I don't like to invest in REITs and business trusts because of their business model.
The REITs and business trusts' business model relies heavily on the following:
1. The need to acquire another asset with a higher yield growth.
2. The need to increase existing rental yield by increasing rental incomes from existing tenants.
3. The asset acquisition is restricted by the loan to value (LTV) restriction.
The main disadvantages:
1. Typically, the tenants cannot survive in bad times. The fixed rental contracts won't impede the retail store closures.
https://www.channelnewsasia.com/news/business/sasa-cosmetics-to-close-all-retail-stores-in-singapore-12146180
https://www.dw.com/en/high-end-stores-in-hong-kong-face-closures-as-mainland-chinese-stay-away/a-51843374
2. Banks may recall the loans because of LTV restrictions due to falling valuations.
I've written something similar about this for the shipping trusts.
http://sg-stock.blogspot.com/2017/03/qualitative-vs-quantitative-analysis.html
Many analysts touted the REITs and business trusts investments because of their stable yields but they disregard the risky business model. The analysts that touted the shipping trusts in the past had gone into hiding after the collapse and nobody had promoted the shipping trusts again ever since.
Sunday, April 5, 2020
Saturday, April 4, 2020
The US dairy and agricultural farmers are dumping their products. Why?
https://sg.finance.yahoo.com/news/u-dairy-farmers-dump-milk-100952217.html
The lockdowns have diminished consumer demands and disrupted logistics greatly for these dairy and agricultural farmers and they're left with no choice but to destroy their own products. This is something that will happen during the depression but it is happening now.
What's going to happen when demands come back?
Food supplies will be in a shortage and prices will start to rise. In a severe situation, hyperinflation will occur and this is my major concern as stated in my earlier post because other prices will rise rapidly due to the excessive monetary and fiscal policies.
http://sg-stock.blogspot.com/2020/03/whats-next-after-covid-19-outbreak.html
The lockdowns have diminished consumer demands and disrupted logistics greatly for these dairy and agricultural farmers and they're left with no choice but to destroy their own products. This is something that will happen during the depression but it is happening now.
What's going to happen when demands come back?
Food supplies will be in a shortage and prices will start to rise. In a severe situation, hyperinflation will occur and this is my major concern as stated in my earlier post because other prices will rise rapidly due to the excessive monetary and fiscal policies.
http://sg-stock.blogspot.com/2020/03/whats-next-after-covid-19-outbreak.html
Emerging markets are being downgraded by the US credit rating firms.
https://sg.finance.yahoo.com/news/coronavirus-puts-clutch-countries-junk-150422794.html
There are serious consequences to the credit rating downgrades. The downgrades will make fundraising more difficult for these emerging markets, especially during a crisis, when they need to dole out stimulus packages to support their economies and citizens.
We've warned about these impending massive downgrades (countries and companies) in early March 2020.
http://sg-stock.blogspot.com/2020/03/weve-correctly-predicted-end-of-good-us.html
If these emerging market countries had the foresight or read our post, they would have prepared for such circumstances in advance.
There are serious consequences to the credit rating downgrades. The downgrades will make fundraising more difficult for these emerging markets, especially during a crisis, when they need to dole out stimulus packages to support their economies and citizens.
We've warned about these impending massive downgrades (countries and companies) in early March 2020.
http://sg-stock.blogspot.com/2020/03/weve-correctly-predicted-end-of-good-us.html
If these emerging market countries had the foresight or read our post, they would have prepared for such circumstances in advance.
Friday, April 3, 2020
APAC Realty - Stock calls
Date | Analyst | Company | Last | Target | Call | Valuation |
04/04/19 | DMG & Partners | APAC Realty | 0.615 | 0.72 | Buy | RNAV |
05/07/19 | DMG & Partners | APAC Realty | 0.555 | 0.72 | Buy | |
05/14/19 | DMG & Partners | APAC Realty | 0.545 | 0.67 | Buy | DCF |
05/16/19 | DBS Vickers | APAC Realty | 0.525 | 0.58 | Hold | PER10x |
06/03/19 | Phillip | APAC Realty | 0.5 | 0.65 | Buy | DCF |
06/06/19 | DMG & Partners | APAC Realty | 0.5 | 0.67 | Buy | |
06/07/19 | CIMB | APAC Realty | 0.51 | 0.67 | Add | |
07/15/19 | Phillip | APAC Realty | 0.545 | 0.65 | Buy | DCF |
08/06/19 | DMG & Partners | APAC Realty | 0.525 | 0.65 | Buy | DCF |
08/06/19 | DBS Vickers | APAC Realty | 0.525 | 0.48 | Hold | PER10x FY20 |
08/08/19 | Phillip | APAC Realty | 0.515 | 0.58 | Buy | DCF |
08/13/19 | CIMB | APAC Realty | 0.51 | 0.6 | Add | PER10x FY20 |
09/12/19 | DMG & Partners | APAC Realty | 0.495 | 0.65 | Buy | |
11/14/19 | CIMB | APAC Realty | 0.515 | 0.66 | Add | DCF |
11/14/19 | DMG & Partners | APAC Realty | 0.515 | 0.6 | Buy | DCF |
11/14/19 | DBS Vickers | APAC Realty | 0.515 | 0.46 | Hold | PER12x FY20 |
11/18/19 | Phillip | APAC Realty | 0.5 | 0.55 | Accumulate | DCF |
12/16/19 | DMG & Partners | APAC Realty | 0.505 | 0.6 | Buy | |
02/25/20 | DMG & Partners | APAC Realty | 0.47 | 0.6 | Buy | DCF |
02/25/20 | DBS Vickers | APAC Realty | 0.47 | 0.52 | Hold | PER12x FY20 |
02/25/20 | CIMB | APAC Realty | 0.47 | 0.61 | Add | |
02/26/20 | Phillip | APAC Realty | 0.49 | 0.55 | Accumulate | DCF |
Amara - Stock calls
Date | Analyst | Company | Last | Target | Call | Valuation |
12/11/19 | DMG & Partners | Amara | 0.45 | 0.88 | Buy | |
03/04/20 | DMG & Partners | Amara | 0.4 | 0.78 | Buy | RNAV (44% discount) |
AIMS AMP Cap Ind Reit - Stock calls
Date | Analyst | Company | Last | Target | Call | Valuation |
04/25/19 | Kim Eng | AIMS AMP Cap Ind Reit | 1.42 | 1.5 | Buy | DDM |
04/25/19 | DBS Vickers | AIMS AMP Cap Ind Reit | 1.42 | 1.5 | Buy | DCF |
05/16/19 | DBS Vickers | AIMS AMP Cap Ind Reit | 1.4 | 1.5 | Buy | DCF |
07/19/19 | DBS Vickers | AIMS AMP Cap Ind Reit | 1.46 | 1.5 | Buy | DCF |
07/25/19 | Lim & Tan | AIMS AMP Cap Ind Reit | 1.47 | 0 | Hold | |
07/26/19 | Kim Eng | AIMS AMP Cap Ind Reit | 1.47 | 1.6 | Buy | DDM |
11/07/19 | DBS Vickers | AIMS AMP Cap Ind Reit | 1.4 | 1.5 | Buy | DCF |
01/31/20 | Lim & Tan | AIMS AMP Cap Ind Reit | 1.43 | 0 | Hold | |
02/03/20 | Kim Eng | AIMS AMP Cap Ind Reit | 1.46 | 1.6 | Buy | DDM |
03/02/20 | DBS Vickers | AIMS AMP Cap Ind Reit | 1.4 | 1.5 | Buy | DCF |
03/05/20 | Macquarie | AIMS AMP Cap Ind Reit | 1.42 | 1.55 | Outperform |
Stock calls for 3 April 2020
Date | Analyst | Company | Last | Target | Call | Valuation |
04/03/20 | DBS Vickers | Mapletree North Asia | 0.78 | 1.05 | Buy | DCF |
04/03/20 | CIMB | SIA | 5.65 | 6.27 | Hold | |
04/03/20 | DIR | SIA | 5.65 | 5.54 | Hold | |
04/03/20 | UOB Kay Hian | Singtel | 2.62 | 3 | Buy | DCF |
04/03/20 | DMG & Partners | Suntec Reit | 1.1 | 1.78 | Buy | DDM |
The US embarked on a smearing campaign when it handled the covid outbreak very badly.
https://www.theedgesingapore.com/news/covid-19/chinese-covid-19-numbers-not-fake-berkley-professor
It is very difficult to understate the covid statistics by 15x to 40x without being discovered. The US and UK had been alleging that China had understated its cases by 15-40x which was ridiculous. These 2 western countries just wanted to deflect their incapabilities from their own countries to falsified statistics in China so that their own statistics would look much better.
https://www.dailywire.com/news/british-scientific-advisers-claim-chinas-outbreak-could-be-15-to-40-times-worse-than-reported-report-says
China's statistics were much lower because the communist government took a hardline approach in containing the virus outbreak while the UK took a herd immunity approach and the US took a relaxed approach. The western countries also didn't like to wear masks.
Who to blame now? The western countries like to blame China except themselves.
It is very difficult to understate the covid statistics by 15x to 40x without being discovered. The US and UK had been alleging that China had understated its cases by 15-40x which was ridiculous. These 2 western countries just wanted to deflect their incapabilities from their own countries to falsified statistics in China so that their own statistics would look much better.
https://www.dailywire.com/news/british-scientific-advisers-claim-chinas-outbreak-could-be-15-to-40-times-worse-than-reported-report-says
China's statistics were much lower because the communist government took a hardline approach in containing the virus outbreak while the UK took a herd immunity approach and the US took a relaxed approach. The western countries also didn't like to wear masks.
Who to blame now? The western countries like to blame China except themselves.
Luckin Coffee crashed and burnt in hell.
https://sg.finance.yahoo.com/news/luckin-coffee-suspends-coo-for-fabricated-transaction-143725441.html
Luckin is currently facing a class-action suit now for fraud.
We had warned about this company since its Ipo.
http://sg-stock.blogspot.com/2019/05/do-not-subscribe-to-luckin-coffee-ipo.html
Luckin is currently facing a class-action suit now for fraud.
We had warned about this company since its Ipo.
http://sg-stock.blogspot.com/2019/05/do-not-subscribe-to-luckin-coffee-ipo.html
The US is showing its true colours during the virus outbreak.
https://sg.news.yahoo.com/spies-hijacks-export-bans-global-165134674.html
The US is hijacking medical supplies from its Nato friends.
The US hijacked 500,000 covid test kits in Italy.
The US hijacked 6m N95 masks from Germany in Kenya. The 6m N95 masks bought by Germany and stored in Kenya were lost. Germany had requested the US to provide the serial numbers of the 39m N95 masks found in the US but this request was rejected by the US.
https://www.newser.com/story/288734/union-uses-elbow-grease-to-rustle-up-39m-n95-masks.html
The latest hijack victim was France that lost its medical supplies to the US.
This is how the US is treating its Nato friends.
The US is hijacking medical supplies from its Nato friends.
The US hijacked 500,000 covid test kits in Italy.
The US hijacked 6m N95 masks from Germany in Kenya. The 6m N95 masks bought by Germany and stored in Kenya were lost. Germany had requested the US to provide the serial numbers of the 39m N95 masks found in the US but this request was rejected by the US.
https://www.newser.com/story/288734/union-uses-elbow-grease-to-rustle-up-39m-n95-masks.html
The latest hijack victim was France that lost its medical supplies to the US.
This is how the US is treating its Nato friends.
MS: The US GDP will shrink 5.5% in 2020.
https://sg.finance.yahoo.com/news/u-economy-shrink-fastest-rate-071059385.html
We had already given this 2020 recession warning in August last year.
http://sg-stock.blogspot.com/2019/08/a-billion-dollar-question-will-us-enter.html
We had also reiterated this numerous times thereafter.
http://sg-stock.blogspot.com/2019/12/the-wall-street-analysts-are-starting.html?showComment=1576822097373#c7821513851698794977
http://sg-stock.blogspot.com/2019/12/the-recession-constellation-are.html
Those who had heeded our warnings would be prepared for this 2020 recession.
We had already given this 2020 recession warning in August last year.
http://sg-stock.blogspot.com/2019/08/a-billion-dollar-question-will-us-enter.html
We had also reiterated this numerous times thereafter.
http://sg-stock.blogspot.com/2019/12/the-wall-street-analysts-are-starting.html?showComment=1576822097373#c7821513851698794977
http://sg-stock.blogspot.com/2019/12/the-recession-constellation-are.html
Those who had heeded our warnings would be prepared for this 2020 recession.
Thursday, April 2, 2020
China and Russia are setting up new internet protocol to replace the US standard.
https://www.ft.com/content/ba94c2bc-6e27-11ea-9bca-bf503995cd6f
The dichotomy in the internet world is happening and the US is losing its hegemony in the internet arena. The TCP/IP will be ditched in the future as pro-China nations will adopt the new IP standard set up by China & Russia.
The new IP standard will start its trial test in 2021 and China will move to adopt this new IP standard after the trial test. China has a big population to make this new IP standard successful and other pro-China nations will follow suit after seeing the advantages of using it.
The dichotomy in the internet world is happening and the US is losing its hegemony in the internet arena. The TCP/IP will be ditched in the future as pro-China nations will adopt the new IP standard set up by China & Russia.
The new IP standard will start its trial test in 2021 and China will move to adopt this new IP standard after the trial test. China has a big population to make this new IP standard successful and other pro-China nations will follow suit after seeing the advantages of using it.
The US ISM PMI for March 2020 is showing a significant deterioration in the US economy.
The ISM PMI for March 2020 declined to 49.1 because of the covid-19 impacts. The prices declined by 8.5 to 37.4 as producers used more local raw material instead. The new order was down significantly by 7.6 to 42.2 because of declines in new export and local orders which showed that consumer spending was pulling back.
The customers’ inventories increased because producers were replenishing their stocks to meet the backlog of order. However, the actual production decreased to 47.7 (-2.6) as the producers had no confidence in the future outlook that had resulted in a reduction in employment. The supplier’s deliveries went up to 65 because of slower delivery time since the sub-index had an inverse relationship with the delivery period.
In conclusion, this ISM PMI was reporting deflation, declining production, weakening local consumption and deteriorating employment situation.
AEM - Stock calls
Date | Analyst | Company | Last | Target | Call | Valuation |
04/26/19 | CIMB | AEM | 1.16 | 1.21 | Hold | PER10x FY20 |
05/09/19 | Kim Eng | AEM | 1.05 | 1.4 | Buy | PB3.1x FY19/20 |
06/11/19 | Kim Eng | AEM | 0.945 | 1.4 | Buy | PB3.1x FY19/20 |
07/18/19 | CIMB | AEM | 1.04 | 1.23 | Add | PER10x FY20 |
07/29/19 | Kim Eng | AEM | 1.22 | 1.4 | Buy | PB3x FY19/20 |
08/14/19 | Kim Eng | AEM | 1.09 | 1.4 | Buy | Roe-g/Coe-g |
09/16/19 | Kim Eng | AEM | 1.19 | 1.5 | Buy | Roe-g/Coe-g |
10/03/19 | Kim Eng | AEM | 1.12 | 1.5 | Buy | Roe-g/Coe-g, PB3.2x FY19/20 |
10/11/19 | Amfrasers | AEM | 1.16 | 1.34 | Outperform | PER11x FY20 |
10/22/19 | CIMB | AEM | 1.3 | 1.44 | Add | |
11/04/19 | Amfrasers | AEM | 1.53 | 1.8 | Outperform | PER12x FY20 |
11/25/19 | CIMB | AEM | 1.8 | 2.12 | Add | |
11/29/19 | DBS Vickers | AEM | 1.71 | 2.38 | Buy | PER12.1x FY20 |
12/10/19 | DBS Vickers | AEM | 1.91 | 2.38 | Buy | PER12.1x FY20 |
12/10/19 | Kim Eng | AEM | 1.91 | 2.12 | Buy | |
12/31/19 | CIMB | AEM | 1.99 | 2.12 | Add | |
01/15/20 | Amfrasers | AEM | 2.16 | 2.57 | Buy | PER14x FY20 |
01/15/20 | Kim Eng | AEM | 2.16 | 2.58 | Buy | |
01/24/20 | DBS Vickers | AEM | 2.05 | 2.38 | Buy | PER12.1x FY20 |
02/11/20 | Amfrasers | AEM | 1.88 | 2.57 | Outperform | |
02/11/20 | Kim Eng | AEM | 1.88 | 2.58 | Buy | |
02/28/20 | DBS Vickers | AEM | 2.24 | 2.52 | Buy | PER11.2x FY20 |
03/10/20 | Kim Eng | AEM | 1.83 | 2.82 | Buy | PB3x FY20/21 |
03/10/20 | Amfrasers | AEM | 1.83 | 2.6 | Outperform | PER12x FY20 |
03/19/20 | CIMB | AEM | 1.49 | 2.71 | Add | GGM, PB4.05x |
04/02/20 | DBS Vickers | AEM | 1.64 | 2.29 | Buy |
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