Stock calls for 13 March 2020

Date	Analyst	Company	Last	Target	Call	Valuation
03/13/20	Phillip	A-Reit	3.15	3.31	Accumulate
03/13/20	Phillip	ART	1	1.53	Accumulate
03/13/20	Phillip	CapitaCommercial	1.83	2.18	Neutral
03/13/20	Phillip	Capitamall Trust	2.25	1.7	Accumulate
03/13/20	Phillip	CapitaRetail China	1.3	1.66	Accumulate
03/13/20	DMG & Partners	DBS	20.2	21.5	Neutral	GGM, PB1.09x FY20
03/13/20	Phillip	Frasers Centrepoint Trust	2.73	3.11	Accumulate
03/13/20	Phillip	Ireit	0.715	0.89	Accumulate
03/13/20	Phillip	Keppel DC Reit	2.14	2.06	Accumulate
03/13/20	Phillip	Mapletree Industrial	2.77	2.03	Neutral
03/13/20	Credit Suisse	SGX	8.69	8.7	Neutral
03/13/20	CIMB	SIA	7.34	8	Hold	PB0.86x
03/13/20	CIMB	Starhub	1.43	1.8	Add	DCF
03/13/20	DBS Vickers	Starhub	1.43	1.72	Buy	DCF

US economic forecast in 2020 and the repercussion.

https://www.fxstreet.com/news/jp-morgan-forecasts-a-us-recession-for-2020-202003130315

JP Morgan forecasts US GDP to shrink to -2% in Q1 and -3% in Q2 respectively.

Goldman Sachs forecasts S&P 500 eps growth to shrink in Q1, Q2 & Q3.

However, the most important news is that covid-19 is 10x more lethal than US flu.

https://www.cnbc.com/2020/03/11/top-federal-health-official-says-coronavirus-outbreak-is-going-to-get-worse-in-the-us.html

Trump had stated that the US flu killed 37,000 people in the US in 2019. A top US health official has stated that covid-19 is 10x more lethal than the US flu.  If covid-19 is 10x more lethal, that will mean this virus will kill 370,000 people in the US.  This outbreak has just begun.

The US death toll is just 41 now as we speak.  Therefore, there will be a lot more deaths to come.

Canadian PM's wife contracted covid-19.

https://www.channelnewsasia.com/news/world/coronavirus-canada-pm-trudeau-wife-sophie-positive-covid-19-12534098

I believe the Canadian PM will contract the virus from his wife because they live together.

The BIG question is when will Trump be tested positive for covid-19 because this news will rattle the stock markets as he is an old man.

Trump has a high chance of getting the virus because he attended a conference with an infected person before.

Japan and Russia alleged that covid-19 originated in the US. - Part 3

https://www.chinadaily.com.cn/a/202003/12/WS5e6a15dfa31012821727e9d8.html

The CDC hearing has presented the truth in Japan and Russia's allegations.

The covid-19 virus was discovered in many corpses posthumously which were previously certified death by the US flu.

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

Let's recap:

1. Japan alleged that the virus originated in the US by analyzing big data.

2. China scientists traced covid-19 H38 to the US.

3. Russia alleged that the virus originated in the US.

4. The chronological events in 2019 also inferred that the US was involved.

5. CDC hearing acknowledged that covid-19 virus was found in corpses thought to have died from US flu.

This recession will be different from past financial recessions. Why?

This recession will be different from past financial recessions because this recession is caused by a pandemic instead of a financial blowout.

The governments have to deal with a virus outbreak and an ensuing economic crisis from the outbreak.  Furthermore, we cannot find a pocket of growth in the world now compared to the past.  Where is the area of growth?

Europe? Recession!
USA? Recession!
China? Recession!
ASEAN? Recession!
Middle East? Recession!

In the 2008 financial crisis, China pulled the world out of recession when the US housing crisis decimated the world.

In 2020, the pandemic decimates the world leaving no region unscathed.  Furthermore, global debt has reached US$260T which is a record high.  We cannot continue to pile up our debts without repercussions.  The day of reckoning will come one day.  Even if it doesn't come today, it will come tomorrow.

https://www.reuters.com/article/us-global-debt-iif/global-debt-shattering-records-iif-idUSKBN1ZC1VQ

Therefore, it will be much harder to pull the world out of recession this time.

No US monetary and fiscal policy can save the US stock markets.

Trump had pumped more money into the repo market by offering $500 billion in three-month repo operations, an additional $500 billion in one-month operations and another at least $220 billion in operations with durations of two weeks or fewer.

There was no liquidity issue in the first place as the repo rate didn’t shoot through the roof. Therefore, increasing the repo funding doesn’t help much and won’t stop the stock market from crashing.

http://sg-stock.blogspot.com/2020/03/why-did-us-fed-do-emergency-interest.html

Trump had also announced some fiscal policies but the stock markets still crashed.

We had stated that using monetary and fiscal policies won't do much to resolve a medical healthcare crisis.  However, the ensuing outcome of a medical healthcare crisis is a financial crisis.  Thus, if we can contain and resolve the virus outbreak, we don't have to worry much about the financial crisis later.

I don't see any way out for the US now except to wait it out.  Hopefully, a vaccine will be produced soon.  As usual, the US will restart its quantitative easing (QE) programme and keep its interest rates low to continue to pump money into the financial system and this will create an even bigger financial crisis in the future.

We had stated before how the QE affected the world using HK and SG as examples.

http://sg-stock.blogspot.com/2019/09/the-hong-kong-protestors-know-nothing.html

The investors such as fund managers are badly burnt this time because they have underestimated the covid-19 outbreak.  Why?

Let's take a look at 10-year yield first.

The 10-year yield (risk-free rate) is rebounding from its recent record low of about 0.30%.  In other words, the bond price is plunging now.  This doesn't auger well for the financial markets because this is the signal that the bond investors are cashing out to cover their losses in stocks and commodities.

The gold prices have also fallen from US$1700 to US$1500++ now.  (The investors are cashing out.)

Bitcoin prices have also fallen to US$5000 now. (The investors are cashing out.)

No market is spared from this bloodbath and this just shows how badly the investors are hurt by this malaise.

Sembcorp Marine - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/10/19	DIR	Sembcorp Marine	1.62	1.62	Hold	Cut from $1.78, PB1.8x FY19
01/22/19	Amfrasers	Sembcorp Marine	1.66	2.5	Buy
02/01/19	UOB Kay Hian	Sembcorp Marine	1.6	1.83	Hold	PB1.7x FY19, Buy @ $1.50
02/04/19	DBS Vickers	Sembcorp Marine	1.59	2.4	Buy	PB2.1x FY19
02/21/19	CIMB	Sembcorp Marine	1.68	2.21	Add	PB2x CY19
02/21/19	OCBC	Sembcorp Marine	1.68	1.77	Hold
02/21/19	phillip	Sembcorp Marine	1.68	1.76	Neutral	PB1.6x
02/21/19	Lim & Tan	Sembcorp Marine	1.68	0	Hold
02/26/19	Amfrasers	Sembcorp Marine	1.72	2.48	Buy
04/09/19	Amfrasers	Sembcorp Marine	1.7	2.48	Buy
04/09/19	DBS Vickers	Sembcorp Marine	1.7	2.4	Buy
05/03/19	CIMB	Sembcorp Marine	1.69	2.21	Add	PB2x
05/06/19	phillip	Sembcorp Marine	1.67	1.76	Neutral	PB1.6x
05/06/19	OCBC	Sembcorp Marine	1.67	1.77	Hold
05/06/19	Amfrasers	Sembcorp Marine	1.67	2.48	Buy
05/06/19	DBS Vickers	Sembcorp Marine	1.67	2.4	Buy	PB2.1x FY19
05/30/19	OCBC	Sembcorp Marine	1.45	1.6	Hold	PB1.45x
06/04/19	DMG & Partners	Sembcorp Marine	1.39	1.99	Buy	PB1.8x FY20
07/03/19	CIMB	Sembcorp Marine	1.54	1.75	Add	PB1.6x CY19
07/03/19	OCBC	Sembcorp Marine	1.54	1.6	Hold
07/04/19	Macquarie	Sembcorp Marine	1.41	1.57	Neutral
07/04/19	DBS Vickers	Sembcorp Marine	1.41	2.4	Buy
07/31/19	DBS Vickers	Sembcorp Marine	1.36	1.9	Buy	PB1.8x FY19
07/31/19	Amfrasers	Sembcorp Marine	1.36	1.59	Neutral	PB1.6x FY19
07/31/19	DMG & Partners	Sembcorp Marine	1.36	1.8	Buy	PB1.64x FY20
07/31/19	CIMB	Sembcorp Marine	1.36	1.16	Reduce	PB1.1x
07/31/19	UOB Kay Hian	Sembcorp Marine	1.36	1.32	Hold	DCF, Buy @ $1.25
08/06/19	Macquarie	Sembcorp Marine	1.28	1.4	Neutral	PB
09/03/19	UOB Kay Hian	Sembcorp Marine	1.16	1.22	Hold	Buy @ $1.10
09/03/19	DMG & Partners	Sembcorp Marine	1.16	1.63	Buy	PB1.48x FY20
09/09/19	CIMB	Sembcorp Marine	1.19	1.26	Hold	PB1.2x CY19
10/09/19	CIMB	Sembcorp Marine	1.2	1.26	Hold	PB1.2x CY19
10/09/19	OCBC	Sembcorp Marine	1.2	1.29	Hold
10/09/19	DBS Vickers	Sembcorp Marine	1.2	1.9	Buy
10/25/19	DBS Vickers	Sembcorp Marine	1.4	1.45	Hold
11/12/19	UOB Kay Hian	Sembcorp Marine	1.33	1.22	Sell
11/13/19	OCBC	Sembcorp Marine	1.34	1.24	Sell
11/14/19	DMG & Partners	Sembcorp Marine	1.29	1.6	Buy	PB1.47x FY20
11/14/19	UOB Kay Hian	Sembcorp Marine	1.29	1.17	Sell
11/14/19	CIMB	Sembcorp Marine	1.29	1.26	Hold	PB1.2x CY21
11/15/19	Macquarie	Sembcorp Marine	1.28	1.4	Neutral	DCF
11/15/19	DBS Vickers	Sembcorp Marine	1.28	1.4	Hold	PB1.3x FY20
12/26/19	Lim & Tan	Sembcorp Marine	1.28	0	Hold
01/21/20	UOB Kay Hian	Sembcorp Marine	1.28	1.4	Hold
02/20/20	OCBC	Sembcorp Marine	1.24	1.23	Hold
02/21/20	UOB Kay Hian	Sembcorp Marine	1.2	1.21	Hold	Buy @ $1.05
02/21/20	DMG & Partners	Sembcorp Marine	1.2	1.45	Buy
02/21/20	DBS Vickers	Sembcorp Marine	1.2	1.35	Hold	PB1.3x FY20
02/21/20	CIMB	Sembcorp Marine	1.2	1.2	Hold
03/10/20	Amfrasers	Sembcorp Marine	0.895	1.19	Neutral