Singapore Stock Exchange - Equity Investments

Saturday, August 17, 2019

18 August will be the judgement day for Hong Kong.

The HK protestors will be rallying a mass protest on 18 August (Sunday) with a proclaimed 3-million turnout.

China has warned that if the protest deteriorates into a massive riot, China will intervene by sending its military police and anti-terrorism force into HK. China basic law allows such intervention without HK approval for anti-terrorism action.

Good luck to HK tomorrow!

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%

https://sg-stock.blogspot.com/2019/07/singapore-nodx-fell-173-in-june-2019.html

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).

https://www.scmp.com/news/asia/east-asia/article/2115888/cash-loving-japanese-savers-play-it-safe-hiding-money-their

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.

The US-China financial war talk is on the rise.

https://sg-stock.blogspot.com/2019/08/the-us-china-trade-war-is-escalating.html

https://sg-stock.blogspot.com/2019/08/the-us-china-trade-war-is-escalating_11.html

The US-China financial war talk is on the rise after we first posted the 4 stages of escalation on 9 August 2019.

The China central bank ex-bankers warned about this on 10 August 2019, a day after our posting.

There is a more detailed discussion on this today (see below).

https://finance.yahoo.com/news/china-may-foreign-exchange-reserves-093000109.html

First of all, we're not fearmongering to profit from this. We're just stating the possible scenarios that might happen which derived from our analysis based on our financial knowledge. It is just a coincident that the financial war talk is becoming a topic after our first post.

Are we clairvoyants? We wished we were but we were not.

We agree that we're not always right but we're also seldom wrong. Heehee!

The Dow Jones index fell 800 points because of 2-10y inverted yield curve.

The US markets fell heavily because of 2-10y inverted yield curve.

We had explained the abnormality of the inverted yield curve below.

http://sg-stock.blogspot.com/2019/03/the-us-treasurys-situation-is-getting.html

We also had reminded our readers to watch the 2-10y yield curve closely in Dec 2018.

https://sg-stock.blogspot.com/2018/12/the-us-3-year-and-5-year-yield-curve.html

The US markets heavy plunges yesterday had slaughtered many investors who bought into the euphoria of the delayed tariffs.

Wednesday, August 14, 2019

The Hong Kong police are incapable to protect the innocent.

The HK police should have taken a much tougher stance against the rioters. It was pretty obvious that the China reporter from Global Times had been taken as a hostage because he was tied up against his will and the circumstance had escalated from rioting into a hostage situation.

The HK police should have fired many rubber bullets at the rioters to disperse them so that the police can bulldoze its ways through to save the hostage but the HK police didn't. The HK police have no capability and competency to save an innocent person. The HK police show that they don't know how to handle the situation and have inadequate training to assess the situation.

Hong Leong Finance - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
02/28/19	Lim & Tan	Hong Leong Finance	2.71	0	Buy
04/26/19	Lim & Tan	Hong Leong Finance	2.8	0	Buy

Hock Lian Seng - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
08/02/19	Lim & Tan	Hock Lian Seng	0.33	0	Buy on weakness

Ho Bee - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
02/26/19	Lim & Tan	Ho Bee	2.51	0	Buy
03/28/19	UOB Kay Hian	Ho Bee	2.5	2.79	Buy	RNAV (30% discount)
04/01/19	Lim & Tan	Ho Bee	2.52	0	Buy
06/28/19	UOB Kay Hian	Ho Bee	2.38	2.79	Buy

Stock calls for 14 August 2019

Date	Analyst	Company	Last	Target	Call	Valuation
08/14/19	Kim Eng	AEM	1.09	1.4	Buy
08/14/19	DMG & Partners	Bumitama	0.6	0.54	Neutral	PER14x FY20
08/14/19	Macquarie	Capitaland	3.42	4.15	Outperform
08/14/19	CIMB	Comfortdelgro	2.62	2.78	Add	DCF
08/14/19	DMG & Partners	Comfortdelgro	2.62	2.55	Neutral	DCF
08/14/19	OCBC	Comfortdelgro	2.62	2.91	Hold
08/14/19	phillip	Comfortdelgro	2.62	2.99	Accumulate	PER18.6x FY19
08/14/19	UOB Kay Hian	Comfortdelgro	2.62	2.95	Buy
08/14/19	DBS Vickers	Comfortdelgro	2.62	2.59	Hold
08/14/19	DMG & Partners	Delfi	1.24	1.68	Buy	DCF, PER28x FY19
08/14/19	Lim & Tan	Fu Yu	0.215	0	Buy
08/14/19	DMG & Partners	Fu Yu	0.215	0.24	Buy	DCF
08/14/19	UOB Kay Hian	Fu Yu	0.215	0.285	Buy
08/14/19	DMG & Partners	HRnetGroup	0.66	0.94	Buy	DCF
08/14/19	Lim & Tan	Innotek	0.5	0	Buy on weakness
08/14/19	OCBC	Mapletree North Asia	1.28	1.43	Buy
08/14/19	OCBC	Singtel	3.18	3.61	Buy
08/14/19	DIR	Venture	15.28	17.9	Outperform
08/14/19	OCBC	Venture	15.28	18.42	Buy	PER14x
08/14/19	DMG & Partners	Wilmar	4.05	4.5	Buy	Sum of parts
08/14/19	UOB Kay Hian	Wilmar	4.05	4.5	Buy
08/14/19	OCBC	Yanlord	1.13	1.68	Buy

The US will close 12,000 retailers in 2019.

https://finance.yahoo.com/news/25-retailers-already-announced-close-132806255.html

The US economy is deteriorating fast and furious because 12,000 retailers will close down in 2019. If 3 people are needed to manage a retail shop, there will be 36,000 retrenched people.

Trump's tariffs are expediting this shutdown.

No frenzy buying in the stock markets after the US delays the China tariffs.

There isn't any frenzy buying in the stock market today after the US delays the China tariffs.

What does this show?

This shows that President Trump has completely lost his credibility because the current investors don't want to be trapped by his gambit. He may tweet again next week to slaughter the investors who buy into this euphoria. This uncertainty is holding back many investors.

Trump is losing his power to manipulate the stock markets now which is a piece of great news.