US
-Durable goods order -6.2% mom
tren outlook
-New home sales fell by 6.7% mom, 40% yoy, median price fell 7% in OCT
risks
- Deutsche bank increase confidence in US automakers getting bailout
Energy sector
- 7.2% surge in oil futures will keep O&G and Agri counters in play
- OPEC meeting on 29th november will provide support
Tech outlook
-Strong rebound in tech sector which will boost nikkei performance
China
- Cuts 1yr lending rate by 108bp to 5.58% on short term deflation risk concerns
- Stimulus focus on housing, rural development, railroads, rebuild earthquake hit
- Direct beneficiary will be Midas, produing aluminium for railroads
Currency
- recent strength is likely linked to retracement of USD strength against asian fx
- US$/SEK fell 0.5 to 8, US$/S$ fell 0.02 to 1.51
SG
Container - NOL
- Container througput for OCT -7.6% vs July, Asia-EU volume -1.1% jan-aug08
Sembcorp - BUY
- ML upgrade sembcorp to buy but cuts target from $4 to $3
yongnam - hold
- wins 7th IR contract of $23.8m, total $238m
- margins strong at 8.5% for 3Q, 11% for last 9 months
- net cash flow negative due to high investments outflow
- credit risks going forward and weak cash position
- cash forms 64% of short term debts but only 10% of total debt, P/cash 7.7x
lottovision - dilution
- placement shares diluting shareholders value and increasing PBv ratio
Conference 27 nov 08
- STI recovery factors likely due to
- Deflation risk
- Growth 2009 challenging
- 4Q growth likely weak, <7%
- Themes: S chips & china property counters (short term)
- Lifted requirement of 70% downpayment
i. Poor demand outlook
ii. Increase credit risks
- Reits
- A reits target $1.38 vs $1.68 due to slow recovery
i. 50% contribution from light industry which has strong correlation with SG GDP
ii. key client defaulted on loan program
- Macarthurcook downgraded due to lack of scale and diversity
- ML
- Sembcorp buy target reduced to $3 from $4
- Sembmar target reduced to $2 from $2.1
- Kepcorp target reduced to $5.35 from $6.15
- Cosco target reduced to 55c from $1.20
- Technical
- Pine Agri brewing
STI
-STI is fairly stagnant up 0.4% at midday when hangseng is up 3.6%
-Volume is thin @ 685m partly due to US markets closed tonight for Thanksgiving
-Singtel down 3.8% due to attacks in Mumbai dragging down STI's performance
Singtel
-militant attacks in Mumbai, Inia
Event impact
-singtel holds 30.4% of Bharti, India's leading mobile operator
-Bharti makes up to 50% of associates contribution and forms 25% of Singtel net prof
fundamentals
-unattractive BS, PL & CF
-2Q yoy earnings fell 12% & net margin fell 17.6%
-consistent operating cash flow but negative net cash flow in 1H
-cash forms 40% ST debt, 15% total debt
Targets for the day
-
---Hyflux - UBS $1.65 vs $2.95 (cheap but limite growth)
---Parkway - JP $1.3 vs $1.8 (risks priced in)
---Mararthurcook - moody's rating cut (lack of scale & diversity)
---A reits - GM $1.38 vs $1.62 (slow recovery)
---Cosco - ML 55c vs $1.2
---Kepcorp - ML $5.25 vs $6.15
---Sembcorp - ML $3 vs $4
---Sembmar - ML $2.1 vs $3
---Wilmar - BNP $3.4 vs $3.8
---Venture - DBSV $6.4 vs $6.8
---Golden Agri - BNP 40c vs $1.1
Automobile risks
-US carmaker failure will be significant
---3m job lost in 1 yr
---personal income fall $150b in 3 yrs
---government tax fall by $156b in 3 yrs
---auto production slide 30-35% lead to GDP dip of >4%
---unemployment immediately spike to 8-8.25% from current 6.5%
Nikkei
-closed up 2% on hopes China rate cuts will boost business from China
Komastu Ltd-controls 17% of China's excavator market
China B share Index
-Shanghai & Shenzhen retraced sharply from day high of 7.56% and 6%
-close up 1.9% and 1% as market sells into strength
Huatai securities
-"some big institutional & private equity investors took profit"
PBOC
-Policy of keeping yuan stable reduce impact of a drastic rate cut
HongKong
-Fund managers are shifting funds into equity after storing cash since may08
-HongKong prefered, seen as more mature & liquid market
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