Food prices surge in China.

Grim news from China:-

a) Inflation rate is at 4.9% (Jan '11) compared to 4.6% (Dec'10)

b) Jan'11 : Surges include

Eggs up by 20%

Fresh fruits by 33%

Sugar up by 80%

High grade rice more by 65%

c) What this means is that millions of the poorer Chinese households which spends half their income on food will experience severe economic setbacks - 50% spending of income on income might translate up to 70%.

d) Remember also that crude oil is now at USD$100 and standing by. The Chinese folks still needs to pay for transport somehow.

e) Food prices hikes were recognised as one of the catalyst in bringing down the governments of Tunisia and Egypt.

ACE INA of the USA acquires Jerneh Insurance Berhad

a) ACE USA has total assets of USD 78billion/RM 245billion.

b) ACE has 15,000 employees in 50 countries around the world.

c) Jerneh is one of the two listed insurance company in Malaysia - higher standard of transparency to both Bank Negara and Security Comm.

d) Two good brands make a stronger whole. 'Nuff said.

TIN PRICES ESCALATING AGAIN.

Why is it that a world economy with the US, bulk of Europe and Japan in recession, our bulk commodities prices are still on the rise?

When a strong wind comes, you can either build windmills or windbreaks!

China in 2011?

Hopefully, China should make the move to tighten their grip on inflation.

See Mssr Rogers

http://www.youtube.com/watch?v=Ja9qC0tYW2Q

Copper, Tin, Anyone?

Traditionally, copper has been used in the electrical industry and closer to home, the as the plates in the humble but crucial car batteries.

http://lite.themalaysianinsider.com/business/article/copper-soars-to-us10000-supply-fears-dominate-mood

But let us look at the fine print regarding such a shortage, shall we?

Remember the earthquake in Chile a while back? I recalled reading something which said that the quake affected the transport links to the mines itself.

I wonder how long this trend will continue. Mines are really expensive to start and those existing ones are definitely looking at the law of decreasing returns.

The effects of such price rise also has a spill over effect in Malaysia itself. I wonder which of the areas or properties near the tin mines in Perak as going for a song right now?

WHY CHINA ? PLUG IN NO 2

Greedy guy writing again.

Today (Jan 2011), China purchases more cars and mobile phones than the US and soon will buy more computers.

Nomura Securities estimated that by 2014, retail sales in China may surpass that of the US.

China has also announced that it will spend USD 1.5 trillion on high speed rail and nuclear power. Not all at once but normally within 5 years (the basic 5 year plans mah!)

http://www.themalaysianinsider.com/business/article/china-plans-to-spend-big-on-nuclear-power-high-speed-rail/

Simple language folks :

China's infrastructure currently is a BIG MESS and yet there are still hitting low double digit growth rates (due to FDI).

There are insufficient rail lines for their own citizens to get back home for CNY that some ppl are resorting to wearing diapers as some have to stand 17 hours on a packed cattle class train. In addition, certain rural areas in China, overloads occurs when people more than 5 households switches on their air-cond/chandelier/ etc.

But what happens when China upgrades its infra and fully capitalises on 1.4 billion of its own internal market?

FDI + Huge Market internally = >10% growth (current growth at slightly over 10%)?

Using simple maths, China's market growing at 10% annually will just DOUBLE after 7 years!!!

Folks: Another thing? China will be buying raw materials and consumables in order to manufacture USD 1.5 trillion worth of infra - what will be the effects of this buying binge on commodities prices?

Buy some Chinese based unit trust + commodities funds!

Inflation fears - PLUG NUMBER 1

Both NST and Malaysian Insider shows this:-

http://www.btimes.com.my/Current_News/BTIMES/articles/2infdeepens/Article/index_html

I understand that the prices of raw food commodities (there goes my banana leaf rice budget) and oil are now increasing - some by 20% for the last 6 months alone re Paul Krugman (Nobel prize winner for New Economics).

Marketing wise, does this show that the 'powers-that-be' are hinting that inflation is to be expected especially after the sudden increase of RON 97 to RM 2.50/liter post-Tenang? Are they preparing us mentally to be hit in the most sensitive location for all men and women : our pocketbooks?

A good friend remarked that after every by-election win, the prices of cooking gas, RON 97, sugar, evaporated milk, etc. seemingly rise almost the very next day.

My shameless commercial plug? Buy some commodity related unit-trusts frens!