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Toh Han Shih

Investors to mourn passing of Webb's Christmas Pick
Corporate governance activist David Webb announced the end  to  his traditional 'Christmas Pick' of a Hong Kong stock, after 10 years of providing  the festive gift, 'before it gets out of hand'. 
'It has become something of a distraction to our main goal of raising the standards of Hong Kong's corporate and economic governance,' Webb (below) says on his website Webb-site.com. 
Last year's pick, Alco Holdings, a consumer  electronics manufacturer, gained 147 per cent from HK$1.21 to HK$2.99 yesterday, outperforming the 47 per cent increase in the Hang Seng Index. The company also paid dividends of 23 HK cents per share.
Webb owns more than 5 per cent of Alco and over 7 per cent of Fujikon Industrial Holdings, his 2005 pick. 
Webb's picks have made money in  eight out of 10 years and also outperformed the Hang Seng Index in  eight out of 10 years. He said if you invested in his first pick in 1999 and rotated that into the next Christmas Pick each year, you would have made 1,118.1 per cent by now. 
Webb said his own entire portfolio, if converted into a hypothetical unit trust, would have returned 1,057 per cent in the past 10 years.
Strong  dollar may curb rallies
An investment manager from a large Hong Kong conglomerate predicts a correction in the Hong Kong, mainland and United States stock markets within the next two months. 
He  says the Hang Seng Index, which has enjoyed a rally since March, could fall 12 per cent to 18,500 points and the S&P 500 may drop 16 per cent to 930. 
One reason for the corrections is the performance of the US dollar. The consensus view is that the greenback, which has been  rising  since the beginning of this month, will remain weak. If  the dollar's current rebound persists, the equity markets are in for a significant correction, because a stronger US dollar is linked to greater investor caution, he argues. 
Historically, a weak US dollar has been associated with a bullish US stock market, because a weaker greenback boosts US exports and corporate earnings. 
As for the Shanghai Stock Exchange, many people do not see a bubble yet, given that the composite index was at 3,123 points yesterday, far below the  historical high of 6,092 in 2007. However, the indices of small and mid-cap A shares are reaching the record highs of 2007. 
'That is the bubble that most outsiders are not aware of,' warned the manager. 
The next few months will tell if he is right or not. 
Fads spark toy shortages
After export crunch fears due to the financial crisis, Hong Kong and  mainland toy companies may see opportunities in interesting niches. 
For example,  British stores are unable to meet the huge rise in demand for Christmas favourite Lego, causing online retailers to charge a markup of two or three times, according to media reports. 
The Lego shortage came about because too many  British retailers, nervous about the financial crisis, ordered too few of the bricks from southern China.
Meanwhile,  mainland toy factories have a new secret weapon to combat the  financial crisis, in the form of the latest fad - interactive toy hamsters called Zhu Zhu Pets. They normally retail for US$10 but are now selling for hundreds of dollars in some US cities because of the craze and a shortage of supply.
Goldman's subsidised HQ
What do you give an investment bank that has everything? How about a government-subsidised 43-storey skyscraper in Manhattan? 
According to reports, the building is a bargain, not just because the final cost is expected to be US$200 million less than the US$2.3 billion price that Goldman Sachs had estimated when construction began in November 2005.
Goldman also benefited from the government's determination to avoid losing jobs in   New York's business district after the September 11, 2001, terrorist attacks. Apparently, building a new headquarters close to the site of the former World Trade Centre entitled Goldman to sell US$1 billion of tax-free Liberty Bonds and get US$49 million of job-grant funds, tax exemptions and energy discounts. 
After threats from then Goldman chief executive Henry Paulson, state and city officials raised the bond ceiling to US$1.65 billion and added US$66 million in benefits. 
Not bad for an institution that set a Wall Street profit record of US$11.6 billion in 2007 and is believed to have earned  about US$11.4 billion this year.



Lai See