Stock calls for 26 September 2019

Date	Analyst	Company	Last	Target	Call	Valuation
09/26/19	Kim Eng	DBS	24.73	28.05	Hold
09/26/19	UOB Kay Hian	Jumbo	0.38	0.37	Hold	Buy @ $0.33
09/26/19	CIMB	Mapletree Industrial	2.49	2.44	Add	DDM
09/26/19	Kim Eng	OCBC	10.77	11.05	Neutral
09/26/19	DMG & Partners	OCBC	10.77	11.5	Neutral	GGM, PB1.07x FY20
09/26/19	Amfrasers	Uni-Asia	0.71	1.24	Buy	Sum of parts, PB0.6x FY20, PER8.5x FY20
09/26/19	Kim Eng	UOB	25.38	29.13	Buy

Simple explanation of the relationship between an interest rate and GDP.

I understand that many people don't understand the relationship between an interest rate and GDP.  Therefore, I will try to explain it in a simple way with my recalled economic knowledge.

I will use the IS-LM (investment-saving & liquidity preference money supply) model to explain this relationship between the interest rate and GDP.  However, this IS-LM model is conceived in a perfect world environment which means that the aggregate demand and supply are a zero-sum game (equal balance) and this perfect world is not true in the real world.

The X-axis represents the interest rate and the Y-axis represents the real GDP output.

The IS-LM diagram is showing that a cut in interest rate will increase the real GDP output (Y) before the interest rate must be raised to prevent an overheating GDP (Y) which will cause the GDP (Y) to decline again.  Basically, the black dot on the IS-LM diagram will move in a cycle accordingly to the interest rate movements.

Since we have a visual understanding of the relationship between the interest rate and the real GDP output, we can move on to understand the real GDP output growth.  There is only real GDP output growth when there is additional production of goods and services.

Thus, the real GDP output growth formula (production function) is:
Y = A * f(K, L)

A=Productivity
K=Capital
L=Labour quantity

As we can see from the production function, K is affected by the interest rate movement because a cut in interest rate will lower the cost of capital which will encourage business investments in machinery and equipment to improve productivity (A).  The lower cost of capital will also encourage the hiring of labour to operate and maintain the additional equipment and new machinery.  In other words, K will affect A and L which in turn will push up Y.  This manipulation of K also applies to the service sector.

I hope our viewers will have a better understanding of the monetary policy (Interest rate) now after reading my post.

How many deaths must happen before the government takes action against cyclists? - Part 2

https://sg.news.yahoo.com/65-yearold-woman-involved-in-escooter-accident-in-bedok-north-dies-151436494.html

Another avoidable death!

The death toll will only increase as long as our government doesn't ban e-scooters on pedestrian paths.  This won't be the last death in SG.

We've stated this before.  I hope that our government will ban e-scooter like what France did to safeguard pedestrians.  Registration of e-scooter won't protect pedestrians from accidental death.

http://sg-stock.blogspot.com/2018/06/how-many-deaths-must-happen-before.html

http://sg-stock.blogspot.com/2018/06/httpwww.html

http://sg-stock.blogspot.com/2019/05/france-has-done-right-thing-for-its.html

Why did China cancel the US farm visits? - Part 2

https://www.cnbc.com/2019/09/23/trump-surprised-when-mnuchin-says-he-asked-china-to-cancel-farm-tour.html

If you look at the video carefully, you will notice that Trump is totally unaware of Mnuchin's doing.  It was Mnuchin who asked China to cancel the US farm visits but the media reported widely that China was the one cancelling the US farm visits.

http://sg-stock.blogspot.com/2019/09/why-did-china-cancel-us-farm-visits.html

It was pretty obvious that Mnuchin was trying to do some hanky panky things behind Trump's back and he was stuttering when Trump questioned him.

A billion dollar question: Will the US enter a recession? - Part 2

https://www.bangkokpost.com/opinion/opinion/1758639/fresh-qe-wont-stop-global-recession

A Thai PHD economist forecast that an unavoidable global recession was coming but a US PHD economist (Janet Yellen) didn't think so.

http://sg-stock.blogspot.com/2019/08/a-billion-dollar-question-will-us-enter.html

Why is there such a discrepancy?

Well, different people interpret the same set of data differently and this is the drawback of empirical research which is interpretation based on observation.  Thus, we can find economics noble laureates disagree amongst themselves too.  In fact, scientific researches are empirical in nature too.

We had stated previously that QE or ME should be used as a last resort because it was a double-edge sword.

https://sg-stock.blogspot.com/2019/09/monetary-easing-ma-policy-should-be.html

My observations of the HK protests. - Part 3

These HK rioters are getting more violent and aggressive now because their numbers have declined significantly.  Thus, they made up their reduction in size with more violent acts.  They tried to snatch the police officer's gun and throw molotov cocktails (petrol bombs) directly at the police.

We had stated these intensified acts of violence in our previous post below.

http://sg-stock.blogspot.com/2019/09/my-observations-of-hk-protests.html

UG Healthcare - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
03/11/19	DMG & Partners	UG Healthcare	0.205	0.32	Buy	PER10x FY20
05/07/19	DMG & Partners	UG Healthcare	0.18	0.32	Buy	PER10x FY20
08/28/19	DMG & Partners	UG Healthcare	0.18	0.3	Buy	PER11x FY20

Tuan Sing - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/29/19	Amfrasers	Tuan Sing	0.395	0.46	Not Rated	RNAV (50% discount)

Top Glove - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
03/11/19	Kim Eng	Top Glove	1.5	1.53	Hold	Ringgit target $4.60, PER24x CY20
04/17/19	UOB Kay Hian	Top Glove	1.48	1.34	Hold	Ringgit target $4.10, Buy @ $3.70
06/27/19	Kim Eng	Top Glove	1.62	1.59	Hold	Ringgit target $4.85

Stock calls for 25 September 2019

Date	Analyst	Company	Last	Target	Call	Valuation
09/25/19	DMG & Partners	ISOTeam	0.235	0.31	Buy	DCF
09/25/19	DBS Vickers	Mapletree Industrial	2.49	2.75	Buy
09/25/19	UOB Kay Hian	Oxley	0.31	0.64	Buy	RNAV (30% discount)

Tianjin Zhongxin - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
04/01/19	UOB Kay Hian	Tianjin Zhongxin	0.915	1.7	Buy	PER13.6x FY19
05/02/19	UOB Kay Hian	Tianjin Zhongxin	0.985	1.7	Buy
06/14/19	UOB Kay Hian	Tianjin Zhongxin	0.885	1.7	Buy
08/15/19	UOB Kay Hian	Tianjin Zhongxin	0.795	1.4	Buy

Thai Beverage - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/04/19	UOB Kay Hian	Thai Beverage	0.59	0.8	Buy	Sum of parts
01/18/19	DMG & Partners	Thai Beverage	0.715	0.85	Buy	Sum of parts
02/13/19	CIMB	Thai Beverage	0.72	0.83	Add	Sum of parts
02/15/19	DBS Vickers	Thai Beverage	0.72	0.87	Buy
02/18/19	UOB Kay Hian	Thai Beverage	0.815	0.86	Hold	Sum of parts, buy @ $0.76
02/18/19	DMG & Partners	Thai Beverage	0.815	0.92	Buy	Sum of parts
02/18/19	CIMB	Thai Beverage	0.815	0.9	Add	Sum of parts
02/18/19	OCBC	Thai Beverage	0.815	0.91	Buy
02/19/19	Phillip	Thai Beverage	0.82	0.81	Neutral	Sum of parts
02/19/19	Amfrasers	Thai Beverage	0.82	0.75	Hold
02/27/19	DBS Vickers	Thai Beverage	0.81	0.94	Buy
03/14/19	UOB Kay Hian	Thai Beverage	0.805	0.86	Hold	Sum of parts, Buy @ $0.78
04/05/19	DMG & Partners	Thai Beverage	0.825	0.92	Buy
05/13/19	Phillip	Thai Beverage	0.825	0.83	Neutral	Sum of parts
05/13/19	CIMB	Thai Beverage	0.825	0.94	Add
05/13/19	UOB Kay Hian	Thai Beverage	0.825	0.85	Hold	Sum of parts, Buy @ $0.76
05/13/19	DMG & Partners	Thai Beverage	0.825	0.92	Buy	Sum of parts
05/13/19	OCBC	Thai Beverage	0.825	0.88	Hold
05/13/19	DBS Vickers	Thai Beverage	0.825	0.91	Buy	Sum of parts
05/14/19	Amfrasers	Thai Beverage	0.765	0.75	Hold
05/28/19	OCBC	Thai Beverage	0.805	0.86	Hold
06/06/19	DMG & Partners	Thai Beverage	0.84	0.92	Buy	Sum of parts, PER23x
06/06/19	DBS Vickers	Thai Beverage	0.84	0.91	Buy
08/15/19	DBS Vickers	Thai Beverage	0.83	0.91	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
08/19/19	Amfrasers	Thai Beverage	0.885	0.8	Neutral
08/22/19	Phillip	Thai Beverage	0.925	0.83	Neutral	Sum of parts
09/02/19	UOB Kay Hian	Thai Beverage	0.9	0.87	Hold	Sum of parts, Buy @ $0.76

Talkmed - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/07/19	DMG & Partners	Talkmed	0.59	0.64	Neutral
02/21/19	DMG & Partners	Talkmed	0.58	0.62	Neutral	DCF
04/29/19	DMG & Partners	Talkmed	0.51	0.62	Buy	DCF

Stock calls for 24 September 2019

Date	Analyst	Company	Last	Target	Call	Valuation
09/24/19	Phillip	A-Reit	3.12	3.31	Accumulate
09/24/19	Phillip	ART	1.31	1.36	Accumulate
09/24/19	phillip	Cache Logistics	0.735	0.75	Neutral
09/24/19	Phillip	CapitaCommercial	2.11	2.18	Neutral
09/24/19	Phillip	Capitamall Trust	2.62	2.68	Neutral
09/24/19	Phillip	CapitaRetail China	1.53	1.66	Accumulate
09/24/19	phillip	Dasin Retail	0.845	0.94	Accumulate
09/24/19	phillip	EC World Reit	0.735	0.87	Buy
09/24/19	Phillip	Frasers Centrepoint Trust	2.71	2.77	Accumulate
09/24/19	Amfrasers	Geo Energy	0.148	0.14	Neutral	DCF
09/24/19	Lim & Tan	Keppel Corp	6.04	0	Buy
09/24/19	Phillip	Mapletree Industrial	2.47	2.03	Neutral
09/24/19	DMG & Partners	Oxley	0.305	0.43	Buy	RNAV (45% discount)
09/24/19	UOB Kay Hian	Wilmar	3.72	4.4	Buy

Why did China cancel the US farm visits?

https://www.freightwaves.com/news/us-to-leave-global-postal-union-next-month

China trade representatives cancelled the US farm visits because China team had learnt that the US was trying to increase China parcel rates by pulling out of the universal postage union.

http://sg-stock.blogspot.com/2019/09/the-us-china-trade-talk-in-us-broke.html

Suntec Reit - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/23/19	OCBC	Suntec Reit	1.86	1.83	Hold
01/24/19	DBS Vickers	Suntec Reit	1.87	2.12	Buy	DCF
01/24/19	OCBC	Suntec Reit	1.87	1.84	Hold
01/24/19	DMG & Partners	Suntec Reit	1.87	1.9	Neutral	DDM
01/24/19	Jefferies	Suntec Reit	1.87	1.85	Hold	Up from $1.80
01/28/19	UOB Kay Hian	Suntec Reit	1.93	2.01	Hold	Buy @ $1.83
01/28/19	CIMB	Suntec Reit	1.93	2.06	Add
03/18/19	DMG & Partners	Suntec Reit	1.93	1.9	Neutral
04/02/19	DBS Vickers	Suntec Reit	1.96	2.12	Buy
04/24/19	OCBC	Suntec Reit	1.86	1.84	Hold
04/25/19	OCBC	Suntec Reit	1.89	1.83	Hold	DDM
05/28/19	CIMB	Suntec Reit	1.82	2.06	Add
05/30/19	OCBC	Suntec Reit	1.82	1.99	Hold	Buy @ $1.81
06/20/19	DMG & Partners	Suntec Reit	1.92	1.9	Neutral	DDM
07/02/19	CIMB	Suntec Reit	1.95	2.15	Add	DDM
07/02/19	DBS Vickers	Suntec Reit	1.95	2.2	Buy	DCF
07/04/19	DMG & Partners	Suntec Reit	1.97	1.9	Neutral
07/10/19	UOB Kay Hian	Suntec Reit	1.95	2	Hold	DDM, Buy @ $1.82
07/29/19	DMG & Partners	Suntec Reit	1.92	2.08	Buy	DDM
07/29/19	OCBC	Suntec Reit	1.92	2.07	Hold
07/30/19	UOB Kay Hian	Suntec Reit	1.93	2.02	Hold	Buy @ $1.84
07/30/19	DBS Vickers	Suntec Reit	1.93	2.15	Buy	DCF
08/27/19	UOB Kay Hian	Suntec Reit	1.89	1.96	Hold	Buy @ $1.79
09/11/19	DMG & Partners	Suntec Reit	1.94	2.08	Buy

Sunpower - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/10/19	UOB Kay Hian	Sunpower	0.385	0.76	Buy	Sum of parts
03/01/19	UOB Kay Hian	Sunpower	0.585	0.88	Buy	Sum of parts
08/16/19	UOB Kay Hian	Sunpower	0.44	0.83	Buy

Sunningdale - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
03/01/19	UOB Kay Hian	Sunningdale	1.56	1.3	Hold	PER11x FY19, Buy @ $1.20
03/01/19	Lim & Tan	Sunningdale	1.56	0	Hold
03/05/19	CIMB	Sunningdale	1.4	1.38	Reduce	PB0.69x FY19
04/11/19	Lim & Tan	Sunningdale	1.39	0	Hold
05/07/19	Lim & Tan	Sunningdale	1.35	0	Hold
05/09/19	UOB Kay Hian	Sunningdale	1.32	1.22	Hold	PER11x FY20, Buy @ $1.10
05/09/19	CIMB	Sunningdale	1.32	1.38	Hold	PB0.69x FY19
08/07/19	UOB Kay Hian	Sunningdale	1.28	1.01	Sell

Stock calls for 23 September 2019

Date	Analyst	Company	Last	Target	Call	Valuation
09/23/19	CIMB	Boustead	0.735	1	Add	Sum of parts
09/23/19	DMG & Partners	Dairy Farm	6.65	6.65	Neutral	DCF
09/23/19	UOB Kay Hian	ISOTeam	0.225	0.34	Buy

The Amnesty International must be blind not to see ordinary people being bashed up by the HK protestors.

https://www.amnesty.org/en/latest/news/2019/09/hong-kong-arbitrary-arrests-brutal-beatings-and-torture-in-police-detention-revealed/

The Amnesty International accused the HK police of police brutality by interviewing the HK protestors.  However, the HK protestors had been smearing the HK police since the protests started.

The Amnesty International turned a blind eye to the violent french police crackdown on the yellow vest protests but criticized the restrained police crackdown on the HK anti-government protests.

Just look at the HK protestors bashing up ordinary people in the following videos.  This is just the tip of the iceberg.

How to trust Amnesty International with their biased eyes?  Shame on Amnesty International!

I hope that the HK Police will get tough with these rioters.  They are no longer protestors!