Counters with Europe exposure

To be honest, I am really sick of hearing about the Greece debts and the bad news that comes in one after another. The market has been very volatile recently and it is really hard to trade at this time because even the rebound is not strong.. can't even last for a day. Everything falls back in place in the afternoon.... very dissapointed and demoralising....

I understand that some of you may be interested in bottom fishing. Though I don't really know and cannot predict when is it really the lowest, but if you are still interested, you may want to look at defensive counters and reduce your positions in counters with high european exposure trading at high premiums.

-Credit Suisse-
Sell all stocks with high European exposure or just those trading at high premiums such as Li & Fung and Tata Motors. With fears of a contagion from the periphery to the core rising and still no quantitative easing by the European Central Bank, investors appear to be selling every Asian stock with European exposure.

Stocks with European exposure that are trading at discounts. The stocks with European exposure that are trading at significant discounts (i.e., already pricing in some fall in ROE), including Yangzijiang Shipping (84% discount), Kia Motors (83%), Hyundai Mobis (66%), Espirit Holdings (53%) and Sembcorp Marine (37%). Can consider??

According to Credit Suisse HOLT® data, Asian stocks with the highest exposure to Europe
in terms of European revenue as a percentage of total revenue are:
- Espirit Holdings – 85%
- Yangzijiang Shipping – 78%
- Hutchison Whampoa – 61%
- Acer Incorporated – 51%
- Suzlon Energy – 43%
- Tata Motors – 40%
- Sembcorp Marine – 38%
- IOI Corporation – 33%
- Li & Fung – 27%
- Olam International – 27%

Another quiet trading day..

Following the drop of 114.88 points in dow jones yesterday, STI gapped down and open at 2806 in the morning. It is currently holding slightly above the psychological level at 2801. Regional markets are also not performing well. Overall sentiments of the market is still weak, with some counters hitting a new low.
There are still jitters and concerns over the europe debt issues, plus the property tightening policies in China. Honestly, all these are very old news and I have been writing about them since the beginning of May. But if all these are not resolved, investors will not have confidence in the stock market. Even if the company releases good news, in this market, it is very hard to perform.

Disappointing....

19 May 2010 14:43 CST DJ MARKET TALK: STI Off 1.5%; Likely To Close At New Low For May
0643 GMT [Dow Jones] STI off 1.5% at 2801.55, may end at lowest level this month, with intraday high of 2815 below May's current lowest close of 2821. Support at 2-month intraday low of 2775 set two weeks ago. Shares in broader market also weak, with most FTSE ST sub-indexes down, market breadth at 7 decliners for every gainer. "The index has already given up its gains accumulated from the start of the year. With the World Cup kicking off next month, it's going to get worse as the attention won't be on markets anymore," says trader at local brokerage. Even defensive, yield plays not spared, with ST Engineering (S63.SG) off 0.9% at S$3.19, Starhub (CC3.SG) off 0.9% at S$2.25, Singapore Press Holdings (T39.SG) off 0.5% at S$3.78. Overall participation remains low as volume under 750 million shares. (frankie.ho@dowjones.com)

The bull, the bear and the pig???????

I was having lunch with my colleagues today and he actually make a really funny comment... "You can be the bull, you can be the bear but you cannot be the pig that gets slaughtered in between." I looked at Stanley and laughed... at times he can really say something which is like, so out of the blue but when you think over it, it does make some sense.

I guess he was referring to the market now. Market is clearly in a consolidation mode.. no clear directions means it is very hard to make a good trading decision; long or short?? I was very tempted to enter the market today but when I think about the weekend approaching, I held back. Any negative news now will drive the market to go furthur down. I feel that we are kindda like standing at the tip of the iceberg.

Genting Singapore announced their results recently. I have nine different reports from different houses which have dfferent opinions about this counter.

Summary

Credit Suisse Underperform TP: S$0.9
Deutsche Bank BUY TP: S$1.00
Morgan Stanley TP: S$0.90 - S$ 0.94
DBS BUY TP: S$1.20
CIMB OUTperform TP: S$1.38
Kim Eng BUY TP: S$1.26
OCBC BUY TP: S$1.29
UBS Neutral TP: S$0.99
CitibanK SELL TP: S$0.65
JP Morgan Overweight TP: S$1.35

14 May 2010 14:36 CST DJ MARKET TALK: STI Flat; Exit As Weakness Ahead - CIMB 0636 GMT [Dow Jones] Singapore shares unable to shake off morning fatigue as investors content to stay out. STI flat at 2869.03, with this week's high of 2899 expected to cap gains; support remains at 2800. "Trading is likely to remain quiet in the afternoon. We expect further downside in the coming days, as such we advise investors to take profit on trades before the weekend," says CIMB. Overall volume anemic at under 700 million shares. Even defensive stocks drawing little interest, with ST Engineering (S63.SG) flat at S$3.23, Starhub (CC3.SG) +0.9% at S$2.26, ComfortDelgro (C52.SG) flat at S$1.49, Singapore Press Holdings (T39.SG) off 0.5% at S$3.86. (frankie.ho@dowjones.com)

Have a fabulous weekend!

May - To buy or not to buy?

It is a little hard to focus now... While the price of most of the counters now is what seems like a 'good buy' but no one knows exactly the direction of the market as yet. The domino effect of the greece debts into the european markets, US markets, asian markets has caused Singapore market to drop by quite a far bit since the beginning of May. Now, with the world cup coming, what's next? History has shown that the market is always extremely quiet during the world cup season, will it still be the same this time?

I do not have the answer to my question... but for those who are interested to buy on this dip. you may be interested in the following article. In times like this, to play safe, look at defensive counters. Avoid penny counters!


STI 15 mins chart

Investopedia explains Defensive Stock
Defensive stocks remain stable during the various phases of the business cycle. During recessions they tend to perform better than the market; however, during an expansion phase it performs below the market. Betas of defensive stocks are less than one.

The utility industry is an example of defensive stocks because during all phases of the business cycle, people need gas and electricity. Many active investors will invest in defensive stocks if a market downturn is expected. However, if the market is expected to prosper, active investors will often choose stocks with higher betas in an attempt to maximize return.

A report from DMG and partners research strategy to provide you with some insights on defensive counters.
Market is down, where should we be looking? We advise investors to stay defensive with a focus on stocks with good earnings visibility and reasonable valuations. We highlight three major screens:
1) growth stocks;
2) stocks with attractive dividend yields and low earnings risks; and
3) cash-rich companies.

Screen 1: Growth stocks. Stocks are ranked by their projected PE-growth. Notable names with PE-growth below 1x include CapitaLand, SIA, WingTai, Venture and Noble. Of smaller caps, notable stocks include Healthway Medical, FJ Benjamin, Broadway and CSC. However, earnings of some of these counters may be adversely affected in a cyclical downturn.

Screen 2: Cash proxy stocks; low earnings risks and attractive yields. Of bigger caps, with cash-generative operations, yields in excess of 6% and minimal overseas exposure, we identify Starhub (9.3%), Suntec (7.5%), A-REIT (7.5%), M1 (7.3%) and SPH (6.2%) as ideal cash proxy stocks. We readily identify S-REITs as strong cash proxies which pay out 100% of earnings as dividends. For defensiveness, our pick remain ParkwayLife REIT (7% yield).

Screen 3: Cash rich companies could be in focus. Companies with large cash holdings include ARA and Venture.

DMG top nine best picks
A-REIT 1.83 TP:2.11 Attractive yield of 7.2%, above heyday yields of 6%. A Trading BUY at current levels.
Broadway 1.08 TP:1.46 Riding on the global HDD and semiconductor growth themes.
ComfortDelGro 1.45 TP:1.78 Trading at 13x FY10 P/E, its lower-range 13-17x P/E trading band; offers yield of 5%.
CWT 0.88 TP:1.10 Potential M&A in the works; attractive special dividend yield of 17%in FY10.
Ezra 1.93 TP:2.80 Positives from potential acquisitions and strong earnings growth
FNN 4.59 TP:5.30 Strong unbilled property sales of S$2.3b and Indochina's resilient F&B growth.
M1 2.05 TP:2.55 Attractive yield of 7% limits downside risks; set to benefit from NBGNBN in mid-2010.
ParkwayLife REIT 1.29 TP:1.52 Defensive business structure; accretive acquisitions on the cards; offers yield of 6.7%.
SPH 3.81 TP:3.95 Trading at 13x FY10 P/E, its mid-range 10-15x P/E trading band. A Trading BUY.

Market... too dynamic to remain static...

The perfect speculator must know when to get in; more important he must know when to stay out; and most important he must know when to get out once he’s in - anonymous

I was shocked when I woke up this morning.... I saw a msg from my friend on my Iphone, "Wat a day in US?" I frantically check the market indices, only to realised that DJ has dropped 347.8 points. I was really worried... I thought the market is going to crash down today.



STI did open low at 2779 today and drop about 20 points. By now, it has recovered quite a bit(2820). Later, reports mentioned that Dow Jones actual losses may not necessary be the closing price, it may be due to a technical gitch which created some error trades in the electronic trading system. The cancellation of the error trades help to alleviate the pain for the massive sell down today. It's is a good thing that STI can still stay above the support level at 2800 today. However, tonight Dow J performance will be a sign to our next monday's market direction. We are all anticipating... Perhaps, prepared for the worst...

Still, overall sentiment for the market is weak. Selldown is very strong and funds are taken out. News and reports are pretty negative. Please be cautious with your trading activities.

07 May 2010 11:00 CST DJ MARKET TALK:
A Case Of Jitters For Asian IPOs? -HEARD ON THE ST 0300 GMT [Dow Jones]
To lose one initial public offering in a week might be a misfortune. To lose four is a sign of real problems. That's the worry in Asia after Swire Properties pulled $3.1 billion flotation Thursday, due to lack of demand, marking HK's second failed listing this week. Giti Tires postponed $500 million float Tuesday. Singapore and Bombay have seen failed IPOs. Specific reasons given; in Swire's case, some suggest pricing was too aggressive. Still, Swire's strong reputation in HK might have supported a higher price in a firmer market. People close to other imminent IPOs suggest demand still strong; investors may simply be becoming more selective. But Chinese authorities' response should be closely watched, as some large Chinese bank IPOs are in pipeline, including Agricultural Bank of China's (AGBC.YY) planned $20 billion float. See "HEARD ON THE STREET: A Case Of Jitters For Asian IPOs?" (AJP)

Downtrend?

Market drop by quite a far bit these few days and trapped those contra players. The sell down was fast... Despite that, OCBC performed well, gained 1.16% after the announcement of their results.

Overall, market sentiment today is pretty negative. Jitters over the Europe debts problems caused the US market to lose 225 points yesterday. As a result. STI gap down today and open at 2863. At present, It is down about 36 points and currently trading at 2864. The Hong Kong and Shanghai market is also not performing and Hong Kong is down by about 400+. It will be tough for STI to recover today unless we see improvement in the regional markets. Volume traded today is also thin, mostly retail investors. Research reports did mention that there might be selling pressure for blue chips when volatility starts to rise.

We were taken aback by this news. One of the largest IPO this year fo far, New Century Shipbuilding actually withdraw from their planned IPO and this news damped the sentiments of the shipping counters like Cosco, NOL,, Yangzijiang, Jaya, JES.



STI should find strong support at 2740-50 in event latest 6% pullback develop into a near 10% correction but technical bounces likely on test of 2820-50 area. A minor technical rebound can be expected soon as the STI heads towards its key 2750 support area with 7-day RSI getting oversold at 25.3, entering the mid-Jan to early Feb zone when the index plunged 9.5% in a 20-day span from 2947 to 2666. -Amfraser Researcher, Najeeb Jarhom-

Sell in May and go away....

I believe many of you would have heard of this cliche saying especially for those who have been in the market for long.

Today is the first trading day of May and it is a really quiet day with not much trading activities and thin trading volume. Moreover the world cup is just round the corner, many traders will tend to be cautious. During this period of time, there could also be reduced capital inflows, savings set aside for vacation trips and buyers at bay due to companies' announcement of results and dividend payout.

Risk aversion strikesUncertainty #1: Europe’s sovereign debt crisis
Over the weekend, Greece accepted a bailout from the EU and IMF worth more than €100bil to avoid default. In return Greece will implement austerity measures worth some €30bil that includes wage cuts, 3-yr freeze in pensions and a 10% increase in sales tax. While there could be a knee jerk reaction to the bailout in the immediate term, uncertainty remains. The concern is that 2-3 years from now, Greece will still have an unsustainable debt and will have to restructure because it will suffer from a very deep recession in the mean time, according to a University of California professor (source: Bloomberg).

Uncertainty #2: US financial reform bill and Goldman Sachs lawsuit
The SEC’s lawsuit of Goldman Sachs and the spectre of criminal charges against the Wall Street firm added to market volatility last week. Shares of Goldman were weaker by 7.7% w-o-w as the company’s executive testified before the Senate. Then, there is also the Obama administration’s financial reform bill that could get passed by end-May. Whether the Goldman case portends more regulatory controls remains to be seen.

Uncertainty #3: China policy risk
The SSEC continued to reel last week, down 3.7% w-o-w as the Chinese government introduced more measures to cool its property market. A moratorium has been placed on fund raising by property firms that could block RMB110bil in share issues planned by 45 companies. In the capital city at Beijing, families have been limited to one new apartment purchase and home loans will be refused to people who cannot prove they have paid taxes and made social security contributions in the city for at least one year. There is also concern that China could also introduce a property tax on residential housing by end June on a trial basis in Beijing, Shanghai, southwestern Chongqing and the southern city of Shenzhen.
-DBS Vickers-

I realised that I do not need to log into the GL system to see the market's performance!
Just take a glance in the office and I know exactly wat is happening.

Five signs in the office to warn me that the market is consolidating or moving downwards.
1. The smell of medicated oil getting stronger and stronger
2. Table-top fans switched on. (Remisiers feels hot when the market is down... panic.. :>)
3. Literally no ringing of phones
4. Gathering around to talk or chit-chat
5. Looking at the computer screen and shaking their head

Five signs in the office when the market is up and running.
1. People shouting breaking counters once every hour
2. All table-top fans switched off
3. Remisiers joking and smiling happily at the computer screen
4. Phones ringing non-stop
5. Busy keying in orders