Stock calls for 12 April 2022

Date	Analyst	Company	Last	Target	Call	Valuation
04/12/22	DMG & Partners	Bumitama	0.765	0.9	Buy
04/12/22	DBS Vickers	Bumitama	0.765	1	Buy
04/12/22	Lim & Tan	Capitaland Investment	4.04	0	Hold
04/12/22	CIMB	Delfi	0.79	1.09	Add
04/12/22	DMG & Partners	First Resources	2.02	2	Neutral
04/12/22	DBS Vickers	First Resources	2.02	2.5	Buy
04/12/22	DMG & Partners	Golden Agri	0.305	0.31	Neutral
04/12/22	Lim & Tan	Overseas Edu	0.255	0	Hold
04/12/22	Credit Suisse	Sembcorp Industries	2.84	3.3	Outperform	Up from $3
04/12/22	UOB Kay Hian	Singtel	2.64	2.9	Buy	DCF, EV/Ebitda13x FY23
04/12/22	Lim & Tan	UOB	31.5	36	Accumulate
04/12/22	DMG & Partners	Wilmar	4.62	5.3	Buy
04/12/22	DBS Vickers	Wilmar	4.62	6.67	Buy

What's the real impact on the US economy if the US FED were to reduce its assets by US$95B every month?

The US FED had indicated that it might reduce its assets by US$95B on a monthly basis which would amount to US$1.1T per year to contain its sky-high inflation.

How would this impact the real US economy?

We will need to understand how the liquidity of money will affect the economic activities in the US first.  The M2 money supply will be reduced when the US FED is selling its assets because it is draining money out of the US financial market.  When the M2 money supply is reduced, it will also cause a reduction in economic activities in the real economy.  Therefore, we will have to look at the M2 money supply multiplier effect to determine the real impact (see the chart below).

The M2/Monetary Base chart is showing that for every dollar being injected into the monetary base, it will cause the M2 money supply to increase by 3.6x and vice versa.

If the FED is reducing its assets by $1.1T per year, it is causing M2 to reduce by US$3.96T per year which is 18% (3.96/22) of the US GDP.  Consequently, the US economic activities will be greatly reduced because of a liquidity squeeze.

How realistic was Deutsche Bank's (DB) prediction that the US recession would happen in 2023?

DB had predicted that the US recession would happen in late 2023.  Therefore, we will be analyzing DB's prediction to see how realistic it is.

DB had projected in April 2022 that the US would achieve a 3% GDP growth in 2022.  The GDP growth was reduced from 4.6% in December 2021.  This was in line with the US conference board's prediction of 3% GDP growth in 2022.

However, DB projected that the US would be having incremental GDP growth quarterly in 2022 which ran counter to the quarterly US conference board's trajectory.

From the graph above, we could see that the US GDP growth would be experiencing an upward trajectory in 2022 before declining in 2023.  Conversely, the US conference board projected a less sanguine outlook in 2022.

On the contrary, DB had projected that the world's real GDP would be declining from 2022 to 2024.  Therefore, we would find it hard for the US to achieve a growing economy in 2022.

Let's look for alternative research to verify DB's projection.

The Bank of America had noted that the company's buybacks had been declining.  This would indicate that the companies were keeping their cash to prepare for the tough road ahead which defied the rosy outlook painted by DB in 2022.

Furthermore, the quarterly earnings and revenue growth were projected to decline in 2022 which also defied DB's rosy outlook.

In conclusion, we can dismiss DB's prediction as being too optimistic and the US recession may come sooner than the expected late 2023.

Mapletree Commercial - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/18/21	Credit Suisse	Mapletree Commercial	2.19	2.26	Neutral	Up from $2.20
01/28/21	UOB Kay Hian	Mapletree Commercial	2.1	2.35	Buy	DDM
02/01/21	CIMB	Mapletree Commercial	2.07	2.26	Hold	Up from $1.88
02/01/21	OCBC	Mapletree Commercial	2.07	2.18	Hold
03/08/21	JP Morgan	Mapletree Commercial	2	2.25	Overweight
04/28/21	DBS Vickers	Mapletree Commercial	2.13	2.25	Buy	DCF
04/28/21	Lim & Tan	Mapletree Commercial	2.13	0	Neutral
04/29/21	UOB Kay Hian	Mapletree Commercial	2.18	2.5	Buy	DDM
05/03/21	CIMB	Mapletree Commercial	2.19	2.32	Hold
05/03/21	OCBC	Mapletree Commercial	2.19	2.2	Hold
06/02/21	DBS Vickers	Mapletree Commercial	2.09	2.25	Buy	DDM
07/26/21	Kim Eng	Mapletree Commercial	2.14	2.35	Buy	DDM
07/26/21	Lim & Tan	Mapletree Commercial	2.14	0	Hold
07/28/21	UOB Kay Hian	Mapletree Commercial	2.11	2.48	Buy
10/28/21	Lim & Tan	Mapletree Commercial	2.17	2.25	Hold
10/29/21	DBS Vickers	Mapletree Commercial	2.17	2.45	Buy	DCF
11/01/21	UOB Kay Hian	Mapletree Commercial	2.18	2.48	Buy	DDM
11/03/21	Kim Eng	Mapletree Commercial	2.19	2.35	Buy
01/03/22	UOB Kay Hian	Mapletree Commercial	2	2.48	Buy	DDM
01/03/22	Kim Eng	Mapletree Commercial	2	2.35	Buy	DDM
01/03/22	Lim & Tan	Mapletree Commercial	2	0	Accept Offer
01/06/22	CIMB	Mapletree Commercial	1.84	2.32	Hold
01/06/22	OCBC	Mapletree Commercial	1.84	2.14	Buy
01/12/22	Amfrasers	Mapletree Commercial	1.82	2.24	Buy
01/27/22	Kim Eng	Mapletree Commercial	1.84	2.24	Buy	DDM
02/18/22	UOB Kay Hian	Mapletree Commercial	1.83	2.48	Buy	DDM
02/23/22	OCBC	Mapletree Commercial	1.85	2.04	Buy
03/17/22	UOB Kay Hian	Mapletree Commercial	1.84	2.48	Buy	DDM
03/22/22	CIMB	Mapletree Commercial	1.9	2.18	Add	DDM
03/23/22	OCBC	Mapletree Commercial	1.87	2.04	Buy
04/05/22	UOB Kay Hian	Mapletree Commercial	1.9	2.48	Buy