Opportunities
SPH Reit (SK6U) about 37x subscribed. Trust is expected to start trading on SGX from 2pm today.
Comments: Response was excellent. Those who have successfully gotten the IPO shares, please inform me so I can update you on the latest happenings before 2pm later.
Nam Cheong (N4E, $0.275) has sold 3 vessels worth a total of US$70.5m. It said it is on track to surpass its record of 21 vessel sales achieved in 2012. The group's order book stands at RM1.5b (S$586m).
Comments: Good news. Newest order is about 14% of orderbook. Technical breakout at 0.280, next resistance at 0.300.
Kepcorp (BN4, $10.78, P/B 2.1x, P/E 12.9x) will focus on building more offshore production and support vessels in Brazil as competition from China cuts prices for its main product.
Comments: Value investing on China yards is what I read from this. Not so much on Kepcorp per se. Consider looking at Cosco (F83, $0.755, P/B 1.3x P/E 22.2x) and Yangzijiang (BS6, $0.915, P/B 1.0x, P/E 6.2X). Do note that as P/E is based on forward earnings, Cosco’s P/E may look high as consensus has not estimated an earnings recovery yet.
Commentary
S&P and Dow Jones Industrials have begun to show divergence. S&P is known to be the better benchmark as it is market-weighted on 500 counters versus a price-weighted Dow on 30 counters.
Profit-taking on US stocks is in-line with flows.
This morning, market is looking at China PMI flash estimates. This will probably guide sentiment in Asian markets for today.
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