risk management panelist
description
Transcript of risk management panelist
Proactive Structural Strategic China/GLobalFund Risk Management China/Global oil, gas ,housing industry market fundamental mechanism, risks Early Warning Operations Simulation Analysis (OSA)
中國石油天然氣上下游基金投資風險管理策略
Monetary, Economic, Fiscal Policy Impact on China/Global Macro-economic Control, Oil, Gas, Housing demand, prices
Mechanism and Investment Risks Simulation/Forecasts
Warren Huang ( 黃華南博士 ) ,Ph D,Founder/CEOOSA Global Strategic Management
[email protected]/ [email protected]
Revision for China Fund World , Pudong Conference, March 5,2008
Lecture Summary Proactive Structural Risks Mechanism Operations Simulation Analysis
OSA Methodology: Two master hands controlling last 20 years Global energy,housing,asset price bubble burst Mechanism, Allocation Fund Risks early warning
1. China/Global Country Risks : Macro economic control, housing bubble burst, mortgage crisis policy impact on inflation, recession, interest rates analysis 2. Currency Risks: Interest rate, trade surplus impact on RMB, global currency market forces mechanism, currency crisis forecasts 3. Credit Risks: Oil, gas, China/Foreign players cash flow, profits, housing price bubble burst impact on credit rating and loan defaults risk4. Operational Risks: All phases of oil, gas, power, banking, finance, daily trading, profit performance risks reporting, monitoring, simulation.
5. Market Risks: Proactive VaR pricing for housing ,banking, finance oil, gas, demand, performance, stock, derivatives prices dynamics mechanism forecast
6. Causes, onset, recovery of disaster, energy,banking,mortgage, financial crisis, asset prices bubble, debt, equities, properties NPL
7. Risks Hedging: Oil, gas, currency, interest rate futures, derivatives prices forecasts, risks hedging.
8. Corporate Governance: Operating, Cost, Financial accounting data tracking, asset price bubble and scandals cycles earning warning
9 M/A , IPO Risks :Joint ventures, pre and post M/A and IPO performance, stock prices, risks tracking.
OSA challenges the unknown futures, fight competition, maximize Risk adjusted return in oil, gas ,fund investment
Dr. Huang over 30 year develop, implemented structural dynamic risks and return simulation,
He pioneered two master hands controlling global economy, finance, capital market asset prices: extensive information knowledge base development Out of 1972 -2008 ( daily Wall Street Journals, Business Week, trading data, internet market and economic analysts, technical analysis, Monte Carlo, Risk Metric statistical analysis fail to track asset prices.
He Trained thousands Taiwan, Tsinghua, Tunghai, Fudan, Peking University faculties,students, applied his Ph.D thesis Moon-landing guidance and control to challenge the unknown future He patented “ Improve Process by OSA” in US and 82 countries, 1980, published thousands articles on US, Taiwan and China government, banking, finance, investment daily news papers, and on US Oil & Gas Journal journal predicted global oil, gas, currency, interest, stock futures prices since 1980
He lectured China, Taiwan, US 15 cities ( Beijing, Shanghai, Taipei, San Francisco Silicon Valley) TV, radio , OPEC petroleum ministers, executives China/global strategic investment risk management workshops to 30 million investors, banking finance, enterprises CEO, executives since 1983.
He predicted years/month ahead of 1987 US stock crisis, Asian Financial crisis 1997, US asset bubble burst 2000 and current China/US rate hikes, soaring oil, gas, commodities prices on his www.osawh.com website and predicted on Sept 2007 Wall Street Journal Street Market Beat, Real Time Economics blog that US rate cuts can not stop housing price slump resulted economic recession continue into 2008 summer and US, global stocks, fund, bear markets correction,
Country Risks OSA :Monetary policy, WTO impact on inflation,
GDP growth 貨幣財經政策入世對中外宏觀調控影響
Excessive money supply, rate cuts,DFI resulted soaring commodity, asset prices and falling US dollar push inflation and GDP higher
export
Monetary policy
Foreign direct investment
Business demandFixed
investment
Consumer demand
Macro-economic inflation and GDP growth
currency
Commodity prices
Monetary, economic, fiscal policy impact on Global/China macro-economic control and daily oil, gas, capital market asset prices since 1983
Dr. Huang structural dynamic models accurately predict economic, energy crisis since 1980 on American Institute. Chemical Engineering Washington DC, World Congress1986, Tokyo
He accurately predicted in July 10, 1994 to Wall Street Journal and Wuhan Guotai, Wanguo CEO that Shanghai A index will soared to 800 from 333 in Aug.1994.(WSJ published late July China B share rebound, Shanghai A rebound to 820 in Aug-Oct, 1994)
He was invited by Wanguo, Guotai and banking CEO to offer lecture to thousands investors, traders, money manager predicted Shanghai A will be traded 600-800 during 1994-1996 due to macro-economic control, results published on Wuhan securities news Oct. 31, and Beijin Financial Times 1994
He accurately predicted in Wuhan stock information journal Feb. 1995 that Shanghai A will rebound from 540 to 800. It did on May 18 soared from 590 to 920 and plunged to 580 in three days, recommended buy Shanghai Petrochemical at one dollar soared to 8 in Aug.
He accurately predicted June 20, 1995 on Beijin Central Peoples radio one hour interview, and Financial Times, Economic Daily news, Commercial Times that Shanghai A will soar from 600 to 800 in Aug.1995.
Predicted on Wuhan securities news March 3, 1996, that China Peoples Bank will cut interest rate, stock market go to bull markets, Shanghai A break 1600.
Lectured Shanghai Eastern radio and Shanghai stock exchange, Dec. 16, 1996 to predict Shanghai A will rebound from 1000 to 1700 in 1997 after 10 % price limit. and to Beijing Peoples Bank finance staff July 2001 China stock plunge to 1500 from 2200. Predicted Nov 2003 on Euro-events China finance, capital market conference that oil, commodity,
metal prices making new high , soaring inflation lead to US , China rate hikes 2004 summer, stock prices plunge and housing, stocks price bubbles 2007 bubble burst
China/Global Economic, Enterprises reform, privatization MBO and IPO Prices Mechanism
Privatization, board members organization, debt restructuring. Maximize corporate/plant wide cost, financial accounting tracking, operating
profit margin through cost reduction and products, market innovation develop, implemented by goal, mission, performance oriented strategic (top management), and executive Operations Simulation Analysis teams maximize China, US oil, gas corporate performances and IPO stock prices in
MBO/IPO prices =F (listed market investor sentiment,and corporate profit margin)
= F (Shanghai/Shenzhen index, corporate profit margin)China oil/gas ADR shares prices ( SINOPEC, PetroChina, CNOOC
IPO after market prices =F (China market investor sentiment, US market investor sentiment, and corporate profit margin)
= F ( Dow Jones index, Shanghai/Shenzhen index, corporate profit margin)
Proactive structural China/Global Inflation, interest rate Risks, Government, corporate bond yield Price Mechanism simulation
Soaring asset, commodity prices, falling currency excessive money supply led to continued China/US inflation, credit tightening led to rising interest rates and bond yields
Inflation rates
Interest rates and bond yield
Consumer spending
currency oil, commodity,asset prices
Money supply growth
currency
Proactive Structural global currency and RMB market forces risks mechanism simulation
WWW.osawh.com/currency.html tracking trade surplus/deficit, interest rate spread impact on daily 40 currencies and last 12 years RMB ( 3 to 12) since 1998,predicted last Sept, that Fed rate cuts
Drag dollar to 1.5 EURO and 105 Yen.
US trade deficit
China/country trade surplus/deficit
Daily US dollar, RMB global exchange rates futures prices
Interest rate spread between US and yours
Integrating into Black-Schole for derivatives prices hedging
Proactive Structural China/Global housing prices, bubbles,wealth risks mechanism simulation
Housing prices and heating, appliances demand are fueled by money supply, excessive credit, stock markets wealth gain, predicted June 2007 PekingUniv, that China housing and stock prices correction late 2007
Money supply growth
Mortgage interest rate
Housing prices bubble, wealth Housing stock prices simulation
Stock market wealth
Stock index changesMBS credit derivatives
Home heating demand ,prices
Home appliances demand
Proactive Structural Market Risks: Global/China Stock indices prices futures market mechanism simulation
www.osawh.com/prod03.html tracking 40 stock indices and associated index ,ETF fund, wealth, prices are generated from money supply, lower interest rates and stock price, predict Sept 2007 that US rate cuts can not stop housing price slump drag into recession,US and global stocks into bear market correction, through summer 2008
Money supply growthConsumer spending
Interest rate/inflation rate
China Shanghai/Shenzhen 300 , A, B, Henseng, H-Share,Nikkei, Taiwan Index, Singapore ST
H stock index, Seoul futures, Investors sentiment , trading volume
US investor sentiment
NY Dow Jones/Nasdaq stock index
Integrate into Black-ScholeFor derivatives prices, hedging
currency
Proactive Structural China/Global coal, oil, gas, freight, power demand, prices stock prices mechanism simulation
China oil, gas downstream are well positioned, fully integrated follow Dr. Huang1991 speech to SINOPEC, Beijin on globalization, integration strategy
CNOOC, SINOPEC, PetroChina and coal stock prices skyatrocketing , Predicted Peking univ. 2007 that Fed rate cuts drive oil price over 100, 2008
Currency
Coal, crude oil, heating oil, gasoline , futures,petrochemical, plastics prices
Profit margin, stocks simulation
Gasoline, heating oil, petrochemical feedstockPrices, costs
Consumer Business spending
Powerplantrate
land, ocean freightcost
Coal, gas, LNGdemand, price
Proactive Structural China/Global Banking, Finance Enterprises Reform and, merger/acquisition performance risks simulation
Cut pre-merger, joint venture costs by 50 % in pre-merger speculationStock prices plunged more than 50-90 % gained in pre-merger speculation post merger integration , profit creation performances,
Investor sentimentsPost merger profit margin
Pre and post merger profit margin Performance improvement and stock
Prices simulation
Post merger integration performance
Pre-merger, reform goal setting targeting
Proactive Structural China/Global corporate governance, asset bubble burst scandals mechanism risks early warning simulation
Tracking cost and financial accounting systems and investors sentiment speculation bubbles for scandals early warning in US Enron and China Guanxia, ST stocks and China Aviation Oil and pension fund investment in housing market scandals 2004-2007
Production and sales tracking
financial accounting earning trackingBalance sheet and off-balance sheet
Derivatives, IPO, merger activities tracking
Strategic and execution corporate governance OSA teams tracking
Cost and financial accounting stock prices
Cost accounting bubble tracking
Investor sentiments, housing, oil, commodity asset bubble,stock index
Proactive Structural Dynamic Simulation of Causes, onset, recovery of China/Global Mortgage, credit,financial ,currency energy banking, bubble burst crisis and NPL loan, credit risk mechanism
Excessive money supply and hot money inflow resulted soaring inflation, rate hikes, trade deficit and currency plunge, rate hike and stocks, properties prices plunge and NPL loanPredicted Sept 2007 on Wall Street Market Beat that Fed rate cuts can not stop housing
price slump, credit crisis and recession 2008Strong Export growth
Excess foreign capital Inflow , currency appreciation
Export decline, soaring trade deficit and currency plunge
Runaway inflation and interest rate hikeStock prices and consumer demand plunge
leading to financial, currency, housing bubble burstdefault, crisis, recovery will begin until trade surplus
And currency rebound, interest rate cuts, stock prices rebound www.osawh.com/riskm.html
Excess money supplyConsumer spending
NPL Mortgage Default
Proactive Structural strategic China/Global project financing risk management early warning
Two master hands controlling China and global economy and industrial sectors ,corporate profitability and stock prices for finance managers asset allocation, wealth management investment strategy, risk control avoid chasing the markets trillion dollars loss
Money supply, interest rates
Currency exchange rates
Investors sentimentsOil, gas,LNG/downstream asset prices
bubble, profit margin simulation
Domestic and global market pricesAnd risks simulation
Conclusions and recommendations
OSA Proactive Structural China/global capital market fundamentals mechanism simulators predicted 6 month ahead the monetary, economic, fiscal policy impact on macro-economic, capital market asset prices to achieve sustainable profit growth systemic and specific risks, early warning supporting strategic China banking, finance, enterprises, capital market reform innovation
Which avoided trillion dollar market loss due to current betting on the wrong side of investment,chasing the markets, speculation on technical charts, market, business, economic data. It provide QFII, QDII rational, reliable decision investment and risk management decision tools in asst allocation, wealth management
Thousand strategic structural dynamic OSA models tracking China and global economic and daily capital market asset prices supporting China and global capital market decision makers through in-houseworkshops, corporate memberships and full banking, finance, enterprises reform, change management OSA program
Conclusions and Recommendation
Proactive OSA simulators predicted years to 6 month ahead the monetary, economic, fiscal policy ,impact on macro-economic control, capital market asset interest rate, currency, oil, gas, downstream demand, prices to achieve sustainable profit growth and prices stability
Monetary , economic, fiscal policy, WTO impact on China capital markets asset prices simulation provide early warning to future oil, gas LNG, upstream/ downstream project financing market, credit, operational risks is the key to sustainable profit growth
Monetary , economic, fiscal policy, WTO impact on China capital markets asset prices simulation, early warning avoided trillion dollar market loss due to current chasing the markets, speculation on technical charts, market, business, economic data. It provide financing managers rational, reliable decision investment and risk management decision tools in asset allocation, wealth management
Proactive Structural SH-SZ300 stock index future e-GARCH-OSA
-.2
-.1
.0
.1
.2
.3
6.5
7.0
7.5
8.0
8.5
9.0
05M07 06M01 06M07 07M01 07M07
Residual Actual Fitted
Tracking China Peoples Bank money supply, inflation, housing price,US mortgage crisis Dow Jones index impact on daily Sh-Sz 300 futures.Accurately predict on Peking Univ, Wall Street Journal Sept 2007, SHSZ follow China rate hikes, raise 10 time deposit ratio and US stocks into bear market correction, plunged from 6000 to 4000 Jan 2008
LN Index
Residu
al
Proactive Structural Simulation of Dow Jones stock index futures
Daily NY Dow JOnes Stock Index SIMULATJapanese Yen = 105
5500
6500
7500
8500
9500
10500
11500
1 2 3 4 5 6
US Fed funud rate
Dow
Jones I
ndex
-2 2 3 4 5 6
US money supply growth %
This simulator predicted last 20 years daily ,Dow Jones index since 1987 crash,With average error below 1.5%, correlation above 0.96. Predicted last Sept on Wall Street Journal Market Beat that Fed rate cuts can not stop housing price slump into summer 2008, drag US to recession, Dow Jones plunge below 12000