Category: Money tips Release Date: 2007-08-02
Source: Everbright Securities
â—?the global economy to absorb the capacity of high raw material prices than market expectations: With the bulk, including crude oil, etc., continued high raw material prices, investors worried about inflation on the rise; while China's central bank raised benchmark lending rates, but also to a certain extent added to the market prices of raw materials for the future trend of concern. However, we believe that the macro-sectors, from the current fundamentals of the world's major economies in terms of its robust level should be the best in 2001, and 2006, economic growth is expected to exceed last year's. This year, since the major macroeconomic data also show that the global economy continued high raw material prices far beyond the absorptive capacity of market expectations. China's economy that this round of regulation is more difficult to produce directional and fundamental economic trends impact. But also in the medium to long term, the real economy side of the basic trends and the basic trends revaluation of assets will not be fundamentally affected. This allows us to believe that non-ferrous metals as an important basic raw materials, consumption growth in 2006 will remain well above the historical average.
â—?non-ferrous metal prices, the pattern of the bull market is far from over: as an important engine for growth in spending, including China and other developing countries, including non-ferrous metal consumption has strong rigidity. Furthermore, from the observation of long-term price movements, market participants have begun to accept higher prices. Thus, the sustained high prices do not constitute a material effect on consumption. On the other hand, supply problems plagued the market once again become an important factor. In addition to the aluminum, the world's leading non-ferrous metals stocks are still at historic lows. Therefore, once the possibility of supply disruptions, speculative funds took the opportunity to push up prices are also expected. Finally, the long-term dollar depreciation will also be conducive to price increases. Taking all these factors, we believe that at least 2006 non-ferrous metal prices will continue to be for one year bull market. But also for the metal zinc, copper and gold, the pattern of the bull market is far from over.
â—?increase the non-ferrous metals price forecasts: the adjustment is large, including zinc, copper and gold. First, we continue to believe that zinc is the next one bronze, at least until 2008, its price will continue reaching record highs. Secondly, the copper as the most influential varieties of basic commodities, the price of 2006 is also expected to exceed market expectations. Finally, as against the U.S. dollar depreciation and inflation expectations increase, the continuing rise in gold prices will also be eagerly awaited. Our investment in the industry is still rated as "the good", the configuration of the proposed increase in the proportion of the industry. At the same time, we believe that the above prices still have further raised the possibility of the future.
â—?Our earnings forecast is generally higher than the market average: This is not as optimistic, but a considerable number of domestic research institutions to price forecasts due to being too conservative. In fact, in addition to zinc prices, we price forecast for the next two years are at the international average. With the following important factors, allows us to believe that the next two years, the domestic non-ferrous metals related to the performance of corporate earnings will be significantly better than market expectations. These factors include: 1) In recent years, the domestic accounting standards have gradually improved, and the board of management tends to be a reasonable assessment mechanism, which makes the adjustment of profits of listed companies is very limited space; 2) With the improvement in profitability since 2004 non-ferrous metals enterprises generally have been digested by the historical burden; 3) According to our knowledge, the present management of domestic enterprises, the operation of the hedge has become more robust and market-oriented.
â—?"buy and hold" is the best investment strategy: with a lot of money into commodity futures markets, the price will be more frequent short-term fluctuations. But this does not affect our right to judge non-ferrous metal prices of long-term trends. Moreover, according to our latest earnings forecast, the current domestic listed companies in major industry valuation standards were generally not high, there are different degrees of undervalued stock prices, especially zinc, copper, aluminum and gold and other sub-sectors. Therefore, the "fear of high" need not. We believe that the advantages of relevant companies, "buy and hold" should be the best investment strategy.
