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Aussie shares opened 1.4% lower as persistent declines on the Wall Street translated to broad based weakness in local markets. Heavyweight miners and financials lead losses ahead of tomorrow’s holiday.

A disappointing session on Wall Street on Friday set the stage for today’s sell off. The Dow, S&P 500 and NASDAQ all fell on fears that the White House's plan to curb bank risk-taking would cut profits. Disappointing results from Google also soured sentiment.

Despite acknowledging that US bank regulation would have a limited effect on local banks, NAB, CBA and Westpac were all down 1.5%. ANZ endured a more pronounced sell off, falling 2.3%.

Among miners, BHP Billiton and Rio Tinto fell 1.9% and 1.4%, taking a combined 12 points off the index. Fortescue fell 2.3%.

Notable gainers included gold and copper specialist Newcrest, which was up 0.5%. Meanwhile, Macquarie Infrastructure rallied 3.9% after concluding a portfolio review that saw valuations remain fairly steady compared to June 2009.

Industrea Limited (IDL) expects an adjusted NPAT for the half year in the range of $17.2 – $17.8 million, down from $24.6 million in the previous corresponding period. The mining products and services provider said the expected decline was due to Handlebar Hill revenue in previous period and timing of technology sales.

However, Industrea forecast strong growth in revenues and profits for the full year due to continued expansion across key divisions.

The company said growth across mining services, diesel equipment, technology and international divisions is set to boost FY10 revenue to $300-330 million and deliver adjusted NPAT between $48-54 million.

Managing director and CEO, Robin Levison, said while the half year result reflected the impact of the global financial crisis on the Australian mining industry, the recent upturn in global commodity markets and China’s renewed push towards improved productivity and safety in its underground coal mining industry had positioned Industrea to achieve increased revenue and profits for the full year.

“Industrea has commenced the New Year on a positive note and we are seeing robust trading conditions for the second half across our expanding business divisions,” Mr Levison said.

”For Huddy’s, we are seeing increasing growth as industry confidence returns which has led us to recommence contract mining operations at Handlebar Hill.”

Mr Levison added that the company was also actively pursuing its global diversification strategy, with growth in export orders to other markets including South Africa and South America also anticipated.

”China though will remain the key market for Industrea, and we have already secured additional capacity for spares sales to the leading China Shenhua Group due to recurring orders from our Product Support Centre,” Mr levison said.

“Industrea has also been invited as a key equipment provider to the Shenhua Group to supply a range of spares to Shenhua’s private bonded warehouse complex which should improve access to the wider group.”

At the close of trade Friday, Industrea shares were trading at 42.5c.

Ausenco Limited (AAX) said it had secured a US$130 million project to complete the Kinsevere Stage II copper project in the African nation of the Democratic Republic of Congo for Anvil Mining Limited (AVM). Ausenco said the contract was to provide Engineering, Procurement and Construction (“EPC”) work for the company following Anvil’s successful US$200 million debt and equity refinancing at the end of last year.

Ausenco CEO Zimi Meka said the result was a part of an upbeat outlook for the company.

“Generally, tendering and pre-qualification activities on a range of potential project opportunities has increased in recent weeks and we remain confident of Ausenco’s growth into 2010 and 2011,” Mr Meka said.

Mr Meka also said the contract followed the recommencement of engineering services to the Kinsevere mine in July 2009.

“Finalising the successful conversion of our engagement to EPC from the previous engineering and design services contract has taken slightly longer than we had envisaged,” Mr Meka added.

”Nevertheless it recognises the successful efforts of both teams and represents an important opportunity and an indication of increasing confidence in the base metals sector.”

At the close Friday, Ausenco shares were trading at $4.11, while Anvil Mining shares were $3.50.

Macquarie Infrastructure Group (MIG) completed a portfolio valuation as part of its restructuring proposal. The MIG directors’ portfolio valuation as at 31 December 2009 was $5.08 billion compared with $5.09 billion at 30 June 2009.

The company noted that the valuation excludes cash and non investment balances.

Of the $5.08 billion in assets, $3.8 billion is part of the Intoll Asset portfolio, which was up 4.3% from June 2009. Macquarie Atlas Road’s (MQA) assets were valued at $1.28 billion, down 11.7% from June 2009.

MIG said the major influence on the Intoll portfolio was the roll forward impact.

Meanwhile, the strengthening of the Australian dollar against MQA Portfolio currencies resulted in a decrease in the value of the MQA Portfolio of approximately 10%, with the remaining marginal decline reflecting other factors.

The group said the MQA Portfolio valuations would next be reviewed for the purposes of MQA’s financial statements for the period ended 30 June 2010.

On Friday, MIG securities were down around 2.5c to $1.22.

By Chris Shaw

Each year Saxo Bank, an online trading and investment specialist, offers up ten "outrageous claims" to provide investors with a chance to mentally stress test their portfolios. Last year Saxo was quite bearish, but this year it is basing its claims on expectations 2010 will prove to be a year of reflation and consolidation, meaning its claims are more balanced than was the case in 2009.

This in part reflects Saxo's view that financial markets in 2010 will continue to benefit from the stimulus measures introduced in 2009, as evidenced by leading indicators continue to move strongly higher. This means weak growth in the first half of 2010 is regarded unlikely, though the second half of the year may be more challenging as risk willingness in the first half of the year will increase the danger signs for investors as the year draws to a close.

One emerging trend likely to be sustained for some time is deleveraging, especially in the private sector in response to higher unemployment, excess spare capacity and greater difficulty in accessing credit. As well, there are signs of a change in international capital flows, as it is unlikely rapid consumption growth will continue in the developed world in the next few years. These trends have influenced Saxo's claims for what may occur in the year ahead.

Over now to Saxo Bank's claims. The first claim is the yield on German bunds will reach 2.25%, with the investment specialist suggesting a combination of deflationary forces and excessive monetary policy will see yields edge lower as traders refuse to buy into the growth story being implied by the equity market. Saxo suggests one or more negative macroeconomic triggers could force bund prices to 133.3, which compares to a current price of 122.6.

Claim number two is that the VIX, which is the Chicago Board Options Exchange Volatility Index, will trend down to 14 during 2010, which compares to a current level of just below 18. Saxo suggests this could happen as it appears the market's assessment of risk is more and more resembling that of markets in 2005/06 when trading ranges narrowed and implied options volatility declined. In other words, claim number two reflects on the chance of increased complacency towards risk on the part of investors.

Claim number three sees potential for the yuan to be devalued by 5% against the US dollar during the year, as there is a risk the efforts of policymakers to stem credit growth to avoid bad loans and the creation of asset bubbles could show Chinese investment-driven growth to be short of expectations. This becomes a bigger risk given China's massive spare capacity and its economic backdrop and so could force the hand of policymakers with respect to the currency.

With respect to gold Saxon Bank suggests there is some speculative element in the price at present, so a general strengthening of the US dollar could see the gold price drop as low as US$870 per ounce (claim number four) from gold's current level of around US$1,130 per ounce. Long-term the group remains bullish on the metal and takes the view gold could hit US$1,500 per ounce within 2014, so even a drop below US$900 wouldn't push the metal out of its long-term uptrend.

A stronger US dollar is certainly in the group's sights as it suggests the greenback could recover against the yen in particular sometime in 2010, both because the carry trade has simply been too easy and the Japanese currency is not reflecting the true state of economic conditions in Japan. Saxo's fifth claim is the USD/yen rate could move to 110 from around 89.30 now.

Claim number six sees the formation of a third political party in the US that could become a deciding factor in Congress following the mid-term elections this year. Saxo suggests this because it senses there is general disapproval of both major parties among the US electorate at present, increasing the calls for real change going forward.

While it may sound outrageous, Saxo Bank's seventh claim sees the US Social Security Trust Fund go broke. This, explains the bank, is an actuarial and mathematical certainty as 2010 may well be the first year where outlays from the non-existing trust fund will need to be financed at least in part by the government's General Fund. This will mean part of social security outlays will need to be funded by higher taxes, more borrowing or the printing of more money.

While a drought in India and greater than normal rainfall in Brazil has supported sugar prices Saxon Bank doesn't see the strength as sustainable, pointing out the forward curve is already indicating considerable downside beyond 2011. As well, high ethanol prices have caused both Brazil and the US to lower the ethanol share of gasoline, which means lower demand. This forms the background for claim number eight: sugar prices could drop by as much as one-third from their current levels of around US$23.33 per pound.

Small cap companies have underperformed the Nikkei lately, but on Saxon Bank's calculations this has come despite their fundamentals suggesting a better investment case than for their big cap peers. Given a price to book ratio of only around 0.77 at present and with only 12% of the TSE Small Index made up of financial stocks, Saxo sees scope for this index to surprise on the upside. Claim number nine is the TSE Small Index could potentially rise by as much as 50% from its current level of around 888 points.

Finally, Saxo Bank's tenth outrageous claim sees the US trade balance again turn positive this year, which would be the first time since the oil crisis in 1975. This could occur in the bank's view because the US dollar has become cheap enough to stimulate US exports and punish exports, which has already seen the trade balance improve somewhat in recent months and may see the currency improve further to record a positive reading for one or more months during the year.

Having offered the above claims Saxon Bank has also offered its top ten trade picks for the year, the first being to be short the euro and South African rand against the Turkish currency given inflationary pressures appear to be building in the Turkish economy and both other currencies appear overvalued at present.

Secondly, Saxo suggests going long German bunds as current pricing appears overly optimistic given the economic problems both German and the European Union (EU) in general are facing, given expectations of low growth and a number of deflationary pressures and high unemployment levels as a whole in the EU in particular.

While neither Japan nor the Eurozone will offer much help, Saxon also sees 2010 being a good year for the CRB Index as global growth in demand for commodities should remain strong. This is top ten trade number three, with the best price performance likely to be seen in the first half of the year.

Saxo also likes a trade of long US 10-year bonds and short Japanese Government Bonds (tip number four) as the US offers greater upside from deflationary pressures thanks to credit contraction in that economy while there is little incentive to lend money in Japan given low yields and an already debt burdened economy. The other positive is there is some forex exposure inherent in the trade, meaning another way for investors to generate a positive return.

Given expectations small cap stocks in Japan are likely to outperform their large cap counterparts, Saxon favours going long the TSE Small cap index and short the Nikkei (tip number five), especially given the fact the yen is weakening at present and the Japanese government has indicated it favours a weaker currency for trade reasons.

With US stock indices priced for a steep recovery heading into 2010, Saxon Bank takes the view likely weak levels of capital investment mean this is not fully justified, so it suggests going long the GWX ETF of companies in developed economies and going short the NASDAQ100 index (tip number six).

Its view sugar prices will come under pressure this year sees Saxon recommend selling the March 2011 sugar contract (tip number seven), supported by its view supply is bound to expand as growing conditions improve in both India and Brazil.

For the first half of the year Saxo also recommends going long the IShares S&P Global Energy Sector Index Fund (tip number eight) as it sees the energy sector generally as a beneficiary of a global economic recovery plus a rebound in resource demand. The sector has recently started to catch up to the move in the oil price and this is expected to continue, which should help drive outperformance as more funds are rotated into energy investments and in particular the large integrated players in the sector.

Back in currency markets, Saxo Bank sees potential in a short euro/Canadian dollar strangle (tip number nine), as 1.55 appears to be something of a pivot point and 1.39 to 1.76 has captured nearly all extremes over the past five years. Breaking down the trade, the bank suggests selling 1-year December euro puts with a strike if 1.45 and selling euro calls with a strike of 1.68 to receive 590 Canadian dollar pips.

Its final trade recommendation for the year (number ten) is to go long the December 3-month short Sterling future contract as the bank takes the view the British economy remains in the doldrums, adding to the potential for the Bank of England to keep rates unchanged for an extended period of time, similar to what the Federal Reserve is doing in the US economy.

At the start of last week (day one of my official return from holidays) one hedge fund asked me about my best trading idea. If I had a few hours to make up my mind, and I had to make one trade, which one would it be?

I instantly responded: go short oil.

It's a pity I couldn't see the faces of staff at the hedge fund, as the correspondence was done via email, but it was clear from the follow-up emails they thought I was either joking, or I had lost my marbles.

Go short oil? Had I somehow missed that the global economic recovery was becoming reality? Experts had started talking about US$100 per barrel again, just read the newspapers!

On that particular Monday, crude oil futures were trading near US$84/bbl. Last night they put in an unexpected sharp rally, but they're still below US$80 and, if my view proves correct, heading for a return back inside the US$70-75/bbl trading range. Note, for instance, that despite crude oil's rally on Tuesday, energy stocks were one of only two sectors in negative territory on the Australian share market during Wednesday's session; the other is Information Technology.

I could be wrong, of course. For all I know a sudden outbreak of extremely cold weather in the Northern Hemisphere, or an announcement by China it will further increase its strategic reserves, could easily push crude oil futures back to US$84/bbl. But the message I am trying to get across, and the reason why I use the above example, is don't just look at one key element -in this case: the solidifying economic recovery- to determine your trading and/or investment strategy this year.

Though it may be less apparent for those who only look at financial markets with a short term (trading) horizon, intrinsic valuation will come to the fore at some point, especially since most experts seem to think that excess global liquidity will be reigned in this year, implying the weight of money will increasingly play a lesser role as the year matures.

To put it very simply: higher economic growth in key regions should translate into higher corporate profits and into higher demand for energy and base materials. Thus prices for companies and for commodities should move higher. But what if these price rises have already occurred?

In the US the main discussion among investment experts seems to be whether market leaders such as Apple, IBM and Microsoft -all on a big winning streak thus far this year- still represent value beyond their present upward momentum. Short term traders might reason I'll play the stock as long as it moves, but for investors with a longer term focus the question is not that easy. If all the upside, or nearly all of it, has already been accounted for, then these stocks should no longer be bought at present levels.

Now that we're mentioning it: I wouldn't necessarily be afraid to have a higher than usual proportion of my investment portfolio in cash. It beats owning shares that seem stretched from a valuation point of view, but it also allows one to jump on any opportunities that might come along as we move through 2010.

Much has been said about the market's potential on the basis of expectations for FY11, and I myself have been a firm advocate for using FY11 projections to gauge where today's true market value is located, but most companies in Australia will only report their full FY10 numbers in August, which is still more than seven months away. In the meantime, a lot of FY11's upside potential is being priced in today.

I have observed, for instance, total recommendation downgrades by the stockbrokers FNArena monitors daily is now outnumbering the number of upgrades for the second week in a row. That's two out of two so far this year, as the first week saw hardly any research released. One downgrade in particular caught my attention: following the release of a production report that was much better than market expectations last week, analysts at Citi nevertheless downgraded Rio Tinto ((RIO)) shares to Neutral.

Their reasoning? Most of the good news is now priced in. As a token of their conviction, Citi analysts stated that in case of any meaningful rally in the shares, they would have no doubt and become sellers of the stock. Now that is conviction!

Most stockbrokers currently have a price target for Rio Tinto shares between $80 and $90. Citi itself is positioned at $83. FNArena's average price target stands at $82.64.

On pure Price-Earnings multiples considerations, Citi analysts seem a bit harsh in their assessment. After all, Rio Tinto shares are only trading on 11.3 times consensus forecasts for FY11, which is far from excessive. Consider, for instance, that BHP Billiton ((BHP)) shares are on a multiple of 12.7, Asciano ((AIO)) is on 19.4 and even Woolworths ((WOW)) and CSL ((CSL)) are both on a multiple of 15.2.

However, Rio Tinto has yet to report its full FY09 results as its fiscal year runs to December. As such, FY11 for Rio Tinto is six months further off today than it is for most Australian companies. In addition, the above mentioned FY11 PE ratio is on the basis of the average AUD value over the past twelve months. At the present AUD/USD value of 0.92-plus the implied PER for fiscal 2011 instantly jumps to 13.3.

Looked upon with a positive state of mind, this still seems to leave further room for share price appreciation, especially with iron ore prices likely to surprise this year and with most metals trading above consensus price projections. But let's not forget the start of Rio's fiscal 2011 is still nearly twelve months away. On FY10 numbers, and taking into account the present value of the AUD against the USD, the PER jumps to 16.

Add-in the fact that Rio's PER hardly ever reached as high as 14.5 (let alone 16) during the period 2005-2007 and one is inclined to have more sympathy for Citi's view. This becomes even more the case given a growing army of experts is questioning whether prices for the likes of crude oil, copper and gold have not moved too high too rapidly between December and early January.

I have already indicated in the opening paragraphs of today's story where I stand in this matter.

For BHP Billiton, whose fiscal year concludes six months sooner than Rio's, the FY11 PE multiple currently stands at 12.7 (on average FX values for the past twelve months). However, if we take guidance from today's AUD/USD value, the PER jumps to 14.5.

On a positive note, if we apply the Australian share market's longer term average forward looking PER of 14.5, then both BHP and RIO seem fully priced, but not excessively so. This, of course, on the understanding that normally the longer term PE multiple applies to the year immediately ahead, which in this case is FY10, not to 18 months into the future (2011).

One important factor for investors to watch during the upcoming reporting season is what'll happen to earnings and dividend expectations for FY11. Some experts believe there is simply not much room left for FY11 projections to rise further, which seems but a reasonable assumption given most growth expectations for the year are in between 20-40%.

Here are a few examples, randomly picked from FNArena's R-Factor on the website (with consensus growth expectation for FY11):

- Emeco ((EHL)) – 50%
- National Australia Bank ((NAB)) – 30.7%
- Qantas ((QAN)) – 74%
- AJ Lucas Group ((AJL)) – 84%
- OneSteel ((OST)) – 89.5%
- Ten Network ((TEN)) – 36.9%

The obvious question from all these figures is: does further confirmation of global economic recovery still have the potential to further increase growth projections for FY11, or have analysts already accounted for as much in their present projections?

Another way of looking at the Australian share market is that, according to FNArena's consensus forecasts, a little over half of S&P/ASX200 companies are currently trading on at least 14.5 times projected FY11 earnings per share. This automatically implies that nearly half of the companies is not.

Some of these companies come with exceptionally low multiples, like Boart Longyear ((BLY)) and Sunland Group ((SUN)) for example, with FY11 PE multiples of 1.65 and 2.89 respectively. But there are many others with less exceptional multiples (and thus likely less risks) including the likes of (again randomly picked):

- Hastie Group ((HST)) – FY11 PER 8.32
- Telstra ((TLS)) – 9.62
- Oz Minerals ((OZL)) – 9.95
- Elders ((ELD)) – 10.54
- QBE ((QBE)) – 12.37

Special mention: all banks still seem to represent good value on FY11 metrics. Only CommBank ((CBA)), which traditionally commands a sector premium, seems relatively fully priced on a FY11 multiple of 13.3.

Another group worth mentioning are healthcare stocks and other defensives. On pure PE multiples these stocks are mostly trading on above market multiples (see examples of Woolworths and CSL earlier in this story) but compared with historical multiples most of these defensive stocks are valued below the multiples they usually enjoyed prior to 2009.

One factor to keep in mind is that healthcare stocks in Australia come with lots of USD exposure.

The reason why I end on a relative value note is because have I noticed professional investors are increasingly looking into alternative value propositions ("alternative" as in "outside the usual movers and shakers that pushed the market in 2009"). It may well be that, as the usual suspects start running into valuation headwinds (RIO, BHP, CBA), the market might make a switch into lesser valued stocks, which in itself could keep the rally going for longer.

Having said this, I do think the ASX200 index undertook an attempt at conquering the 5000 technical resistance level earlier this month, and the attempt was readily and bluntly rejected by Mr Market. As far as my information goes, the market is now waiting for direction in between support at 4850 and resistance at 5000.

As far as Rio Tinto goes, technical resistance lies at $80, while for BHP Billiton it is at $44-$44.50.

All these resistance levels are near, but they still leave further room to move upwards.

More worrying is the fact that 1150 for the S&P500 in the US historically has tended to be a tough barrier to move past. And guess where the index closed at yesterday? Wham bam, right on the mark!

With these thoughts I leave you all this week,

Till next week!

Your editor,

Rudi Filapek-Vandyck

(as always firmly supported by the Ab Fab team at FNArena)

P.S. I – All paying members at FNArena are being reminded they can set an email alert for my editorials. Go to Portfolio and Alerts in the Cockpit and tick the box in front of Rudi On Thursday. You will receive an email alert every time a new editorial has been published on the website.

The Dow Jones posted its third straight triple-digit loss Friday, sending the Dow Jones to its worst weekly performance since February 2009. Investors looked past solid earnings results to concentrate on President Obama’s plan to regulate the banking industry and the Chinese government’s moves to reign in spending.

Meanwhile, in more bad news, the jobless rate in 43 states rose in December, reversing a small decline from the month before.

The Dow Jones lost 213.27 points, or 2.01%, to 10,389.88, the S&P's 500 fell 21.56 points, or 1.89%, to 1,116.48 and the NASDAQ dipped 25.55 points, or 1.12%, to 2,265.70.

It’s nearly 18 months since the NASDAQ and S&P 500 lost this much ground in a week.

The government is looking to regulate banks, by reinstalling a law out of use for more than 10 years. The law would determine the extent to which banks can work in either retail or commercial banking.

Among the retail banks, Citigroup lost 0.6%. Bank of America slumped 3.7%, while Wells Fargo sank 2.6%.

Three banks expected to bear the brunt of the new banking rules were Goldman Sachs, Morgan Stanley and JPMorgan which sank 4.2%, 5.3% and 3.4% respectively.

One of the few gainers on the index was GE, which tacked on 0.6% after saying the year ahead looked positive despite missing earnings estimates.

Among the retailers, Wal-Mart was steady although Macy’s shed 1.1%. Amazon.com lost 4.1%.

In a wrap of the tech stocks Microsoft slumped 3.5%, though Google set the low water mark, down 5.7% after co-founders Larry Page and Sergei Brin plan to off-load as much as US$5.5 billion in stock.

All the major players in the sector lost ground.

One of the few gainers was McDonald’s, which put on 0.3% after earnings slightly beat estimates. Overall the fast food market was resilient in the face of widespread selling.

COMEX gold for February delivery fell US$13.50 to settle at US$1,089.70 an ounce.

ConocoPhillips retreated 3.1%, while Chevron was down 2.2%. Exxon Mobil, the industry giant, was down 0.9%.

NYMEX light crude oil for February delivery lost US$1.54 to settle at US$74.54.

European Markets

The same concerns that saw huge losses on the US markets impacted the European markets, with concern rife over the effect on the banking sector President Obama’s regulation plans would have.

The UK benchmark FTSE 100 shed 32.11, or 0.60% to 5,302.99, while French CAC40 lost 41.38, or 1.07% to 3,820.78. The German DAX fell 51.65, or 0.90% to 5,695.32.

As in the US, the banking sector was the hardest hit with a measure of the strength in the sector hitting five-month lows.

In the UK, Barclays slumped 4.1% and Royal Bank of Scotland retreated 1.8%.

HSBC, Europe’s largest bank, was down a more muted 0.2%.

Swiss banking giants Credit Suisse and UBS slumped 6.4% and 3.9% respectively.

Deutsche Bank was down 4.2%.

Among the resource stocks sentiment continued to be affected by the prospect of China raising interest rates and curbing lending.

Rio Tinto lost just 0.1% though losses for the week were more than 8%. Aussie peer BHP Billiton lost 0.4% on Friday.

Kazakhstan focused copper producer, Kazakhmys, lost 8.2% in the week.

UK confectioner Cadbury’s put on 4.9% after finally caving to four months of pressure from Kraft and accepting a nearly US$20 billion offer for the company.

GlaxoSmithKline lost 1% and Astrazeneca dipped 0.8% though the healthcare sector was one of just two to advance over the week.

Japanese Markets

Japan’s Nikkei slumped on concerns President Obama’s proposal to reduce risk-taking at banks would discourage people from investing in high-risk assets. Exporters weakened as the yen strengthened against the greenback.

The Nikkei 225 fell 277.86, or 2.56% to 10,590.55.

Commodity stocks were hit by concerns demand for commodities will decrease due to President Obama’s proposal. Oil explorer Inpex and Nippon Mining dropped 4.2% and 3.2%.

Trading house Mitsubishi Corp slumped 4.5% due to its high exposure to commodity sales.

Automakers Toyota and Honda shed 3.2% and 2.4%, while electronics companies Sony and Panasonic slid 1.3% and 1.4%.

Shin-Etsu sank 6% as it forecast full-year net income to be below analyst estimates.

Komatsu and Hitachi Construction Machinery lost 2.6% each.

Hong Kong Market

Hong Kong stocks, like most other global markets, lost ground Friday. Stocks, however were more affected by falling commodity prices and the prospect of tightened lending in China, than banking restrictions in the US.

The Hang Seng lost 136.49, or 0.65% to 20,726.18.

There was surprising strength shown by the banks. Bank of China edged 0.5% higher.

Bank of Communications soared 3.2%, while heavyweight lender ICBC jumped 2.3%.

However, HSBC, which makes up one-sixth of the market lost 1.6%.

Shoe maker Yue Yuen Holdings put on 0.4%, while Li & Fung, which makes clothes for the US giant Wal-Mart slumped 4.7%.

Resource stocks were heavily sold, with Aluminium Corp of China retreating 2.7%. The stock lost 9.1% of its value last week.

Directors' Interest Notices
22 January 10

  * Excercise of Options

Substantial Shareholder Changes 
22 January 10

All movements are percentage changes