Read my lips - we're undoubtedly in a recession Going into the red during a recession takes on a new meaning when it comes to cosmetics - and lipstick in particular. Estee Lauder chairman Leonard Lauder (below) is credited with coming up with the 'lipstick theory', which suggests an economy can be read by the rise and fall of lipstick sales. He found that during times of economic uncertainty sales of cosmetics increased as women opted to indulge themselves for the 'feel good' factor while having to cut back in other areas of spending. The theory seems to be supported by the latest Citigroup research, which identified a recession-proof investment opportunity in the beauty business after interviewing 700 female Korean consumers in the first quarter. It found that although the majority of the women would spend less on make-up during the economic crisis, those who said they would spend more were prepared to dig into their purses deep enough to tip the balance into a net 4 per cent increase on cosmetics buying. In a country famous for creating beauty through plastic surgery, the respondents said they spent an average HK$1,000 a month on cosmetics, or the equivalent of most people's mandatory provident fund contributions. The 'lipstick theory' also appears to be working in Hong Kong where the largest cosmetic chain, Sa Sa International, has seen its share price soar 51 per cent so far this year, and even embattled Modern Beauty Salon Holdings jumped 33 per cent yesterday, taking its gain for the year to just over 10 per cent. Just for show On the surface, blue-chip oil giant CNOOC is one of the most generous state-owned companies to its directors. Chairman Fu Chengyu earned 12.04 million yuan (HK$13.67 million) last year, a rise of 6.6 per cent on 2007. Even if you strip out his share option benefits, he was still entitled to 6.6 million yuan, which almost eclipsed the total amount paid to the board of rival Sinopec. However, what he actually received is a different matter. In response to mainland media reports on the executives' high pay, CNOOC felt compelled to put the record straight. A spokesman explained yesterday that when CNOOC dual-listed in Hong Kong and New York eight years ago, the company adopted some international protocols such as management incentive schemes to bring it in line with its global counterparts. These protocols account for the huge salary figures published by the company, but in reality they are only for show and bear little relation to the bosses' actual take-home pay which is determined by the State-owned Assets Supervision and Administration Commission of the State Council. Apparently, the executives 'donate' the difference back to the parent company. Superman is human after all Since Li Ka-shing decided to cash in four billion Bank of China shares at HK$1.98 a share three months ago, the mainland lender has produced a 40 per cent rally, closing on a seven-month high yesterday of HK$2.95. It has been much the same story for fellow tycoon Lee Shau-kee and a couple of his investments. The Henderson Land Development chairman reduced both of his holdings in China Life Insurance and Ping An Insurance (Group) - via his brother Lee Shau-nam, Uncle Five - to a non-discloseable level at the end of last year. Five months ago Mr Lee started selling China Life at HK$19.38, 31 per cent below yesterday's closing of HK$28.25. This is not to suggest that the two gentlemen have lost any money from the deals. In fact they both made handsome profits, although they could have been even better looking if they had hung on for a few months more. However, investors following their every move may think twice next time. Another example to show that Superman is human after all was his bullish advice three weeks ago when he suggested investors buy into Cheung Kong (Holdings) and Hutchison Whampoa if they have some spare cash. He was on the button about being bullish as the Hang Seng Index has climbed 10 per cent since then, but his two flagships have been underperforming - Cheung Kong shares are up only 7 per cent, trailing most property counters, while Hutchison is slightly below the price on the date of his advice.