Stock calls for 16 December 2021

Date	Analyst	Company	Last	Target	Call	Valuation
12/16/21	OCBC	Capitaland Integrated Commercial Trust	2	2.51	Buy
12/16/21	CIMB	City Developments	6.97	8.97	Add
12/16/21	DMG & Partners	City Developments	6.97	9	Buy
12/16/21	Lim & Tan	Ho Bee	2.8	0	Accumulate on weakness
12/16/21	Lim & Tan	Hongkong Land	5.41	0	Accumulate on weakness
12/16/21	Lim & Tan	KSH	0.35	0	Accumulate on weakness
12/16/21	CIMB	UOL	7.1	8	Add

US FED will hike its rates in 2022!

https://finance.yahoo.com/news/fed-fomc-monetary-policy-decision-december-2021-153342164.html

Just as we had expected, the US FED was already behind the inflation curve and it had to rectify its misjudgment by expediting its tapering pace.  Thereafter, the US FED will hike its official rates in 2022 after its tapering.

http://sg-stock.blogspot.com/2021/12/the-us-is-at-crossroad-now-and-it-may.html

http://sg-stock.blogspot.com/2021/12/how-likely-is-us-fed-behind-inflation.html

What are the upsides and downsides for 2022?

 Upside:

Downside:

Let's see what will happen in 2022.

US retail sales declined in November as expected.

 

US retail sales declined to 0.3% in November.  We had expected this from our earlier PMI analysis.

http://sg-stock.blogspot.com/2021/12/ism-pmi-november-indicated-that-us.html

JP Morgan has upgraded China's GDP growth.

https://www.channelnewsasia.com/business/jpmorgan-raises-china-q4-and-2022-gdp-forecast-2381256

JPM has upgraded China's GDP growth and this doesn't come as a surprise to us because we've stated much earlier that China has reached its trough.

http://sg-stock.blogspot.com/2021/12/the-world-economic-conditions-have.html

Food Empire - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/14/21	UOB Kay Hian	Food Empire	0.75	0.88	Buy	PER12.3x FY21
01/18/21	UOB Kay Hian	Food Empire	0.75	0.95	Buy
02/08/21	DMG & Partners	Food Empire	0.875	1.27	Buy
02/09/21	UOB Kay Hian	Food Empire	0.955	1.3	Buy
03/02/21	DMG & Partners	Food Empire	0.915	1.27	Buy
03/04/21	Lim & Tan	Food Empire	0.905	0	Accumulate on weakness
05/14/21	UOB Kay Hian	Food Empire	0.86	1.3	Buy
05/17/21	DMG & Partners	Food Empire	0.84	1.27	Buy
06/07/21	UOB Kay Hian	Food Empire	0.915	1.3	Buy
06/23/21	Lim & Tan	Food Empire	0.89	1.2	Accumulate
07/07/21	DMG & Partners	Food Empire	0.88	1.27	Buy
08/17/21	DMG & Partners	Food Empire	0.81	1.23	Buy	PER15x FY22
09/02/21	UOB Kay Hian	Food Empire	0.78	1.3	Buy
09/27/21	Lim & Tan	Food Empire	0.76	1.26	Accumulate
10/05/21	DMG & Partners	Food Empire	0.77	1.23	Buy	PER15x FY22
11/10/21	Lim & Tan	Food Empire	0.81	1.26	Accumulate
11/15/21	UOB Kay Hian	Food Empire	0.79	1.3	Buy	PER16.6x FY22

First Sponsor - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
02/18/21	Phillip	First Sponsor	1.33	1.56	Buy	Sum of parts (20% discount)
04/29/21	Phillip	First Sponsor	1.39	1.55	Accumulate	Sum of parts (20% discount)
08/04/21	Phillip	First Sponsor	1.36	1.56	Accumulate	Sum of parts (20% discount)
09/21/21	Phillip	First Sponsor	1.36	1.65	Buy	RNAV (30% discount)

First Ship Lease Trust - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
02/22/21	Phillip	First Ship Lease Trust	0.085	0.105	Buy	PB1x FY22
02/24/21	Phillip	First Ship Lease Trust	0.085	0.105	Accumulate	PB0.9x FY22
05/03/21	Phillip	First Ship Lease Trust	0.09	0.03	Accumulate	PB0.9x FY22

Stock calls for 15 December 2021

Date	Analyst	Company	Last	Target	Call	Valuation
12/15/21	Macquarie	City Developments	7.1	9.9	Outperform	RNAV (45% discount)
12/15/21	Lim & Tan	Comfortdelgro	1.38	1.85	Buy
12/15/21	UOB Kay Hian	Kimly	0.41	0.41	Hold	PER16x FY22
12/15/21	DMG & Partners	Manulife US Reit	0.66	0.9	Buy

Sinovac shot gives no shield for Omicron?

https://www.businesstimes.com.sg/government-economy/sinovac-shot-gives-no-shield-for-omicron-hong-kong-study

Sinovac manufacturer has come out to defend its vaccine by stating that its booster shot is able to fight omicron.

https://www.scmp.com/news/china/science/article/3159784/omicron-chinas-sinovac-covid-19-vaccine-fails-antibodies-test

What's going on now?

Well, 3-shot of mRNA is unable to prevent omicron infection as numerous cases have surfaced that people with 3 shots of mRNA are being infected.

https://www.theguardian.com/world/2021/dec/12/how-omicron-appears-to-be-infecting-britain-despite-the-vaccine

2 airport crews in Singapore who got 3 vaccine shots were also infected by omicron recently.

All the infected cases show that no vaccine is able to prevent omicron infection at all.

How likely is the US FED behind the inflation curve?

Let's take a look at the chart below to determine how likely is the US FED behind the inflation curve.

This is how a surprise index works.  When the actual situation outperforms a forecast (projection), it will have a positive number.  The reverse is true when the actual situation underperforms a forecast (projection).

As we can see from the chart, the inflation surprise index is rising.  This means that the actual inflation is outperforming the inflation forecasts. However, the chart is showing that the economic surprise index is declining.  This means that the actual economic growth is underperforming the economic forecasts.

In conclusion, analysts had been underestimating inflation and overestimating economic growth for the past 1 year.  Thus, it was highly likely that the US FED was already behind the inflation curve.