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Thursday, April 9, 2020

Stock calls for 9 April 2020.

DateAnalystCompanyLastTargetCallValuation
04/09/20DBS VickersCromwell Reit (EUR)0.360.59Buy
04/09/20DMG & PartnersDairy Farm4.894.95NeutralDCF
04/09/20DMG & PartnersSheng Siong1.311.42BuyDCF
04/09/20UOB Kay HianSPH1.531.39HoldSum of parts, Buy @ $1.20
04/09/20CIMBSunningdale0.8751.09Add

Temasek is cashing out its investments.

https://sg.finance.yahoo.com/news/temaseks-2-week-selling-spree-raises-us-779-million-101403435.html

Our state wealth fund is divesting to conserve cash.

We had stated a few days ago that state wealth funds would be divesting to conserve their cash because of diminishing returns.

http://sg-stock.blogspot.com/2020/04/what-will-companies-do-with-credit.html

Wednesday, April 8, 2020

Boustead - Stock calls

DateAnalystCompanyLastTargetCallValuation
09/23/19CIMBBoustead0.7351AddSum of parts
11/25/19CIMBBoustead0.7651Add
01/03/20CIMBBoustead0.761AddSum of parts
01/16/20UOB Kay HianBoustead0.780.92BuySum of parts

Best World - Stock calls

DateAnalystCompanyLastTargetCallValuation
04/05/19DMG & PartnersBest World2.022.95Buy
04/16/19CLSABest World1.771.75SellUp from $1.29
04/26/19DMG & PartnersBest World1.620Cease CoverageSuspension

Banyan Tree - Stock calls

DateAnalystCompanyLastTargetCallValuation
05/22/19phillipBanyan Tree0.5350.76AccumulateSum of parts, PB0.7x FY19
08/16/19phillipBanyan Tree0.4550.51AccumulateSum of parts, PB0.6x FY19

Stock calls for 8 April 2020

DateAnalystCompanyLastTargetCallValuation
04/08/20OCBCCapitamall Trust1.742.12Hold
04/08/20DMG & PartnersCSE Global0.380.54BuyPER12x FY20
04/08/20Kim EngDBS19.1121.99Buy
04/08/20DBS VickersMapletree Logistics1.631.85Buy
04/08/20Kim EngOCBC8.9310.32Buy
04/08/20CIMBSPH1.61.57HoldSum of parts
04/08/20Lim & TanSPH1.60Sell
04/08/20DBS VickersSPH1.61.56Hold
04/08/20Kim EngUOB20.1522.55Buy
04/08/20DBS VickersYangzijiang0.9151.5BuySum of parts

Why am I not interested in REITs and business trusts? - Part 2

https://sg.finance.yahoo.com/news/a-us-100-billion-reit-rout-pulverises-family-fortunes-across-asia-022303086.html

After we had highlighted the risky REITs and Business Trusts' businesses, Bloomberg published an article to inflict more pain on them.

http://sg-stock.blogspot.com/2020/04/why-am-i-not-interested-in-reits-and.html

REITs and Business Trusts have to defer rental payments to help out the tenants and this will cause them to terminate or reduce their dividend payouts as their cash flows are being affected.

If the tenants close their businesses, the vacancy rates will spike up and the banks will re-evaluate their credit risks which will ensue in loan recalls and top-ups.  Many retailers are defaulting on their rental payments illegally because of covid-19 outbreaks now.

https://www.bloomberg.com/news/articles/2020-04-04/coronavirus-landlords-in-peril-as-retailers-refuse-to-pay-rent

China has more patents than US now!

https://finance.yahoo.com/news/first-china-knocks-u-top-120842062.html

The US had been accusing China of stealing its technologies because the US held the most patents in the world.

However, things have started to change now.  China has already overtaken the US in international patent filings.  Thus, China can start to accuse the US of stealing China's technologies now especially in 5G and quantum technologies.

Yeah!

Tuesday, April 7, 2020

Is the US preparing for a small scale war now?

The US is trying to recall 1m reservists now.

https://finance.yahoo.com/news/trump-calls-reserves-coronavirus-battle-235113292.html

The US is also trying to get Americans overseas to return home.

https://thehill.com/changing-america/resilience/natural-disasters/490477-pompeo-americans-who-wish-to-return-home-from

These 2 actions are very uncanny in my eyes. Why?

China didn't activate its reservists to handle the virus outbreak but used only its active military personnel.  China also didn't try to get all its Chinese overseas back home as this would pose a high risk of imported cases.

It looks like the US is preparing for a small scale war instead of handling the virus outbreak.  The US always starts a war when it has a homefront problem that it cannot handle.  The homefront problems in the US are the covid-19 outbreak and the low oil price that is hurting its shale oil producers.

Which country will the US attack this time?

Anybody wanna make a guess?

An American doctor told the truth about covid-19 situation in the US.

This American doctor told the truth about covid-19 situation in the US.  The US government knew about the virus outbreak in Dec 2019 but chose to ignore it.  Then, the US government tried to shift the blame to China.

Avi-Tech - Stock calls

DateAnalystCompanyLastTargetCallValuation
07/16/19DMG & PartnersAvi-Tech0.280.27NeutralDCF
08/29/19Lim & TanAvi-Tech0.270Buy
09/10/19DMG & PartnersAvi-Tech0.310.31NeutralDCF
10/08/19DMG & PartnersAvi-Tech0.340.31Neutral
11/07/19DMG & PartnersAvi-Tech0.350.41BuyDCF
12/10/19DMG & PartnersAvi-Tech0.40.44BuyDCF
02/17/20DMG & PartnersAvi-Tech0.390.5BuyDCF
02/20/20UOB Kay HianAvi-Tech0.420.57Buy
03/30/20DMG & PartnersAvi-Tech0.3250.5Buy
04/07/20DMG & PartnersAvi-Tech0.3050.5Buy

Asian Healthcare - Stock calls

DateAnalystCompanyLastTargetCallValuation
02/21/20TayronaAsian Healthcare0.1920.305OverweightDDM, PER14.5x FY22

Ascendas India Trust - Stock calls

DateAnalystCompanyLastTargetCallValuation
04/29/19DBS VickersAscendas India Trust1.271.4BuyDDM
07/29/19DBS VickersAscendas India Trust1.421.55Buy
10/25/19DBS VickersAscendas India Trust1.551.65BuyDDM
12/19/19DBS VickersAscendas India Trust1.531.65Buy
02/04/20DBS VickersAscendas India Trust1.581.65Buy
02/07/20DBS VickersAscendas India Trust1.651.85Buy
03/02/20DBS VickersAscendas India Trust1.651.85Buy

Stock calls for 7 April 2020

DateAnalystCompanyLastTargetCallValuation
04/07/20DMG & PartnersAvi-Tech0.3050.5Buy
04/07/20DMG & PartnersCapitaland2.744.2Buy
04/07/20DMG & PartnersCSE Global0.350.73Buy
04/07/20DMG & PartnersESR-Reit0.2450.5Buy
04/07/20DMG & PartnersFu Yu0.1990.32Buy
04/07/20DMG & PartnersKeppel Corp5.517.6Buy
04/07/20DMG & PartnersManulife US Reit0.6650.88Buy
04/07/20DMG & PartnersOxley0.1990.36Buy
04/07/20DMG & PartnersSGX9.339.1NeutralPER23x FY21
04/07/20DMG & PartnersST Engineering3.034.9Buy
04/07/20DMG & PartnersWilmar3.44.3Buy

What will the companies do with the credit rating firms’ face-off and their consequences?

Many companies have stopped or reduced their dividend payouts and terminated their share buybacks to conserve cash to avoid credit rating downgrades.

However, these actions will cause their share prices to drop due to the diminishing purchases of their companies’ stocks, as there are no incentives to buy them anymore.  Consequently, this will prompt the state wealth funds to sell the stocks of these companies to conserve their cash for future value purchases or redirect their cash for their own economic developments.

The current financial crisis flowchart is as follow:

Corporate debt -----> Company's credit rating -----> Company share price

First of all, the corporate debt will spark off a financial crisis which will affect the company's credit rating.  Therefore, the company has to conserve cash in case it has to redeem its corporate debt.  The debt redemption will cause the share price to fall as investors want the company to put its cash in a growth sector and not to repay its debt.  A shale oil producer will be an excellent example to depict this.

Many shale oil producers have to raise funds continuously to purchase equipment and chemicals to do oil extractions and these corporate debts are usually repackaged into high yield debts (junk bonds).  When the junk bonds market starts to crumble due to the low oil prices, these shale oil producers will have to terminate their dividends and share buybacks to conserve their cash to avoid credit rating downgrades.  Without these incentives to support the share purchases, their stock prices will start to fall because the investors will bailout.

The US FED has managed to stop this hemorrhage temporarily by declaring to buy any debt including junk bond and this has caused the US FED to accumulate US$5.3T assets insofar.

https://www.reuters.com/article/us-health-coronavirus-fed-programs-expla/explainer-what-the-federal-reserve-has-done-in-the-coronavirus-crisis-idUSKBN21I1BK