Stock calls for 24 June 2019

Date	Analyst	Company	Last	Target	Call	Valuation
06/24/19	OCBC	CapitaCommercial	2.14	1.88	Sell
06/24/19	Lim & Tan	Cromwell Reit (EUR)	0.505	0	Hold
06/24/19	DBS Vickers	Frasers Centrepoint Trust	2.54	2.85	Buy
06/24/19	Amfrasers	Frasers Centrepoint Trust	2.54	2.33	Neutral	DDM
06/24/19	CIMB	Genting	0.93	1.06	Add

Citibank and Fed Kashkari look towards a 50bp cut in July 2019.

https://sg.finance.yahoo.com/news/citi-sees-case-fed-cut-213503893.html

https://finance.yahoo.com/news/minneapolis-fed-president-kashkari-advocated-for-50-basis-point-rate-cut-140027452.html

Wow! Wow!

Look like the Fed and Citi are expecting a very bad GDP number to come out in July.  This means that the US economy is deteriorating fast and furious now because of the US-China trade war.

Baltic dry index - 1239

Today, Friday, June 21 2019, the Baltic Dry Index climbed by 45 points, reaching 1239 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 - 967

Related stock: Keppel Corp, Sembcorp Marine & Cosco

SIA - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/17/19	UOB Kay Hian	SIA	9.76	10.2	Hold	Sum of parts, Buy @ $9
01/24/19	Kim Eng	SIA	9.5	11.2	Buy	PB0.94x
01/24/19	CIMB	SIA	9.5	10.25	Hold	PB0.9x CY19
02/15/19	CIMB	SIA	9.87	10.25	Hold	PB0.9x CY19
02/15/19	DBS Vickers	SIA	9.87	11	Buy	PB0.9x FY20
02/15/19	Lim & Tan	SIA	9.87	0	Hold
02/18/19	Kim Eng	SIA	9.76	11.2	Buy	PB0.94x
02/18/19	UOB Kay Hian	SIA	9.76	10.2	Hold	Buy @ $9.50
02/18/19	OCBC	SIA	9.76	10.71	Buy
03/19/19	CIMB	SIA	9.83	10.25	Hold
03/19/19	UOB Kay Hian	SIA	9.83	10.1	Hold	Buy @ $9
04/16/19	UOB Kay Hian	SIA	9.88	10.1	Hold	Sum of parts
04/16/19	OCBC	SIA	9.88	11.02	Buy
05/17/19	CIMB	SIA	9.4	10.14	Hold	PB0.9x CY19
05/21/19	OCBC	SIA	9.3	11.02	Buy
05/21/19	UOB Kay Hian	SIA	9.3	9.6	Hold	Buy @ $8.80
05/21/19	DBS Vickers	SIA	9.3	10.8	Buy	PB0.95x FY20
06/19/19	UOB Kay Hian	SIA	9.17	9.5	Hold	Sum of parts, Buy @ $8.60

SHS - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/29/19	phillip	SHS	0.197	0.24	Accumulate	PER10x FY19
03/08/19	phillip	SHS	0.191	0.194	Neutral	PB0.7x
05/21/19	phillip	SHS	0.174	0	Cease coverage

Sheng Siong - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/02/19	DMG & Partners	Sheng Siong	1.06	1.27	Buy
01/04/19	phillip	Sheng Siong	1.07	1.13	Accumulate
02/20/19	UOB Kay Hian	Sheng Siong	1.08	1.15	Hold
02/27/19	DMG & Partners	Sheng Siong	1.09	1.25	Buy	DCF
02/27/19	OCBC	Sheng Siong	1.09	1.19	Buy
02/27/19	DBS Vickers	Sheng Siong	1.09	1.25	Buy	PER25x FY19
02/27/19	CIMB	Sheng Siong	1.09	1.22	Add	PER22.2x FY20
02/27/19	UOB Kay Hian	Sheng Siong	1.09	1.11	Hold
03/04/19	phillip	Sheng Siong	1.09	1.3	Accumulate	PER25x
03/05/19	Amfrasers	Sheng Siong	1.09	1.24	Buy
03/13/19	DMG & Partners	Sheng Siong	1.08	1.25	Buy	DCF
03/19/19	Kim Eng	Sheng Siong	1.08	0.95	Sell	DCF, PER19.5x FY19
04/05/19	DMG & Partners	Sheng Siong	1.04	1.25	Buy
04/16/19	Kim Eng	Sheng Siong	1.06	0.95	Sell	DCF
04/29/19	UOB Kay Hian	Sheng Siong	1.04	1.11	Hold	Buy @ $1
04/29/19	DBS Vickers	Sheng Siong	1.04	1.25	Buy	PER5x FY19
04/30/19	DMG & Partners	Sheng Siong	1.04	1.23	Buy	DCF & PER21x
04/30/19	CIMB	Sheng Siong	1.04	1.1	Hold	PER20.5x CY20
04/30/19	Amfrasers	Sheng Siong	1.04	1.24	Buy	DCF
04/30/19	OCBC	Sheng Siong	1.04	1.19	Buy
05/02/19	phillip	Sheng Siong	1.03	1.3	Buy	PER25x
06/06/19	DMG & Partners	Sheng Siong	1.1	1.23	Buy
06/06/19	DBS Vickers	Sheng Siong	1.1	1.25	Buy
06/14/19	Kim Eng	Sheng Siong	1.09	0.95	Sell	DCF

Stock calls for 21 June 2019

Date	Analyst	Company	Last	Target	Call	Valuation
06/21/19	UOB Kay Hian	Capitamall Trust	2.58	2.65	Hold
06/21/19	Lim & Tan	Del Monte	0.12	0	Buy
06/21/19	DBS Vickers	Fortune Reit	10.66	11.8	Buy	DDM
06/21/19	UOB Kay Hian	Frasers Centrepoint Trust	2.55	2.72	Buy
06/21/19	DMG & Partners	Jumbo	0.38	0.47	Buy	DCF, PER23x FY19
06/21/19	DBS Vickers	Keppel Corp	6.57	9	Buy
06/21/19	UOB Kay Hian	Mapletree Commercial	2.04	2.22	Buy

Traders are pricing in a 100% chance of a Fed rate cut in July 2019

https://www.cnbc.com/2019/06/19/traders-are-pricing-in-a-100percent-chance-of-at-least-one-fed-rate-cut-in-july.html

We had expected a rate cut to happen after analzying the US interest rates and the economic situation (see below) in the US.

https://sg-stock.blogspot.com/2019/06/will-us-fed-reduce-its-interest-rates.html

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

Look like the US Fed will reduce its interest rates in July 2019 as expected by the US traders.

Shangri-La Asia - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
03/21/19	OCBC	Shangri-La Asia	11.04	16.4	Buy
03/22/19	OCBC	Shangri-La Asia	11.18	16.16	Buy

SGX - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/04/19	phillip	SGX	7.15	9.01	Buy
01/25/19	CIMB	SGX	7.5	7.9	Add	PER22.1x FY20
01/25/19	DMG & Partners	SGX	7.5	8.2	Buy	PER22x FY20
01/28/19	phillip	SGX	7.57	8.36	Buy	PER23.2x FY19
01/28/19	OCBC	SGX	7.57	7.98	Buy	PER22x F19/20
02/22/19	Citibank	SGX	7.87	7.8	Hold
03/12/19	Citibank	SGX	7.46	7	Sell
03/14/19	DBS Vickers	SGX	7.26	7.05	Hold	DDM, PER20x CY20
03/19/19	phillip	SGX	7.31	8.17	Accumulate	PER23.2x
04/05/19	DMG & Partners	SGX	7.42	8.1	Buy	PER23x FY20
04/26/19	OCBC	SGX	7.26	7.6	Hold	PER21x FY20
04/26/19	DBS Vickers	SGX	7.26	7.05	Hold	DDM, PER20x FY20
04/26/19	Kim Eng	SGX	7.26	8.79	Buy	PER23x FY19
04/29/19	phillip	SGX	7.4	8.09	Accumulate	PER21.4x
04/29/19	CIMB	SGX	7.4	7.9	Add	PER22.1x FY20

Sembcorp Marine - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/10/19	DIR	Sembcorp Marine	1.62	1.62	Hold	Cut from $1.78, PB1.8x FY19
01/22/19	Amfrasers	Sembcorp Marine	1.66	2.5	Buy
02/01/19	UOB Kay Hian	Sembcorp Marine	1.6	1.83	Hold	PB1.7x FY19, Buy @ $1.50
02/04/19	DBS Vickers	Sembcorp Marine	1.59	2.4	Buy	PB2.1x FY19
02/21/19	CIMB	Sembcorp Marine	1.68	2.21	Add	PB2x CY19
02/21/19	OCBC	Sembcorp Marine	1.68	1.77	Hold
02/21/19	phillip	Sembcorp Marine	1.68	1.76	Neutral	PB1.6x
02/21/19	Lim & Tan	Sembcorp Marine	1.68	0	Hold
02/26/19	Amfrasers	Sembcorp Marine	1.72	2.48	Buy
04/09/19	Amfrasers	Sembcorp Marine	1.7	2.48	Buy
04/09/19	DBS Vickers	Sembcorp Marine	1.7	2.4	Buy
05/03/19	CIMB	Sembcorp Marine	1.69	2.21	Add	PB2x
05/06/19	phillip	Sembcorp Marine	1.67	1.76	Neutral	PB1.6x
05/06/19	OCBC	Sembcorp Marine	1.67	1.77	Hold
05/06/19	Amfrasers	Sembcorp Marine	1.67	2.48	Buy
05/06/19	DBS Vickers	Sembcorp Marine	1.67	2.4	Buy	PB2.1x FY19
05/30/19	OCBC	Sembcorp Marine	1.45	1.6	Hold	PB1.45x
06/04/19	DMG & Partners	Sembcorp Marine	1.39	1.99	Buy	PB1.8x FY20

Stock calls for 20 June 2019

Date	Analyst	Company	Last	Target	Call	Valuation
06/20/19	DMG & Partners	Suntec Reit	1.92	1.9	Neutral	DDM
06/20/19	OCBC	UOB	26.14	28.9	Buy

China has started to sell US treasuries. - Part 4

https://www.reuters.com/article/us-usa-treasury-securities/china-holdings-of-us-treasuries-in-april-skid-to-nearly-two-year-low-idUSKCN1TI2RA

China had sold US treasuries again.  Why?

We've stated the rationale behind the selling in our previous posts.

http://sg-stock.blogspot.com/2019/05/china-has-started-to-sell-us-treasuries_18.html

The US treasuries sold off was not a retaliation against the US but to defend the RMB.  This is the reason the RMB is unable to breach the $7 mark.

What are the repercussions for selling the US treasuries?

China will have to convert the USD abroad into RMB and remit it back to China. This will cause an influx of RMB in China and increase the money supply.  As idling money will depreciate in value over time, the China central bank will make good use of the excess money by reducing the bank's required reserve ratio to stimulate its local consumption.

http://sg-stock.blogspot.com/2019/05/how-china-rrr-cut-will-impact-its.html

Thereafter, the excess money will flow into the stock markets, property markets, etc and boost inflation.  Consequently, inflation will help to reduce the debt burdens in China.

Why is inflation able to reduce the debt pressure?

Inflation works in the same way as compound interest. It creates asset appreciation and causes wealth accumulation much faster than debt because debt is not subjected to the same effect.  Therefore, inflation is able to reduce the debt pressure in China.

However, China cannot afford to sell all its US treasuries because overwhelming inflation will create an overheating economy and China has to manage the burgeoning inflation well or else it will have a bigger problem to resolve in the future.  Fortunately, the worldwide economic situation has created an ideal environment in China for inflation to rear its head.  Why?

The ECB has just stated its willingness to implement a QE policy with an interest rate cut recently.

https://www.economist.com/finance-and-economics/2019/06/18/donald-trump-takes-aim-at-mario-draghi-over-interest-rates

Furthermore, the US is also keen to reduce its own interest rates.  Financially speaking, the money will usually flow to a higher interest rate country (China) from a lower interest rate country (EU,US).  Thus, China doesn't need to do anything but to wait for the capital inflows from the EU and US when they reduce their interest rates.  In conclusion, China just needs to sell enough US treasuries to maintain a stable RMB and the expected capital inflows will work its wonders in China.

Sembcorp Industries - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/10/19	DIR	Sembcorp Industries	2.64	3.05	Outperform	Sum of parts, cut from $3.26
01/15/19	UOB Kay Hian	Sembcorp Industries	2.63	3.2	Buy	Sum of parts
01/23/19	CIMB	Sembcorp Industries	2.69	3.49	Add
02/01/19	UOB Kay Hian	Sembcorp Industries	2.59	3.2	Buy
02/04/19	DBS Vickers	Sembcorp Industries	2.58	3.7	Buy
02/21/19	Lim & Tan	Sembcorp Industries	2.66	0	Hold
02/25/19	DBS Vickers	Sembcorp Industries	2.67	3.9	Buy	RNAV (10% discount), PB1x
03/13/19	UOB Kay Hian	Sembcorp Industries	2.57	2.8	Hold	Sum of parts, Buy @ $2.35
03/18/19	Lim & Tan	Sembcorp Industries	2.52	0	Hold
04/09/19	DBS Vickers	Sembcorp Industries	2.75	3.9	Buy
05/16/19	OCBC	Sembcorp Industries	2.54	3.13	Buy	Sum of parts
05/16/19	DBS Vickers	Sembcorp Industries	2.54	3.9	Buy	Sum of parts, PB1x
05/16/19	CIMB	Sembcorp Industries	2.54	3.41	Add	Sum of parts
05/17/19	phillip	Sembcorp Industries	2.55	3.75	Buy	Sum of parts
06/04/19	OCBC	Sembcorp Industries	2.38	3.03	Buy	Sum of parts

SATS - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation	Remark
01/04/19	UOB Kay Hian	SATS	4.59	5.6	Buy
01/11/19	OCBC	SATS	4.94	5.23	Hold	DCF
02/08/19	UOB Kay Hian	SATS	4.8	5.6	Buy
02/14/19	phillip	SATS	4.98	5.47	Accumulate	DCF, PER24.6x FY19
02/14/19	OCBC	SATS	4.98	5.23	Hold
02/14/19	CIMB	SATS	4.98	5.46	Add	PER20.3x
02/14/19	Lim & Tan	SATS	4.98	0	Hold
02/14/19	DBS Vickers	SATS	4.98	5.59	Buy	DCF & PER22x FY19
02/14/19	Kim Eng	SATS	4.98	5.8	Buy
02/15/19	Citi Research	SATS	5.08	6	Buy
03/26/19	UOB Kay Hian	SATS	5.06	5.6	Buy
04/15/19	Kim Eng	SATS	5.31	5.8	Buy
05/13/19	UOB Kay Hian	SATS	5.27	5.6	Buy
05/17/19	OCBC	SATS	5.22	5.35	Hold
05/21/19	phillip	SATS	5.08	5.47	Accumulate	DCF, PER24x FY19
05/21/19	UOB Kay Hian	SATS	5.08	5.05	Hold	Buy @ 4.60
05/21/19	DBS Vickers	SATS	5.08	5.44	Buy	DCF & PER22x FY20
06/03/19	UOB Kay Hian	SATS	5.07	5.05	Hold	Buy @ $4.70
06/06/19	DBS Vickers	SATS	5.04	5.44	Buy
06/12/19	Kim Eng	SATS	5.04	6.1	Buy	DCF
06/17/19	CIMB	SATS	5.14	5.4	Add	PER21.9x CY20

Sasseur - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation	Remark
02/20/19	Kim Eng	Sasseur	0.74	0.9	Buy	DDM
02/20/19	DBS Vickers	Sasseur	0.74	0.97	Buy	DCF
04/03/19	CIMB	Sasseur	0.78	0.92	Add

Stock calls for 19 June 2019

Date	Analyst	Company	Last	Target	Call	Valuation
06/19/19	Phillip	A-Reit	2.98	2.88	Neutral
06/19/19	Phillip	ART	1.31	1.36	Buy
06/19/19	phillip	Cache Logistics	0.79	0.75	Neutral
06/19/19	Phillip	CapitaCommercial	2.11	1.93	Neutral
06/19/19	Phillip	Capitamall Trust	2.57	2.21	Neutral
06/19/19	Phillip	CapitaRetail China	1.55	1.66	Accumulate
06/19/19	phillip	Dasin Retail	0.88	0.94	Accumulate
06/19/19	OCBC	DBS	24.8	29.18	Buy	Buy @ $27.50 or lower
06/19/19	phillip	EC World Reit	0.775	0.87	Buy
06/19/19	OCBC	ESR-Reit	0.53	0.56	Buy
06/19/19	Phillip	Frasers Centrepoint Trust	2.61	2.36	Neutral
06/19/19	Phillip	Keppel DC Reit	1.64	1.59	Accumulate
06/19/19	Phillip	Mapletree Industrial	2.17	2.03	Neutral
06/19/19	UOB Kay Hian	SIA	9.17	9.5	Hold	Buy @ $8.60

President Trump is the man behind wall street.

Just a tweet from President Trump that he and President Xi would have an extended talk at G20 sent the stock markets rallying.

If the trade talk falls out between the US & China at G20, the stock markets will fall hard and fast too.  How do we determine the progress?

If Trump is going to insist on his previous terms, the trade talk will fall out.

If Trump is going to discuss the Hong Kong extradition bill and protest with Xi, the trade talk will fall out.

If Trump is going to threaten Xi with additional tariffs, the trade talk will fall out too.

We just need to observe the discussing issues between Xi and Trump to predict the outcome of the trade talk.

Sanli Env - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
05/06/19	Tayrona	Sanli Env	0.18	0.234	Overweight