Raffles Medical - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/23/19	phillip	Raffles Medical	1.11	1.16	Accumulate
02/20/19	UOB Kay Hian	Raffles Medical	1.12	1.3	Buy	DCF
02/26/19	DMG & Partners	Raffles Medical	1.12	1.02	Neutral	DCF
02/26/19	OCBC	Raffles Medical	1.12	1.25	Buy
02/26/19	DBS Vickers	Raffles Medical	1.12	1.12	Hold	Sum of parts, PER27x FY18/19
02/26/19	phillip	Raffles Medical	1.12	1.09	Neutral	DCF
04/30/19	DMG & Partners	Raffles Medical	1.07	1.02	Neutral
05/02/19	phillip	Raffles Medical	1.08	1.09	Neutral	DCF
05/02/19	DBS Vickers	Raffles Medical	1.08	1.12	Hold	Sum of parts
05/14/19	Kim Eng	Raffles Medical	1.02	1.13	Hold	DCF
06/12/19	CIMB	Raffles Medical	1.02	1.1	Hold
07/30/19	UOB Kay Hian	Raffles Medical	1.03	1.27	Buy	DCF
07/30/19	DMG & Partners	Raffles Medical	1.03	1.02	Neutral
07/30/19	DBS Vickers	Raffles Medical	1.03	1.12	Hold	Sum of parts
07/31/19	phillip	Raffles Medical	1.04	1.09	Neutral	DCF

Stock calls for 10 September 2019

Date	Analyst	Company	Last	Target	Call	Valuation
09/10/19	DMG & Partners	Avi-Tech	0.31	0.31	Neutral	DCF
09/10/19	Amfrasers	CSE Global	0.46	0.64	Outperform	Sum of parts, PER12x, PB2x
09/10/19	Lim & Tan	SPH	1.99	0	Hold
09/10/19	DBS Vickers	UOL	7.47	8.53	Buy	RNAV (35% discount)
09/10/19	UOB Kay Hian	Yangzijiang	0.98	1.46	Buy	PB0.84x

Q & M - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/23/19	phillip	Q & M	0.495	0.513	Neutral

Propnex - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
02/27/19	UOB Kay Hian	Propnex	0.565	0.66	Buy
04/01/19	UOB Kay Hian	Propnex	0.595	0.66	Buy
05/16/19	UOB Kay Hian	Propnex	0.505	0.6	Buy	DCF, PER10x FY19
06/03/19	phillip	Propnex	0.5	0.63	Buy	DCF
06/07/19	CIMB	Propnex	0.49	0.64	Add
08/16/19	UOB Kay Hian	Propnex	0.505	0.5	Hold
08/19/19	phillip	Propnex	0.5	0.59	Buy	DCF

Perennial Reit - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
02/14/19	DBS Vickers	Perennial Reit	0.645	0.83	Buy	RNAV (55% discount)
04/24/19	DBS Vickers	Perennial Reit	0.65	0.83	Buy	RNAV (55% discount)
05/13/19	DBS Vickers	Perennial Reit	0.64	0.83	Buy	RNAV (55% discount)

Stock calls for 9 September 2019

Date	Analyst	Company	Last	Target	Call	Valuation
09/09/19	CIMB	CSE Global	0.465	0.68	Add
09/09/19	Kim Eng	IHH Healthcare	1.85	2.1	Hold	Sum of parts, Ringgit $6.30 target price
09/09/19	DBS Vickers	Keppel Pacific	0.75	0.9	Buy
09/09/19	DBS Vickers	Mapletree Commercial	2.24	2.4	Buy	DCF
09/09/19	CIMB	Sembcorp Marine	1.19	1.26	Hold	PB1.2x CY19
09/09/19	Kim Eng	Venture	15.48	18.88	Buy	Roe-g/Coe-g, PB2.2x FY19

The HK protestors have revealed their true aim of their protests.

https://sg.news.yahoo.com/hong-kong-protesters-plan-march-022648940.html

The true aim of the protests is to break away from China and gain independence but HK has always been part of China.

Who are the organizers of these protests?

1. HK institute of human resource management
2. HK confederation of trade unions
3. HK journalists association
4. Civic party
5. Labour party
6. Democratic party

What do these organizers have in common?

They all received fundings from NED.

http://sg-stock.blogspot.com/2019/07/the-truth-behind-hk-protests.html

Why is making an interest rate policy a difficult task in China?

China has different provinces with different economic growth and each province has different tiered cities (tier 1, tier 2 & tier 3) which have different property prices.

2018 GDP numbers in China provinces:

China was growing at 6.6% in 2018 but its provinces were growing at different rates.  Tianjin was growing at 3.6% (below the country 6.6%) while Guizhou and Tibet were growing at 9.1% (above the country 6.6%).  Each province has its own tiered cities with different property prices.

When China cuts/raises its interest rates, the rates will have to be applied across the board and each province will be impacted differently.  For example, if China cut its interest rates, Tianjin's GDP growth (3.6%) might grow closer to the national rate (6.6%) which was good for Tianjian but Guizhou's GDP growth (9.1%) might be inflated to the extent that it became an overheating economy which was bad for Guizhou.  The interest rate changes would also impact the property prices in the different tiered cities in each province.

Therefore, the Chinese government has to assess the interest rates' impacts in each province first before making any change to the current interest rates.  The assessments will take time since every mayor has to report the impacts back to the central government for better decision making.

The SG government is glad that it is not facing such a difficult task.  Can you imagine SG has different GDP growth in each town?  What if Ang Mo Kio had a 9.1% growth while Chua Chu Kang had a 3.6% growth and each town had its own tiered cities?  Would the SG government be able to implement the property measures so easily?

When will China reduce its interest rates?

When the US and the rest of the world are in a rate-cutting frenzy, China cannot alienate itself and hold its rates perpetually.  Thus, it is a question of when will China do it instead.

In order for our readers to understand this better, it is best that the readers read and understand the rationale and logic of China not reducing its interest rates at this moment.

https://sg-stock.blogspot.com/2019/06/china-has-started-to-sell-us-treasuries.html

What had  China done insofar to stimulate its economy after the US cut the FED rates?

China had implemented the new LPR and reduced the RRR.

http://sg-stock.blogspot.com/2019/08/why-is-renminbi-rmb-depreciating-again.html

http://sg-stock.blogspot.com/2019/09/china-has-just-cut-banks-rrr-by-50bp.html

Please read our post on RRR to understand its impact.

http://sg-stock.blogspot.com/2019/05/how-china-rrr-cut-will-impact-its.html

China does not have runaway inflation, so China can afford to cut its interest rates.  However, China is not doing it now. Why?

If you think that China doesn't cut its interest rates because of its simmering inflation, then I must say that you are wrong because you do not understand China's economic structure well enough.

The properties constitute a large part of the people's assets and the property sector is the Achilles heel of China.  Therefore, any disruption to the property sector will disrupt the economy severely.

As we can see, China has been trying to avoid any disruption to the property sector by implementing LPR and reducing RRR instead of cutting its interest rates because these 2 policies have minimal impacts on the property sector.

China will only cut its interest rates after it has figured out how to rein in the property prices with new property policies and measures because cutting the interest rates will create a buying frenzy to inflate the property prices.  A skyrocketing property market will create social unrest and China is trying to maintain stability in the country.

Baltic dry index - 2462

Today, Friday, September 06 2019, the Baltic Dry Index decreased by 37 points, reaching 2462 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 - 898

Related stock: Keppel Corp, Sembcorp Marine & Cosco.

The Hong Kong protest continues after HK CE's telecast.

https://sg.news.yahoo.com/hong-kong-protesters-aim-stress-test-airport-210048026.html

We had already stated that the HK protest would not end because the protestors were paid to protest.  Those protestors are not interested in the extradition bill because it is never the goal of their protests.  Their goal is to make quick money out of these protests.

https://sg-stock.blogspot.com/2019/09/latest-hk-chief-executives-telecast.html

https://sg-stock.blogspot.com/2019/09/the-hk-protestors-have-rejected-hk-ces.html

We hate to be right in our analysis for this kind of situation.

China has just cut the bank's RRR by 50bp!

https://www.scmp.com/economy/china-economy/article/3026064/china-cuts-banks-reserve-requirements-latest-effort-boost

China has just cut the bank's RRR by 50bp to stimulate its economy.

Many analysts had expected China to cut its interest rates to stimulate its economy and they were proven to be wrong when China didn't do as they concluded.  We had stated in June 2019 that China wouldn't cut its interest rates but would reduce its RRR further.

http://sg-stock.blogspot.com/2019/07/will-china-cut-its-bank-interest-rates.html

Please read our economic analysis in June to understand the rationale for China not to cut its interest rates.

https://sg-stock.blogspot.com/2019/06/china-has-started-to-sell-us-treasuries.html

Will the US Fed reduce its interest rates in September 2019?

http://sg-stock.blogspot.com/2019/08/the-us-fed-has-cut-interest-rate-by-025.html

We got it right when we predicted a US FED rate cut in July by analyzing the 4 important rates in US.

Let's do it again to see what will happen in September 2019.

Iorr: 2.10% (Falling), Max is 2.25% as set by the FED.

Effr: 2.13% (Falling)

Ioer: 2.10% (Falling)

On RRP: 2%

The official US interest rates set by the FED range from 2% to 2.25% currently.

Effr: 2.13% (Loan rate offered by FED to US bank)
Ioer: 2.10% (Deposit rate offered by FED to US bank for the excess fund)

The spread between Effr and Ioer denotes the monetary supply condition in the US banking system.  In other words, the lesser the spread, the looser the monetary supply and vice versa.  A shrinking spread describes an easing while a widening spread describes a tightening condition.  This spread has not widened which means that there is no monetary tightening in the US.  However, the 10-year treasury yield (risk-free rate) is only around 1.5% currently which is below the Ioer (2.1%).  Thus, the US FED has to cut its rates to make the Ioer less attractive to the banks in order to stimulate the economy.

Please read the post below to understand the 4 interest rates better.

http://sg-stock.blogspot.com/2019/04/whats-happening-to-usd-now-why-is-it.html

The falling rates are signaling that the US FED is likely to cut rates again for it to stay relevant.  Furthermore, the US FED is being held hostage by Trump and wall street to cut rates now.  Therefore, the US Fed has no choice now, especially the PMI is weakening.

http://sg-stock.blogspot.com/2019/09/ism-pmi-analysis-for-us-economy-in.html

If the US Fed dares to defy Trump and Wall Street, the stock markets will crash.  I don't see the US Fed having the guts or gumption to fight for its independence and risk crashing the stock markets by putting the rates on hold.

Penguin - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
04/26/19	phillip	Penguin	0.45	0.61	Buy	PER5x FY19 (ex-cash)
05/21/19	phillip	Penguin	0.44	0.61	Buy	PER5x FY19 (ex-cash)
05/27/19	CIMB	Penguin	0.445	0.72	Add	PB1x FY19
08/07/19	phillip	Penguin	0.495	0.61	Buy	PER5x FY19 (ex-cash)

Parkway Life - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/30/19	DBS Vickers	Parkway Life	2.8	3.1	Buy
03/18/19	UOB Kay Hian	Parkway Life	2.88	3.25	Buy	DDM
04/01/19	UOB Kay Hian	Parkway Life	2.92	3.25	Buy	DDM
05/02/19	UOB Kay Hian	Parkway Life	2.89	3.25	Buy
07/31/19	Lim & Tan	Parkway Life	3.06	0	Hold
08/01/19	UOB Kay Hian	Parkway Life	3.06	3.25	Buy
08/01/19	DBS Vickers	Parkway Life	3.06	3.35	Buy

Pacific Century - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
03/04/19	Lim & Tan	Pacific Century	0.385	0	Buy

Stock calls for 6 September 2019

Date	Analyst	Company	Last	Target	Call	Valuation
09/06/19	DBS Vickers	Capitaland	3.51	4	Buy
09/06/19	phillip	Clearbridge	0.142	0.26	Buy	DCF
09/06/19	DBS Vickers	CSE Global	0.47	0.65	Buy	PER12x FY20
09/06/19	DMG & Partners	DBS	24.63	25.3	Neutral	GGM, PB1.23x FY20
09/06/19	OCBC	Hutchison Port	0.22	0.17	Hold
09/06/19	DMG & Partners	Keppel Pacific	0.74	0.88	Buy	DDM

The US-China trade war is not subsiding.

https://www.channelnewsasia.com/news/business/us-imposes-duties-on-structural-steel-from-china--mexico-11874126

The US has imposed duties on China's structural steel.

China has to recognize that the US cannot be trusted and will renege on its promises like a thug. 

There is no need to be a gentleman when it comes to dealing with the US because the US will not show any goodwill gesture prior to the October meeting.

http://sg-stock.blogspot.com/2019/09/the-us-china-trade-talk-is-deferred-to.html

PACC Offshore - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
02/26/19	DBS Vickers	PACC Offshore	0.183	0.2	Hold	PB0.8x FY19
05/14/19	DBS Vickers	PACC Offshore	0.173	0.2	Hold	PB0.8x FY19