venture outside the list. Most of those banks are state-owned or large joint-stock banks. We think it is not worth the risk dealing with small banks. It is not that we think they would actually default on loans. But we would like to avoid the risk altogether to be prudent.

There are many wealth management services similar to Yu E Bao. What is the strength of Yu E Bao?

First, the core value of our team is prudent wealth management. We have placed risk control in the highest place. Second, Yu E Bao operates on Alipay (the third-party payment service run by e-commerce giant Alibaba Group). It is connected to more than 49 million ordinary people and retail investors. That makes it particularly deep-rooted in society. Third, it brings the function of money market fund investment and payment together. The user experience is good. There are, of course, other funds being developed with a payment function. But we have been at the frontier.

What is the impact of interest rate changes on Yu E Bao? Some people say Yu E Bao's yield will stop rising. What is your view?
The yield of Yu E Bao goes with the cost of capital in the market. In December, there was a rebound in money rates, and the yield of Yu E Bao also increased. When money rates were low, the yield of Yu E Bao was low as well.

We will try to repay investors with moderate returns on investment. If the money market goes weak, it is normal for our yields to fall. But it would not happen all of a sudden. Neither do we promise to deliver any rate of returns. Yields are not our primary concern. We are most concerned with risk control.

The U.S. payment company PayPal introduced a money market fund service in its second year. It shut it down in 2011 as investment shrank. Do you worry that this may be where Yu E Bao is headed?

We have been thinking about this since the first day Yu E Bao was launched. Now that we have grown, whether we will become a second PayPal is more of an issue. The puzzle is not only ours. It is true for the entire money market fund industry.

A big question is: If China has a zero interest rate like the United States, is there still a reason for money market funds to exist? This may not happen very quickly, judging by current conditions. For China to have zero interest rates for a long term, it has to have gone through a very large economic cycle.

Regarding yields, here's the latest 互联网理财收益下滑 余额宝将破6%理财通降1%. In short, these products have seen yields plunge more than 1% in the past few weeks, from 7.9% down to 6.8%. During the mind-month mini-panic over the default of the trust, along with the annual pre-Spring Festival cash crunch, 7-day annualized interest rates surged to between 11% and 13%. If investors are turning cold on trust products, they still need someplace to park their cash and no doubt these funds may be attractive, but the iron law of finance is still in effect. The larger these funds get, the lower the yields will go.

Thus far I've only mentioned Alibaba's product. Both Baidu and Sina have money market funds too. There's also a new entrant into the field from Tencent's WeChat program.

Text, Chat, Profit: Tencent Launches Investing on WeChat

The new service is no doubt aimed at competing with Alibaba’s service, which was introduced last year. It’s also likely a ploy by Tencent to entice users to link their bank and WeChat accounts. The fund, called Licaitong, offers an impressive 7.3940% seven-day annualized yield, besting Yu’e Bao’s rate by almost 1%.

China’s financial sector has long been dominated by state-owned banks, but technology companies have begun to enter their turf by using online platforms to push innovations in the sector.

Though Alibaba was first to push into the sector, others have been hot on its heels. It isn’t known how many customers or how much investment Licaitong attracted on its first day, but a promotion giving away cash prizes to promote the new product attracted enough users to crash the system, according to Chinese magazine Caixin. Tencent’s official QQ customer service said the promotion has been postponed.

Alibaba, Sina cast envious eyes on Tencent's 'Hongbao'

WeChat's red envelope function allows users to bind their bank cards to their WeChat accounts, and then designate sums of money to put in a virtual red envelopes that can be sent electronically to other users. It looks like Tencent didn't actually make any money from the envelopes themselves, but instead benefited by getting 5 million of its users to bind their bank cards to their accounts. That's an extremely important step as Tencent tries to build up lucrative e-commerce business on WeChat. By comparison, the mobile arm of Alibaba's Alipay mobile service, known as Alipay Wallet, currently has about 10 million registered users. According to Tencent, users sent some 20 million red envelopes over the first 2 days of the Lunar New Year.

Comments from Qihoo 360 (NYSE: QIHU) executive Tao Weihua were typical of the generally positive sentiment towards Tencent, praising WeChat for its latest success and also taking a backhand poke at Sina for failing to develop a similar product for its equally popular Weibo service. Baidu (Nasdaq: BIDU) wireless executive Yue Guofeng similarly noted that the huge success of the Tencent product marked a turning point for Sina Weibo, whose popularity has recently started to drop following its meteoric rise over the last 3 years.

Alibaba certainly understands the threats to its dominance in both e-commerce and electronic payments posed by WeChat. It launched Laiwang, a rival mobile social networking app, last fall and has aggressively promoted the product at every possible opportunity since then.

Financial competition is now driving innovation in social networking. Despite criticism of being copycats and tightly regulated by the state, the Chinese economy is one of the most dynamic in the world in many areas because it is developing old and new markets simultaneously with lots of crossover experimentation. In the short term, these products are a result of the credit bubble: with so much cash sloshing around the Chinese economy, funds can rapidly grow in size, but they are still part of the overall financial system. Though these funds present competition for traditional asset managers, they will be unable to escape a financial crisis, at which point their very existence could come into question. Would investors trust Alibaba over their local bank? If I was a bank, I would start working on my brand image.

For more on Weixin/WeChat see:

5 ways China’s WeChat is more innovative than you think

A Popular Chinese Social Networking App Blazes Its Own Path

Messaging Battle Royale: Sina vs Tencent vs China Unicom vs China Mobile

Sina's Weibo service and Alibaba have linked up. Now China Unicom has linked up with Tencent's WeChat software.
Wechat, Weibo vs. SMS

"The telecommunications companies may try to invent a competitive instant messaging service of their own. The other way is to cooperate with OTT service providers. But the disadvantage in the first solution lies in the fact that the telecom companies are unfamiliar with making Internet-related products; so their products might not give the users the same comfortable experiences when it's put to use. China Unicom has opted for the second solution by seeking cooperation with WeChat."

In fact, the popular messaging App -- WeChat is not just conquering user but turning rivals into partners. China Unicom in Guangdong province and WeChat's owner Tencent are introducing the first joint SIM card. Users can enjoy both WeChat's new services and discounts from China Unicom.

From August 8: China Unicom’s WeChat Subscription Plan Hits China Today

Today marks the first step in the tentative and possibly-doomed alliance between Chinese telecoms and WeChat, the OTT chat app that’s destroying their text messaging revenues. As of right now — the minute this post is published — China Unicom users nationwide* can purchase a special WeChat SIM card and access the app even if they don’t have a regular 3G subscription through the telco.

The card doesn’t just allow use of the wireless web for chatting, though, it also will allow users to use other data-heavy aspects of the app, including playing games, sending stickers, and making payments online. Users who purchase it can choose from a variety of plans, which run between 30 and 60 RMB ($5-$10) per month although other fees apply, including and up-front price for the card itself.

WeChat is Tencent's strong play. Weibo is Sina's. Weibo has added chat service and WeChat integrates with Tencent's other programs such as QQ and Tencent Weibo. But for now, both programs have a dominant niche. The main outlier so far is China Mobile.

China mircoblog wars

In China, competing Twitter-like services are known as 微薄 (wéibó), which literally translates as micro blog. A Twitter knockoff named Fanfou (饭否) was shut down during the Xinjiang riots last year and to the best of my knowledge, it lost its first-mover advantage. Sina (SINA) appears to have taken the lead, with 56% of the microblog market. It's service was running off of its Sina.com domain, but this week it launched Weibo.com to give the service its own identity.

Tencent (0700.HK) has also stepped into the market though, and it is a heavy hitter. It's QQ messaging service is a monster, with over 600 million registered users and concurrent users peaking at over 100 million. It also offers music, streaming TV and movies, games and more through the platform. It also has social networking services and has now added microblogs. Tencent basically offers everything you can imagine and more, although it seems many of the components are not most popular.

Tencent isn't the only competitor. NetEase (NTES), Sohu (SOHU) and Baidu (BIDU) are among those looking to take market share. One battle tactic is the capture of celebrity microblogs, who attract millions of followers.
China’s Microblogging Celebs Blow Past Western Stars
Rumor: Baidu to Overhaul Microblog Platform, Poach Celebrities

Here is an in-depth Chinese article covering the topic: 微博之战——争夺中国人的“意见”与“关系”

H-Shares Near or at 52-week highs

I posted this list on the "mirror" site, and I'm not about to translate it at this hour. Add .hk to the symbols and you can see them on Yahoo!, or click the links and change the page to English. First are near 52 week high, then at 52 week high, and then I have one Mainland stock, Emei Shan. This list is not total, nor any recommendation, just some stocks off one watch list. Many are tech, commodity, and consumer stocks.

很多我经常看看的股票快到52周高：
香港交易所 0388

越秀投资 0213

中国粮油控股 0606

紫金矿业 2899

有的已经到了！
腾讯控股 0700

京信通信 2342

金山软件 3888

阿里巴巴 1688

中国食品 0506

康师傅控股 0322

中国旺旺 0151

比亚迪股份 1211

中国动向 3818

大陆
峨眉山 000888.SZ

Update 2009-06-03: Clive Corcoran has an article on Seeking Alpha, the title of which explains the content: 

Hong Kong Index Ends at Exactly 38% Retracement of Swing High/Low

Gold & Energy Performing Well After Fed Announcement

My Best of Funds portfolio had been in a funk for about three weeks, as I covered my shorts a bit early and didn't go long the market, sticking mainly with cash, precious metals, and miners. However, yesterday's move, and today's if things hold through the close, lifted the fund to a new all-time high. The $70 swing in gold, from yesterday's lows to today's highs, was the main catalyst, while higher oil prices helped. One stock I'd added recently was Hercules Offshore (HERO), up more than 20% today and over 40% in the fund. I can't really thank Ben Bernanke for the move, even though he's responsible. I'd prefer to invest in positive growth stories, rather than the destruction of the U.S. dollar—but I also prefer high probability trades to low probability ones.

I was checking to see how the Hong Kong and Chinese listed shares on my watch list were doing. On the Mainland, the notable mover was Shanghai Zhenhua Port Machinery <上海振华港口机械>(600320.SS), which gained just under the 10% limit.

A big mover on the Nasdaq was General Steel Holdings (GSI), up 12.8% yesterday and on pace for another 14% today.

In Hong Kong, Lingbao Gold <灵宝黄金> (3330.HK) climbed 15% and Mongolia Energy <蒙古能源> (0276.HK) advanced 20.9%.

Newsworthy (article links in English): ZTE reported 2008 full year earnings. <中兴通讯>(0763.HK, 000063.SZ)
Forbes also has an article on ZTE's push into the American smart phone market.

Tencent reported 2008 full year earnings. <腾讯> (0700.HK)

Li Ning reported 2008 earnings. 中文 <李宁> (2331.HK)