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Wednesday, May 3, 2023

Marco Polo - Stock calls

Date

Analyst

Company

Last

Target

Call

Valuation

01/05/22

SAC Capital

Marco Polo

0.028

0.032

Buy

PER8x FY22

03/25/22

DMG & Partners

Marco Polo

0.029

0.04

Buy


06/03/22

DMG & Partners

Marco Polo

0.03

0.04

Buy

DCF

06/17/22

UOB Kay Hian

Marco Polo

0.028

0.043

Buy

PB1.1x FY22

08/30/22

DMG & Partners

Marco Polo

0.037

0.05

Buy

DCF

12/07/22

UOB Kay Hian

Marco Polo

0.047

0.048

Hold

PB1.1x FY23

03/30/23

DMG & Partners

Marco Polo

0.043

0.06

Buy

DCF

Mapletree North Asia - Stock calls

Date

Analyst

Company

Last

Target

Call

Valuation

01/03/22

Lim & Tan

Mapletree North Asia

1.11

0

Accept Offer


01/06/22

CIMB

Mapletree North Asia

1.09

1.13

Add

DDM

01/06/22

OCBC

Mapletree North Asia

1.09

1.15

Hold


03/21/22

Lim & Tan

Mapletree North Asia

1.12

0

Accept Offer


04/20/22

Lim & Tan

Mapletree North Asia

1.23

0

Accept Offer


04/21/22

CIMB

Mapletree North Asia

1.23

1.13

Hold


04/21/22

Citi Research

Mapletree North Asia

1.23

1.2

Hold


Stock calls for 2 May 2023

Date

Analyst

Company

Last

Target

Call

Valuation

05/02/23

DBS Vickers

AEM

3.38

3.35

Hold

PER10x FY24

05/02/23

Uob Kay Hian

Capitaland Integrated Commercial Trust

2.03

2.29

Buy

DDM

05/02/23

OCBC

Capitaland Integrated Commercial Trust

2.03

2.21

Buy


05/02/23

DMG & Partners

Capitaland Integrated Commercial Trust

2.03

2

Neutral

DDM

05/02/23

UOB Kay Hian

CDL Hospitality

1.26

1.55

Buy

DDM

05/02/23

Citi Research

CDL Hospitality

1.26

1.15

Sell

DDM

05/02/23

Kim Eng

Far East Hospitality

0.62

0.8

Buy


05/02/23

CIMB

Mapletree Commercial

1.76

1.9

Hold


05/02/23

UOB Kay Hian

Mapletree Industrial

2.38

2.82

Buy

DDM

05/02/23

OCBC

Mapletree Industrial

2.38

2.77

Buy


05/02/23

Lim & Tan

Mapletree Logistics

1.74

1.8

Neutral


05/02/23

DBS Vickers

Micro-Mechanics

2.1

1.75

Fully Valued

PER21x FY23/24

05/02/23

DMG & Partners

Sheng Siong

1.77

2

Buy

PER21x FY23

05/02/23

phillip

UOB

28.22

35.7

Buy

GGM, PB1.48x FY23

05/02/23

UOB Kay Hian

Wilmar

3.93

5.5

Buy

Sum of parts

Tuesday, May 2, 2023

The US ISM PMI has been contracting for 6 months.

The prices subindex had increased to 53.2 (+4) because it was affected by an uprise in employment subindex (50.2, +3.3).  The employment increased as the producers boosted its production (48.9, +1.1) to fulfil the increase in customers’ inventories (51.3, +2.4) which was caused by an increase in new orders (45.7, +1.4) from new export order (49.8, +2.2).  However, the new local order was declined (Est'd -0.8) as consumers cut back on their spendings because of the high inflation.


The backlog of order fell to 43.1 (-0.8) because the increase in customers’ inventories exceeded the new order.  The supplier’s delivery (44.6, -0.2) continued to improve due to an easing in supply and logistical issues.  A lower delivery index means a faster delivery period.  The inventories (46.3, -1.2) were depleted by the production boost and the producers used more imported material (49.9, +2) than local raw material (Est’d -3.2).


In conclusion, the above factors caused the PMI to increase marginally to 47.1 (+0.8) but the economy would still enter into a recession in 2023 as the PMI had been contracting (below 50) for 6 months already.

What will the FED do for its FOMC in May 2023?

Let's take a look at the Fedwatch tool result.
The Fedwatch tool is indicating that the Fed will increase its rate by 25bp with over 90% probability in May 2023.


Sunday, April 30, 2023

Latest US economic statistics for the 4th week of April 2023.

All the recent US economic statistics are pointing to an impending recession.  Why? Let's take a look and do a brief analysis.

US Leading economic indicator (LEI): It has been trending down.

The US LEI has been giving out a recession signal since 2022.

US recession probability: It has been rising. What's the validity of this probability?

The truck tonnage index corroborates the rising recession probability and the declining LEI because it trucking tonnages have been declining.  This means the main street demand is falling as consumers are cutting back on their spendings.

Why are US consumers cutting back their spendings?  Let's take a look at the PCE inflation index.

PCE index: 4.9%
Core PCE index: 4.6%
Both the PCE and Core PCE indexes have stayed above 4% for a long time and the US consumers are affected by the sky-high inflation because their savings have been depleted.

The latest GDP figure, being a lagging indicator, has started to reflect the reality of the main street activities.

Q1 GDP growth: 1.1%
The Q1 GDP growth of 1.1% was being supported by consumption but it was the peak already because consumers' savings were depleted by the high inflation.  The US consumption will start to fall in Q2.

Let's break the GDP growth down and we can see the true reality.

GDP growth = G + I + C + Net export (X-M)
GDP growth = 0.81 + (-2.34) + 2.48 + 0.11 = 1.06% (rounded up to 1.1%)

As we could see from the breakdown, the investment (-2.34) dropped significantly because of a sharp drop in business inventories.  The consumption (+2.48) was holding up the GDP growth but it had reached its peak and was no longer sustainable.  The US government spending (0.81) won't be able to increase much further in Q2 because of its debt ceiling.  If the US can't increase its net export, the Q2 GDP figure won't be better than Q1.

Baltic dry index - 1576

Related stock: Sembcorp Marine, Cosco & Pan Ocean.

US rig count (weekly) - 755

Related stock: Sembcorp Marine & Cosco.