Interesting things over the weekend

1. Toyota Finance Co. China is going to issue debt in RMB to boost its sales through cheaper car loan.

Only 8% of the car sale in China in 2008 was done through financing while this number is more than 60% in developed countries. Typically, consumer can get car loan through either banks or the finance companies operated by the car makers, and the later one often charges a higher rate due to its funding constrain. This issuance, if successful, could help with Toyota to boost its car sales by offering lower rate to its clients and should expect more debts of this kind to come in the future, given China is loosening its restriction on consumer loans, especially car loans.

2. More pain to feel on office rent in Shang Hai.

Have been visiting Shang Hai quite a few times in 2008, though not this year. One of the feelings that I had so strongly is the supply of office space in Pu Dong area. At that time IFC Shang Hai was still under construction and we had already got the then highest building in Asia just completed on the other side of the road. In 2009, more data is out to confirm that vacancy rate has been steadily up for a few months while rent of the top class office in 1Q is down around 15% yoy according to the local statistic.

3. McDonald in US vs. Café De Coral in HK

One of the evidences that people started to adjust their consumption habit during a cyclical recession in an indebtedness-de-leveraging world, is the restaurant they dine at. McDonald sees its Feb sales number up 6.8% while the number of newly opened restaurant in NYC dropped for the first time in 2008, to 119 from 163 in 2008. If you think one step further as to where is our Uncle M in HK, it won’t be hard for you to think of Café De Coral, even though it is not cheap around 20 P/E multiple and Dvd Yield around 3.4%, but just can not help pointing that out for you after I had a dinner there recently, paying 51 HKD but getting a set of food, more delicious than most 200+ that I had. Go to have a trial if you are in HK if you have not yet, to see how efficient and cost-saving they are.

4. Another 4 trillion package?

There has been quite a number of media reports over the weekend stating that it is possible that Chinese Government is going to launch another 4 trillion stimulus plan, as early as next Wednesday. While the first 4 trillion has been focusing on the infrastructure and FAI side, this 2nd round will, on the other hand, be concentrating more on the consumption side. Whether or not it is true, I don't have the answer for you. But what is worth noting is how the market is going to act on it, next week when it starts to talk about it. We shall see.