Stock calls for 17 May 2022

Date	Analyst	Company	Last	Target	Call	Valuation
05/17/22	Phillip	Capitaland Investment	3.79	4.12	Accumulate	Sum of parts
05/17/22	OCBC	Capitaland Investment	3.79	4.13	Hold
05/17/22	UOB Kay Hian	Comfortdelgro	1.41	1.66	Buy	PER16.4x FY22
05/17/22	phillip	Comfortdelgro	1.41	1.8	Buy	DCF
05/17/22	DBS Vickers	Comfortdelgro	1.41	1.95	Buy
05/17/22	Kim Eng	Comfortdelgro	1.41	1.76	Buy	DCF
05/17/22	DBS Vickers	EC World Reit	0.615	0.7	Buy	DCF
05/17/22	DMG & Partners	EC World Reit	0.615	0.65	Neutral	DDM
05/17/22	DMG & Partners	First Resources	2.11	2.2	Neutral	PER10x FY23
05/17/22	CIMB	Frasers Property	1.08	1.41	Add	RNAV
05/17/22	DMG & Partners	Fu Yu	0.265	0.28	Neutral	DCF
05/17/22	Lim & Tan	Hwa Hong	0.29	0.37	Accept Offer	Offer price $0.37
05/17/22	Amfrasers	Jiutian	0.098	0.245	Outperform	PER4.5x
05/17/22	CIMB	SBS Transit	2.87	3.4	Add
05/17/22	DBS Vickers	SIA	5.16	6.2	Buy	PB1.3x FY23/24
05/17/22	DBS Vickers	Silverlake	0.32	0.46	Buy	PER17x FY23
05/17/22	CIMB	Silverlake	0.32	0.4	Add
05/17/22	UOB Kay Hian	Singapore Post	0.705	0.9	Buy	Sum of parts
05/17/22	CIMB	Singapore Post	0.705	0.9	Add
05/17/22	Phillip	Thai Beverage	0.68	0.8	Accumulate	PER18x FY22
05/17/22	Lim & Tan	Thai Beverage	0.68	0.9	Buy
05/17/22	CIMB	Thai Beverage	0.68	0.91	Add
05/17/22	DMG & Partners	Thai Beverage	0.68	0.97	Buy	Sum of parts

Will the US be heading for a soft or hard landing? - Part 5

Many financial analysts and investment firms are lining up with our prognosis after our first post.

Let's take a look at Goldman Sachs' prognosis.

Goldman Sachs has downgraded US GDP growth to 1.25% in 2022 and 1.5% in 2023 on a Q4/Q4 basis.

Will the US be heading for a soft or hard landing? - Part 4

We've stated very clearly that the US would be facing a hard landing in our 1st post and the latest economic statistics corroborated our projection.

Let's begin by taking a look at the latest CPI.

The latest April CPI (yoy) was 8.3% which eased slightly from the previous 8.5% (March).  However, the monthly core CPI had increased to 0.6% in April.  Actually, the latest statistics didn't bode well for the US economy and showed that the US inflation was becoming entrenched and structural.  Structural inflation means inflation is no longer caused by monetary policies but by exogenous factors.  The year-on-year change eased because the low base effect from the previous year had diminished but the yearly decline didn't fall significantly and the monthly change in the core CPI had increased instead.

Let's take a look at the CPI breakdown.

We can see from the graph below that the US inflation is hitting the consumers hard in the following sectors.

Food costs have also risen fast and furious in the US.

What are the high inflation impacts on the US economy?

The high inflation has caused the US personal saving rate to drop below the mean.

The low personal saving rate has forced Americans to resort to increasing their credits to maintain their existing lifestyles.

The rising Fed rates have also caused the mortgage rates to rise significantly from the previous year.

The recent 2 Fed hikes have caused the Michigan consumer sentiment to fall to the lowest level in over 1 year.

However, the current Fed rates are still too low to contain the high inflation and must be increased significantly.

If the Fed really hikes its rate to 5%, the mortgage rate will be around 9-10% because it is at least 4% above the fed rate and the high mortgage rate will cause a housing crisis in the US again.  Therefore, the US FED has lost the confidence to engineer a soft landing and a hard landing is likely to materialize.

Which segment of the stock market will be affected the most in a rising interest rate environment?

Well, the growth stocks and the technology market (Nasdaq) will be affected the most because they have a strong inverse relationship with interest rates.  Let's take a look at the chart below.

We can see from the chart that when the 10-year treasury yield rises, the Nasdaq index will fall and vice versa.  This shows that the growth stocks and the technology market are very sensitive to the treasury yield movements.  There is no doubt that interest rates will keep rising until inflation is under control and this will cause the treasury yields to rise as well.  When the treasury yields keep rising, the Nasdaq index won't do well.

Baltic dry index - 3104

 
Related stock: Sembcorp Marine, Cosco & Pan ocean.

US rig count (weekly) - 714

Related stock: Sembcorp Marine & Cosco.

UMS - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
06/15/21	DBS Vickers	UMS	1.41	1.83	Buy
06/30/21	UOB Kay Hian	UMS	1.47	1.92	Buy
07/05/21	Kim Eng	UMS	1.53	1.8	Buy
07/29/21	UOB Kay Hian	UMS	1.56	1.92	Buy
08/02/21	CIMB	UMS	1.61	1.97	Add
08/16/21	DBS Vickers	UMS	1.75	2.16	Buy	PER17x FY22
08/17/21	Kim Eng	UMS	1.73	2.1	Buy	PER15x FY22
09/06/21	CIMB	UMS	1.7	1.97	Add
09/17/21	Kim Eng	UMS	1.72	2.1	Buy
10/11/21	Kim Eng	UMS	1.58	2.1	Buy
11/15/21	DBS Vickers	UMS	1.38	1.8	Buy	PER17x FY22
11/15/21	UOB Kay Hian	UMS	1.38	2.08	Buy
11/16/21	Kim Eng	UMS	1.41	1.71	Buy
11/17/21	CIMB	UMS	1.48	1.63	Add
11/17/21	UOB Kay Hian	UMS	1.48	1.66	Buy	Ex-Bonus
12/02/21	Kim Eng	UMS	1.49	1.71	Buy
01/17/22	DBS Vickers	UMS	1.44	1.8	Buy
02/03/22	Kim Eng	UMS	1.2	1.71	Buy
02/09/22	UOB Kay Hian	UMS	1.21	1.8	Buy	PER15.5x FY22
03/01/22	DBS Vickers	UMS	1.2	1.8	Buy
03/02/22	Lim & Tan	UMS	1.23	1.77	Buy
03/03/22	DBS Vickers	UMS	1.21	1.7	Buy	PER17x FY22
03/04/22	Kim Eng	UMS	1.21	1.42	Buy
04/04/22	SAC Capital	UMS	1.21	1.39	Hold	Cut from $1.8
04/28/22	UOB Kay Hian	UMS	1.18	1.45	Buy
05/11/22	DBS Vickers	UMS	1.14	1.7	Buy
05/11/22	Lim & Tan	UMS	1.14	1.52	Buy
05/12/22	Kim Eng	UMS	1.22	1.5	Buy
05/13/22	CIMB	UMS	1.16	1.63	Add	PER14.45x FY23