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Monday, March 9, 2020

Raffles Medical - Stock calls

DateAnalystCompanyLastTargetCallValuation
01/23/19phillipRaffles Medical1.111.16Accumulate
02/20/19UOB Kay HianRaffles Medical1.121.3BuyDCF
02/26/19DMG & PartnersRaffles Medical1.121.02NeutralDCF
02/26/19OCBCRaffles Medical1.121.25Buy
02/26/19DBS VickersRaffles Medical1.121.12HoldSum of parts, PER27x FY18/19
02/26/19phillipRaffles Medical1.121.09NeutralDCF
04/30/19DMG & PartnersRaffles Medical1.071.02Neutral
05/02/19phillipRaffles Medical1.081.09NeutralDCF
05/02/19DBS VickersRaffles Medical1.081.12HoldSum of parts
05/14/19Kim EngRaffles Medical1.021.13HoldDCF
06/12/19CIMBRaffles Medical1.021.1Hold
07/30/19UOB Kay HianRaffles Medical1.031.27BuyDCF
07/30/19DMG & PartnersRaffles Medical1.031.02Neutral
07/30/19DBS VickersRaffles Medical1.031.12HoldSum of parts
07/31/19phillipRaffles Medical1.041.09NeutralDCF
07/31/19Kim EngRaffles Medical1.041.05HoldDCF
07/31/19OCBCRaffles Medical1.041.06Hold
10/30/19DMG & PartnersRaffles Medical11.02NeutralDCF
10/30/19CIMBRaffles Medical11.16AddSum of parts
10/30/19UOB Kay HianRaffles Medical11.27BuyDCF
10/30/19DBS VickersRaffles Medical11.12Hold
11/05/19phillipRaffles Medical11.05NeutralDCF
11/05/19Kim EngRaffles Medical11.07HoldDCF
11/05/19OCBCRaffles Medical11.02Hold
02/25/20DMG & PartnersRaffles Medical1.020.96NeutralDCF
02/25/20UOB Kay HianRaffles Medical1.021.21BuyDCF
02/25/20DBS VickersRaffles Medical1.021.1HoldSum of parts
02/25/20Kim EngRaffles Medical1.021.06HoldDCF
02/25/20CIMBRaffles Medical1.021.16Add
02/26/20phillipRaffles Medical1.010.99NeutralDCF

Q & M - Stock calls

DateAnalystCompanyLastTargetCallValuation
01/23/19phillipQ & M0.4950.513Neutral

Propnex - Stock calls

DateAnalystCompanyLastTargetCallValuation
02/27/19UOB Kay HianPropnex0.5650.66Buy
04/01/19UOB Kay HianPropnex0.5950.66Buy
05/16/19UOB Kay HianPropnex0.5050.6BuyDCF, PER10x FY19
06/03/19phillipPropnex0.50.63BuyDCF
06/07/19CIMBPropnex0.490.64Add
08/16/19UOB Kay HianPropnex0.5050.5Hold
08/19/19phillipPropnex0.50.59BuyDCF
10/11/19phillipPropnex0.490.59Buy
10/14/19UOB Kay HianPropnex0.490.56BuyPER12x FY20
11/15/19UOB Kay HianPropnex0.5250.62BuyPER12x FY20
11/18/19phillipPropnex0.5150.59BuyDCF
11/25/19CIMBPropnex0.5150.68Add
02/21/20Lim & TanPropnex0.530.68Buy
02/28/20CIMBPropnex0.5550.7AddDCF
02/28/20UOB Kay HianPropnex0.5550.68Buy
03/02/20phillipPropnex0.5450.7BuyDCF
03/06/20UOB Kay HianPropnex0.5550.68Buy

Stock calls for 9 March 2020

DateAnalystCompanyLastTargetCallValuation
03/09/20CitibankDBS2317.5Sell
03/09/20DBS VickersFrasers Centrepoint Trust2.973.35Buy
03/09/20DMG & PartnersFrencken0.831.05BuyDCF
03/09/20CitibankOCBC10.218.85Sell
03/09/20UOB Kay HianSPH1.892.25BuySum of parts
03/09/20CitibankUOB23.219.3Sell

Saturday, March 7, 2020

We've correctly predicted the end of a good US period by March 2020. So what's next?

We've correctly predicted the end of a good US period by March 2020 as stated in our previous post in Dec 2019.

http://sg-stock.blogspot.com/2019/12/the-recession-constellation-are.html

Some people said we got lucky. Some said it was just a fluke.  However, have you ever thought about why the lady's luck stood on our side instead of yours?  This is because we analyze better than others.  This also explains the rationale behind our motto: We are not always right but we are also seldom wrong.

Some people in the US must have also reached the same conclusion as us and they tried to capitalize on it by planting the covid-19 virus in Wuhan.  The US CDC had not come out to explain how the US had the 1st (H38) and 2nd-generation (H3) covid-19 viruses but these 2 earlier generations were not found in Wuhan.  The US has all the 5 generations of covid-19 cases now.  No wonder Japan and Russia alleged that covid-19 originated in the US.

http://sg-stock.blogspot.com/2020/03/japan-and-russia-alleged-that-covid-19.html

http://sg-stock.blogspot.com/2020/02/japan-and-russia-alleged-that-covid-19.html

Thus, the US recession constellation really aligns with our prediction because the US invisible hand is at work.

So what's gonna happen next after Q1 2020?  This is the coveted answer that many people want to know.

The 4 US interest rates (1orr, Effr, Ioer and on rrp) dropped immediately after the US FED cut the rates to 1%-1.25%.  The 4 US interest rates range from 1 to 1.1% now.  The FED cut also caused the risk-free rate (10-year yield) to fall to 0.74%.

I've discovered something about the repo market (on rrp) when I looked at it in details.

The US FED can fulfill almost all the 1-day and 3-day repo orders but only partial fulfillment for 14-day repo orders.

1-day repo order:

3-day repo order:

14-day repo order:

What is on rrp? It is a 1-day FED debt (backed up by US treasury & MBS) that investors can buy in the repo market and the FED will buy back the debt the next day by paying 1% interest.  Basically, this is a risk-free 1-day investment with a 1% return.  In other words, you buy the 1-day FED debt today and wake up tomorrow with a 1% return.

Why can't the FED fulfill all the orders?

Yes, there are overwhelming investors in the repo market but the fundamental problem is the US FED doesn't have enough US treasury and Mortgage-backed securities) to back up the 1-day debt that it is selling in the repo market.  In a nutshell, the US FED is short of USD to buy the treasury and MBS while the treasury department is flushed with USD because the investors are buying a lot of US treasuries in turbulence times like now since the treasuries are considered haven assets.

With the low-interest rates and huge money supply in the US treasury, the USD is bound to depreciate and it is depreciating as we speak.

As monies flow from a low-interest rate yielding country to a high-interest rate yielding country, there will be a capital flight in the US when other countries do not follow the US in cutting rates because investors will search for higher yields outside of the US.  Subsequently,  the US will need to prevent such a phenomenon from happening by getting the US credit rating firms to downgrade the creditworthiness of other countries and companies.

Generally speaking, a lower credit rating will impose a higher financial cost (higher interest rate) on future funding.  Thus, other countries will have to cut their interest rates to neutralize the higher financial costs imposed on their lower credit ratings to stimulate their own economies and also shield their companies from the financial impacts.

This is the US invisible hand at work again.

Notwithstanding the US factor, many firms and countries will also have their credit ratings reduced because of direct and indirect financial losses due to the covid-19 outbreak and we are seeing many GDP downgrades right now.

Thus, I see massive credit rating downgrades happening in Q2 2020 at the earliest or Q3 2020 at the latest.  If the US cut its rates to Zero, the repo market would be wiped out because it was the easiest way to make money.  The repo market is a US$4T market and investors can make at least US$40B risk-free return with just a 1% interest rate now.

https://www.icmagroup.org/Regulatory-Policy-and-Market-Practice/repo-and-collateral-markets/icma-ercc-publications/frequently-asked-questions-on-repo/4-how-big-is-the-repo-market/

It will be very difficult to make a decent return for the banks and investors when the interest rate is at Zero or below.

Baltic dry index - 617

Today, Friday, March 06 2020, the Baltic Dry Index climbed by 18 points, reaching 617 points.
Baltic Dry Index is compiled by the London-based Baltic Exchange and covers prices for transported cargo such as coal, grain and iron ore. The index is based on a daily survey of agents all over the world. Baltic Dry hit a temporary peak on May 20, 2008, when the index hit 11,793. The lowest level ever reached was on Wednesday the 10th of February 2016, when the index dropped to 290 points.
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Related stock: Sembcorp Marine, Cosco & Pan ocean.

US rig count - 793


Related stock: Keppel Corp, Sembcorp Marine & Cosco.

Friday, March 6, 2020

The US CDC is trying to fudge the covid-19 statistics.

https://www.ccn.com/coronavirus-coverup-is-america-hiding-the-real-scale-of-outbreak/

The US CDC has removed the covid-19 statistics in the US.  It is not revealing the number of people being tested and the individual cases in every city and state.

Prime US Reit - Stock calls

DateAnalystCompanyLastTargetCallValuation
11/05/19DBS VickersPrime US Reit0.941.05BuyDCF
02/13/20Kim EngPrime US Reit1.021.1BuyDDM
03/06/20DBS VickersPrime US Reit0.9951.05BuyDCF

Perennial Reit - Stock calls

DateAnalystCompanyLastTargetCallValuation
02/14/19DBS VickersPerennial Reit0.6450.83BuyRNAV (55% discount)
04/24/19DBS VickersPerennial Reit0.650.83BuyRNAV (55% discount)
05/13/19DBS VickersPerennial Reit0.640.83BuyRNAV (55% discount)
02/21/20DBS VickersPerennial Reit0.520.83BuyRNAV (55% discount)

Penguin - Stock calls

DateAnalystCompanyLastTargetCallValuation
04/26/19phillipPenguin0.450.61BuyPER5x FY19 (ex-cash)
05/21/19phillipPenguin0.440.61BuyPER5x FY19 (ex-cash)
05/27/19CIMBPenguin0.4450.72AddPB1x FY19
08/07/19phillipPenguin0.4950.61BuyPER5x FY19 (ex-cash)
10/09/19UOB Kay HianPenguin0.620.85BuyPER7.6x FY2020
11/08/19CIMBPenguin0.660.81AddPB1x FY20
11/08/19UOB Kay HianPenguin0.660.85Buy
11/11/19phillipPenguin0.70.93BuyPER5x FY20 (ex-cash)
12/06/19UOB Kay HianPenguin0.7250.85Buy
02/26/20CIMBPenguin0.710.82AddPB1x FY20
02/26/20UOB Kay HianPenguin0.710.85Buy
02/27/20phillipPenguin0.6750.88BuyPER5x FY20 (ex-cash)