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Director’s Cut
More ore to the furnace
Despite government pressure on the real estate sector, Graeme Train says the
level of construction activity in China has defied expectations. >> Read Report
Graeme thinks the market pays too much attention to the sales data of China’s
larger cities, as sales growth in 3
rd
tier cities and below is extremely strong.
Sales are weak in the 1
st
and 2
nd
tier cities, where there has historically been the
highest proportion of investment demand. That said, as you can see in the chart
below, sales volumes in smaller cities (shaded grey) are still growing at a rapid
pace. Keep in mind, China has between 100 and 150 cities with populations over
1 million people, and Graeme’s understanding is that sales activity in the cities
not captured in this list are showing growth closer the right side of the chart.
Graeme also highlights the significant amount of demand potential arising from
the upgrading of China’s existing housing stock. He argues that as China moves
to increase its urban density and improve urban living conditions, these older
units will be replaced with taller, more steel intensive buildings.
Together these views suggest China’s residential construction demand is likely
to remain strong, as is the sector’s iron ore demand. This supports our bullish
view on Rio Tinto (RIO AU), which has a compelling valuation and plans to
significantly lift their annual iron ore production capacity. >> Read Report
Highlights
Jonathan Elmi says Zions Bancorp (CMA US) and Northern Trust (NTRS
US) are set to benefit when US interest rates rise.
Polina Diyachkina thinks Inpex’s (1605 JP) LNG sale should be the most
significant positive catalyst for the stock this year.
Tim Nolan suggests buying Informa (INF LN) and UBM (UBM LN) in
advance of a more positive macro outlook later in the year.
With a forward dividend yield of 7.5% and PER of 10 times earnings, Michael
Wiblin has upgraded Westpac (WBC AU) to Outperform.
Stephen Flynn says Russia’s Federal Grid Company (FEES RU) is
compelling value with ~30% growth and a 2011 PER of 12 times.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Director’s Cut
More ore to the furnace
Despite government pressure on the real estate sector, Graeme Train says the
level of construction activity in China has defied expectations. >> Read Report
Graeme thinks the market pays too much attention to the sales data of China’s
larger cities, as sales growth in 3
rd
tier cities and below is extremely strong.
Sales are weak in the 1
st
and 2
nd
tier cities, where there has historically been the
highest proportion of investment demand. That said, as you can see in the chart
below, sales volumes in smaller cities (shaded grey) are still growing at a rapid
pace. Keep in mind, China has between 100 and 150 cities with populations over
1 million people, and Graeme’s understanding is that sales activity in the cities
not captured in this list are showing growth closer the right side of the chart.
Graeme also highlights the significant amount of demand potential arising from
the upgrading of China’s existing housing stock. He argues that as China moves
to increase its urban density and improve urban living conditions, these older
units will be replaced with taller, more steel intensive buildings.
Together these views suggest China’s residential construction demand is likely
to remain strong, as is the sector’s iron ore demand. This supports our bullish
view on Rio Tinto (RIO AU), which has a compelling valuation and plans to
significantly lift their annual iron ore production capacity. >> Read Report
Highlights
Jonathan Elmi says Zions Bancorp (CMA US) and Northern Trust (NTRS
US) are set to benefit when US interest rates rise.
Polina Diyachkina thinks Inpex’s (1605 JP) LNG sale should be the most
significant positive catalyst for the stock this year.
Tim Nolan suggests buying Informa (INF LN) and UBM (UBM LN) in
advance of a more positive macro outlook later in the year.
With a forward dividend yield of 7.5% and PER of 10 times earnings, Michael
Wiblin has upgraded Westpac (WBC AU) to Outperform.
Stephen Flynn says Russia’s Federal Grid Company (FEES RU) is
compelling value with ~30% growth and a 2011 PER of 12 times.
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