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Market Views 12 January 2012

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Announcements

There has been some problem sending this mail to Yahoo!Mail accounts the last few days. Please refer to web, facebook or twitter versions.

Happy New Year ☺

This year, there will be a series of seminars to help everyone better understand the markets.

Market-Juice Seminar Series will be covered over 6 months with 1 session each month.

We will start with "Mindset Tuning – the Optimal Attitude to Stock Market Investments" coming in the first week of Feb

Look out for more details coming soon


Juice

Macro
Spain auctions as much as 5b euros of 2015 and 2016 securities today, with Italy selling as much as 12b euros of bills today and as much as 4.75b euros of bonds in tomorrow.
Comment: Important to note the outcome of the debt sales by Spain and Italy. Note the take-up rate and the yields. We can also take direction from the movement of the EUR/USD pair and also the EU markets when they open for some expectations later

O&M
STX OSV's (MS7) stock price has started peeling away from the broader market in the past week, stoking expectations that its parent STX Europe might soon be selling its 50.75% majority stake in the offshore vessel builder.
Comment: Be careful of this one. If the share sales gets played again, this may cause a very strong sell off again

Property
Over in Choa Chu Kang, CDL has priced The Rainforest EC at about $730 psf on average for buyers on the normal progress payment scheme. The first-day sales result for The Rainforest is similar to the slightly over 150 units CDL sold for its Blossom Residences EC project at Segar Road in July last year. That project was priced at $685 psf on average. Those who opt for the deferred payment scheme (DPS) - which is still available for EC projects - will pay 3% more.
Comment: Property market remains weak but the property developers seemed to have bottomed out after a lousy performance in 2011. Time to look around and fish for possible winners. Keeping and eye on Capitaland (C31) CMA (JS8) and Kepland (K17) to accumulate on dips


Sources: Bloomberg, Reuters, WSJ, The Business Times, Analyst Reports, Company Announcements

Market Views 10 January 2012

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Announcements

Happy New Year ☺

This year, there will be a series of seminars to help everyone better understand the markets.

Market-Juice Seminar Series will be covered over 6 months with 1 session each month.

We will start with "Mindset Tuning – the Optimal Attitude to Stock Market Investments" coming in the first week of Feb

Look out for more details coming soon


Juice

Fund Flows
Hedge funds sit out rally with speculation on stock gains close to ’09 low. Rallying stocks have done little to entice professional money managers back to U.S. equities.
Comment: They probably lost too much last year to be too daring at the start of the year

O&M
Keppel (BN4) AmFELS to Construct and Upgrade Deepwater Semisubmersible for Diamond Offshore for US$150 million
Comment: This brings Keppel's orderbook to S$10.9b. Orderbook is stronger but price may be on the high side now

Ezra's (5DN) subsea construction division EMAS AMC wins about 450 million krone (S$97million) Statoil contracts in the North Sea on the Norwegian Continental Shelf. The deals are worth up to 600 million krone if options to expand the work to more floating platforms are exercised.
Comment: Note that Ezra is closing on its US$1b target orderbook. Which is a good thing


Sources: Bloomberg, Reuters, WSJ, The Business Times, Analyst Reports, Company Announcements

Market views 09 January 2012

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Announcements

Happy New Year ☺

This year, I will be planning a slew of courses to help everyone better understand the market and also to introduce everyone to topics that no one else covers in courses outside, either that, or they charge lots of money for it

We will start with "Mindset Tuning – the Optimal Attitude to Stock Market Investments" coming in the first week of Feb
Look out for more details coming soon

Japan is closed for "Coming of Age Day"

Juice

Management Changes
Management changes announced last Fri may catch the eye; SMRT (S53) named Tan Ek Kia interim CEO after Saw Phaik Hwa resigned following public outcry over recent service disruptions, while Cosco (F83) named Ma Ze Hua as chairman to replace retiring Liu Guo Yuan.
Comment: My MRT train was delayed again this morning. Let's hope the on-coming fellow does a better job. However, I think it is unlikely much better unless they change the government-linked company's culture inside out, change the people and the profile of the people they hire. But that will be disastrous for those who work for SMRT. This is not a problem that can be solved in the short term or just by changing CEO. The engineers still need time to solve the disruptions, and the company will need time to change their train system maintenance policy and also audit methods
As for Cosco, granted that the out-going Chairman is old. This change should not be a red-flag to signal that something is very wrong

Noteworthy Analyst Calls
Biosensors (B20): Nomura reiterate Buy, increase TP to $1.90 from $1.70. House tweak forecasts to account for the conversion of the US$120m notes by Weigao and price pressure in Japan, and raise TP to incorporate the potential of the group entering the US market.
Comment: Biosensors is attending JPM conference this week. This may bring more attention to the stock

Genting SP (G13): UBS downgrades to Neutral from Buy, TP $1.65 from $2.08. House note that profit growth may remain subdued in 2012. Q410, RWS’ VIP vol have been on a declining trend
Comment: Despite being everyone's favourite stock, I urge everyone to take note of the reality of the situation with Genting

SG Developers: Residential project Archipelago’s preview just prior to the announcement of the ABSD has seen 12% of units sold with options lapsed. DMG maintains Neutral on developers and SELL on City Dev C09)
Comment: Take note of the trend of lapsing options and revoking of purchase agreements

Rig Builders: JP Morgan has sector Outlook. House stays O/W on robust rig demand. Slight preference for KepCorp (BN4) over SembMar (S51) on the back of: KepCorp being more resilient (defensive) in an uncertain macro environment
Comment: Rig-building will continue to be profitable if oil price stays above US$80/barrel. We take note of the preference here

CPO: Daiwa notes that weather trade could go on for a while. CPO prices have benefitted from dry weather conditions in South America.
Potential soybean crop losses in South America are reversible if rain comes soon, which then might curb CPO price gains near term.
Comment: Preference is still for Goldenagri (E5H) as it has the largest plantations in the world. It is also the largest plantation (pure play) stock, meaning the main business is growing palm and not doing other business like its other competitors listed here


Sources: Bloomberg, Reuters, WSJ, The Business Times, Analyst Reports, Company Announcements

Market VIews 06 January 2012

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Announcements

Happy New Year ☺
This year, I will be planning a slew of courses to help everyone better understand the market and also to introduce everyone to topics that no one else covers in courses outside.
The idea is to have one session each month, free for clients.
Keep a look out for details here!


Juice

Shipping
Cosco(F83) announced that it has secured a US$220m contract to build 2 self-propelled construction vessels. Contract is awarded by an Asian Co. to Cosco (Nantong) Shipyard.
Kim Eng note that while the contract is certainly welcome news in the current soft offshore market, margins are likely to remain depressed due to learning curve issues on its earlier contracts. Bulk shipping newbuilds are still also dogged by execution issues and low pricing. Overall house maintain Sell recommendation with $0.72 TP.
Similarly CIMB maintains Sell with TP $0.92.
Comment: I won't pay too much attention to the analysts. Cosco is a counter to look out for in better times. Price is relatively high in this environment otherwise, it can be a good catch


Sources: Bloomberg, Reuters, WSJ, The Business Times, Analyst Reports, Company Announcements

Market Views 05 January 2011

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Announcements

Happy New Year ☺
This year, I will be planning a slew of courses to help everyone better understand the market and also to introduce everyone to topics that no one else covers in courses outside.
The idea is to have one session each month, free for clients.
Keep a look out for details here!
Japan is having "Golden Week" this week


Juice

Singapore

December PMI came in at 49.5, better than expected and higher than November but still under 50 (above which signals expansion in manufacturing)Comment: Nothing new here. Technical recession is likely to be expected, as portaryed in the news also.

Analyst Reports

Biosensors by MS: Top pick for 2012. Expect further expansion of its distribution network in international markets, benefiting from the advanced technologies of its flagship product, BioMatrix. In addition, Co. expects to receive CE mark approval for its core pipeline product, BioFreedom, from the EU in 2012, which should be the key catalyst for the next 12-24 months.
Comment: Chart has broken its 52 week high. Looks bullish. Co. is having a presentation a JPMorgan's BioMedical Conference next week


Sources: Bloomberg, Reuters, WSJ, The Business Times, Analyst Reports, Company Announcements

Market-Juice Midday 04 January 2011

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Announcements

Happy New Year ☺
This year, I will be planning a slew of courses to help everyone better understand the market and also to introduce everyone to topics that no one else covers in courses outside.
The idea is to have one session each month, free for clients.
Keep a look out for details here!
Japan is having "Golden Week" this week

Juice

O&M

Keppel Corp (BN4), the world's largest rig builder, said on Tuesday its subsidiary had agreed to acquire a 49.9% stake in Norway's OWEC Tower, a designer of offshore wind turbine foundations, for about 61m norwegian crowns (US$10.3m)
Comment: Not much of a price mover by itself. Keppel will still move with the market

Yangzijiang said on Tuesday it now owned a 45% stake worth US$49.5m in YZJ Offshore Engineering Pte Ltd, a joint venture between Co. and Qatar Investment Corporation.
Comment: Not much of a price mover here but chart looks good and this can be an additional kicker. CIMB has a technicaly BUY on YZJ today

Sources: Bloomberg, Reuters, WSJ, The Business Times, Analyst Reports, Company Announcements

Market Views 03 January 2011

click to enlarge

Announcements

Happy New Year ☺
This year, I will be planning a slew of courses to help everyone better understand the market and also to introduce everyone to topics that no one else covers in courses outside.
The idea is to have one session each month, free for clients.
Keep a look out for details here!
Japan is having "Golden Week" this week

Juice

Macro

Singapore GDP came in -4.9% q-o-q. Slighty better than expected (consensus: -5.0% Bloomberg, -5.5% Reuters)
Comment: 2 quarters of -ve growth to go into recession. We still need confirmation from Q1 2012

Palm Oil

Mewah (MV4) said Tuesday it plans to invest about US$145m in a crude palm oil refinery, packing plant and related logistics facilities in Indonesia. The project is expected to be completed by the end of its 2013 financial year, and will be financed through proceeds from its IPO, internal funds and bank borrowings. The refinery is expected to have an installed capacity of 630,000 MT/year. Co. also said it will delay the completion of its crude palm oil refinery in Sabah to prioritize its Indonesia refinery project, and will also delay the completion of its packing plants in Zhangjiagang and Tianjin.
Comment: Market might use this excuse to play up the stock. Take note that the delays in the other projects make this announcement a bit of a "no gain" even though output of refined products may increase by about 20% frm the current 3.8m MT/year

Shipping

Another tough year looms for shipping industry. Rates are unlikely to rebound, depressed by capacity glut, slow global growth. Experts agree rates are unlikely to rebound in 2012 across the tanker, bulk carrier and container shipping market because of too many ships meeting the world's demand for goods and energy.
Comment: Nothing interesting here. Stocks have been battered already. Take note that counters like NOL (N03), Cosco (F83) and Yangzijiang (BS6) are SIMSCI index stocks. This means that they can still be laggards if the market moves either way


Sources: Bloomberg, Reuters, WSJ, The Business Times, Analyst Reports, Company Announcements