Opportunities
Singapore Air (C6L, $10.39) Aug. passenger load factor 82.4% vs 78.3%; Aug. overall load factor 69.1% vs 67.5%
Comments: SIA is still trading below book value (0.9235x P/B according to Bloomberg and 0.955x P/B according to Reuters). Previously, I have alerted everyone on SIA below $10 in the column. Keep this on your watchlist. Shipping and Aviation are industries worth looking into as they are in recovery phases. Yes, we may not see it yet but by the time recovery is clearer, prices would not be so cheap anymore.
Blumont Group (A33, $1.96) plans to invest A$21m-A$22m in Resource Generation
Comments: $3.3bil market cap and P/E of 245x according to Reuters.
Ezra Holdings (5DN, $1.295) issues S$25m 5% fixed rate notes due 2015.
Comments: Recent run up may spark profit-taking?
Commentary
Flows in Asian markets have been muted in the last few trading sessions. This suggests a quiet period and some profit-taking here and there.
Technically, charts on major indices are trading close to their downtrend resistance. A scenario that is possible is a false break and another leg down. This is a scenario that is worth keeping in mind in contrary to all the bullishness that says a breakout of these resistance lines will take the markets higher.
The bullish scenario is inconsistent with the flows at the moment so the chances of that happening, is not as high in my opinion.
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