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Ben Kwok

Look out, investors warned - even wider swings ahead
Caveat emptor! The Securities and Futures Commission and  Hong Kong Exchanges and Clearing have told you so.
The two securities watchdogs  warned yesterday of potential volatility around the close of trading next Tuesday because of the six-monthly review of the MSCI indices.
'The SFC and HKEx are aware of possible increases in trading activities and unusual price movements during the rebalancing events, period ends and expiration of derivatives contracts ... be mindful of these events when making your investment decisions,'  their announcement  said.
It's a case of the watchdogs  making sure they got their  bark in first after being criticised following the last MSCI review on May 30,  which saw some wild price movements, with blue chips shooting up like penny stocks  during the 10-minute trading extension that had  been introduced only a few days earlier. The movements were caused by  about HK$30 billion worth of trading by fund managers  forced to buy stocks during the closing auction session to adjust to the new weighting of the indices.
Warning or no warning, it's still a case of 'on your marks, get set ...'
Just do the opposite
In a bull market, no one needs to listen to analysts about what to buy, while in a bear market it seems no one wants to listen to them about what to sell.
Every month, Merrill Lynch updates a list of most/least preferred stocks as a guide for short-term investors. But a glance at  its own one-month, three-month and 12-month indices shows that Merrill's most preferred stocks have been performing worse than its least preferred.
It's no surprise that everything is in negative territory, but the most preferred index is minus 27 per cent for one month, minus 56 per cent for three months and minus 67 per cent over a year. This compares with minus 21 per cent, minus 45 per cent and minus 61 per cent for the respective least preferred indices.
For the record, the current most preferred stocks are Bank of China (HK), Esprit and  Hongkong Land, while the least preferred are Bank of East Asia, Li & Fung and Swire Pacific, which replaced Wharf.
Maybe they should call it the most/least preferred list for shorting.
When vice pays off
Merrill is sure to have more success with its investor advice on human frailty.
The brokerage published a research report this week on the merits of vices during recessions based on the theory that consumers do not kick their drinking, smoking and gambling habits even in tough economic times.
It showed that in six US recessions since 1969, vice stocks such as Altria, Philip Morris and Molson Coors produced average returns of more than 10 per cent.
This compares with other recession-proof sectors such as consumer  staples, which rose 6.7 per cent, and health care, 1.8 per cent, while the S&P 500  fell an average 1.5 per cent.
However, it's unlikely to be much comfort to Las Vegas Sands boss Sheldon Adelson, whose casino stock has plummeted 95 per cent in the US so far this year.
Or you could swim
If having to pay 30 per cent more for an inferior service wasn't bad enough, Lamma Island residents have discovered a whole new list of reasons not to be overjoyed with at  Tsui Wah Ferry Service.
The list came to light when a couple  were asked to pay HK$11 to transport their son's  tricycle on the ferry from Pak Kok Tsuen to Yung Shue Wan.
They complained that there had never been any charge when the route was run by Hong Kong and Kowloon Ferry before being re-tendered to Tsui Wah earlier this year.
The crew member promptly produced an official booklet with a whole range of Tsui Wah Ferry Service charges that included HK$6 for carrying a broom, HK$10 for a piece of ceiling board, HK$25 for transporting a light stand and, most worrying of all, HK$5 for a 'piece of asbestos pile'.
We called Tsui Wah to inquire about shipping some 'asbestos pile' to Lamma, only to be told that the ferry service was mainly for the use of passengers and we would be better advised to hire a special boat for the shipment, as it would probably be more economical.



Lai See