Stock calls for 18 August 2020

Date	Analyst	Company	Last	Target	Call	Valuation
08/18/20	CIMB	APAC Realty	0.375	0.538	Add
08/18/20	DBS Vickers	Bumitama	0.515	0.66	Buy	DCF
08/18/20	UOB Kay Hian	Fu Yu	0.245	0.29	Buy
08/18/20	CIMB	Innotek	0.39	0.478	Add
08/18/20	DBS Vickers	Mapletree Industrial	3.14	3.25	Buy
08/18/20	CIMB	Sasseur	0.78	0.84	Add
08/18/20	DBS Vickers	SIA Engineering	1.86	2.4	Buy
08/18/20	DMG & Partners	Singtel	2.4	3.2	Buy	Sum of parts
08/18/20	DBS Vickers	Singtel	2.4	2.85	Buy	Sum of parts
08/18/20	DBS Vickers	ST Engineering	3.39	3.8	Buy
08/18/20	DMG & Partners	ST Engineering	3.39	3.9	Buy	Sum of parts
08/18/20	Phillip	Thai Beverage	0.635	0.82	Buy	PER18x FY21
08/18/20	UOB Kay Hian	Thai Beverage	0.635	0.78	Buy	Sum of parts
08/18/20	CIMB	UMS	1.06	1.1	Hold
08/18/20	Kim Eng	UMS	1.06	1.36	Buy
08/18/20	OCBC	Yanlord	1.3	1.41	Buy

Another constellation is aligning and a big financial crisis is brewing this time. - Part 7

Is Warren Buffett preparing for a financial crisis?

https://www.investopedia.com/berkshire-cuts-bank-holdings-takes-position-in-gold-5074946

Warren Buffett (WB) has been cutting back on financial shares and increasing the gold position.  Why?

It is a well-known fact that WB doesn't like gold because it doesn't pay any dividends at all.  Why is he buying gold now when its price is at an all-time high?

I think he is projecting the exact same outcome that I've been anticipating below.

http://sg-stock.blogspot.com/2020/07/another-constellation-is-aligning-and_75.html

The financial tsunami that I'm projecting is based on the following highlights.

Rising US-China tension (trade, economic, financial, sanction, etc)

Excessive monetary policies

Imploding debts

Covid virus

Natural disasters (floodings in China & Japan now, and the US typhoon season)

Unsustainable financial firms' earnings (bond trading income)

Lendlease Reit - Stock calls

 

Date	Analyst	Company	Last	Target	Call	Valuation
10/15/19	DIR	Lendlease Reit	0.94	1.01	outperform
12/06/19	DBS Vickers	Lendlease Reit	0.92	1.05	Buy	DCF
02/12/20	DBS Vickers	Lendlease Reit	0.91	1.05	Buy
03/18/20	DBS Vickers	Lendlease Reit	0.48	0.94	Buy
04/02/20	DBS Vickers	Lendlease Reit	0.52	0.94	Buy
05/08/20	DBS Vickers	Lendlease Reit	0.575	0.85	Buy
06/01/20	DBS Vickers	Lendlease Reit	0.67	0.85	Buy
07/03/20	DBS Vickers	Lendlease Reit	0.68	0.85	Buy

KSH - Stock calls

 

Date	Analyst	Company	Last	Target	Call	Valuation
11/12/19	Lim & Tan	KSH	0.465	0	Buy
01/28/20	Lim & Tan	KSH	0.415	0	Buy on weakness
04/06/20	Lim & Tan	KSH	0.29	0	Hold
08/03/20	Lim & Tan	KSH	0.345	0	Neutral

Koufu - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
07/03/19	UOB Kay Hian	Koufu	0.72	0.95	Buy
08/08/19	UOB Kay Hian	Koufu	0.71	0.95	Buy
08/08/19	DBS Vickers	Koufu	0.71	0.88	Buy	PER17x FY20
10/01/19	UOB Kay Hian	Koufu	0.72	0.95	Buy
10/01/19	DBS Vickers	Koufu	0.72	0.88	Buy
11/05/19	DBS Vickers	Koufu	0.755	0.88	Buy	PER17x FY20
11/06/19	UOB Kay Hian	Koufu	0.77	0.95	Buy
12/11/19	SAC Capital	Koufu	0.765	0.87	Buy
01/06/20	DBS Vickers	Koufu	0.775	0.88	Buy
02/12/20	UOB Kay Hian	Koufu	0.725	0.83	Buy
02/13/20	DBS Vickers	Koufu	0.735	0.84	Buy	PER17x FY20
03/02/20	DBS Vickers	Koufu	0.705	0.84	Buy	PER17x FY20
03/03/20	UOB Kay Hian	Koufu	0.71	0.81	Buy
03/03/20	Lim & Tan	Koufu	0.71	0	Hold
04/22/20	DBS Vickers	Koufu	0.615	0.68	Hold
04/24/20	UOB Kay Hian	Koufu	0.6	0.69	Buy
06/01/20	DBS Vickers	Koufu	0.65	0.68	Hold
06/15/20	DBS Vickers	Koufu	0.655	0.75	Buy	PER17x FY20/21
06/15/20	CIMB	Koufu	0.655	0.86	Add	PER19x FY21
07/02/20	CIMB	Koufu	0.695	0.86	Add	PER19x FY21
07/03/20	DBS Vickers	Koufu	0.715	0.75	Buy
07/03/20	UOB Kay Hian	Koufu	0.715	0.78	Buy
07/03/20	Lim & Tan	Koufu	0.715	0	Hold
08/05/20	Phillip	Koufu	0.67	0.8	Buy	PER18.5x FY21
08/12/20	DBS Vickers	Koufu	0.68	0.77	Buy	PER17x FY21
08/13/20	UOB Kay Hian	Koufu	0.675	0.78	Buy
08/13/20	Lim & Tan	Koufu	0.675	0	Buy on weakness
08/17/20	CIMB	Koufu	0.685	0.86	Add

Stock calls for 17 August 2020

Date	Analyst	Company	Last	Target	Call	Valuation
08/17/20	Phillip	APAC Realty	0.375	0.365	Neutral	DCF
08/17/20	DMG & Partners	Bumitama	0.51	0.65	Buy	PER11x FY21
08/17/20	Kim Eng	Bumitama	0.51	0.74	Buy
08/17/20	phillip	Comfortdelgro	1.39	1.65	Accumulate	DCF
08/17/20	UOB Kay Hian	Comfortdelgro	1.39	1.78	Buy
08/17/20	DBS Vickers	Comfortdelgro	1.39	1.63	Buy	PER15x FY21
08/17/20	DMG & Partners	Comfortdelgro	1.39	1.55	Buy	DCF, PER17.6x FY21
08/17/20	CIMB	Comfortdelgro	1.39	1.4	Hold
08/17/20	Kim Eng	Comfortdelgro	1.39	1.76	Buy	DCF
08/17/20	CIMB	First Resources	1.38	1.8	Add
08/17/20	DBS Vickers	First Resources	1.38	1.7	Buy	DCF
08/17/20	DMG & Partners	First Resources	1.38	1.45	Neutral	PER14x FY21
08/17/20	UOB Kay Hian	First Resources	1.38	1.65	Buy
08/17/20	Kim Eng	First Resources	1.38	1.79	Buy	PER18x FY20
08/17/20	Amfrasers	Frencken	1.04	1.21	outperform	PER12x FY21
08/17/20	DMG & Partners	Fu Yu	0.24	0.3	Buy	DCF
08/17/20	DBS Vickers	Fu Yu	0.24	0.27	Hold	PER12.6x FY21
08/17/20	Lim & Tan	Fu Yu	0.24	0	Buy
08/17/20	DMG & Partners	Golden Agri	0.154	0.13	Sell	Sum of parts
08/17/20	CIMB	Golden Agri	0.154	0.12	Reduce
08/17/20	CIMB	Koufu	0.685	0.86	Add
08/17/20	Lim & Tan	Overseas Edu	0.29	0	Buy
08/17/20	phillip	Propnex	0.59	0.7	Buy	DCF
08/17/20	UOB Kay Hian	Sasseur	0.775	0.99	Buy	DDM
08/17/20	DBS Vickers	ST Engineering	3.39	3.4	Hold	Sum of parts, Buy @ below $3.10
08/17/20	UOB Kay Hian	ST Engineering	3.39	3.4	Hold	Buy @ $3.15
08/17/20	CIMB	ST Engineering	3.39	3.76	Add
08/17/20	OCBC	ST Engineering	3.39	3.9	Buy
08/17/20	Amfrasers	Sunpower	0.575	0.91	outperform
08/17/20	DMG & Partners	Thai Beverage	0.605	0.72	Buy	Sum of parts
08/17/20	CIMB	Thai Beverage	0.605	0.7	Hold
08/17/20	Amfrasers	Thai Beverage	0.605	0.93	Outperform
08/17/20	Amfrasers	UMS	1.08	1.17	Neutral	PER13x FY21
08/17/20	UOB Kay Hian	Venture	20.25	17.64	Hold	PER14.4x FY21, Buy @ $16

Singapore Nodx rose 6% in July 2020.

https://sg.finance.yahoo.com/news/singapore-july-exports-rise-6-003000134.html

Year on year changes (YOY):

July 2020: 6%

June 2020: 16.1% (Revised to 13.9%)

May 2020: -4.6%

April 2020: 9.7%

March 2020: 17.6%

February 2020: 3% (Revised to 3.1%)

January 2020: - 3.3%

December 2019: 2.4%

November 2019: - 5.9%

October 2019: - 12.3%

September 2019: -8.1%

August 2019: - 8.9%

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%

Baltic dry index - 1577

Today, Thursday, August 13 2020, the Baltic Dry Index climbed by 37 points, reaching 1577 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.

=========================

Related stock: Sembcorp Marine, Cosco & Pan ocean.

US rig count - 935

 Related stock: Keppel Corp, Sembcorp Marine & Cosco.

How do you interpret PPI vs CPI and their impacts on the economy?

If you only know how to interpret the PPI and CPI headline numbers and their m-o-m or y-o-y changes, it only shows that you don't know how to analyze the data and also don't understand their economic relationship. 

Well, different people interpret the same data set differently. Therefore, I will show you how a brilliant analyst (me) does it.

Let's begin by looking at the economic relationship first.

In economic terminology, the process is depicted as follow:

CPI/PPI ----->> M1-M2 spread/3m-10y yield spread ----->> PMI ----->> GDP

http://sg-stock.blogspot.com/2019/06/the-true-picture-of-us-economy.html

Next, we can learn about PPI and CPI impacts.

In a nutshell, a producer will be motivated to produce more when the PPI is rising because of the rising profit margin while a rising CPI will sap consumer demands because it diminishes the consumer purchasing power.

When the PPI is greater than the CPI, it will motivate the producer to produce more. Therefore, this phenomenon is known as an inventory growth phase and this will increase the GDP under the investment component (See below).

GDP = Government spending + Investment + Consumption + Net Exports (X-M)

The reverse is true when the PPI is lesser than the CPI since it motivates the producer to produce lesser. Thus, this phenomenon is known as an inventory reduction phrase and this will decrease the GDP.

The most recent PPI vs CPI chart is showing that the PPI is below the CPI and is in the negative or contracting territory. Moreover, the recent upward slope of the PPI denotes that the producer is reducing the inventory passively instead of proactively (downward slope).

How true is this conclusion (inventory reduction phase)?

We can find another alternative variable (PMI inventories subindex) to verify and authenticate this.

http://sg-stock.blogspot.com/2020/08/us-ism-pmi-had-shown-great-improvement.html

The PMI inventories subindex is in a contracting mode (below 50) which also substantiates our conclusion (inventory reduction phase).

This conclusion (inventory reduction phase) is bad news for the GDP unless the other GDP components can neutralize this negative factor.

Kimly - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
08/13/19	DMG & Partners	Kimly	0.235	0.23	Neutral	DCF
10/15/19	DMG & Partners	Kimly	0.225	0.23	Neutral
11/28/19	DMG & Partners	Kimly	0.24	0.24	Neutral	DCF
12/11/19	DMG & Partners	Kimly	0.245	0.24	Neutral
06/16/20	DMG & Partners	Kimly	0.22	0.24	Neutral
06/26/20	DMG & Partners	Kimly	0.225	0.26	Buy	DCF

Keppel Reit - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
07/04/19	DMG & Partners	Keppel Reit	1.28	1.12	Neutral
07/16/19	CIMB	Keppel Reit	1.26	1.41	Add	DDM
07/16/19	DMG & Partners	Keppel Reit	1.26	1.2	Neutral	DDM
07/16/19	UOB Kay Hian	Keppel Reit	1.26	1.37	Buy
07/16/19	DBS Vickers	Keppel Reit	1.26	1.45	Buy	DCF
07/16/19	Lim & Tan	Keppel Reit	1.26	0	Hold
08/06/19	DBS Vickers	Keppel Reit	1.2	1.45	Buy
08/27/19	UOB Kay Hian	Keppel Reit	1.24	1.21	Hold	Buy @ $1.1
10/02/19	DBS Vickers	Keppel Reit	1.26	1.45	Buy	DCF
10/02/19	DMG & Partners	Keppel Reit	1.26	1.23	Neutral	DDM
10/17/19	CIMB	Keppel Reit	1.24	1.35	Add	DDM
10/17/19	UOB Kay Hian	Keppel Reit	1.24	1.2	Hold	DDM, Buy @ $1.1
10/17/19	Lim & Tan	Keppel Reit	1.24	0	Hold
12/04/19	DBS Vickers	Keppel Reit	1.23	1.45	Buy
12/10/19	DMG & Partners	Keppel Reit	1.25	1.23	Neutral
01/24/20	DBS Vickers	Keppel Reit	1.27	1.45	Buy	DCF
01/24/20	CIMB	Keppel Reit	1.27	1.38	Add
02/04/20	DBS Vickers	Keppel Reit	1.21	1.45	Buy
03/18/20	DBS Vickers	Keppel Reit	0.96	1.45	Buy
04/13/20	UOB Kay Hian	Keppel Reit	0.95	1.3	Buy
04/23/20	CIMB	Keppel Reit	0.99	1.2	Add	DDM
04/23/20	DMG & Partners	Keppel Reit	0.99	1.23	Neutral
04/24/20	Lim & Tan	Keppel Reit	1.04	0	Buy on weakness
05/04/20	DMG & Partners	Keppel Reit	1.06	1.07	Neutral	DDM
06/08/20	DBS Vickers	Keppel Reit	1.16	1.35	Buy	DCF
06/08/20	UOB Kay Hian	Keppel Reit	1.16	1.3	Buy
06/23/20	DMG & Partners	Keppel Reit	1.13	1.07	Neutral
07/02/20	UOB Kay Hian	Keppel Reit	1.11	1.3	Buy
07/09/20	DBS Vickers	Keppel Reit	1.1	1.35	Buy
07/21/20	DMG & Partners	Keppel Reit	1.09	1.1	Neutral	DDM
07/21/20	Lim & Tan	Keppel Reit	1.09	0	Buy
07/21/20	CIMB	Keppel Reit	1.09	1.2	Add