Lunch bites

KIM ENG
Lunch Bites - Cosco Corp Top volume featureCOSCO (COS SP, $1.63) – Cosco’s volume has picked up after it announced a groundbreaking drillship order worth more than US$500m. We have upgraded Cosco to a BUY. Technically, it is poised for more upside with the breakout of an ascending triangle. RSI is positive and support is at $1.56.

Top Idea

KIM ENG Top Idea

Overall volume traded is still thin... Highest volume Capitaland
Infrastructure
Midas Holdings (MIDAS SP) – Positive contract momentum
Midas announced two contracts yesterday worth a total of RMB130m. We estimate this brings the total contracts/letter of intent it secured in the last month to RMB290m. With improving market sentiment and positive contract momentum, we postulate that its Hong Kong dual-listing plans could be coming to fruition. We continue to peg our target price to 22x FY10F, in line with its peers in Hong Kong, and maintain our BUY recommendation with target price of $1.22.

Remisier Business: The game of how well you know your customers....

Hey guys, I'm so sorry that I haven't been blogging recently.... there were some changes in my work so I was busy doing the necessary paperwork.. but I am really glad that some of you are following up on the articles I wrote.
I have been meeting up with a lot of remisiers and dealers recently, just trying to understand how they succeed in their business when this industry is so competitive. I realise that it really takes a lot of perserverance, determination, EQ, foresight, passion and patience to walk through this long, tiring but rewarding career. The best sentence came from a remisier I have hardly know for two hours and he said that the remisier business is a game of how well you know your customers. His words keep ringing in my mind and I will definitely register all the kind teachings from the seniors... and my uncle who provided advices and took care of me in Kim Eng Securities....

There I go again.... rested enough and starting my engine again... Nothing fails if I'm determined and hardworking... Thank you for giving me the support and I hope to have your continual support.

The market has been really boring since the beginning or World cup. The volume traded in the market is quite low and the investors doesn't seem to be coming in... Counters breakout but did not hold. Market is clearly in a consolidating state and might unfortunately, last the entire year.

US market open negatively but closed positvely yesterday but did not have a significant effect on the Singapore market. If you search the news website like bloomberg or cnbc for information, you will realise that the overall market economy is not stabilized at the moment. Fortunately, the Q2 results for most of the companies is still acceptable or improving.

KIM ENG
PropertyKeppel Land (KPLD SP) – Tasting the fruit of its labour
Keppel Land (KepLand) reported a 1H10 PATMI of $134.7m. While this makes up 40% of our full-year estimate, it is largely in line with expectations as we anticipate even stronger contributions from its residential projects in 2H. Following good response to its recent launches in China, it has lined up more launches in 2H10.
The strong Singapore GDP forecast for 2010 should continue to underpin KepLand’s position as the leading prime Grade A landlord. New acquisitions from the Government Land Sale programme could also be on the horizon. Maintain BUY at a target price of $4.85.

Market Talk
Retail – Osim International (OSIM SP)banked cushy profits for its second quarter ended 30 June, with a 142% year-on-year surge from $5m to $12.1m. Revenue, fuelled by the launch of new products such as the uSoffa Petit, grew 12% from $117m to $131m. “Our product innovation and competitive positioning continued to drive consumer demand. We launched uMama Warm which exceeded sales expectations,” said Ron Sim, OSIM’s founder and chief executive. For the six months ended 30 June, net profit grew 146% to $20.1m, bolstered by strong margins. Revenue for the same period was up 22% year-on-year, from $213m to $259m.

Genting Singapore by Merrill Lynch

Haven't update this blog for a long time.... There are some changes to my job and have been pretty busy trying to make changes and updating all information. The world cup is coming to an end soon and it may be time for the market to improve. However, the world news are still causing jitters to the stock market.

Raise PO to S$1.40, implying 14x 2011E EV/EBITDA for RWSWe lift our earnings forecasts for Genting Singapore and thus raise our SOTPbased
PO to S$1.40, implying 23% upside. Short-term catalysts include the
completion of the UK asset sale as well as quarterly earnings, which we believe
will exceed consensus estimates. Despite the strong turnaround in share price
performance recently, we maintain our high conviction Buy on this stock.
Very little dilution from MBS opening and FIFA World Cup
A recent company visit reaffirmed that its casino operation at Resorts World
Sentosa (RWS) has not seen much dilution from the Marina Bay Sands (MBS)
grand opening and the on-going FIFA World Cup. Daily casino revenue remains
close to the levels the firm attained when it operated as a monopoly in early 2010.
Slot machines remain star performer; raising earnings
Despite the increased competition from MBS, slot machine performance at RWS
remains strong. We attribute this to the strong product offering – electronic table
games, progressive jackpots and a higher payout ratio – which enables it to gain
market share from slot clubs in Singapore.
As a result, we raise our 2010 and 2011 EBITDA assumptions by 13% and 12%,
respectively, to account for slots’ sustainable strong performance, which accounts
for over 20% of group forward earnings. With the upgrade, our 2010 and 2011
EBITDA forecasts are 41% and 26% above consensus.
UK disposal positive, enhancing focus and balance sheet
The proposed disposal of its UK casino business is a positive, in our view. It
enables management to concentrate on the ramp-up of RWS over the next 1.5
years, including junket introduction, the Universal Studio extension, new hotel
offerings and the Marine Life Park. More importantly, it will further enhance the
group’s balance sheet to prepare itself for the next leg of growth – possibly in
developed market jurisdictions – by 2012.

World Cup 2010

Market has been pretty quiet recently which is expected due to the world cup season. . low volume and low trading range. . Received a report today from J.P. Morgan sent to me by my team leader and guess wat... It was a 69 pages report on quantitative analysis of World cup 2010. Now wat, even the banks are diverting their attention to the world cup.. hmmm...... looks like I should join the crowd and share the information with my readers.


England won nine of their 10 matches in qualifying to progress to the 2010 FIFA World Cup South Africa™ in some style, with Wayne Rooney scoring nine goals in the process.

Fabio Capello picked up the pieces following Steve McClaren's ill-fated spell in charge that had seen England miss out on a place at UEFA EURO 2008. The Italian suffered no such problems, though, and England head into South Africa 2010 with confidence high following a successful qualification campaign which saw them top Group 6.

Their only defeat - a 1-0 loss against Ukraine - came in the penultimate group game. In total, England scored 34 goals in their 10 qualifiers and conceded just six.
http://www.fifa.com/worldcup/news/newsid=1222660/index.html#nine+days

The world cup will start on the 11th June and end on the 11th July...

J.P. Morgan has predicted the following outcome based on a few parameters.

Winner of world cup: England

Second: Spain

Third: Netherlands

Quant analysis is a practice often considered as “too complex” by a large part of the investment community.

In this document we explained that, on the contrary, Quant is far from complex as Quants merely try to remove human based opinions when they make investment decisions.
Instead they use information and data points they consider relevant to investment in a systematic and efficient manner. Once they have found data sets thought to exert influence over future returns, they backtest them and make sure they can be used on a day-to-day basis to generate alpha.
As Quants use only numerical/statistical data for their market analysis, it seemed that sound Quant/mathematical Models could be used in fields outside Finance to make
accurate predictions.
With the amount of statistical information now available for Football fans, we thought it would be a very fruitful ground for investigation. We therefore decided to “translate” our successful stock-picking Quant Model and adapt it to predict the outcome of the World Cup matches and ultimately provide the World Cup winner.
As explained in the document, we focused on very intuitive data (comprising recent team performance, FIFA ranking, probability to win etc). Ultimately, we used our mathematical Model and applied it on a match by match basis and predicted winners.
Whilst our Model points towards Brazil as being the strongest team to take part in the World Cup, our “World Cup Wall Chart” indicates that thanks to the actual fixtures determined by the schedule, we believe England will be the winner of the 2010 World Cup.

We also highlight that the 3 favourites according to both our model and market prices (Brazil, Spain and England) offer a combined probability of 52.5% of winning the World Cup (as per prices on 30 April).

-J.P. Morgan-

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)