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Friday, May 31, 2019

Turkey's economy has worsen!

https://sg.finance.yahoo.com/news/1-turkish-economy-shrinks-2-075823691.html

The Turkish economy has shrunk by 2.6% in Q1.  This is really a piece of bad news as a weakening economy will lead to a weakening lira and create a vicious cycle.  Ultimately, this will cause a collapse in the Turkish stock market.

Watch out for Turkish development as this may lead to the European Financial Crisis (EFC).

http://sg-stock.blogspot.com/2019/03/1997-asian-financial-crisis-is.html


M1 - Stock calls

Date Analyst Company Last Target Call Valuation
01/02/19 Kim Eng M1 2.09 1.63 Sell
01/04/19 Phillip M1 2.08 2.06 Accept Offer Offer $2.06
01/08/19 OCBC M1 2.06 2.06 Accept Offer Offer $2.06
01/14/19 DMG & Partners M1 2.07 2.06 Neutral Offer $2.06
01/29/19 CIMB M1 2.06 2.06 Hold Offer $2.06
02/12/19 Kim Eng M1 2.04 1.77 Sell
03/07/19 OCBC M1 2.05 2.06 Accept Offer Offer $2.06

Lian Beng - Stock calls

Date Analyst Company Last Target Call Valuation
01/16/19 Lim & Tan Lian Beng 0.515 0 Buy on weakness

KSH - Stock calls

Date Analyst Company Last Target Call Valuation
11/19/18 OCBC KSH 0.525 0.81 Buy
11/19/18 Lim & Tan KSH 0.525 0 Buy
02/15/19 OCBC KSH 0.52 0.81 Buy
04/17/19 OCBC KSH 0.535 0.81 Buy
05/31/19 Lim & Tan KSH 0.45 0 Buy

Stock calls for 31 May 2019

Date Analyst Company Last Target Call Valuation
05/31/19 Amfrasers Accordia Golf Trust 0.585 0.7 Buy
05/31/19 UOB Kay Hian IHH Healthcare 1.79 2.07 Buy Ringgit $6.30 target price, PER32.8x FY2020
05/31/19 Lim & Tan KSH 0.45 0 Buy
05/31/19 DBS Vickers MM2 Asia 0.24 0.34 Buy Sum of parts, PER16x FY20
05/31/19 OCBC Soilbuild Reit 0.6 0.62 Hold
05/31/19 DMG & Partners Valuetronics 0.625 0.61 Neutral DCF
05/31/19 UOB Kay Hian Valuetronics 0.625 0.8 Buy

Microsoft has banned Huawei from its ecosystem.

https://marketrealist.com/2019/05/microsoft-joins-google-in-cutting-off-huawei/

Microsoft is already a US state agent many years ago and I'm not surprised by this.

We've reported on MS before (See the posts below).

http://sg-stock.blogspot.com/2017/05/stop-using-microsoft-windows-and-you.html

http://sg-stock.blogspot.com/2019/05/the-us-is-going-to-impose-blanket-ban.html

Hahaha! Canada has to deal with its own waste now.

https://sg.news.yahoo.com/cargo-ship-arrives-philippines-return-canadian-trash-151417611.html

Canada cannot ship its waste to the Philippines and Malaysia now.  Hahaha!

It is forced to deal with its own waste now by finding its own landfill, building its own waste burning furnace, etc.  The bottom line is the air won't be as clean as before in Canada anymore.

The US stock markets are getting precarious.

The risk-free (10y bond yield) rate is at 2.22% and it is below the Fed's interest rates bandwidth of 2.25%-2.5%.  This will increase the Fed's pressure to reduce its interest rates as the current rates are no longer relevant and effective to manage the market expectation.  This exposes the fragility of the risk appetite of the investors in the current market.  Furthermore, there are some yield curve inversions which denote a forthcoming recession.

Is a recession coming soon?

A recession is highly likely to happen in our view. Why?

The US corporate debt-to-GDP ratio is giving a red light warning now.


Whenever there was a credit cycle peak in the past, there would be a US recession.  The credit cycle peaks happened in 1990 (oil shock recession), 2000 (tech bubble burst), 2008 (US housing collapse, Lehmans bro minibonds) and 2018 (forthcoming recession).

The credit cycle had peaked in 2018 and the US-China trade war started in 2018 too.  The world economies have started to slow down now due to the trade war.  Consequently, the US bond markets are showing the low-risk appetite of the investors in the current market.  With so many negative factors in this global environment now, a recession is inevitable.

Thursday, May 30, 2019

Koufu - Stock calls

Date Analyst Company Last Target Call Valuation
02/27/19 DBS Vickers Koufu 0.63 0.8 Buy PER17x FY19
03/08/19 UOB Kay Hian Koufu 0.67 0.95 Buy PER18.1x FY19
03/08/19 Lim & Tan Koufu 0.67 0.85 Buy PER18x FY19
04/08/19 UOB Kay Hian Koufu 0.805 0.95 Buy
05/07/19 DBS Vickers Koufu 0.77 0.8 Hold PER17x FY19
05/09/19 UOB Kay Hian Koufu 0.75 0.95 Buy

Kimly - Stock calls

Date Analyst Company Last Target Call Valuation
01/07/19 DMG & Partners Kimly 0.24 0.27 Neutral
02/14/19 DMG & Partners Kimly 0.245 0.24 Neutral DCF
04/05/19 DMG & Partners Kimly 0.24 0.24 Neutral
05/09/19 DMG & Partners Kimly 0.245 0.23 Neutral DCF

Keppel Reit - Stock calls

Date Analyst Company Last Target Call Valuation
01/22/19 DBS Vickers Keppel Reit 1.18 1.31 Buy DCF
01/22/19 CIMB Keppel Reit 1.18 1.34 Add DDM
01/22/19 DMG & Partners Keppel Reit 1.18 1.06 Neutral DDM
01/28/19 UOB Kay Hian Keppel Reit 1.18 1.35 Buy
03/07/19 UOB Kay Hian Keppel Reit 1.28 1.35 Buy DDM
03/18/19 DMG & Partners Keppel Reit 1.23 1.06 Neutral
04/01/19 UOB Kay Hian Keppel Reit 1.29 1.35 Buy DDM
04/18/19 DMG & Partners Keppel Reit 1.24 1.12 Neutral DDM
04/18/19 DBS Vickers Keppel Reit 1.24 1.38 Buy DCF
04/18/19 Lim & Tan Keppel Reit 1.24 0 Hold
04/24/19 UOB Kay Hian Keppel Reit 1.21 1.37 Buy DDM
04/24/19 DBS Vickers Keppel Reit 1.21 1.4 Buy DCF
04/25/19 CIMB Keppel Reit 1.23 1.34 Add DDM
05/30/19 UOB Kay Hian Keppel Reit 1.21 1.37 Buy

Stock calls for 30 May 2019

Date Analyst Company Last Target Call Valuation
05/30/19 UOB Kay Hian CapitaCommercial 1.95 2.16 Buy
05/30/19 phillip Clearbridge 0.149 0.28 Buy DCF
05/30/19 DMG & Partners Dairy Farm 7.83 8.25 Neutral DCF
05/30/19 UOB Kay Hian Keppel Reit 1.21 1.37 Buy
05/30/19 OCBC Sembcorp Marine 1.45 1.6 Hold PB1.45x
05/30/19 OCBC Suntec Reit 1.82 1.99 Hold Buy @ $1.81

The US broke promise on South China Sea.

https://www.channelnewsasia.com/news/asia/president-xi-jinping-broke-promise-on-south-china-sea-us-general-11578314

It was the US who broke the promise on the South China Sea.  We reported this in our previous post below.

http://sg-stock.blogspot.com/2018/11/a-1947-map-showed-that-south-china-sea.html

Furthermore, it was the US Navy that accompanied China to reclaim the South China Sea islands after WW2.  China has the documentation and pictures to prove this reclamation in the South China Sea.  Who wouldn't take pictures of this historical event back then?

A pro-China Malaysia is a threat to Singapore economically. Why?

https://www.asiaone.com/malaysia/mahathir-says-malaysia-will-use-huawei-much-possible

A pro-China Malaysia is a threat to SG because it will render SG a less strategic partner to China.

Currently, China trusts Malaysia more than SG despite having some hiccups with Malaysia.  The ECRL, BKK-KL HSR and Melaka Gateway projects display the strategic alliance and trust between China and Malaysia.  Furthermore, Malaysia has bought China military armaments while SG has not because the US doesn't allow it.

Although SG is a Chinese majority country and Chinese-speaking nation, China trusts a Malay-speaking Malaysia more than SG now.  Speaking the same language used to be an advantage but China had become smarter.  China only believes in what you do, not what you say anymore.  This puts SG in a much lower priority than Malaysia since actions speak louder than words.  Thus, a pro-China Malaysia will start to erode SG economically over time.

How did the US fudge the US-China trade data?

The US claimed that it exported US$120B goods to China in 2018 but excluded the US$37.5B HK exports.  HK is part of China but the US doesn't include the HK trade data in the US-China trade data.  Furthermore, the US also didn't include the exported US services to China (US$72B including HK) because it wanted to exaggerate the US-China trade deficit.

For your information, I culled and calculated the aforesaid figures from the US census bureau website.

Thus, in total, the US exported US$229.5B worth of goods and services to China in 2018 which was almost double the trade figure that was stated by the US.

The US also will exclude military sales from the trade data and this exclusion will benefit the US since it is a large military weapons exporter.  The US-SG goods trade deficit in 2018 was US$5.9B but the US-SG services trade surplus was US$12.4B.  Therefore, the US had a trade surplus of US$6.5B (nett figure) with SG in 2018.  However, this US trade surplus of US$6.5B was an understatement because SG bought a lot of US military weapons which were excluded from the trade data.

https://ustr.gov/countries-regions/southeast-asia-pacific/singapore

The ungrateful US keeps talking about the US-SG goods trade deficit and puts SG on its currency watchlist without any valid reason.  Who is the real victim here when SG has a total trade deficit of US$6.5B with the US (excludes military sales)?

http://sg-stock.blogspot.com/2019/05/the-us-is-targeting-singapore-malaysia.html


Rare earth processing is not so easy.

https://sg.finance.yahoo.com/news/china-set-control-rare-earth-011355016.html

Rare earth processing is an esoteric industry because it is highly toxic and will pollute the environment.  Furthermore, there are very few talented people who possess such knowledge.

It is estimated that there are about 100 PHD holders in this specialized field in China.  However, there is no such talent outside of China.  This is the reason that China is able to dominate this field with its rare earth processing knowledge.  Thus, the US must be stealing information and knowledge from China if it is able to develop any advanced processing capability.

Wednesday, May 29, 2019

MAS's response to US watchlist report will not get SG off the list.

https://sg.finance.yahoo.com/news/mas-responds-to-us-report-says-it-does-not-engage-in-currency-manipulation-070614263.html

It is a common knowledge in the world that SG uses currency and not interest rates policy to manage its economy.  Therefore, it is pointless to respond to the US watchlist report because the US won't listen due to its unilateralism culture.  SG is partly to blame for grooming the unilateralism mindset in the US because we've been supporting and pursuing US political interests.  The day of reckoning is here and we've only ourselves to blame.

http://sg-stock.blogspot.com/2019/05/the-us-is-targeting-singapore-malaysia.html

Keppel KBS - Stock calls

Date Analyst Company Last Target Call Valuation
01/02/19 DBS Vickers Keppel KBS 0.61 0.78 Buy DCF
01/28/19 DBS Vickers Keppel KBS 0.68 0.8 Buy DCF
04/03/19 DBS Vickers Keppel KBS 0.705 0.8 Buy

Keppel Infrastructure - Stock calls

Date Analyst Company Last Target Call Valuation
01/23/19 DBS Vickers Keppel Infrastructure 0.515 0.58 Buy DDM
03/15/19 Lim & Tan Keppel Infrastructure 0.485 0 Hold
04/16/19 DBS Vickers Keppel Infrastructure 0.48 0.58 Buy DDM

Keppel DC Reit - Stock calls

Date Analyst Company Last Target Call Valuation
01/04/19 Phillip Keppel DC Reit 1.36 1.45 Accumulate
01/23/19 Phillip Keppel DC Reit 1.44 1.52 Accumulate DDM
01/23/19 CIMB Keppel DC Reit 1.44 1.51 Add DDM
01/23/19 OCBC Keppel DC Reit 1.44 1.6 Buy
01/23/19 DBS Vickers Keppel DC Reit 1.44 1.6 Buy DCF
02/15/19 Phillip Keppel DC Reit 1.45 1.52 Accumulate
03/12/19 OCBC Keppel DC Reit 1.44 1.6 Buy
04/08/19 Amfrasers Keppel DC Reit 1.47 1.62 Buy DDM
04/09/19 CIMB Keppel DC Reit 1.48 1.54 Add DDM
04/16/19 OCBC Keppel DC Reit 1.49 1.64 Buy
04/16/19 Lim & Tan Keppel DC Reit 1.49 0 Hold
04/18/19 Phillip Keppel DC Reit 1.49 1.59 Accumulate DDM, PB1.37x FY19
05/02/19 Amfrasers Keppel DC Reit 1.51 1.62 Buy