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Saturday, May 30, 2020

How important is Hong Kong to China?

https://www.reuters.com/article/us-hongkong-protests-finance-explainer/explainer-how-important-is-hong-kong-to-china-as-a-free-finance-hub-idUSKBN2350VO

Many analysts painted the picture that at least 60% of FDI in China came from HK and without HK, China would lose all these foreign direct investments (FDIs).  However, the truth is the exact opposite from these analyses.  Why?

Many US firms established their regional HQs or HQs in HK because of the US special trading status bestowed upon HK since the US wanted to make use of the special political status (1 country-2 systems) that HK possessed.  The HK tax-free status between the US and HK had given the US firms the advantages to import and export to China through HK without any tax.  Therefore, many US firms avoided direct investments in China by harnessing this special trading status in HK and invest in China indirectly through HK.  This basic understanding helps to explain the high HK's FDI in China. 

This special US-HK trading status also gives US the leverage to embark on a US-China trade war because the US can exclude the HK trading figures from the US-China trade deficit.  In the last decade, the US-HK trade surplus had reached about US$300B which had benefitted the US.

https://www.channelnewsasia.com/news/asia/amcham-sad-day-hong-kong-trump-strips-special-treatment-12786452

http://sg-stock.blogspot.com/2019/05/how-did-us-fudge-us-china-trade-data.html

The time has come for China to close this loophole in the US-China trading relationship.  HK was able to enjoy this preferential treatment because China had always treated HK as a long-lost child.  Recently, China had decided to impose its national securities law (NSL) on HK so that it could get rid of US influences in HK to restore peace and order in HK.  Yes, there will be protests in the next 1-2 years but peace and order will return after China executes the NSL against some defiant Hongkongers as a show of force.  This NSL will be good for HK in the long run.

http://sg-stock.blogspot.com/2019/11/hong-kong-is-financial-hub-because-of.html

The US firms will lose a lot and China will gain more leverage against the US because the US firms will have to invest directly in China instead since there is no added advantage by using HK after the US cancels the special US-HK trading status.  The US has to weigh the pros and cons now with regards to this cancellation.

Many US firms will not choose to give up the China market since there are a lot of monies to be made and their stock prices will drop significantly without China revenues.  Therefore, China will gain more direct FDIs but will diminish its HK's FDIs in the end which will not result in a significant fall in the total China FDI figure.  The only victim in this episode will be HK since HK deserves it with its misjudgement (anti-China stance).

Baltic dry index - 504

Today, Friday, May 29 2020, the Baltic Dry Index climbed by 15 points, reaching 504 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 - 301


Related stock: Keppel Corp, Sembcorp Marine & Cosco.

Friday, May 29, 2020

OCBC Bank - Stock calls

DateAnalystCompanyLastTargetCallValuation
04/02/19phillipOCBC11.2113.7Buy
04/02/19DBS VickersOCBC11.2112.9Buy
04/11/19CIMBOCBC11.7212Hold
04/22/19DMG & PartnersOCBC11.7712.2NeutralPB1.12x FY20, Up from $10.96
04/23/19Kim EngOCBC11.7810.73Hold
04/24/19UOB Kay HianOCBC11.8314.12BuyGGM, PB1.39x FY19
05/03/19phillipOCBC12.0413.7Buy
05/10/19DMG & PartnersOCBC11.3112.2NeutralPB1.12x FY20
05/10/19CIMBOCBC11.3112Hold
05/13/19MacquarieOCBC11.3913Outperform
05/13/19phillipOCBC11.3912.68AccumulateGGM, PB1.3x FY19
05/13/19UOB Kay HianOCBC11.3914.62BuyGGM, PB1.42x FY19
05/13/19CIMBOCBC11.3912.59HoldGGM, PB1.26x
05/22/19Kim EngOCBC11.0911.07Hold
06/03/19CIMBOCBC10.5712.59Hold
06/06/19phillipOCBC10.6312.7Accumulate
06/13/19UOB Kay HianOCBC10.814.62Buy
06/17/19Kim EngOCBC10.7811.07Hold
06/25/19DBS VickersOCBC11.2811.5HoldGGM, PB1.1x FY20
07/01/19UOB Kay HianOCBC11.414.62Buy
07/02/19Kim EngOCBC11.5911.07Hold
07/03/19phillipOCBC11.5412.7Accumulate
07/08/19DMG & PartnersOCBC11.3912.2NeutralGGM, PB1.12x FY20
07/23/19DBS VickersOCBC11.6411.5Hold
08/02/19Lim & TanOCBC11.420Buy on weakness
08/02/19CitibankOCBC11.4212.3Hold
08/05/19phillipOCBC11.2112.5AccumulateGGM, PB1.3x
08/05/19DMG & PartnersOCBC11.2111.8NeutralGGM, PB1.1x FY20
08/05/19UOB Kay HianOCBC11.2114.48BuyGGM, PB1.4x FY19
08/05/19DBS VickersOCBC11.2111.5HoldGGM, PB1.1x FY20
08/06/19CIMBOCBC11.0812.59HoldGGM, PB1.3x
08/06/19Kim EngOCBC11.0811.05HoldDDM
08/20/19DMG & PartnersOCBC10.7111.5NeutralGGM, PB1.07x FY20
08/21/19CIMBOCBC10.6912.53Hold
09/02/19phillipOCBC10.6512.32AccumulateGGM
09/05/19UOB Kay HianOCBC10.7114.48BuyGGM, PB1.4x FY19
09/26/19Kim EngOCBC10.7711.05Neutral
09/26/19DMG & PartnersOCBC10.7711.5NeutralGGM, PB1.07x FY20
09/27/19CIMBOCBC10.8212.53Hold
10/04/19phillipOCBC10.7112.32Accumulate
10/17/19UOB Kay HianOCBC10.8614.45BuyGGM, PB1.4x FY19
10/23/19DBS VickersOCBC10.7111.5Hold
11/05/19phillipOCBC11.0712.32Accumulate
11/05/19DMG & PartnersOCBC11.0711.5NeutralGGM, PB1.08x FY20
11/05/19Lim & TanOCBC11.070Buy
11/05/19CitibankOCBC11.0711Hold
11/05/19JefferiesOCBC11.0711.5Hold
11/06/19MacquarieOCBC11.0812.4OutperformPB
11/06/19Kim EngOCBC11.0811.26HoldDDM
11/06/19UOB Kay HianOCBC11.0814.45BuyGGM, PB1.4x FY19
11/06/19DBS VickersOCBC11.0811.5HoldGGM, PB1.1x FY20
11/07/19phillipOCBC11.111.7AccumulateGGM, PB1.1x
12/02/19CIMBOCBC10.7811.94Hold
12/02/19Kim EngOCBC10.7811.26Hold
12/03/19DMG & PartnersOCBC10.7511.5Neutral
12/03/19DBS VickersOCBC10.7511.5Hold
12/04/19phillipOCBC10.6811.7Accumulate
01/03/20UOB Kay HianOCBC11.0314.45Buy
01/08/20CIMBOCBC1111.94Hold
02/03/20DBS VickersOCBC10.8311.5HoldGGM, PB1x FY20
02/10/20UOB Kay HianOCBC10.8612.8Buy
02/19/20MacquarieOCBC10.9712.4Outperform
02/24/20phillipOCBC11.0212.1AccumulateGGM, PB1.11x FY20
02/24/20DMG & PartnersOCBC11.0211.2NeutralGGM, PB1.03x FY20
02/24/20UOB Kay HianOCBC11.0212.68Buy
02/24/20CitibankOCBC11.0211.6Hold
02/24/20JefferiesOCBC11.0211Hold
02/25/20Kim EngOCBC10.9211.57Hold
03/02/20DBS VickersOCBC10.611.5Hold
03/04/20CitibankOCBC10.6511Hold
03/05/20MacquarieOCBC10.5512.4Outperform
03/05/20DBS VickersOCBC10.5511HoldGGM, PB1x FY20
03/05/20CIMBOCBC10.5511.05Hold
03/09/20CitibankOCBC10.218.85Sell
03/10/20phillipOCBC9.5212.1Accumulate
03/11/20JefferiesOCBC9.7211Buy
03/17/20DMG & PartnersOCBC8.79.6BuyGGM, PB0.89x FY20
03/17/20DBS VickersOCBC8.78.6HoldGGM, PB0.8x FY20
03/17/20JefferiesOCBC8.710Buy
03/19/20MacquarieOCBC8.4910.5Outperform
03/20/20CIMBOCBC8.089.04Add
03/31/20DMG & PartnersOCBC8.529.6Neutral
04/01/20DBS VickersOCBC8.548.6Hold
04/01/20JefferiesOCBC8.5410Buy
04/01/20CitibankOCBC8.548.85Sell
04/08/20Kim EngOCBC8.9310.32BuyDDM
04/13/20phillipOCBC8.9512.1Accumulate
04/22/20UOB Kay HianOCBC8.79.78Buy
04/22/20DMG & PartnersOCBC8.79NeutralGGM, PB0.84x FY20
04/23/20DBS VickersOCBC8.627.9HoldGGM, PB0.7x FY21
04/24/20MacquarieOCBC8.6510Outperform
05/11/20phillipOCBC8.889.14AccumlateGGM, PB0.85x
05/11/20DMG & PartnersOCBC8.888.7HoldGGM, PB0.81x FY20
05/11/20Kim EngOCBC8.889.46HoldDDM
05/11/20DBS VickersOCBC8.887.9HoldGGM, PB0.7x FY21
05/11/20Lim & TanOCBC8.880Accumlate
05/11/20CIMBOCBC8.888.37Hold
05/11/20UOB Kay HianOCBC8.889.78BuyPB0.8x FY20
05/13/20MacquarieOCBC8.899.67OutperformPB

Netlink - Stock calls

DateAnalystCompanyLastTargetCallValuation
04/01/19UOB Kay HianNetlink0.830.92Buy
04/01/19Kim EngNetlink0.830.93Buy
05/07/19UOB Kay HianNetlink0.8250.92BuyDCF
05/09/19DBS VickersNetlink0.820.87Buy
05/15/19OCBCNetlink0.8350.95Buy
05/15/19DBS VickersNetlink0.8350.9BuyDCF
05/15/19PhillipNetlink0.8350.93AccumulateDCF
05/15/19Kim EngNetlink0.8350.94BuyDDM
06/03/19PhillipNetlink0.830.93BuyDCF
06/06/19DBS VickersNetlink0.8250.9Buy
06/12/19UOB Kay HianNetlink0.8350.97Buy
06/27/19Kim EngNetlink0.890.94Buy
07/15/19PhillipNetlink0.880.93AccumulateDCF
07/17/19Kim EngNetlink0.8850.94Buy
08/06/19UOB Kay HianNetlink0.880.92BuyDCF
08/06/19PhillipNetlink0.880.93AccumulateDCF
08/07/19Kim EngNetlink0.8650.94BuyDDM
08/07/19DBS VickersNetlink0.8650.95BuyDCF
10/07/19UOB Kay HianNetlink0.91.01BuyDCF
10/11/19PhillipNetlink0.910.93Accumulate
10/17/19Kim EngNetlink0.91.03BuyDDM
10/18/19DBS VickersNetlink0.910.95Buy
11/04/19UOB Kay HianNetlink0.9351.01BuyDCF
11/04/19PhillipNetlink0.9350.99AccumulateDCF
11/05/19OCBCNetlink0.9551.03Buy
11/05/19DBS VickersNetlink0.9551.04BuyDCF
11/05/19Kim EngNetlink0.9551.06Buy
01/03/20DBS VickersNetlink0.941.04BuyDCF
01/30/20UOB Kay HianNetlink11.05BuyDCF
02/10/20DBS VickersNetlink1.011.04BuyDCF
02/11/20UOB Kay HianNetlink11.05BuyDCF
02/12/20DBS VickersNetlink11.05BuyDCF
02/14/20PhillipNetlink1.010.99NeutralDCF
03/02/20DBS VickersNetlink0.981.05Buy
03/23/20DBS VickersNetlink0.90.95BuyDCF
05/08/20DBS VickersNetlink11.02HoldDCF
05/11/20phillipNetlink0.9851.03AccumlateDCF
05/11/20UOB Kay HianNetlink0.9851.08Buy

Moya Asia - Stock calls

DateAnalystCompanyLastTargetCallValuation
05/02/19DMG & PartnersMoya Asia0.0810.095Buy
06/06/19DMG & PartnersMoya Asia0.0760.1Buy
08/20/19DMG & PartnersMoya Asia0.0680.083BuyDCF
10/15/19DMG & PartnersMoya Asia0.0650.08Buy
01/09/20DMG & PartnersMoya Asia0.080.093BuyDCF
03/02/20DMG & PartnersMoya Asia0.0730.082BuyDCF

Stock calls for 29 May 2020

DateAnalystCompanyLastTargetCallValuation
05/29/20DMG & PartnersAPAC Realty0.350.6Buy
05/29/20DBS VickersCapitamall Trust1.932.15BuyPB1x
05/29/20DBS VickersChina Everbright0.1990.49BuyPER7x
05/29/20DMG & PartnersCity Developments7.679.5BuyRNAV (45% discount)
05/29/20DBS VickersKeppel Corp5.976.8Buy
05/29/20CIMBKeppel Corp5.977.48AddSum of parts
05/29/20DMG & PartnersKeppel Corp5.977.3Buy
05/29/20DBS VickersMapletree Commercial1.662.25Buy
05/29/20DMG & PartnersSheng Siong1.521.72BuyDCF
05/29/20DBS VickersSingtel2.513.09Buy
05/29/20UOB Kay HianSingtel2.512.8BuyDCF
05/29/20DMG & PartnersSingtel2.513.4BuySum of parts
05/29/20Lim & TanSingtel2.512.45Hold
05/29/20OCBCSingtel2.513.24Buy
05/29/20DBS VickersSPH Reit0.8250.8Hold
05/29/20DBS VickersStarhill0.460.5Hold
05/29/20Kim EngTop Glove4.626.52BuyRinggit target $20, PER23x CY21

Thursday, May 28, 2020

MM2 Asia - Stock calls

DateAnalystCompanyLastTargetCallValuation
05/31/19DBS VickersMM2 Asia0.240.34BuySum of parts, PER16x FY20
06/04/19Kim EngMM2 Asia0.2450.26Hold
07/19/19DBS VickersMM2 Asia0.230.34BuyPER16x FY20
08/15/19DBS VickersMM2 Asia0.1970.29BuySum of parts
08/20/19Kim EngMM2 Asia0.1860.2HoldPEG1x
10/09/19CIMBMM2 Asia0.2150.32AddSum of parts
11/15/19DBS VickersMM2 Asia0.2850.3HoldSum of parts, PER12.8x FY20
03/25/20DBS VickersMM2 Asia0.1240.107Fully Valued

Mindchamps - Stock calls

DateAnalystCompanyLastTargetCallValuation
04/05/19DMG & PartnersMindchamps0.6550.87Buy
05/17/19DMG & PartnersMindchamps0.660.83BuyDCF
08/27/19DMG & PartnersMindchamps0.5250.83Buy
12/11/19DMG & PartnersMindchamps0.460.87Buy
03/02/20DMG & PartnersMindchamps0.3950.37NeutralDCF

Micro-Mechanics - Stock calls

DateAnalystCompanyLastTargetCallValuation
05/02/19PhillipMicro-Mechanics1.631.63NeutralPER15x FY20
09/03/19PhillipMicro-Mechanics1.591.6NeutralPER15x FY20
11/05/19PhillipMicro-Mechanics1.91.6Reduce
02/12/20PhillipMicro-Mechanics1.881.6ReducePER15x FY20
04/27/20PhillipMicro-Mechanics1.641.6Neutral
04/29/20UOB Kay HianMicro-Mechanics1.71.82HoldBuy @ $1.55

Stock calls for 28 May 2020

DateAnalystCompanyLastTargetCallValuation
05/28/20MacquarieAIMS AMP Cap Ind Reit1.221.45Outperform
05/28/20Lim & TanCity Developments7.6811.2Buy
05/28/20MacquarieDairy Farm4.265.8Outperform
05/28/20MacquarieKeppel Corp6.037Outperform
05/28/20MacquarieSGX8.7511Outperform
05/28/20DMG & PartnersSGX8.758.6HoldPER24x FY21
05/28/20DBS VickersSGX8.757.4Fully ValuedDDM
05/28/20CIMBSGX8.758Reduce
05/28/20OCBCSGX8.758SellPER21.6x FY21
05/28/20JefferiesSGX8.758.5HoldPER23.5x
05/28/20Lim & TanSGX8.750Buy on weakness
05/28/20UOB Kay HianUnusual0.1350.123HoldBuy @ $0.111
05/28/20MacquarieUOL6.7110.15Outperform

Wednesday, May 27, 2020

Memtech - Stock calls

DateAnalystCompanyLastTargetCallValuation
04/26/19UOB Kay HianMemtech0.961.33Buy
05/15/19CIMBMemtech1.091.35Accept offeroffer $1.35
05/15/19Lim & TanMemtech1.091.35Accept offeroffer $1.35
06/17/19Lim & TanMemtech1.331.35Accept offeroffer $1.35

Mapletree North Asia - Stock calls

DateAnalystCompanyLastTargetCallValuation
04/03/19DBS VickersMapletree North Asia1.311.45Buy
05/02/19OCBCMapletree North Asia1.361.4Hold
05/02/19DBS VickersMapletree North Asia1.361.6BuyDCF
07/19/19DBS VickersMapletree North Asia1.451.65BuyDCF
07/30/19OCBCMapletree North Asia1.381.43Hold
07/31/19CIMBMapletree North Asia1.421.5AddDDM
08/14/19OCBCMapletree North Asia1.281.43Buy
09/30/19DBS VickersMapletree North Asia1.331.65BuyDCF
10/29/19Lim & TanMapletree North Asia1.260Hold
10/30/19DBS VickersMapletree North Asia1.271.6BuyDCF
10/31/19OCBCMapletree North Asia1.271.43Buy
11/12/19DBS VickersMapletree North Asia1.231.6Buy
12/05/19OCBCMapletree North Asia1.161.41Buy
12/06/19DBS VickersMapletree North Asia1.151.3BuyDCF
12/09/19OCBCMapletree North Asia1.181.36Buy
01/20/20OCBCMapletree North Asia1.241.37Buy
01/20/20Lim & TanMapletree North Asia1.240Hold
01/22/20CIMBMapletree North Asia1.241.31AddDDM
01/22/20DBS VickersMapletree North Asia1.241.35BuyDCF
04/03/20DBS VickersMapletree North Asia0.781.05BuyDCF
04/03/20CIMBMapletree North Asia0.781.3Add
05/04/20CIMBMapletree North Asia0.9451.26Add
05/04/20DBS VickersMapletree North Asia0.9451.05BuyDCF