It is also prudent for inflation to drift closer to stock options

Historically, the government's policy effect has generally been postponed for six months or so.　　The author predicts that inflation will be present in the first half of next year, as early as this year. Despite the financial crisis, the global economic recovery is still a long way to go, but the pace of inflation seems to have crept closer. Moderate inflation is welcomed by both the Government and the parties and is conducive to the healthy development of the economy. Historically, the government's policy effect has generally been postponed for six months or so. The author predicts that inflation will be present in the first half of next year, as early as this year.　　In view of this, we briefly discuss the operation strategy of stock options under inflation expectation. There are many indications that inflation will be the first, with a sharp rebound in international oil prices, leading to a bottoming out of commodity prices. Since the December 19, 2008 International oil prices to create a barrel of 32.4 U.S. dollars a 6-year low, this year has been rising, the recent rise in a breakthrough of 70 U.S. dollar mark, the mainland refined oil prices have also been significantly increased.　　At the same time, the mainland's fuel oil, gold, natural rubber, copper, aluminum and other commodity futures also basically doubled, deductive and crude oil futures almost the same inflation. Second, countries to deal with the financial crisis and recession, have launched a huge amount of stimulus budget and rescue package.　　The world's leading governments have adopted expansionary monetary easing, and interest rates in most G20 countries have fallen to historic lows and even 0 per cent, especially as most banks in Hong Kong have been close to zero. In a number of positive policies, rigid demand, pine credit, interest-lowering incentives and the promotion of the mainland and Hong Kong property market warmer. Inventories of commercial housing have fallen rapidly, with some major cities having to digest all their inventories in just 4-5 months at current volumes.　　Some of the cash-rich property developers began to "enclosure movement", some plots have been photographed sky-high. The stock market is also "not bad money". As of June 3, this year, the A-share index has risen 52.6%; The Dow Jones index has risen 35% since March 6, hitting a 12-year low of 6470.11, and Hong Kong's Hang Seng has surged 63.75% since March 9.　　The rise in the stock market has created a strong wealth effect, with Hong Kong stocks soaring by HK $2 trillion a month in May, with an average of about 2 million investors earning HK $1 million per person. Low interest rates and America's mad printing of money, the so-called quantitative easing, have put the dollar under increasing pressure to depreciate. And the United States has always used the monetary debt financing means, will be the international community against the dollar increasingly tired. It is generally agreed that the dollar is easy to fall, regardless of economic data, and depreciation is a medium-to long-term trend. US debt and the dollar have not been as confident as ever before, and investors will inevitably produce inflationary expectations.　　The mainland's recent exchange of oil with Brazil, after exchanging oil with Russia, is both a precaution and a testament to inflationary expectations. The strategy of stock options under inflation expectation one: Select resources stocks, focus on steel stocks. We believe that the future steel demand and prices will continue to rise, the reason is: steel demand recovery, priceLattice began to move higher. Data released by the China Logistics and Purchasing association in May showed that judging from the New Order index, in 20 industries, the April electrical machinery and equipment manufacturing, transportation equipment manufacturing, beverage manufacturing and other 15 industries, the index is higher than 50%; from the production index, in 20 industries, the electrical machinery and equipment manufacturing , transportation equipment manufacturing, beverage manufacturing, non-metallic mineral products industry, non-ferrous metal smelting and calendering processing industry led by the 6 industries to more than 60%.　　In addition, 4 trillion of investment mainly to "Tiegangki", coupled with new products downstream product orders continue to rebound, will be a strong demand for steel. The rise in raw material prices also supports steel prices at the bottom. This year, imports of iron ore prices continue to climb, coupled with the coking industry's limited value, the price of steel raw materials rose. Sea freight prices continued to rise, since May, the price of iron ore shipping costs have risen nearly 60%.　　Japan and South Korea took the lead to accept 2009 years Chang, China Iron ore long association negotiations will be more difficult, the 2009 iron ore negotiations in China, the final price is likely to fall by 35% to 40% last year's price, to calculate the current steel prices still have room to rise. Strategy two: Focus on the housing unit. Liquidity, the urbanization of the mainland to attract a large number of people into the city, construction costs rise, inflation expectations, and other factors, determines the future price rise difficult to fall. However, the cumulative increase in housing stocks in recent years is generally large. Should focus on the choice of net assets per share nav discount large, high cash flow, operating and sales of the ideal internal housing units, such as the Birth of the exhibition (000754.HK) and Fang Hing Real Estate (000817.HK), and so on, compared with the forecast of Nav has about 40% discount, there is still room for growth in the future; Soho China (00410.　　HK), China Overseas (00410.HK), cash flow is more than 8 billion yuan, the demand for equity financing is not strong, but also through the purchase of land to promote NAV and development potential, the long-term opportunities. Strategy three: Invest in high interest stock. Generally speaking, companies with the ability to pay higher dividends in a stable manner generally have a healthier financial position, good operation and risk management, and relatively strong profitability. The dividend rate of some companies is much higher than the long-term Hong Kong dollar bond interest rates issued by these companies, which can be used in public shares, Power shares, road stocks, banking stocks, and telecommunications stocks to dazzle strategy four: controlling positions and risks. The current retail position is best controlled by 50%-70%, because the hot spot is not very obvious, also do not have the whole warehouse single stock. The specific operation should not be too high, preferably in 5 days, 10 days, 20 days near the moving average, the median shareholding. (Fu Cheong Securities Research Department)