Marco Polo - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/05/22	SAC Capital	Marco Polo	0.028	0.032	Buy	PER8x FY22
03/25/22	DMG & Partners	Marco Polo	0.029	0.04	Buy
06/03/22	DMG & Partners	Marco Polo	0.03	0.04	Buy	DCF
06/17/22	UOB Kay Hian	Marco Polo	0.028	0.043	Buy	PB1.1x FY22
08/30/22	DMG & Partners	Marco Polo	0.037	0.05	Buy	DCF
12/07/22	UOB Kay Hian	Marco Polo	0.047	0.048	Hold	PB1.1x FY23
03/30/23	DMG & Partners	Marco Polo	0.043	0.06	Buy	DCF

Mapletree North Asia - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/03/22	Lim & Tan	Mapletree North Asia	1.11	0	Accept Offer
01/06/22	CIMB	Mapletree North Asia	1.09	1.13	Add	DDM
01/06/22	OCBC	Mapletree North Asia	1.09	1.15	Hold
03/21/22	Lim & Tan	Mapletree North Asia	1.12	0	Accept Offer
04/20/22	Lim & Tan	Mapletree North Asia	1.23	0	Accept Offer
04/21/22	CIMB	Mapletree North Asia	1.23	1.13	Hold
04/21/22	Citi Research	Mapletree North Asia	1.23	1.2	Hold

Stock calls for 2 May 2023

Date	Analyst	Company	Last	Target	Call	Valuation
05/02/23	DBS Vickers	AEM	3.38	3.35	Hold	PER10x FY24
05/02/23	Uob Kay Hian	Capitaland Integrated Commercial Trust	2.03	2.29	Buy	DDM
05/02/23	OCBC	Capitaland Integrated Commercial Trust	2.03	2.21	Buy
05/02/23	DMG & Partners	Capitaland Integrated Commercial Trust	2.03	2	Neutral	DDM
05/02/23	UOB Kay Hian	CDL Hospitality	1.26	1.55	Buy	DDM
05/02/23	Citi Research	CDL Hospitality	1.26	1.15	Sell	DDM
05/02/23	Kim Eng	Far East Hospitality	0.62	0.8	Buy
05/02/23	CIMB	Mapletree Commercial	1.76	1.9	Hold
05/02/23	UOB Kay Hian	Mapletree Industrial	2.38	2.82	Buy	DDM
05/02/23	OCBC	Mapletree Industrial	2.38	2.77	Buy
05/02/23	Lim & Tan	Mapletree Logistics	1.74	1.8	Neutral
05/02/23	DBS Vickers	Micro-Mechanics	2.1	1.75	Fully Valued	PER21x FY23/24
05/02/23	DMG & Partners	Sheng Siong	1.77	2	Buy	PER21x FY23
05/02/23	phillip	UOB	28.22	35.7	Buy	GGM, PB1.48x FY23
05/02/23	UOB Kay Hian	Wilmar	3.93	5.5	Buy	Sum of parts

The US ISM PMI has been contracting for 6 months.

The prices subindex had increased to 53.2 (+4) because it was affected by an uprise in employment subindex (50.2, +3.3).  The employment increased as the producers boosted its production (48.9, +1.1) to fulfil the increase in customers’ inventories (51.3, +2.4) which was caused by an increase in new orders (45.7, +1.4) from new export order (49.8, +2.2).  However, the new local order was declined (Est'd -0.8) as consumers cut back on their spendings because of the high inflation.

The backlog of order fell to 43.1 (-0.8) because the increase in customers’ inventories exceeded the new order.  The supplier’s delivery (44.6, -0.2) continued to improve due to an easing in supply and logistical issues.  A lower delivery index means a faster delivery period.  The inventories (46.3, -1.2) were depleted by the production boost and the producers used more imported material (49.9, +2) than local raw material (Est’d -3.2).

In conclusion, the above factors caused the PMI to increase marginally to 47.1 (+0.8) but the economy would still enter into a recession in 2023 as the PMI had been contracting (below 50) for 6 months already.

What will the FED do for its FOMC in May 2023?

Let's take a look at the Fedwatch tool result.

The Fedwatch tool is indicating that the Fed will increase its rate by 25bp with over 90% probability in May 2023.

Latest US economic statistics for the 4th week of April 2023.

All the recent US economic statistics are pointing to an impending recession.  Why? Let's take a look and do a brief analysis.

US Leading economic indicator (LEI): It has been trending down.

The US LEI has been giving out a recession signal since 2022.

US recession probability: It has been rising. What's the validity of this probability?

The truck tonnage index corroborates the rising recession probability and the declining LEI because it trucking tonnages have been declining.  This means the main street demand is falling as consumers are cutting back on their spendings.

Why are US consumers cutting back their spendings?  Let's take a look at the PCE inflation index.

PCE index: 4.9%

Core PCE index: 4.6%

Both the PCE and Core PCE indexes have stayed above 4% for a long time and the US consumers are affected by the sky-high inflation because their savings have been depleted.

The latest GDP figure, being a lagging indicator, has started to reflect the reality of the main street activities.

Q1 GDP growth: 1.1%

The Q1 GDP growth of 1.1% was being supported by consumption but it was the peak already because consumers' savings were depleted by the high inflation.  The US consumption will start to fall in Q2.

Let's break the GDP growth down and we can see the true reality.

GDP growth = G + I + C + Net export (X-M)

GDP growth = 0.81 + (-2.34) + 2.48 + 0.11 = 1.06% (rounded up to 1.1%)

As we could see from the breakdown, the investment (-2.34) dropped significantly because of a sharp drop in business inventories.  The consumption (+2.48) was holding up the GDP growth but it had reached its peak and was no longer sustainable.  The US government spending (0.81) won't be able to increase much further in Q2 because of its debt ceiling.  If the US can't increase its net export, the Q2 GDP figure won't be better than Q1.

Baltic dry index - 1576

Related stock: Sembcorp Marine, Cosco & Pan Ocean.

US rig count (weekly) - 755

Related stock: Sembcorp Marine & Cosco.