Another catalyst has been the reported merger of Huaneng Power and Shandong Power. This may be the first of many. Having said that, merging two bad companies does not necessarily make one good one. There are some question marks about the management of many red chips and H shares, and that's been totally justified since they've never really delivered good results or met expectations over the long term. You've got to be very careful about stock selection.
China Mobile is obviously a quality core holding.
China Mobile has good management and the balance sheet is strong. Most investors will decide to buy China Unicom depending on the discount to China Mobile. The two companies we like best are Cosco Pacific, a port operator listed in Hong Kong, and China Shipping, which is also listed there. Sure, the price of oil is an issue, but we think a total collapse in world oil prices is extremely unlikely. These three shares have obviously moved very strongly in the last week or so, but we still think they're a buy.