AIO Finance Analysis

I often hear people asking “What is the best endowment plan?” in forums. In a short answer let me say there is no such thing as the best endowment plan. Endowment like any other kind of investment instruments does not guarantee its future performance. An endowment plan that yield good return in the past may not yield the same return in the future.

What is an endowment policy? It is basically a saving plan bundled with insurance protection. Before getting an endowment policy, ask yourself what is the purpose of getting one? If your objective is to save up a certain some of funds for usage after twenty years, then I recommend you to get a pure saving plan. If your objective is to have an insurance coverage, then get a pure insurance plan. Mixing your objectives with this kind of combo plan does not equate a good plan. Let me give a few disadvantages of owning an endowment policy.

1. You will incur high distribution costs which include commission fees to agent during first few years of policy
2. Since a major portion of your premium goes into saving and a small portion goes into insurance, your sum assured is always pathetically low
3. As endowment policy is a long term plan, early termination will result in losses. That means you may not get back all your premiums paid depending on the year of surrender. In other words, your savings is locked for a number of years
4. An endowment policy always projected a high return per annum which is not guaranteed. The actual return is most of the time less than projection

Now the question is, “Is there an alternative solution to an endowment plan?” The answer is definitely a YES. However this method involves a little bit of do-it-yourself approach. Let me discuss your saving and insurance portion separately.

Savings
The money paid for the saving portion of an endowment is actually invested in bonds and equities by the insurance company. That is how the insurance company is able to generate returns for your savings. There is no secret about that. So why not invest the money yourself into bonds and equities? Depending on your risk appetite and investment horizon, you can set up a diversified portfolio consisting of global equities and bonds fund. I shall not dwell into bonds and equities as it requires a separate topic.

However for the less savvy individuals, I would recommend setting up a regular savings plan with a balanced fund. Visit Fundsupermart Funds Selector and select Balanced under main categories, you will see a whole list of available funds. I would recommend any of the following balanced funds:
DWS Premier Select Trust
First Sate Bridge
UOB GrowthPath series

Insurance
As for your insurance portion, you might want to set aside a small sum of money into a term insurance. Depending on your age group and length of coverage, you can get a $100,000 insurance protection for less than $20. I would recommend you check out the following term insurance:
NTUC i-Term
Aviva SAF Group Term

Closing date of application: 15 April 2008
Commencement of trading: 17 April 2008

Established in 1998, China Eratat Sports is engaged in the design, manufacture, and sale of sports fashion footwear and apparel under their own Eratat brand.

Company background

• Their products are sold across 21 provinces / cities at 1,393 retail locations through their PRC distributors.
• They distinguish themselves from their competitors by developing their products based on the concept of "Life - Sports".
• International Artiste Wang Lee Hom has been their brand ambassador since 2002.

• They are well received and widely recognised in the PRC market since 1998, even having received the "2006 China Best Public Image Brand".
• They have strong product development capabilities, being able to generate approx. 3,000 and 1,000 design specification types for their footwear and apparel products range per annum respectively.
  
  
  

1. To increase their production lines in their new factory premises to achieve 11.5m pairs of footwear and 6.2m apparel units per annum.
2. To strengthen their brand image and recognition by advertising aggressively on TV and print, use of brand ambassadors, especially for the run-up and during the Beijing Olympics.

Gold is trading much weaker in New York Tuesday morning, as the precious metals complex is caught up in another major fund liquidation involving virtually all commodities.

Gold opened with major losses on the Comex, after plunging to $897/oz at the London AM Fix, and at 10:13 am the nearby June contract was trading at $892.20/oz, down $29.30 from Monday's settlement price. After opening at $903/oz, gold was quickly sold down to a low of $888.50/oz, but it has managed to recover.


Where is gold price heading to from here?
If you have gold futures position, you may be panic, and eager to sell off all your gold positions just in case gold price goes lower. But if you has done so, you might be selling at the low, and you will regret very soon.

As a trader, it is not rare for market to go against you, actually it happens me a lot of time, and I still exit from the trade with a profit. When market goes against you, don't panic, use all the brain power in your head to analyse the situation, and execute the next step (buy more, cut loss or do nothing).

In my view, the two main drivers for rising gold are Falling USD and Rising crude oil price

Click here for More
Source: Metal Trading

Home Sales News
New home sales slump to 9-month low in Feb. The number of new homes sold by developers dropped to just 170 units in February - the lowest since the Urban Redevelopment Authority (URA) began releasing monthly sales data in June 2007. And CB Richard Ellis executive director Li Hiaw Ho estimates that new home sales could be just 700-800 units for the first quarter of 2008 - even lower than the 894 units sold in the fourth quarter during the Asian financial crisis in 1997. In an analysis of the data released yesterday, Jones Lang LaSalle (JLL) said, however, that prices were comparatively stable. The firm's head of research (South-east Asia) Chua Yang Liang said that using the 'lowest median prices' category of the URA data, median prices declined 0.7% for units sold in the Core Central Region (CCR) and 5% in the Outside Central Region (OCR) on a month-on-month basis. For units sold in the Rest of Central Region (RCR), the lowest median price increased 14.2% from $765 psf in January to $874 psf in February.


Swiber
Swiber Holdings announced on Sunday night that it was awarded a LOI from CUEL Thailand for offshore installation work (platforms, jackets, topsides and pipelines) in the Gulf of Thai. The contract is tenable for five years and estimated to be worth US$50 p.a. The contract is scheduled to start in 1Q09.

Swiber has shown impressive YTD win of US$742m boosting order book to about US$1bn. This is the first long-term contract that Swiber wins after Brunei Shell project of about US$200m which will end in 2009. We believe more of such long-term contracts will provide a good mix for Swiber's order book and confidence in earnings visibility. Our FY08 revenue forecasts for FY08 is 90% backed by orders while FY09 is
already 45% secured.

Source: DBS Vickers

Investors should continue to stay defensive heading into 2Q. Our view that the STI has a downward bias to 2530-2650 remains intact. While minor oversold bounces do occur, it’s still a sell-into-strength market.

The clearest indication came last week when the FED’s USD200bil injection into credit markets triggered a 180pts gain from Tuesday’s low of 2794 to Wednesday’s high of 2976 that was all given back by Thursday.


Defensive plays such as telecom (SingTel, StarHub and M1) and consumer staples (SPH, SMRT, SingPost) should hold up well in coming weeks. Outside of these defensive stocks, other index heavyweights are likely to pull the STI lower towards 2530-2650.

The Singapore economy saw earnings rise but productivity dips for first time in six years. Labour productivity slipped 0.9% in 2007 while real earnings rose 4%. Jobless rate is down to a decade low of 1.6%.

Source: DBS Vickers
(Click here to Read More...)

Is the credit crunch over? News on Tuesday of the Federal Reserve pumping $200 billion of Treasurys into the market sent stocks soaring.

But several investing experts said that even if stocks rally again Wednesday, you shouldn't start popping champagne corks.

"There is the hope that the credit crunch is over but it's not founded in reality," said Haag Sherman, managing director with Salient Partners, a Houston-based investment firm and subsidiary of Sanders Morris Harris.


As stocks started moving higher Tuesday, Sherman said he thought many investors with bearish bets were forced to buy - or 'cover' their positions - so they could lock-in gains or minimize losses. But investors need to be selective.

Source: CNN

Closing date of application: 10 March 2008
Commencement of trading: 12 March 2008

Established in the 2003, Li Heng Chemical Fibre is principally engaged in the manufacture and sale of high-end nylon yarn products under their brand names "Liyuan" and "Liheng" in the PRC.

Their two production facilities in Changle City, Fujian Province, PRC, are strategically located amongst clusters of textile and garment manufacturing industries, which are their main customers, and related supporting service industries.Their revenue and profit have been registering 91.2% and 93.3% growth respectively over the past 3 years.


Financial figuresIntended IPO price: $0.80
No. of shares available for public offer: 10m
No. of shares available for placement offer: 390m
Total post invitation share capital: 1,700m
Dividend policy: No fixed policy.

Conclusion:
Based on its numbers, Li Heng is comparable to the leading SGX textile stocks such as Shina Sky, Fibrechem, and Sinotech Fibre, instead of the smaller companies such as C&G and Foreland.Li Heng should trade at a Fair Value of $1.30 or 12x PE only.

Probability of getting allotted for the IPO - FAIR
(Prospectus here...)
(Click here to Read More...)
Source: Extraordinary Profits

Closing date of application: 10 March 2008
Commencement of trading: 12 March 2008

Established in the 1967, Roxy-Pacific holdings is a Singapore-based specialty property and hospitality group.

Key Competitive Strengths:
They have been developing properties since 1967, and having experienced several cycles in the property market, have an established track record and reputation.
They are one of the more active developers in the Eastern area of Singapore, with an in-depth familiarity and a land bank of 30,422 sqm for 8 prospective developments there.

Key Risk Factor:
The risk of the Singapore Property Market bull run coming to a halt in the near term.

Financial figures
Intended IPO price: $0.30
No. of shares available for public offer: 7m
No. of shares available for placement offer: 126m
Total post invitation share capital: 636.56m
Dividend policy: No fixed policy.


Conclusion:
Based on its numbers, Roxy-Pacific is comparable smaller property developers which only focus on the Singapore property market such as Eastern Holdings, Sing Holdings, which typically trade at 10-12x PE. As such, Roxy-Pacific should trade at a Fair Value of $0.30 (IPO price) or 12x PE only.

Probability of getting allotted for the IPO - FAIR
(Prospectus here...)
(Click here to Read More...)
Source: Extraordinary Profits

Investors were spooked by a media report that a planned bailout of US bond insurer Ambac Financial was running into snags, dealers said. Ambac and other major bond insurers have been hard hit in the financial turmoil stemming from the US housing slump and related credit squeeze. "Investor fears of a US recession have strengthened. There is even a growing view that the US economy has already entered into a recession," said Ryohei Muramatsu of Commerzbank in Tokyo.

Markets expect the Fed to cut its federal funds rate at a March 18 meeting. The central bank has already slashed borrowing costs by 2.25 percentage points since September in a bid to shore up flagging economic growth.

Asian stocks plunged Monday with Tokyo ending down almost 4.5 percent, battered by a slumping dollar and fears that the US economy is slipping into recession, dealers said.

Investors dumped shares after heavy losses on stock markets in the United States and Europe last week following signs that the fallout from the US credit crisis was far from over.

Hong Kong was down 3.1 percent in late trade, Seoul gave up 2.3 percent as Singapore and Sydney both shed about 3.0 percent.

"Wall Street's plunge amid a raft of bad news hit sentiment in a big way... raising fears about the possibility of the market slipping into a downward spiral again," said Kim Min-Sung, analyst at Bookook Securities in Seoul. Tokyo was the hardest hit, with the Nikkei-225 tumbling 4.49 percent to end below the key 13,000 points level for the first time in over a month.

The results were "a reminder to investors that subprime woes have not gone away," CIMB-GK Research analyst Song Seng Wun wrote in a note to clients from Singapore. "The mortgage meltdown and credit crisis are likely to have a substantial negative impact on the US as well as global economic growth in the coming months," Song added.

Source: Yahoo! News

China's top energy firm PetroChina is considering building a multi-billion-dollar refinery in Singapore, a local newspaper reported, allowing it to escape Beijing's fuel price controls.

Building a new 400,000 to 500,000 barrel per day (bpd) plant could cost more than $10 billion, according to recent cost estimates for similar size projects, but would fit PetroChina's ambition to become a leading fuel trader in Asia.

"It is currently doing a feasibility study and doing due diligence on this...and so far the feedback has been positive," The Business Times quoted an unnamed source as saying. Two PetroChina officials reached by Reuters said they could not confirm the report, but downplayed its significance.

"The idea was to process PetroChina's equity oil overseas and supply refined fuels to China," said the official.

The Business Times cited another source who said the new refinery would be at least 400,000 to 500,000 barrels per day.

A refinery in Singapore would also give PetroChina more flexibility and power to influence benchmark Asian oil prices, advancing its effort to become a top trader.
Several years ago PetroChina bought a 35 percent stake in Singapore's $500 million Universal Terminal, Asia's largest commercial oil storage terminal, which was completed last November.

"Given PetroChina's business profile, it makes sense for them to have an oil refinery in a global pricing hub like Singapore," the newspaper quoted the second source as saying.

Source: Reuters

Tha latest news in the almost never-ending series on "inflationary" price increases includes new adjusted pump prices from Caltex for all three classes of petrol. Regular 95 now costs S$2.046 per litre, Regular 98 at S$2.12 and Premium 98 at S$2.286 per litre. As Singaporeans may know by now, there is a worldwide commodities "boom" which had led to prices of everything from steel, oil, pork and flour rising quite a bit. This has inadvertently resulted in an inflation rate of 6.6% which was recently reported in the news. Yet, when I recently passed by a car road show at Suntec City atrium (open area near Carrefour), there were scores of people literally lining up to purchase cars !

Anyhow, let me break down the numbers according to BT and comment on them. According to the article, if you spend S$50K on a car with a 70% loan at 3% p.a interest for 7 years, then you will end up paying close to S$130K after 10 years. The breakdown is as follows:-

Cost of Car including COE - S$50K
Car Loan (70% of purchase price at 3% p.a. for 7 years) - S$7,350
Insurance (S$1,500 per year for 10 years) - S$15K
Road Tax (S$500 per yearfor 10 years) - S$5K
Parking Charges for Home and Office (S$250 per month x 12 x 10 years) - S$30K ERP Charges (S$3 per day x 240 working days x 10 years) - S$7.2K
Petrol Costs (S$200 per month x 12 x 10 years) - S$12K
Maintenance and Repairs (S$300 per annum x 10 years) - S$3K

The rest of the assumptions are for fines and accidents, which I assume one should and would not incur unless one was driving recklesly, or drink driving ! The BT article totals up the figures to give an approximate S$132,550, which boils down to about S$1,105 per month. If you take into account the "additional" potential extra costs, the cost per month is about S$1,360. Thus, for a person who takes home about S$3K (median income level per individual), this makes owning a car very challenging indeed !

To end off, all I can say is that if one forgoes a car, he can hope to achieve financial freedom sooner. But the material comforts and convenience of a car cannot be under-stated, and those who seek this or who require a car because of an infirmed member of the family or young children should ensure they work out the numbers as I had, to see if they have sufficient funds to sustain a car. As I always say, it's easy to own a car, but darn hard to maintain one !

Banks such as DBS Group, Oversea-Chinese Banking Corp and United Overseas Bank may be in focus after a record loss at insurer AIG exacerbated fears of more write-downs in the financial sector.

Stocks and factors to watch:

Goldman Sachs has cut the target price of conglomerate SembCorp Industries' shares to S$4.60 from S$5.70 but kept its "neutral" call, citing weak earnings in its utilities division and lack of positive catalysts.

SembCorp Industries posted a 42 percent rise in fourth-quarter profit on demand for utilities and rig building, and said it was eyeing acquisitions for growth.

Oversea-Chinese Banking said it has withdrawn its offer for commodities and property firm Straits Trading

MapleTree Logistics Trust said it has agreed to buy a warehouse for S$26.5 million ($19 million).

Swiber Holdings said its fourth-quarter net profit jumped more than five times to $20.2 million.

Source: Reuters

Wilmar International the world's largest listed palm oil trader, reported a five-fold jump in fourth-quarter net profit as palm oil soared to record highs, and said it hopes to expand outside Asia.

Singapore's second-most valuable listed company said despite an expected moderation in global economic growth it was bullish on agricultural commodities, but its shares fell as much as 6.6 percent as traders cashed in on a strong rally this month.
Earnings were boosted by contributions from recent acquisitions and high palm oil prices KPOK8, which hit a record high on Monday having more than doubled since the start of 2007.

"We have consolidated our position in Asia, our home base, and are now planning to expand in similar businesses beyond Asia to countries like Russia, Commonwealth of Independent States and Africa," Chairman and Chief Executive Kuok Khoon Hong said on Thursday.

Palm oil prices have eased from their Monday peak but remain 27 percent up this year. Strong demand from India and China due to a possible supply squeeze in coming months would likely keep the market buoyant, oil traders said.

Wilmar trades at 24.7 times to its 2008 earnings, versus 20 and 25 times for its Malaysian rivals Sime and IOI Its Singapore competitor Golden Agri-Resources trades at 13 times.

Source: Reuters

Genting International’s (GIL) 4Q results were below expectations with annualised net loss of S$381m coming in 5% below our full-year estimate and 7% below consensus. Core net profits were a more drastic 44% lower than our numbers. Unsurprisingly, there were no dividends declared.

Hurt by UK slowdown. GIL chalked a 12% topline decline in 4Q largely due to the poorer showing at its UK gaming division, which continued to suffer from lower headcount and drop from the effects of the smoking ban as well as economic impact with the greater impact coming from its provincial casinos.

Profitability hit by higher cost. The gaming tax structure that came into effect in Apr-07 had a net effect P&L of over £6m in FY07. This impacted GIL’s margins on top of the additional costs relating to start-ups of two casinos and renovations for inclusion of smoking terraces.

Unexciting near term prospects. The Sentosa IR project remains on track to meet its soft opening in 1Q2010. We are positive on the project outlook although start up and grand opening costs including depreciation will more than likely bring about a loss in 2010.

Downgrading to NEUTRAL. Given the weaker UK outlook and higher interest expense, we slash forecasts substantially for FY08 (-95%) and now estimate a loss for FY09. We introduce our FY2010 forecasts, which include first-year losses for the Sentosa IR. As a result, our end-CY08 sum-of-parts RNAV target price is lowered to S$0.73 from S$0.86. There appears to be little near term catalysts for GIL and this underpins our recommendation downgrade from Outperform. The stock remains a solid play into Singapore’s future tourism and gaming potential.
Time to short?

Source: CIMP

Energy-related stocks such as rig-builder SembCorp Marine and palm oil firm Wilmar may be in focus on Tuesday as the price of oil closed in on $100 per barrel due to speculation that OPEC will cut supply at a meeting next week.

U.S. stocks rose more than 1 percent on Monday on signs that the two largest U.S. bond insurers would stabilise, bringing a wave of relief to a market dogged by concerns of further bank write-downs.

Stocks and factors to watch:
- Singapore Telecommunications said that it has entered an agreement with five international telecommunications carriers to build a ultra high-speed cable system worth $300 million.
- JPMorgan has upgraded Chartered Semiconductor to "neutral" from "underweight", citing its recent acquisition of Hitachi Semiconductor Singapore wafer plant as a good move for the firm to diversify its client base.
- Commodities trader Noble said the firm has bought a 19.6 percent stake in a unit of Macarthur Coal worth A$48.5 million ($45 million).
- Chinese shipbuilder Yangzijiang said its full-year net profit rose 91 percent for the year ended Dec 31, 2007.
- Cruise operator Star Cruises posted a loss of $123.5 million for the full-year 2007.
- Coal mining firm Straits Asia Resources said its full-year net profit fell by 40.7 percent for year ended Dec 31, 2007

Source: Reuters

It seems like Asian stock indexes will be unnerved by fresh signs that the US is tipping into a recession yet again.

Job growth is faltering, oil price raising, consumer confidence plunging. The fallout from the worst housing slump in a quarter-century grows. Wherever you look, the signs are unmistakable that the economy is in trouble. Because of all the bad news, more and more economists foresee the US falling into a recession.

Short term lookout for STI stands at 2780 points with a resistance at will be at 3160 points.

DBS ($17.90) was $16.74 then and has also overshot our $18 sell target reaching $18.46. It should find support around $17.50 now and could test the latest highs soon.
UOB ($18.20) was $17.04 and rallied to $18.50 this week. Support is now around $17.70.
SGX ($9.08) remains a tricky stock as it held up well at $8.80-$9 that time but rebounded to only $9.50-65, indicating heightened market uncertainties. It should be a buy around $8.80-90.

Keppel ($10.44) dipped below our $9.80-$10 support to $9.76 and has moved back to old $10.70-$11 support. Buying on weakness towards $10.20 is called for as it could move back to $11.
City ($11.74) was picked at $11.26 and rallied to $12.38 with new higher support now at $11.50-60 and it should rally back to near $12.50 by the results release in a week’s time.
SIA ($15.56) was at $15.26 then, moving up to $16.18 and should continue to be well support at $15.-$15.20. Rebounds to above $16 call for profit-taking.
Source: AMFRASER

I came across this article from MyPaper reporting on Unit Trust. I thought why not share it on my blog. Similarly, DWS Global Agribusiness, unit trust from DBS caught my eye. The Fund invests in opportunities at various points along the “food chain” ranging from agricultural commodities to consumer products. Areas include land and plantation, seed and fertiliser, protecting and irrigation, food processing and manufacturing companies. With the exception of cotton, all other soft commodities went up again in November.Oil prices nearing USD 100 per barrel was one of the reasons for further food inflation. Other funds recommended by MyPaper includes
1. Legg Mason Singapore Bond Fund
2. Lion Capital Team Singapore Fixed Income Investment Class
3. A Henderson Global Bond Fund
4. ING Singapore DollarBond Fund
5. UOB Global Bond Fund


MyPaper Report
It was a less-than-positive start to the new year, with oil prices hitting US$100 per barrel and a weak job market outlook heightening the fears of a United States recession. A sell-off in equities and lower bond yields have caused bonds to outperform equities.

Singapore bond funds performed better because they were largely overweight on Government bonds which carried good credit ratings and were more focused compared to more diversified global bond funds. Would bonds continue to perform better than equities? It is still unclear as the outlook for equities is still uncertain in the near term.

For now, investment in bonds is still recommended for three reasons.
First, we are starting to see Main Street (the investing public) being affected by Wall Street. Weak job numbers and the fall in ISM (Institute for Supply Management) non-manufacturing data showed that the US economy had slowed down sharply from December to January, and it was clear that the financial market turmoil which
began in the housing market had affected the broader economy.

Second, it is not clear whether US housing market has bottomed out yet. Housing grew at about 1.006 million units per month in December, a new-low since late 2005 and the lowest in 17 years. Housing permits and existing home sales continued to form new lows in December 2007 since their descent in 2005. Sub-prime foreclosures as a ratio over total loans have also been increasing since 2005. These numbers suggest that the US housing industry is weak. Lastly, the effects of the US Economic Stimulus package will be felt only in the second half of this year. The package to stimulate the economy is great – consumer cash rebates, business incentives and easing on home loan limits – but the easing of loan limits will take effect next month and the cash rebates will be in the mail only by May. Until then, the economy might not feel the full impact of the economic stimulus.

For now, we favour bonds over equities as the outlook for the latter is still unclear. Investors with spare cash could consider high-quality fixed income securities such as European sovereigns as it is likely that the European Central Bank might reduce rates. Or they could wait until the market bottoms out before investing in equities. In the long term, the outlook for emerging markets is still promising, so don’t panic.

Source: MyPaper

Samko Timber IPO. (from Extraordinary Profits)
Closing date of application: 21 February 2008
Commencement of trading: 25 February 2008

Established in the 1978, Samko Timber is a leading Indonesian timber processing company and one of the top 5 tropical hardwood plywood producers globally.

They have approx. 450,000 ha of natural forest concessions and approx. 125,000 ha of industrial forest plantations.

Their production facilities include:
• 7 timber processing plants
• 1 fibreboard production plant
• 10 satellite veneer plants
• 1 power plant
• 2 chemical glue facilities
Their products include:
• Primary and secondary processed timber products
• Harvested logs
• Chemical glues of several types and grades
Financial figures

Intended IPO price: $0.55
No. of shares available for public offer: 3m
No. of shares available for placement offer: 180m
Total post invitation share capital: Approx. 684.6m

Conclusion:
Some investors have an aversion to Indonesian stocks because of the political and natural instability suffered by the country. Samko has a profit margin of only 3.1% - i.e. for every $100 of revenue they only earn $3.10 of profit. Considering those factors, I would prefer to avoid this IPO. Probability of getting allotted for the IPO - VERY LOW


Click here for prospectus
Read here For More
Source: Extraordinary Profits

STI range bound from 2650 to 3300 - Sell into strength near 3280

We continue to believe that the 2650 level represents a ‘worst case’ scenario for the FTSE ST Index while rebound upside is capped at 3300. Our base case scenario is for the US economy to slow down to as low as 1% growth during 1H before picking up to 2.5% in 2H.

A range bound pattern between 2650 to 3300 should develop in coming month(s) until data shows the effect of the 125bps by the FED and the US stimulus package filtering down into the economy. Click below for more


Click Here for More
Source: Extraordinary Profits

Source: CIMB-GK Securities Pte Ltd

KSH Holdings Ltd – Wins S$53.5m contract; Recommend Buy at TP S$0.72

The Group secured a S$53.5m contract from Eurochem for the construction of a 13-storey business park building at International Business Park, bringing its order books to S$505m that will take the Group through to FY11.

We have raised our earnings forecast by 9% for FY09 for the recent contract win from Eurochem Corporation Pte Ltd (“Eurochem”) worth S$53.5m. We believe KSH has the capacity to clinch another $150~250m projects.

We value KSH using sum-of-the-parts valuation method, valuing its property developments and construction business, at 7x blended FY08/09F construction earnings. At this level, price target works out to $0.72, providing an upside of 57%. We reiterate BUY.

NOL – net profit up 44% to US$523 million

Neptune Orient Lines (NOL) today reported net profit for full year 2007 of US$523 million, 44% higher than previous year, owing to improved liner volumes and freight rates in selected key trades. For the fourth quarter of 2007, the company registered net profit of US$196 million, up 292% on yoy basis.

The revenue for the year was up 12% to a record US$8.16 billion while the fourth quarter’s revenue up 22% to US$2.42 billion on qoq basis.

Source: WestComb Securities

Implications for the stock market

No cheer from the budget. Unlike 2007, we do not expect the budget to have any impact on the stockmarket, given the remote possibility of a corporate tax cut. The upcoming budget is likely to be pro-individual, given ongoing concerns of rising inflation and the fact that pro-business measures had been employed over the past few years.

Focus will be on the 4Q and final GDP growth rate for 2007, as well as its forecast for 2008, to be released this Thursday. With the deteriorating growth environment, there’s downside bias to our current growth forecasts of 6.5% for 2008, vs 7.5% for 2007 (preliminary estimate).

Budget has no impact on the stock market in previous years, except for 2007

We tracked the performance of the stock market for pre and post budget rallies. 2007 was the only year where there’s evidence of a pre-budget rally (+3.5%) and post budget rise (+1.5%) in the STI index, spurred by the cut in corporate tax rate and rise in employer CPF’s contribution which was positive for the property market.

Prior to 2007, the budget failed to inspire the market, while and in the bear years of 2001 to 2003, the stockmarket slided after the budget.

Read More
Source: Extraordinary Profits

For the past one month STI has drop from 3461pts to a 2931pts, a fall of -15%. However I have heard from people that they are still stuck with their paper lost and are unwilling to sell their stock away. I can only place 15 stocks on the chart below. For the full table, click on read more below .

(Read More)
Source: STI Stocks Info

I'll like to wish all a happy and prosperous chinese new year.

I'm sorry for the slow update over the chinese new year, was busying collecting ang bao and training up for the "IR".

I'll promise to update asap. Hope everyone same as me "Huat Ah"!

Singtel overall results exceed expectations. Underlying net profit of S$931m (up 22% yoy, 2% qoq) exceeded our forecast of S$912m and consensus forecast of S$907m. Besides there was exceptional income of S$21m in 3Q08. We have excluded S$84m in compensation from IDA from last year results for fair comparison.
BUY S$3.86 FSSTI : 3,077.08
Price Target : 12-month S$ 4.50

Hour Glass released its 3Q08 results that were in line with expectations. Bottomline as at 3Q08 grew y-o-y by 58% from S$5.1m to S$8.2m on the back of a topline growth of 22% y-o-y to S$132m and improved gross profit margins. Gross profit margins of the Group improved 1.72ppt to 19.96%. Net margins improved 2.38ppt to 8.82% in 3Q08.
BUY S$1.85 FSSTI : 2,981.75
Price Target : 12-Month S$ 2.36 (Prev S$ 2.32)

GRP's 1H08 revenue grew 7.1% YoY to S$15.2m (vs. our forecast of S$15.8m), with contributions mainly from the marine and hoses division due to the increased demand from customers in the marine, oil & gas industry. Gross profit rose 13.4% to S$5.6m while gross profit margin improved slightly from 34.8% to 36.9%. Net profit increased 24.9% to S$2.1m as net profit margin edged up from 12.0% to 14.0%.
BUY S$0.19 Fair Value: S$0.25

Source: OCBC Securities & DBS Vickers

Singapore banks are expected to release their 4Q07 results from mid-Feb-08. We expect earnings growth of 23% y-o-y for FY07 as a result of overall growth in income. While 2H07 would show marginal slowdown in non-interest income, earnings recorded in 1H07 have held up earnings for the year. Disappointments to earnings, if any, could potentially come from higher than expected provisions from CDO investments.
Outlook - Sentiments are weak although fundamentals hold up. Amid fears of a US and global recession coupled with the weakening of US and European markets, weak sentiments may go against our calls for Singapore banks. In the immediate term, fundamentalists should accumulate on weakness, banking on dividend yields of 4%. Buy calls maintained but target prices lowered. Our Buy calls are maintained although our target prices are lowered in view of higher risks as we lower our sustainable ROE targets and raise our equity premium assumptions, hence cost of equity in our Gordon Growth Model assumptions. We prefer UOB (Buy, TP lowered to S$20.80 from S$27.50) to OCBC (Buy, TP
lowered to S$9.00 from S$10.40).
Source: DBS Vickers

Expect the market to follow the US forth quarter economic data out this week.
-December Factory order
-Retail Chain Index
-ISM Services
-4Q Productivity
-4Q Unit labor cost
-Jobless claims
-December Consumer Credit
-December Wholesale inventories

For exact date of the result (Read More...)
Source: Steady Bull

I have collect some fixed deposit rate from some Singapore banks and place it in the figure above. If I miss out anything do tell me.

1 Ms Mirriam MacWilliams does not subscribe to the belief of investing in stocks with falling prices or buying them at their rock-bottom prices. It is the worst time to buy because you have no idea why the prices are falling, she said. Only fund managers are able to do that because of the sheer number of stocks they control.

2 Never rush in to buy the stocks. “I prefer the stocks to give me a
direction; once I have a direction, I apply entry and exit parameters,” she advised. “Always have a trading plan.”

3 Take note of the time horizon or percentage move on the stock. For example, if you are in a three-week trade window period, you may want to aim for a 10-per-cent move on the stock. If the window period is around three or four days, you would expect the stock to move
about 5 per cent.
4 She has this advice for short-term investors: “You just need to
understand certain criteria in the US stock market such as the price movement of the stock and the number of the stocks. “As long as you understand the criteria for investing, you don’t have to get so worried
about economic fluctuations.” Long-term investors looking at a window period of one to two years should “keep their eyes on the pulse of the
interest rates in the US”.

5 Be a consistent trader. Do something over and over again that yields you good return and eliminate all the pitfalls for that risk.

6 All-time high prices are risky. Do not get too emotional when prices escalate or decline.

7 Know that fund managers will go in the opposite direction of the masses. When the market is bullish and everyone is getting in, they are getting out, and vice versa.

Source: MyPaper

The heavy correction has punished a lot of stocks, but one of those most heavily punished is Allco REIT. It has fallen more than 50% from $1.40 in May 06 to $0.67 currently. As such, I am placing Allco REIT on the stock alert with a buy at $0.67 at 50% below NAV.
(Read More...)
Source: Extraordinary Profits

Another stock we saw was GEMSTV. We expect to see it rally and some brokers give a high target price for it. We might see it break $0.415.
(Read More...)
Source: Steady Bull

Asian stocks are likely to fall after a late downturn on Wall Street, and amid jitters over Japanese corporate earnings, as several companies, including Sony Corp report on Thursday.

Markets like India, which slid on uncertainty over the U.S. Federal Reserve's next move, could rebound after the Fed cut rates by 0.5 percent following last week's emergency 0.75 percent cut.

Australian shares set the tone for Asia, sinking as much as 2 percent in early trade on Thursday, led down by banks and the market's biggest retailer, Woolworths Ltd.

In Japan, investors knocked banks on Wednesday after reports that Mizuho Financial Group might inject an additional $1.9 billion into its unit Mizuho Securities to shore up the brokerage hit by bad subprime investments. Sharp falls for key Hong Kong and Taiwanese stocks, like Sinopec and UMC, on Wall Street pointed to weaker openings for Taiwan and Hong Kong.

Asian stocks listed on Wall Street .BKAS fell 0.8 percent, while MSCI's measure of Asian stocks excluding Japan .MIAPJ0000PUS slid 1.86 percent.

As expected, FED cut its rates again ~ FED funds rate to 3% and Discount rate to 3.5%. Stock rallied as soon as FED announced they cut its rates but the rally was short lived.

Is it because wall streets has rallied for the past 2 days and price already factor in the rate cuts? Or maybe jobless rate (will be announced on Friday)will give us a hint that recession is on sight????

Shares of Singapore Petroleum (SPC) rose as much as 3.8 percent to S$6.33 with 377,000 shares traded a dy after the firm said it had doubled its net profit in the fourth-quarter.

Singapore Petroleum Corporation just delivered another good set of earnings. Its been a very fruitful dividend stock for me. Overall, I am getting a yield of 13% on this investment this year. This goes to show that:

• The business is important
• The company operation is important
• The cashflow is important
• Valuation / Getting the right price is important.

Goldman tells investors to sell S'pore banks

Call comes after key index drops 22 per cent from Oct peak. Investors should sell shares of Singapore's DBS Group Holdings Ltd and its two rivals on expectation the banks' earnings growth will moderate, Goldman Sachs Group Inc said.

It's 'time to take profit, not bottom fish' after the city-state's lenders have fallen about 20 per cent from late last year, Goldman's Singapore-based analyst Tan Bok Chuan said in a report dated Jan 27.
The analyst made his recommendation after the FTSE Strait Times Financials Index, whose 55 members include DBS, United Overseas Bank Ltd (UOB) and Oversea-Chinese Banking Corp (OCBC), Singapore's three banks, dropped 22 per cent from a peak in October.
Any share price gains triggered by interest rate cuts by the US Federal Reserve would present selling opportunities, he said.

'While the macro outlook for Singapore remains resilient despite an expected mild US recession, we are less sanguine on the Singapore banks' earnings outlook,' Mr Tan said.

Yesterday, DBS closed 88 cents or 4.6 per cent down to S$18.06. UOB fell 58 cents or 3.2 per cent to S$17.50, while OCBC fell 20 cents or 2.6 per cent to S$7.60.

The FTSE Strait Times Financials Index fell 3.3 per cent yesterday.
Goldman is keeping a 'neutral' call on the city's three banks.
Mr Tan said declines to S$14.50 for DBS and S$15.50 for UOB would represent buying opportunities.

Investors should buy OCBC when it falls to S$6.80, he added.
Of the three banks, OCBC, owner of Singapore's biggest life insurer, is the city-state's 'most defensive' banking stock, Mr Tan said.

'We like OCBC for its defensive qualities: adequate CDO (collateralised debt obligation) provisions in our view with minimal exposure to the US monoline bond insurers,' Mr Tan said in a report.

OCBC said in November last year that it took a S$221 million 'allowance', or charge, on its asset- backed securities, writing down the value of the investments linked to US sub-prime mortgages to S$48 million as of Sept 30.

The bank has a CDO portfolio of S$641 million.
CDOs are securities that pool loans, bonds or credit- default swaps and use the income to pay investors.

The securities are divided into different parts of varying risk and return.
OCBC is also benefiting from declining interbank loan rates in Singapore, which means the cost of funding its loans is shrinking, Mr Tan said.

Singapore's three- month interbank rate fell to a three-year low on Jan 25, 6.25 basis points to 1.5625 per cent yesterday, data compiled by Bloomberg showed.

A basis point is 0.01 percentage point.

The bank may report net income of S$2.11 billion for 2007, 13 per cent higher than Goldman's earlier forecast, Mr Tan said.
Profit may fall to S$1.98 billion this year, still 14 per cent more than his previous estimate, Mr Tan said.

DBS, South-east Asia's biggest bank, is the 'most at risk operationally', while UOB, Goldman's least favoured of the three Singapore lenders, 'continues to struggle to grow its regional franchise', the Goldman analyst said.

Source: Bloomberg

Wee Hur Holdings

Shares of construction firm Wee Hur Holdings opened at S$0.30 on Wednesday, 20 percent above its initial public offering price of S$0.25 per share.

Upon opening, its shares had further risen to S$0.31 -- 24 percent above the IPO price. The company, which raised S$20.9 million at its IPO, plans to use the proceeds to fund acquisitions and take up larger contract projects.

Congrats to all who have got its IPO. Finally saw an IPO turning green. I hope many other IPO will share it success.

Source: Reuters

China Sky

Shares of China Sky Chemical Fibre rose as much as 9.6 percent to S$1.48 with 1 million shares traded after the nylon fibre manufacturer said it has agreed to acquire Qingdao ZhongDa Chemical Fibre for RMB450 million.
The Singapore-listed Chinese firm will pay 60 percent of the amount in cash, and the remaining 40 percent through the issue of 21 million new ordinary shares for between S$1.70 and $2.00 per share.

BBR Holdings

Shares of BBR Holdings rose as much as 14.3 percent to S$0.08 with 2.4 million shares traded after the firm said it secured a S$95.3 million contract to build an office complex.
The two 12-storey tower blocks in western Singapore are expected to be completed by August 2009, the firm said in a statement on Monday.
Source: Reuters

The Bulls will not surrender. At least for the time being.

Hang Seng Index: 24053.61 (-1068.76)
Nikkei Index: 13087.91 (-541.25)
ST Index: 3041.06 (-118.42)

Well, everyone might think that I am being cynical based on the ironic results we had in the Asian session today. Hang on. Allow me to elaborate.

If you all had been observant enough, volume was relatively thin today, especially ST Index with only 1.3 bln trade volume done, a turnover of approximately $1.6 bln. What does this signify ? Bears are exhausted. Is it a deliberate move by the BBs to push down the markets so that they can buy cheap? I won't rule out this possibility but I might be wrong too.

Anyway, let's move on. Dow Jones is looking good now and it seems like a victory day for the bulls once more as investors are anticipating a 0.5% basis point cut from the Fed, not forgetting Europe had also recovered from a huge gap down following a disappointing Dow's performance yesterday.

Rule of Thumb:

Never trust futures. They are only indicative, lagging and not definite. Can only be taken as reference. Markets are dynamic creatures, like a chameleon. Any slight broadcast of news would move the futures and no one is able to predict what will happen next, unless you are GOD.

I firmly believe that markets will make another U-turn tomorrow, with the contest between the Bulls and Bears continues. But this time the Bulls will triumph. Well, at least for another two days, prior to the much awaited Federal meeting.

Oh ya, one more time i forgot to mention. Did I ever mention Gold was the current safest bet ? I think i did. It's currently trading at $927 an ounce, up from a comparative value of about $874 an ounce traded, mentioned on 23th Jan's post. If you are a Gold futures' expert, you will know what I mean.

Enough about Gold. If Dow really closes GREEN tonight, Yangzijiang will be a good buy. Cheers !!

I managed to read this chart from Investmentmoats. These are the counties where many banks will advice you to place a Unit Trust Investment with them. However with the market now, I will recommend you take a wait and see attitude till the market calms down.

Jade Technologies Holdings

The 51 per cent drop in the share price of leadframes manufacturer, commodities & resources trader and real estate developer, Jade Technologies Holdings, since mid-October 2007 from 40.5 cents prompted group president and non-executive director Anthony Soh Guan Cheow to acquire an initial 5.5 million shares (direct) last Monday at 20 cents each. Mr Soh also has deemed interest of 445.7 million shares or 45.97 per cent of the issued capital.
The purchase was made after the group, along with listed firm E3 Holdings, announced that they would acquire a 49 per cent stake in oil refinery and 100 per cent stake in a 3 km land parcel in Jilin Province in mainland China. The purchase by Mr Soh was the first on-market trade by a director or substantial shareholder in Jade Technologies since July 2007.
The stock closed sharply lower at 12 cents on Friday.

UOB Kay Hian Holdings

Chairman and managing director Wee Ee Chao recorded his first trade in investment holding firm UOB Kay Hian Holdings in the past five years, with 1.29 million shares purchased last Tuesday and Wednesday at $1.74 each. The trade increased his deemed holdings to 117.9 million shares or 16.3 per cent. The rare acquisitions were made on the back of the 29 per cent drop in the share price since November 2007, from $2.42.
The chairman's purchases were significant as they were made at sharply higher than his sale prices in 2003. He previously sold 5.8 million shares from August to December 2003 at an average of 89 cents each. Those sales in 2003 were made at a profit based on the 2.7 million shares that he acquired in 2002 at an average of 65 cents each. The fact that he turned from a seller in 2003 to a buyer five years later at a sharply higher price indicates strongly that the stock is undervalued at $1.74 each. The stock closed higher from the chairman's last purchase price to $1.84 on Friday.

ArianeCorp

CEO Kea Kah Kim has reduced his stake in ultra high-capacity data networks provider ArianeCorp by 39.4 million shares or 39 per cent, after the stock fell by 47 per cent from 7.5 cents on Dec 28, 2007. The disposal was made last Monday at four cents each, which lowered his deemed holdings to 62.5 million shares or 8.2 per cent. The sale was made at sharply lower than his previous on-market purchase price, based on the five million shares that he bought from November to December 2004 at an average of 13.9 cents each. The stock has fallen sharply since January last year, from 13 cents to 3.5 cents on Friday.

LottVision

Legg Mason Inc ceased to be a substantial shareholder of digital video designer, developer and distributor, LottVision, on Jan 18 following the sale of 15 million shares at an estimated price of 15.5 cents each. The trade reduced its deemed holdings by 38 per cent - to 24.3 million shares or 4.9 per cent. The group lowered its interest to below 5 per cent on the back of the steep decline in the share price since July 2007, from 69 cents. Not surprisingly, Legg Mason's sale was made at sharply below its open-market purchase prices from April to August last year.The counter closed lower compared to Legg Mason's exit price at 13 cents on Friday.

I have change the blog template. Hope you guys like the new blog design.

China Oilfield Technology

We visited China Oilfield Technology (COT) recently to have a look at its operations. Crude oil prices have receded, but are at prices where enhanced oil recovery (EOR) techniques remain feasible. Specifically, EOR will have a starring role as the Chinese economy struggles for energy independence and addresses the mismatch between strong demand and peaking domestic supply. As a proven and major EOR player in a key domestic oil region, the potential for COT's business remains intact.

Current Price: S$0.49
Fair Value: S$1.01

M1

M1 posts 4.8% fall in Q4 net profit to $37.9m. MOBILEONE yesterday reported a 4.8 per cent fall in net profit to $37.9 million for the fourth quarter of 2007 as it spent more on keeping its customers and on higher staff costs. The smallest of three telcos here said that full 2007 net profit was up 4.4 per cent to $171.8 million. The fourth-quarter net profit missed the $41.3 million median estimate of six analysts surveyed by Bloomberg. Q4 revenues rose 2.9 per cent to $206.9 million. M1 announced a final dividend of 8.3 cents, bringing the total payout (including a capital distribution) to 15.4 cents for the year, representing an 8 per cent yield based on the $1.92 closing price yesterday. Chief executive Neil Montefiore said that it had been a tough quarter, and 2008 would be even more challenging. Although its customer base rose 14.8 per cent to 1.54 million, market share fell to 27.4 per cent at the end of November from 28.3 per cent in August and 28.5 per cent in November 2006.

Current Price:S$1.92
Fair Value: S$2.33

Centraland Limited

The Company is a premium brand property developer in Zhengzhou City, the provincial capital of Henan Province, which is one of the most populated provinces in PRC. It is principally engaged in the development and sale of residential and commercial properties.

5m Offer shares at S$0.50 each by public offer
240m Placement shares at S$0.50 each.
Issue Manager: Boulton Capital Asia Pte Ltd
Underwriter and Placement Agent: UOB Kay Hian
Closing date: 30 January 2008, 12pm.

SGX listed peers:

Yanlord Land has a current market cap of $4.8b on SGX and is considered one of the top property developer in China with strong foothold in key cities. FY06: Sales $952m, net income $170m, EPS 11.36 cents.

China Yuanbang has a current market cap of $201 million. FYJun 07: Sales S$67m, net income $15.6m, EPS 3.1 cents.

Sunshine Holdings has a market cap of $158m. FY06: Sales $119m, net income $30m, EPS 3.8c
Landbank 840,000 sqm.

(Read More...)
(Prospectus)

Source: Singapore IPO