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Saturday, August 17, 2019

The Hong Kong protestors tried to create a bank run in HK but it would be a futile attempt.

https://www.scmp.com/business/banking-finance/article/3023065/hong-kongs-banks-say-they-have-adequate-cash-meet-demand

These HK protestors should go back to schools and study more about finance.  The HKMA has close to US$450b in reserves for any currency and financial war.  It is impossible to even ruffle any feather in the banking system at all.  Furthermore, HK has China as its backer to weather out any financial crisis.

https://www.hkma.gov.hk/eng/key-information/press-releases/2019/20190807-4.shtml

A bank run is impossible to happen but some inconvenience will be caused to the general public because the banks have to refill the ATM notes more frequently.  This will only incur the wrath of the general public and the protestors will suffer more backlashes from the public.

Baltic dry index - 2088

Today, Friday, August 16 2019, the Baltic Dry Index climbed by 41 points, reaching 2088 points.
Baltic Dry Index is compiled by the London-based Baltic Exchange and covers prices for transported cargo such as coal, grain and iron ore. The index is based on a daily survey of agents all over the world. Baltic Dry hit a temporary peak on May 20, 2008, when the index hit 11,793. The lowest level ever reached was on Wednesday the 10th of February 2016, when the index dropped to 290 points.
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Related stock: Sembcorp Marine, Cosco & Pan ocean

US rig count - 935

Related stock: Keppel Corp, Sembcorp Marine & Cosco

Friday, August 16, 2019

IFS Capital - Stock calls

Date Analyst Company Last Target Call Valuation
01/15/19 Amfrasers IFS Capital 0.225 0.29 Buy PB0.7x FY18

Ifast Corp - Stock calls

Date Analyst Company Last Target Call Valuation
02/21/19 DBS Vickers Ifast Corp 1.11 1.19 Hold DDM
04/30/19 DBS Vickers Ifast Corp 1.12 1.05 Hold DDM
07/30/19 DBS Vickers Ifast Corp 1.1 1.05 Hold DDM

Hutchison Port - Stock calls

Date Analyst Company Last Target Call Valuation
02/13/19 OCBC Hutchison Port 0.26 0.22 Sell
02/13/19 DBS Vickers Hutchison Port 0.26 0.26 Hold DCF
02/25/19 OCBC Hutchison Port 0.235 0.22 Hold
04/30/19 OCBC Hutchison Port 0.24 0.22 Hold
04/30/19 DBS Vickers Hutchison Port 0.24 0.26 Hold
07/25/19 OCBC Hutchison Port 0.225 0.22 Hold
07/26/19 DBS Vickers Hutchison Port 0.225 0.23 Hold DCF

Stock calls for 16 August 2019

Date Analyst Company Last Target Call Valuation
08/16/19 Amfrasers Accordia Golf Trust 0.535 0.67 Buy DDM
08/16/19 phillip Banyan Tree 0.455 0.51 Accumulate Sum of parts, PB0.6x FY19
08/16/19 phillip China Everbright 0.315 0.5 Buy PER9x
08/16/19 DMG & Partners CSE Global 0.44 0.61 Buy DCF
08/16/19 UOB Kay Hian CSE Global 0.44 0.62 Buy
08/16/19 phillip Dasin Retail 0.87 0.94 Accumulate DDM, PB0.65x
08/16/19 DMG & Partners Golden Agri 0.295 0.22 Sell Sum of parts
08/16/19 UOB Kay Hian Propnex 0.505 0.5 Hold
08/16/19 DBS Vickers Sembcorp Industries 2.26 3.2 Buy Sum of parts (10% discount), PER16x FY19, PB0.8x FY19
08/16/19 CIMB ST Engineering 4.07 4.36 Add Sum of parts
08/16/19 DBS Vickers ST Engineering 4.07 4.64 Buy Sum of parts
08/16/19 Lim & Tan ST Engineering 4.07 0 Hold
08/16/19 UOB Kay Hian Sunpower 0.44 0.83 Buy
08/16/19 CIMB Thai Beverage 0.905 1 Add Sum of parts
08/16/19 DMG & Partners Thai Beverage 0.905 0.92 Take Profit Sum of parts, PER19x FY20
08/16/19 DBS Vickers UMS 0.585 0.49 Fully Valued PER9x FY20
08/16/19 Kim Eng Valuetronics 0.62 0.94 Buy ROE-g/COE-g
08/16/19 DMG & Partners Valuetronics 0.62 0.61 Neutral DCF
08/16/19 UOB Kay Hian Valuetronics 0.62 0.8 Buy
08/16/19 OCBC Wilmar 3.78 4.26 Buy
08/16/19 DBS Vickers Wilmar 3.78 4.25 Buy Sum of parts, PER16.3x FY20

Cathy Pacific top honchos are forced to resign after HSBC.

https://sg.news.yahoo.com/rupert-hogg-resigns-ceo-cathay-090923588.html

This is a crystal clear message to conglomerates that anti-government supporters won't be allowed to operate in HK and they will be punished.

Cathy Pacific and HSBC have their roots traced back to the UK.  Therefore, the UK is also involved in HK protests.

Insofar, the USA, UK and Taiwan are reported to be involved in HK protests.

The Hong Kong protestors have lost the general public support.

https://www.straitstimes.com/asia/east-asia/angry-hong-kong-residents-press-anti-protest-demands-in-newspaper-ads

The HK protestors infuriated the general public that the public demanded harsher measures against the protestors in the press.

http://sg-stock.blogspot.com/2019/08/hong-kong-protestors-fabricated-fake.html

http://sg-stock.blogspot.com/2019/08/hong-kong-protestors-showed-their.html

http://sg-stock.blogspot.com/2019/08/the-hong-kong-police-are-incapable-to.html

http://sg-stock.blogspot.com/2019/08/hong-kong-protestors-are-back-at.html

The HK protestors overplayed their hands in the name of democracy and infuriated the general public.  We had stated previously that these protestors would be at the receiving end in the end.  This is actually happening sooner than we've expected.

http://sg-stock.blogspot.com/2019/08/anti-protestors-are-emerging-in-hong.html

Singapore Nodx fell 11.2% in July 2019.

https://sg.finance.yahoo.com/news/singapore-feb-exports-rebound-sharply-003106148.html

Year on year changes (YOY):

July 2019: -11.2%
June 2019: -17.3%
May 2019: -15.9%
April 2019: -10%
March 2019: -11.7%
February 2019: 4.9%
January 2019: -10.1%
December 2018: -8.5%
November 2018: -2.6%
October 2018: 8.3%
September 2018: 8.3%
August 2018: 5%
July 2018: 11.8% (Corrected)
June 2018: 1.1%
May 2018: 15.5%
April 2018: 11.8%
March 2018: -2.7%
February 2018: -5.9%
January 2018: 13%
December 2017: 3.1%
November 2017: 9.1%
October 2017: 20.9%
September 2017: -1.1%
August 2017: 16.7%
July 2017: 8.5%
June 2017: 8.2%
May 2017: -1.2%
Apr 2017: -0.7%
Mar 2017: 16.5%
Feb 2017: 21.1%
Jan 2017: 8.6%

Does the US 2-10y inverted yield curve signify a looming recession?

The US 2-10y inverted yield curve is an accurate harbinger of a looming recession but it does not have a 100% probability.

Will the current 2-10y inverted yield curve be different this time?

Do not listen to any analyst's justification that it will be different this time and let the numbers speak for themselves.

I've learnt in life that relying on statistics is more accurate than listening to any analyst because the numbers don't lie but people will since they interpret the numbers differently.

The problem with the US economy is not the inverted yield curve.  The fundamental problem that everyone is not observing is that the US debt growth is so much faster than the GDP growth.

https://www.marketwatch.com/story/the-us-treasury-is-about-to-flood-the-market-with-debt-to-fund-a-1-trillion-deficit-heres-why-that-is-a-worry-2019-08-15?siteid=yhoof2&yptr=yahoo

The US has a budget shortfall of US$1T for the full year which is about 4.9% of its GDP but the US GDP growth is only at 2.1%.  We can see that the US debt growth is more than 2.3x its GDP growth and this is a recipe for a recession.

http://sg-stock.blogspot.com/2019/07/the-us-china-trade-war-impacts-on-both_27.html

Furthermore, the ISM PMI has been falling for 4 consecutive months.  This means that the US is still sliding down on the business cycle curve and has not reached its bottom.  Therefore, I see no recovery in sight yet.  Conversely, the PMI is showing that China has reached the bottom of its business cycle curve and is on a recovery path.

http://sg-stock.blogspot.com/2019/08/ism-pmi-analysis-for-us-economy-in-july.html

The US will need to issue more US treasuries to make up for the US$1T budget shortfall and this will definitely push up the short-term bond yields which will cause the inverted yield curve to worsen.

http://sg-stock.blogspot.com/2019/07/the-us-total-debt-is-at-us69t-now.html

The US total debt will hit US$70T with this bond issuance.

So tell me, will this 2-10y inverted yield curve be different this time? No!  This inverted yield curve is just reflecting the reality that the US is heading into a recession unless the US ends the trade war.

A new world, an unchartered territory – A negative yield environment


There are US$16T of negative yield bonds at this moment as we speak and we have never come across this before in our lifetime.  The world will be in big trouble when the largest economy (USA) is also in a negative yield environment.

The conventional mindset is positive yield whereby the borrower pays the lender an interest rate to secure a loan and not the other around.  Our current financial system and economic structure are not built for a negative yield environment.

If we want to accept and adopt a negative yield environment, we will need to change our mindsets but people are resistant to changes.  How many people can accept the reality that they are paying the bank an interest rate for their deposits instead of the bank paying them an interest rate?  How many creditors can accept it when they need to pay borrowers an interest rate?   Where will the banks get the money to lend out when people start to stash money at home?  Many elders in Japan started to buy safes to keep money at home when the banks started to charge deposit fees (interests).


In order to minimize the disruptions to the conventionalists, we will need to restructure our financial system and economic structure which will entail many uncertainties and risks because we have never done this before in our lifetime.  This will be a regime change and it is an arduous task.

Conversely, if we reject the negative yield environment and maintain our conventional thinking, we will need to enforce positive yield on the current situation and cause a great recession or depression to happen.

We are stuck between a rock and a hard place now.  Even the economists are at their wit ends now because they’ve never studied the negative yield environment before in their lifetime.

Hong Kong protestors fabricated fake news to defame HK police.

https://www.straitstimes.com/asia/east-asia/young-woman-allegedly-shot-in-the-eye-during-hong-kong-protests

The woman who injured her eye in the protest was actually shot by another protestor who did it with a catapult.  She was not shot by the beanbag round used by the police because a beanbag round couldn't cause the injury she sustained.  She also didn't lodge an official police report against the police because she knew her injury was not caused by the police.

The video below showed that there was no police near her when she was "shot".

The HK protestors fabricated the news to defame the HK police and used the fake news to orchestrate a violent riot against the HK government and police.  This is not a protest but a real riot. The HK police must take a tougher stance against these rioters.


Thursday, August 15, 2019

Hong Kong protestors showed their incompetencies and lack of understanding in their cause.

HK protestors don't even know what they're protesting for.  They don't know because they're being paid to do a brainless job.

An Australian knows more about China and HK than the HK protestors.  Hahaha!

HK has no more future when the next generation is like that.

China warns the US if it implements the September 1 tariffs.

https://www.channelnewsasia.com/news/business/asia-stocks-slump-on-recession-fears-11810102

The US has only delayed tariffs against 60% of China goods to December but will still impose tariffs against 40% of China goods on 1 September.

The US is at the receiving end now and the Chinese won't back down because Trump has made it more difficult to reach a trade deal by adding the HK issue to the trade talk list.  Trump wants Xi to settle the HK issue humanely first before he is willing to have a trade talk with Xi.

HRnetGroup - Stock calls

Date Analyst Company Last Target Call Valuation
01/02/19 DMG & Partners HRnetGroup 0.8 1.18 Buy DCF
02/25/19 DMG & Partners HRnetGroup 0.795 1.06 Buy DCF
02/26/19 DBS Vickers HRnetGroup 0.8 1.05 Buy PER15x FY19, ex-cash
03/13/19 DMG & Partners HRnetGroup 0.79 1.06 Buy
03/26/19 CIMB HRnetGroup 0.765 1.03 Add
05/07/19 DMG & Partners HRnetGroup 0.77 1.06 Buy DCF
05/13/19 DMG & Partners HRnetGroup 0.77 0.94 Buy DCF
05/14/19 DBS Vickers HRnetGroup 0.76 0.85 Hold PER16x FY19, ex-cash
06/06/19 DMG & Partners HRnetGroup 0.71 0.94 Buy
06/13/19 CIMB HRnetGroup 0.72 1.01 Add PER18x CY20
08/14/19 DMG & Partners HRnetGroup 0.66 0.94 Buy DCF

Hotel Properties (HPL) - Stock calls

Date Analyst Company Last Target Call Valuation
02/27/19 Lim & Tan Hotel Properties 3.76 0 Hold
04/17/19 OCBC Hotel Properties 3.88 4.74 Buy
07/15/19 OCBC Hotel Properties 3.69 4.74 Buy

Hongkong Land - Stock calls

Date Analyst Company Last Target Call Valuation
01/17/19 DBS Vickers Hongkong Land 6.92 7.86 Buy
01/17/19 Citibank Hongkong Land 6.92 5.9 Sell
03/01/19 DBS Vickers Hongkong Land 6.77 8.02 Buy RNAV (40% discount)
03/01/19 Citibank Hongkong Land 6.77 6.45 Sell
05/10/19 DBS Vickers Hongkong Land 6.97 8.02 Buy RNAV (40% discount)
08/02/19 DBS Vickers Hongkong Land 6.09 7.93 Buy
08/05/19 DBS Vickers Hongkong Land 6.02 7.7 Buy RNAV (40% discount)
08/06/19 CIMB Hongkong Land 5.74 7.4 Add
08/06/19 Citibank Hongkong Land 5.74 5.85 Sell

Stock calls for 15 August 2019

Date Analyst Company Last Target Call Valuation
08/15/19 DBS Vickers Bumitama 0.59 0.69 Buy DCF, PER18.5x FY19
08/15/19 DMG & Partners Centurion 0.41 0.43 Neutral DCF
08/15/19 Amfrasers Comfortdelgro 2.51 2.77 Neutral PER19x FY19
08/15/19 CIMB Comfortdelgro 2.51 2.78 Add
08/15/19 Lim & Tan CSE Global 0.435 0 Buy
08/15/19 Kim Eng First Resources 1.57 1.8 Buy
08/15/19 DMG & Partners First Resources 1.57 1.45 Neutral PER14x FY20
08/15/19 CIMB First Resources 1.57 1.76 Add
08/15/19 Amfrasers Manulife US Reit 0.89 0.98 outperform
08/15/19 DMG & Partners Manulife US Reit 0.89 0.98 Buy DDM
08/15/19 DBS Vickers MM2 Asia 0.197 0.29 Buy Sum of parts
08/15/19 CIMB Sembcorp Industries 2.26 2.83 Add Sum of parts
08/15/19 UOB Kay Hian Sembcorp Industries 2.26 2.34 Hold
08/15/19 UOB Kay Hian ST Engineering 4.22 4.36 Hold
08/15/19 DMG & Partners ST Engineering 4.22 4.7 Buy Sum of parts
08/15/19 DBS Vickers Thai Beverage 0.83 0.91 Buy
08/15/19 UOB Kay Hian Tianjin Zhongxin 0.795 1.4 Buy
08/15/19 UOB Kay Hian Wilmar 3.86 4.4 Buy
08/15/19 CIMB Yongnam 0.171 0.28 Add

Besides the US retail sector, the US farms are in troubles too.

https://finance.yahoo.com/news/american-farms-billions-debt-numbers-153314408.html

The US farms are heavily in debts!

China's ban on US agricultural products is hitting the US farmers severely.

The US-China tariffs are hitting the US retailers severely too.

http://sg-stock.blogspot.com/2019/08/the-us-will-close-12000-retailers-in.html

If the US property sector crashes at this time, the banks will recall the farm loans which in turn will cause massive farm bankruptcies because the farmers use their lands as collaterals.

The US is just hanging on the edge of the precipice.  When the US loses the grip, it will fall into the abyss.