Hot news! China has just rolled out a single dose vaccine!

https://www.globaltimes.cn/page/202102/1216709.shtml

This is definitely great news as China's single-dose vaccine can be further strengthened with a booster to prolong the immunity period to 2 years.

This longer immunity period is very important as it can facilitate travelling and people don't have to take annual vaccinations for overseas trips.

Baltic dry index - 1675

 Related stock: Sembcorp Marine, Cosco & Pan ocean.

US rig count (weekly) - 402

Related stock: Sembcorp Marine & Cosco.

The US 7-year treasury bond sale was a flop!

https://www.zerohedge.com/markets/treasury-yields-soar-after-catastrophic-tailing-7y-auction

TREASURY $62B 7-YEAR NOTE AUCTION RESULTS: 

DRAWS 1.195%

BID-TO-COVER: 2.04 Vs 2.30 PRIOR

Overseas Buyer: 38.06% Vs 64.10% PRIOR

We had already expressed our concern about the US treasury bond sales previously because the US had lost China and the EU as its buyers.

http://sg-stock.blogspot.com/2021/01/the-achilles-heels-in-bidens-policies.html

This latest bond sale shows that foreigners are no longer interested to purchase US bonds.

The US is facing rising rates pressure in 2021. - Part 2

The US 10-year yield has breached 1.5% in Feb 2021 and is above the level in last Feb.

We did warn about the rising rates pressure last week.

http://sg-stock.blogspot.com/2021/02/the-us-is-facing-rising-rates-pressure.html

For those who don't understand the bond structure, the bond price and yield have an inverse relationship because of the bond calculation method.

Bond Yield: 1.5% (The 10-year yield has been trending up.)

Bond price: $133.98 (The 10-year bond price has been trending down.)

In another perspective, the rises in bond yields can be viewed as an indication of impending inflation.  We had been projecting the 2021 US inflation in October 2020.

http://sg-stock.blogspot.com/2020/10/the-us-inflation-is-coming-part-4.html

Some prominent economists are corroborating our projection now.

https://sg.finance.yahoo.com/news/bank-englands-haldane-warns-inflation-120928077.html

https://sg.finance.yahoo.com/news/rates-may-rise-sooner-tame-124318828.html

Moreover, some commodities' prices have also been trending up, particularly the copper prices since copper is a ubiquitous industrial metal.  Thus, this will provide the oomph to a rise in the producer price index.

The spikes in bond yields had just caused some significant falls in the US stock markets recently.  Therefore, we need to watch out for the movements in bond yields and inflation.  A good indication of such a movement will be the 10-year breakeven inflation rate.

* 10-year breakeven inflation rate = (10-year nominal Treasury yield) - (10-year TIPS yield)

As we can see from the aforementioned chart, the 10-year breakeven inflation rate has been on an upward trend since 2020.  This shows the market expectation of future CPI inflation.

Top Glove - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
03/20/20	Kim Eng	Top Glove	1.9	2.08	Buy	Ringgit target $6.32, PER30x CY21
03/20/20	UOB Kay Hian	Top Glove	1.9	1.99	Hold	Ringgit target $6.05, Buy @ $5.50
03/20/20	CIMB	Top Glove	1.9	2.24	Add	Ringgit target $6.80
03/27/20	DBS Vickers	Top Glove	2.02	1.99	Hold	Ringgit target $6.05
05/14/20	CIMB	Top Glove	3.08	3.41	Add	Ringgit target $10.40, PER32x CY21
05/14/20	Kim Eng	Top Glove	3.08	3.59	Buy	Ringgit target $10.95, PER30x CY21
05/27/20	CIMB	Top Glove	4.42	5.37	Add	Ringgit target $15.50, PER36.8x CY21
05/27/20	UOB Kay Hian	Top Glove	4.42	6.05	Buy	Ringgit target $17.50
05/29/20	Kim Eng	Top Glove	4.62	6.52	Buy	Ringgit target $20, PER23x CY21
06/10/20	Kim Eng	Top Glove	5.7	6.52	Buy	Ringgit target $20, PER23x CY21
06/10/20	CIMB	Top Glove	5.7	8.14	Add	Ringgit target $25, PER22x CY21
06/12/20	Kim Eng	Top Glove	5.56	7.13	Buy	Ringgit target $21.9, PER23x CY21
06/12/20	UOB Kay Hian	Top Glove	5.56	7.13	Buy	Ringgit target $25.69
07/07/20	Aminvestment	Top Glove	6.5	8.37	Buy
07/21/20	UOB Kay Hian	Top Glove	8.15	7.14	Buy	Ringgit target $21.90
07/22/20	Kim Eng	Top Glove	8.24	9.32	Buy	Ringgit target $28.60, PER16x
07/29/20	UOB Kay Hian	Top Glove	8.65	11.97	Buy	PER16x FY21, Ringgit target $36.90
09/14/20	Kim Eng	Top Glove	2.58	3.14	Buy	Ringgit Target $9.53 (ex-2 for 1 bonus), PER9x FY21
09/18/20	CIMB	Top Glove	2.63	3.29	Add	Ringgit target $10, PER17x CY22
09/18/20	UOB Kay Hian	Top Glove	2.63	4.05	Buy	Ringgit target $12.30
10/07/20	UOB Kay Hian	Top Glove	2.83	4.03	Buy	Ringgit target $12.30
10/07/20	CIMB	Top Glove	2.83	3.28	Add	Ringgit target $10, PER17x CY22
10/09/20	Kim Eng	Top Glove	2.87	3.13	Buy	Ringgit Target $9.53 (ex-2 for 1 bonus), PER9x CY21
11/06/20	UOB Kay Hian	Top Glove	2.73	4.01	Buy	Ringgit target $12.30
12/10/20	Kim Eng	Top Glove	2.27	2.85	Buy	DCF, Ringgit target $8.65
12/10/20	UOB Kay Hian	Top Glove	2.27	4.05	Buy	Ringgit target $12.30
12/15/20	CIMB	Top Glove	2.19	2.93	Add	PER16x CY22, Ringgit target $8.90
01/11/21	CIMB	Top Glove	2.11	2.93	Add	PER16x CY22
01/13/21	Aminvestment	Top Glove	2.18	2.13	Hold	Ringgit target $6.50

Tiong Woon - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
07/09/20	Lim & Tan	Tiong Woon	0.375	0	Accumulate
10/28/20	Lim & Tan	Tiong Woon	0.4	0	Neutral

Tianjin Zhongxin - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
04/20/20	Lim & Tan	Tianjin Zhongxin	0.67	0	Accumulate
04/21/20	UOB Kay Hian	Tianjin Zhongxin	0.715	1.35	Buy	PER10.5x FY20
08/19/20	UOB Kay Hian	Tianjin Zhongxin	0.87	1.25	Buy	PER9.9x FY20