AIO Finance Analysis

Best endowment plan

2008-04-11T12:23:00.002+08:00

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.

You will incur high distribution costs which include commission fees to agent during first few years of policy
Since a major portion of your premium goes into saving and a small portion goes into insurance, your sum assured is always pathetically low
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
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

Click here for more.

Source: STI Stock Info

China Eratat Sports IPO.

2008-04-11T12:18:00.003+08:00

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.

Competitive Strengths

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.

Key Growth Plans:

To increase their production lines in their new factory premises to achieve 11.5m pairs of footwear and 6.2m apparel units per annum.
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.

Financial figures

Intended IPO price: $0.30
No. of shares available for public offer: 8m
No. of shares available for placement offer: 155m
Total post invitation share capital: Approx. 414.9m

Conclusion:

Based on its numbers, China Eratat is a smaller company as compared to its SGX-listed peers of China Hongxing and China Sports, whose net profits were approx. S$60m and S$30m respectively. As such, they trade at a higher 25x and 18x historical PEs respectively.

China Eratat Sports should trade at a Fair Value of $0.40 or a discounted 14x PE only. Probability of getting allotted for the IPO - FAIR

Click here for prospectus here.
Click here for more.

Source: Extraordinary Profits

Gold Price. Going Up or Down?

2008-04-02T09:50:00.001+08:00

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

Singapore Market

2008-03-27T14:40:00.002+08:00

It a long time since I posted anything. Sorry for the delay. Do leave comments.

Singapore: Singapore market declined following a two day rally. Due to a lack of fresh buying leads, investors chose to lock in profits and wait at the sideline. This is despite the unexpected 10% increase in February factory output. Cues are still heavily dependent on US economic data. FTSE-STI down 4.97 or 0.2% to close at 2,995.22 points. Trading volume was 1.47 billion shares valued at S$1.57 billion and losers outnumbered gainers 370 to 253. Commodities supplier Olam International Ltd suffered a 14.1% lost to S$1.95 after its rating was cut to “sell” from “neutral” by Merrill Lynch.

Wall Street: US market retreated after pessimistic numbers on February’s durable goods orders. The Commerce Department released a 1.7% dip in last month’s order for durable goods, which is indicative on business spending and consumer demand. This is its second consecutive shrink. Adding to worries, the Commerce Department also announced that sales of new homes slumped 1.8% in February, which dragged down sales for the fourth straight month to a 13-year low. Dow Jones slipped 109.74 or
0.9% to 12,422.86 points and Nasdaq dropped 16.69 or 0.7% to close at 2,324.36 points. However, crude oil soared US$4.58 to close at US$105.80 per barrel on NYMEX.

Outlook: The mini-rally that started on Monday and moved the benchmark STI to the 3,000 level is likely to end earlier than our expectation. We have expected the market to rally towards the end of the week on expectation of better Singapore manufacturing number. True, the index for industrial productions has registered another month of double-digit growth, by 10% in February 2008 after growing 12.8% in January (see Chart). However, investors chose to remain at the sidelines pending further development in the US. Thus, the worst-than-expected US durable orders are likely to lead to some profit taking today. The US economy is probably in a recession now. However, the Singapore economy is expected to remain healthy, shown by the latest manufacturing numbers. With the backing of the Singapore economy, buy on weakness will still be the preferred investment strategy.

Source: WestComb

Martket News - Swiber, Home Sales

2008-03-19T14:15:00.004+08:00

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

Market News - STI

2008-03-18T14:31:00.001+08:00

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...)

Reason Why STI Rose today

2008-03-13T00:25:00.002+08:00

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

IPO - Li Heng Chemical Fibre

2008-03-05T15:14:00.003+08:00

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

IPO - Roxy-Pacific Holdings

2008-03-05T15:06:00.003+08:00

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

Market News - Fed Cut

2008-03-04T14:08:00.002+08:00

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

Corporate News - PetroChina

2008-03-04T14:07:00.001+08:00

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

To Buy or Not to buy a Car?

2008-03-04T09:17:00.002+08:00

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 !

Source: SG Music Whiz
(Click here for full article)

Market News - Fears of more write down for Singapore Banks

2008-03-03T14:17:00.002+08:00

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

Corporate News - Wilmar

2008-02-28T14:18:00.001+08:00

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

Corporate News - Genting International

2008-02-27T09:22:00.005+08:00

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

Market News - SembCorp Marine, Wilmar, Singtel, Noble, Yangzijiang, Star Cruises, Straits Asia Resources

2008-02-26T11:03:00.004+08:00

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

Market News - US going to recession again?

2008-02-25T14:32:00.004+08:00

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.

Corporate News -DBS, UOB, SGX, City, SIA

2008-02-21T17:35:00.002+08:00

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

Unit Trust

2008-02-21T09:20:00.005+08:00

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

IPO - Samko Timber

2008-02-19T14:48:00.014+08:00

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

Market News - STI

2008-02-18T21:18:00.007+08:00

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

Corporate News - Swiber, Jade, ST Engineering, Wee Hur, China Essence Group,

2008-02-14T10:31:00.012+08:00

Swiber Holdings and Principia Recherche & Development SA announced the formation of a joint venture to undertake the supply and sale of studies, design of offshore and marine facilities, as well as related services in the offshore and marine industry in South East Asia. The proposed joint venture company will be 51% owned by Principia, and 49% owned by Swiber’s wholly-owned subsidiary, Kreuz International Pte Ltd. Principia, a subsidiary of AREVA within AREVA TA Business Unit, is specialised in scientific engineering and studies and in the design, manufacture and sale of related software applications in the worldwide marine and offshore business. “Our strategic view is to offer to our customers a larger range of services from conceptual and FEED stage up to detailed design supported by our more than 25 years’ experience in the marine industry combined with the well established know-how of Swiber.” said Benoit de Moulliac, the CEO of Principia.

Jade Technologies Holdings is selling its wholly owned, loss-making subsidiary Jade Precision Engineering (JPE). The company has entered into a sale and purchase agreement with United Pacific Industries (UPI) for the disposal of JPE. The proposed disposal is expected to be completed on Feb 24, with final settlement on March 8. Upon completion, JPE will become a wholly owned subsidiary of UPI. JPE, with annual sales of $35 million in 2007, manufactures stamped, etched and plated leadframes for the semiconductor industry. JPE has been loss-making since 2001. As at Sept 29, 2007, JPE had accumulated losses of $21 million. The estimated total consideration is $6 million, which will be paid to Jade in the form of new UPI shares up to a maximum limit of 43 million new UPI shares (7.8% of existing issued shares or 7.2% of enlarged share capital), with the balance in cash.

ST Engineering said its US shipyard, VT Halter Marine, has secured a new contract to design and build two platform supply vessels (PSVs), which are used to support exploration and offshore production of energy. The contract is valued at between US$45 million and US$55 million and construction is scheduled to begin in the second quarter of 2008, with delivery in 2010. The contract was awarded by L&M Botruc Rental Inc, which operates one of the largest fleets of offshore marine transportation vessels in the Gulf, said ST Engg. L&M is also one of the largest privately held supply boat companies and the sixth-largest boat company on the Gulf Coast, it said. The vessels will be used to carry supplies, deck cargo and drilling fluids in supporting offshore operations.

Wee Hur Holdings, a building contractor in Singapore with a range of construction projects, has won two new contracts worth a total $146.5 million. The group announced yesterday that its wholly owned subsidiary, Wee Hur Construction Pte Ltd, has been awarded two projects for a residential development and a commercial development worth $99.9 million and $46.6 million respectively. The first contract, awarded by a subsidiary of the Ho Bee Group, is for a residential development located in the prime Newton Road area. The second contract, awarded by Ascendas (Tuas) Pte Ltd, is the Phase 1 construction of a commercial building at Changi Business Park. The two projects represent an approximately 61% increase over Wee Hur's order book as disclosed in its IPO prospectus.

China Essence Group yesterday reported an 85% yoy rise in net profit to 100.8 million yuan (S$19.9 million) for its third quarter ended Dec 31, 2007. Revenue for the three months almost doubled from 166 million yuan to 330.3 million yuan. The third-quarter results brought nine-month net profit to 174.7 million yuan, up 69%. Revenue climbed 63% to 588.8 million yuan. The group saw a rise in sales volume for its potato starch products, as well as a hike in average selling prices, which was helped by rising consumer prices and China's implementation of anti-dumping regulations on potato starch producers from the European Union since February 2007. Earnings per share for the nine months climbed to 0.45 yuan from 0.27 yuan. Overall gross profit margins dipped from 47.4% to 45.6% because of an increase in the cost of potatoes.

Source: CIMB-GK Securities Pte Ltd

IPO News - YongMao Holdings Limited

2008-02-14T09:13:00.009+08:00

Yongmao Holdings Limited, a designer and manufacturer of a wide range of towercranes and towercrane components and accessories in the People's Republic of China ("PRC"), launched its initial public offering ("IPO") today, in conjunction with its proposed listing on the Mainboard of the Singapore Exchange Securities Trading Limited ("SGX-ST").

Yongmao offers a wide range of towercranes and towercrane components and accessories under its own brands -"YONGMAO" and "SUNCRANE". To date, the Company has developed approximately 50 models and sub-models of towercranes. Used mainly in construction sites, infrastructure projects and in the shipbuilding industry, Yongmao's towercranes are sold mainly to construction equipment distributors and equipment rental companies in overseas markets and to construction companies and equipment rental companies in the PRC.

Yongmao's towercranes are sold and exported by Yongmao and/or its customers to many countries in America such as the United States and Panama, Africa such as Zambia and South Africa, Middle East such as UAE, Saudi Arabia and Bahrain, Europe such as Belgium, UK and Ukraine and Asia such as Hong Kong, Macau, Singapore, Indonesia, Thailand, South Korea and India.

Yongmao's invitation comprises 111,550,000 new shares ("New Shares") at $0.35 per share, of which 3,800,000 are offer shares and 107,750,000 are placement shares. The invitation representing approximately 25.1% of the Company's enlarged share capital of 443,750,000 shares, is being launched at a historical price-to-earnings ratio of approximately 9.9 times, calculated based on its historical net earnings for FY2007 and a pre-invitation share capital of 332,200,000 shares.

The Company is expected to raise net proceeds of approximately S$35.4 million from the issue of the New Shares, of which approximately S$31.6 million will be used for the construction of a new manufacturing facility and for the acquisition of plant and machinery. The remaining proceeds will be used for working capital purposes.

CIMB-GK Securities Pte. Ltd. is the issue manager, underwriter and placement agent for this IPO. The IPO will open from 1 February 2008 to 19 February 2008, 12.00 noon. Trading on the SGX-ST is expected to commence on 21 February 2008.

Attractive Industry Prospects Globally

Yongmao believes that in the short term, the industry will be facing a shortage in capacity to meet the demand and technical requirements for towercranes of the higher-class tonnage that Yongmao manufactures. Accordingly, it is expected that the supply of towercranes will remain tight in the next few years.

Focused Growth Strategy

Going forward, Yongmao intends to expand its production capacity to meet the increasing demand. A new manufacturing facility is currently under construction and is expected to be completed by about the end of 2008. This new facility, if fully equipped, is expected to have approximately double the capacity of the existing manufacturing facility in terms of production capacity for towercranes.

Source: Remisiers Research
Prospectors: Click Here

Conclusion by Extraordinary Profits:

Unlike the usual small cap china companies, Yongmao has the advantages of having a strong parent company in Tat Hong, and a business that has high barriers of entry.

Because of that, I believe that Yongmao should trade at the higher end of valuations for typical small cap stocks.

Yongmao should trade at a Fair Value of $0.68 or 10x PE only.
Probability of getting allotted for the IPO - LOW

Corporate News - KSH, NOL

2008-02-13T09:18:00.000+08:00

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

Market News - Budget 2008

2008-02-12T17:05:00.000+08:00

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

Performance of STI VS other Stocks

2008-02-10T14:08:00.000+08:00

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

Happy Chinese New Year

2008-02-09T12:56:00.000+08:00

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"!

Corporate News - Singtel, Hour Glass, GRP

2008-02-05T15:33:00.000+08:00

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

Corporate Report - Singapore Banks

2008-02-05T15:30:00.000+08:00

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

Market News - US Key Economic Data Due

2008-02-04T10:10:00.000+08:00

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

Fixed Deposit Rates from Singapore Banks

2008-02-03T10:56:00.011+08:00

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.

Market News - Stock Tips From MyPaper

2008-02-01T11:43:00.000+08:00

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

Corporate News - Allco REIT, GEMSTV

2008-02-01T09:50:00.000+08:00

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

Market News - Asian Stock likely to fall

2008-01-31T11:05:00.000+08:00

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.

Source: Reuters

Market News - Fed Rate Cut

2008-01-31T09:04:00.000+08:00

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????

(Read More...)
Source: Steady Bull

Corporate News - SPC

2008-01-31T09:01:00.000+08:00

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.

(Read More...)
Source: Investmentmoats

Market News

2008-01-30T16:10:00.000+08:00

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

Corporate News

2008-01-30T10:41:00.000+08:00

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

Market News

2008-01-30T09:33:00.000+08:00

Volatile Market

In view of the high volatile market, do you think one should continue to invest in warrant as doing warrant will increase one's exposure to higher volatility in the already highly volatile market. I had a discussion with on friend on that but i disagree with him on the current situation that we should be buying the underlying instead of adding more volatility by leveraging on warrant.

My view is that we cannot lower the volatility through warrant but we can control the risk exposure by lowering the trade value of warrant and yet achieve a comparable risk/gain/loss. Am i right to say that? An example would be a $20 share and a 10c warrant with June/July expiry, out of money warrant. Conversion is 10. A very vague guide but what i want to say is by varying the trade size, we can achieve good exposure with comparable risk.
(Read More...)
Source: Malaysia Finance

Corporate News - Sky China, BBR Holdings

2008-01-29T17:20:00.001+08:00

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

Market News

2008-01-29T14:10:00.000+08:00

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 !!

Source: (TFA)

Unit Trust News

2008-01-29T10:51:00.000+08:00

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.

Source: Investmentmoats

Corporate News

2008-01-29T10:47:00.000+08:00

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.

(Read More...)
Source: Economics Zone

New Blog Template

2008-01-29T10:17:00.000+08:00

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

Corporate News

2008-01-28T09:24:00.000+08:00

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

Corporate News

2008-01-27T18:40:00.000+08:00

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

Market News

2008-01-24T18:47:00.000+08:00

China Oilfield bid to enter Russia fails

Russia

has rejected a bid by China Oilfield Services Ltd to buy a unit of TNK-BP, smothering what would have been the Chinese firm's first acquisition abroad at the final hurdle and sending its shares 12 percent lower.

State-owned China Oilfield, the drilling and equipment arm of top Chinese offshore oil producer CNOOC Group, had agreed to buy oil services firm STU from TNK-BP for more than $10 million, making its maiden foray into the world's No. 2 oil exporting country.

Now, a company official told Reuters the Russian government had thrown out the deal -- which both firms had thought would go ahead with little obstacle -- without a word of explanation.

China Oilfield had expected the Russian deal to be finalised last April. It had already won Beijing's blessing and obtained approval from both companies.

China Oilfield now views Russia, the Middle East and the Gulf of Mexico as strategic markets it needs to explore. It already maintains a presence in Southeast Asia.

But if it eventually wins entry into Russia, it will still lag Western oilfield services giants such as Schlumberger Ltd and Halliburton Co , which have bought into local independents and now control about a third of the Russian service sector. Russian oil majors and independents each hold a third.

China Oilfield Chief Executive Yuan Guangyu told Reuters last August that the company was in advanced talks to buy another foreign firm, in a deal that would dwarf the STU transaction.

I don't think they have the scale to buy any listed company. If they do look it's probably going to be private smaller companies

The firm has operations in more than 10 countries and derived 18 percent of its revenue from abroad in the first half of 2007. It aims to raise that share to 30 percent by 2008.

Market News

2008-01-24T17:47:00.001+08:00

Singapore-listed China stocks rally after signing of QDII investment agreement

Chinese stocks that are traded in Singapore rallied Thursday after the Monetary Authority of Singapore and the China Banking Regulatory Commission signed an agreement to allow Chinese banks to offer their clients investment opportunities in Singapore under China's qualified domestic institutional investor (QDII) scheme

"I think they (Chinese investors) should find it quite attractive to invest in Singapore. Chinese companies listed here are the cream of the crop since they adhere to stricter listing rules," said Kim Eng Securities analyst Gregory Yap

While this should be positive, Yap said he is not expecting an immediate dramatic impact since China plans to sign similar accords with securities regulators in US, Germany and Japan. So far, China has signed QDII pacts with Hong Kong and the UK

UBS also doubts that Chinese banks will rush to buy shares in Singapore

"This is hardly an environment for a rush of Chinese banks' funds into the Singapore market. Having said that, this will likely be a short term catalyst for a big bounce in oversold S-chips (Chinese stocks listed in Singapore)," said UBS research head Tan Min Lan in a note to clients Among big cap Chinese stocks, Tan said she believes that Cosco Corp Singapore, Yangzijiang Shipbuilding, sports shoemaker China Hongxing and Synear Food are oversold considering these shares have fallen between 40 and 50 percent in the last three months. At 12.15 pm (0415 GMT), the FTSE ST China index was up 8 percent at 568.67. The index was introduced on January 10 by the Singapore Exchange as part of a revamp of local stock market indices. The index represents 50 out of the more than 100 Chinese stocks listed in Singapore

Shipbuilder and shipping company Cosco was up 12.4 percent at 4.72 Singapore dollars, Yangzijiang was up 10.4 percent at 1.38 dollars, China Hongxing was 12.7 percent higher at 71 cents and Synear Food was up 15.2 percent at 1.21 dollars

Mobile phone maker Longcheer Holdings rose 14 percent to 48.5 cents

Corporate News

2008-01-24T17:40:00.000+08:00

Chartered Semiconductor

Valuation

Our target price of S$0.90 continues to be based on a 2008E P/BV of 1.0-1.3x, at a slight premium to our valuation for UMC due to CHRT’s improved technological edge. Benchmarking CHRT to UMC is justified in our view because the gap between the two companies in operating margins, ROE, weighted average tech node, and breakeven utilization is narrowing. We use P/BV as our primary valuation method due to the cyclicality of the industry, and earnings could be absent during downcycles.

Risks

We rate CHRT Medium Risk based on our quantitative risk-rating system, which tracks 260-day historical share-price volatility. Upside risks that could cause the shares to trade above our target price include stronger-thanexpected PC and handset demand, faster-than-expected inventory build by OEM/EMS customers, a better-than-expected wafer pricing environment, and faster-than-expected tech migration to 0.09um at 12" fab.

Mapletree Logistics Trust

4Q07 results above expectations. Revenue was up 49.9% yoy to S$40.3m while distributable profit was up 67.8% yoy to S$19.7m. Full-year revenue was S$141.7m with a distributable profit of S$71.8m and DPU of 6.57cts, which is 2% above our ‘s and consensus’ forecast. The strong performance in the last quarter was attributed to increased revenue from nine acquisitions completed in the quarter. 2007

Operating expenses were significantly below expectations as a result of economies of scale. As at 31 Dec 07, MLT’s portfolio reached S$2.379bn, with revaluation gains of S$125.58m. Target price lowered to S$1.36 from S$1.65.

CapitaCommercial Trust, Singapore's third-biggest property trust by market value, said on Thursday its fourth-quarter distributable income rose 14.5 percent due to higher rentals from its portfolio of office properties.

The trust said it earned net distributable income of S$32.3 million ($22.5 million) for the three months ended December, higher than the S$28.2 million it had earned in the year-ago period. CapitaCommercial Trust, 30-percent owned by Southeast Asia's biggest developer CapitaLand, will pay unit-holders 2.33 Singapore cents per unit for the quarter.

Cosco said it has won $422 million worth of shipbuilding contracts. The firm said in a statement that the contracts are expected to have a postive impact on the company's earnings for the fiscal year ending December 31 2008.

Singapore-listed heart stent maker Biosensors said Thursday that it has appointed Robert Michael Kleine as president and chief executive with immediate effect. He replaces Lu Yoh Chie who will continue as chairman, the company said in a statement.

Corporate News

2008-01-23T14:36:00.000+08:00

Wee Hur Holdings Ltd.

Wee Hur Holdings Ltd specialise in construction projects, ranging from new construction, additions and alterations of existing buildings. Bascially we can use one phrase to describe this company - A "Brave" Construction Firm.

2,091,000 Public Offer shares at $0.25
81,558,000 Placement shares at $0.25
Joint Managers: SBI E2-Capital and Phillip Capital

Closing date: 28 Jan 2008 12pm (they should have chosen 8.08 am as the closing time)

Assuming EPS for 2007 is 1H07 x 2 = 3.6 cents, based on the IPO price of 25 cents, it is trading at a historical PE of 6.9x, which in my view, is reasonably priced. Assuming a EPS growth of 20% for FY 2008, the EPS will be 4.32 cents. Assuming a PE value of 8x, the 'fair value' will be around 34 cents.

(Read More...)

Source: Singapore IPOs

Market Report

2008-01-23T12:28:00.000+08:00

CapitaMall Trust – Reported a 19% increase in fourth-quarter distributable income on better returns from its shopping malls. CapitaMall will pay $62.3m distributable income, for the October-to-December period, or 2.34 Singapore cents per unit. This compares with distributable income of $52.3m it paid in the year-ago period. CapitaMall competes with other Singapore-listed real estate investment trusts which own offices and retail malls, including Suntec Reit, Macquarie MEAG Prime, and Frasers Centrepoint.

Bright Orient Holdings – Is to give up its clothing manufacturing operation after buying a bulk carrier and port operation business in a reverse takeover deal worth some $160.5m. Yesterday, Bright Orient said that it entered into a conditional agreement to acquire the entire issued and paid-up capital of Golden Oriental Pte Ltd. It will pay the vendors by issuing some two billion new Bright Orient shares. Bright Orient said that the purchase consideration was determined at arm's length and on a willing-buyer-willing-seller basis. 80% of the escrowed shareholders' stake will be issued to vendors Guo Ze Ming, Chang Poh Nee, Sarah Sim Kim Lian and Wan Teck Guan when the acquisition is completed. The remaining 20% will be released if the enlarged group achieves a net profit of at least $18m for the year ending March 2009. Upon the completion of the deal, Bright Orient will issue 60.7m facilitator shares to Pacific Ten Holdings and 39.7m facilitator shares to Joy Wing Enterprises for helping in the acquisition, it said.

Marco Polo Marine – Signed a binding letter of intent to enter into a strategic partnership with Glencore International's Singapore-incorporated unit ST Shipping and Transport to jointly own and operate a fleet of transshipment tugboats and barges. The soon-to-be-incorporated 50:50 joint venture will provide transshipment services primarily for cargo managed and carried by Glencore International and its related corporations and affiliates. Glencore is one of the world's largest suppliers of a wide range of commodities and raw materials to industrial consumers. Under the terms of the agreement, Marco Polo will procure the building and supply of an initial fleet of 16 vessels - eight tugboats and eight barges - for the joint venture at an intended aggregate contract value of about $34m. Marco Polo's participation in the joint venture is expected to have a positive financial impact on the net tangible assets and EPS of the group for the financial year ending Sept 30, 2008.

Chip Eng Seng Corporation – Has been awarded a contract worth $188m by the Housing & Development Board for the construction of 1,394 dwelling units in Queenstown. The contract, won through wholly-owned subsidiary Chip Eng Seng Contractors (1988) Pte Ltd, also includes the construction of a multi-storey carpark, link bridges, a roof garden, an education centre and other facilities. Building works are expected to begin next month and to be completed by 2011. This is Chip Eng Seng's first construction contract won this year. As at June 2007, Chip Eng Seng had a construction order book of about $590m that will take the group through to 2011. The company is undertaking two other HDB housing projects. One is in Sembawang and the other is the Pinnacle @ Duxton, which features seven 50-storey residential blocks with skybridges, and communal and commercial facilities.

Raffles Education Corporation – Intends to seek a Hong Kong mainboard listing for part of the group's China operations. It did not indicate the amount it plans to raise but Reuters, quoting sources, said it could be up to US$700m, and that the listing may take place in the middle of the year. The company said that a listing would allow its China operations to focus on growth there. It also believes that such a move would unlock the value of its investments in the China operations. Raffles Education, which has engaged UBS AG for the planned flotation, said the proposed listing is still at a preliminary stage and is subject to approval by shareholders and regulators. Raffles Education, which runs 29 colleges in the Asia-Pacific region with total enrolment of some 44,000 students, is one of the largest publicly listed education companies in Asia. Earlier this month, it proposed a one-to-two stock split.

Wee Hur Holdings – The building contractor launched its IPO of about 83.65m shares at 25 cents each. The shares comprise about 78.91m new shares and 4.74 vendor shares. The company, which is seeking a mainboard listing, plans to use the estimated $17.8m net proceeds of the IPO to fund projects. For the last three financial years, Wee Hur's revenue grew from $48.1m in FY2004 to $80.6m in FY2006, with net profit rising from $1.7m to $2.8m. Wee Hur's executive chairman and managing director Goh Yeow Lian said he believes the IPO subscription “will be good” given the current construction boom and the company’s proven track record. He added that even during the slump in the construction industry, Wee Hur was always in the list of preferred contractors and remained profitable. Mr Goh sees construction as the main growth area for the company, and has no immediate plans for expansion. The IPO, which is jointly lead-managed by SBI E2-Capital Asia Securities and Philip Securities, closes on Jan 28. The shares are expected to begin trading on Jan 30.

Man Wah Holdings – Managing director Wong Man Li has bought 921,000 shares in the company, raising his direct and deemed stake in Man Wah from 62.07% to 62.34%.

Sky China Petroleum Services – Said that it is considering a proposal to take up exclusive development and operating rights to an oilfield located in the petroleum-rich Songliao Basin, China. The oilfield is expected to be developed in three phases, and Sky China estimates that the initial investment in Phase 1 will cost about US$30m.

Sinobest Technology Holdings – Has warned of an unaudited consolidated loss for the year ended Dec 31, 2007, due mainly to a fall in sales and gross profit amid continuing fierce competition.

Mapletree Logistics Trust – Has signed a put and call option agreement to acquire a warehouse in Singapore for $40m. The firm also terminated the purchase of a property at 21 Tai Seng Drive.

Market News

2008-01-23T10:22:00.000+08:00

Bear Market or just Correction?

Yesterday, the US Federal Reserve slashed its key federal funds short-term interest rate by three quarters of a percentage point to 3.50 percent Tuesday amid sharp falls on global stock markets. Therefore, the stock market is expected to recover some points and maybe drop back to its deepest valley just like before. Personally I feel that the fed rate is only a temporary fix and the ultimate problem is not fixed.

In South East Asia, the Indonesian rupiah rose sharply, past the 9,400-per-dollar level on today, after a Federal Reserve interest rate cut boosted appetite for risky assets. The rupiah rose as high as 9,390, up 1.1 percent from late Asian trade on Tuesday. It was said that the rupiah follows regional currencies as well as the other emerging currencies. The Fed rate cut sent positive sentiment.

Analysts had anticipate that Thai stocks will recover on after plunging to their lowest in more than seven months as panicky investors fled the market fearing a U.S. recession could wreck the global economy. Foreign investors sold a net 4.86 billion baht ($146.6 million) of Thai shares, raising their net selling to 34.97 billion baht since the start of this year. Fund managers say foreigners are selling in Thailand to cover losses elsewhere.

By chance, I was reading a blog by Tan Kin Lian. He mentioned that we are in a severe bear market. I too agree with him. If I’m one of the funds manager, I believed I will do the same. Being a good fund manager, I would want to earn or minimize losses in the market. What would I do? I sell in large volumes, causing people to panic and sell. Thereafter, I buy in a cheaper price. Fact? It is up to you to decide.

Tan Kin Lian Comments
“We are now in a severe bear market. The stockmarket around the world has dropped more than 20% from its recent peak. The drop can be 5% a day. It can drop a few days in a row.

This is the work of hedge funds. When the market is weak, they sell in large volumes, causing weak holders to panic and sell their holdings. There are no buyers, so the drop is severe. Later, the hedge funds will bear back their short positions at the depressed prices and make a profit. It has happened on many occasions in past years, during bear markets.

Long term investors should not worry. This short term massive selling last a few days and will stabilise or recover. In fact, this is a good opportunity to buy stocks at extremely depressed prices.”

Market News

2008-01-21T14:00:00.000+08:00

Value Buys

Lately, I've been asked by many people whether it is a good time to buy stocks now, and if so, which stocks would be worth buying.

But before I go into that, I feel that I should state this disclaimer:

The sub-prime crisis currently faced by the American economy is very, very real, and so is the threat that it could potentially send the U.S. into a recession, and the rest of the global economy along with it.

If that were to happen, then we would experience a situation whereby stock prices would be falling lower over the next few years.

If you believe that the above scenario is more likely than not, then obviously it would be better to completely stay away from stocks for the next few years until the recession has done its damage.

In which case, you should probably stop reading from here and ignore the rest of this post. (Read More...)

Source: Extraordinary Profits

Unit Trust News

2008-01-21T10:16:00.000+08:00

Unit Trust Recommendation

Above is a chart by Fundsupermart (click to enlarge)

For those who are still interested to buy Unit Trust at the moment, you can refer to the chart for Unit Trust by Fundsupermart. From the table, we can see that Lion Capital Malaysia and Legg Mason SEA Special Sits are doing pretty well at 36% and 40%.

In addition those who wants to save on the manage fees; you can buy Unit Trust at Fundsupermart or POEMs. They are charging only 2%-3% at Fundsupermart and 1.5% at POEMs when banks are charging around 5%. In all you stand to save at least 2% of your investment.

You can refer to here for 2007 best performing funds
http://aiofinance.blogspot.com/2008/01/top-performing-unit-trust.html

Market News

2008-01-18T15:55:00.000+08:00

Biosensors

Singapore's Biosensors International said on Friday it has received regulatory approval to sell its heart stents in Europe, and expects a return to profitability in the second half of its 2009 financial year.
The loss-making medical equipment maker has been waiting for its CE Mark since April 2005. The mark will enable Biosensors to sell its BioMatrix drug-eluting heart stent in Europe. A heart stent is an expandable mesh-like medical device that is inserted into a clogged artery and used as a scaffold to keep it open.

"With this approval we received, BioMatrix will be available in Europe and parts of Asia," said chief executive Lu Yoh-Chie in a conference call with reporters.

The firm, which in November posted a net loss of $3 million for its half year fiscal 2008, expects higher revenue from the heart stents to return it to profitability in fiscal year 2009.

"We believe in the first half we would continue to make losses, but in the fourth quarter or second half we will be in a position to break-even or even turn a profit," Lu said.

Kevin Sayer, the firm's chief financial officer, said total revenue for 2009 is expected to come in at around $100 million to $115 million, with revenue from heart stents contributing almost half.

The firm, which has been expanding in Asia, will start marketing its BioMatrix heart stent in China in 2010.

Chua Kee Lock, the company's president, told Reuters in an interview in September that Biosensors was looking to penetrate India, Taiwan and South Korea within the next 12 months. The firm bought over a Chinese medical company earlier this month.

Biosensors, with a market cap of $765 million, competes with healthcare giants such as Johnson & Johnson and Abbott Laboratories Inc .

Lu said he was not ruling out a takeover.

"Everything is possible, we do not rule out any possibilities going forward," Lu said.

Shares in Biosensors were suspended from trade on Friday. The stock has outperformed a weaker Singapore benchmark index to gain 15 percent so far this year, after it underperformed and ended 2007 little changed.

Source: Reuters

Others

2008-01-17T16:12:00.000+08:00

Apple Macbook Air

Just to side track a bit, it such a beauty not to be shared. Saw this Mac laptop. It's amazing that how thin it was design. Great Job to Apple.

The MacBook Air features a 1.8-inch hard disk drive with 80GB of storage capacity standard. A 64GB solid-state disk (SSD) drive is an option. The hard drive is a Parallel ATA (PATA) model that operates at 4200 RPM.

The laptop is powered by an Intel Core 2 Duo chip running at 1.6GHz, with 1.8GHz available as an option. Jobs noted that Intel was willing to engineer a new version of the Core 2 Duo specifically to Apple's specifications -- it's 60 percent smaller than others. The chip operates with 4MB of on-chip shared L2 cache running at full processor speed, and uses an 800MHz frontside bus. 2GB of 667MH DDR2 SDRAM is also included.

Like the MacBook and the MacBook Pro, the MacBook Air features a slimmed down MagSafe connector for power. It comes with a 45 watt power adapter. A flip-down door on one side reveals USB 2.0, Micro-DVI (to connect an external display) and a headphone jack. The MacBook Air also includes 802.11n-based wireless networking support and Bluetooth 2.1 + EDR.

Apple estimates that with wireless networking turned on, the MacBook Air can get about 5 hours of battery life.

Unit Trust News

2008-01-17T12:22:00.000+08:00

Top Performing Unit Trust in 2007

Above is a chart by Fundsupermart.

It seems like India and China are still the top performers in the Unit Trust market. You can see from the chart that they are infested with both India and China funds. The question is that will they maintain their drive?

(Read More...)

Source: Fundsupermart

Market News

2008-01-17T10:40:00.000+08:00

Wilmar falls on China price intervention

Shares of Wilmar International tumbled as much as 8.4 percent to S$4.45 with 5.9 million shares traded on news that Chinese regulators would limit the plantation firm's ability to raise prices on their edible oil products.

"There is increasing pressure on Wilmar to subsidise the Chinese consumers and absorb part of the higher raw material cost," Merrill Lynch analyst Han Lim Chong said.

Merrill Lynch said in a client note that while there was continuing upside potential to the stock given high crude palm oil prices, the risks to the firm's downstream margins have "risen significantly".

China on Wednesday issued a list of producers of daily necessities that must apply for government permission to raise prices, fleshing out a cabinet decision last week to begin direct market intervention to curb inflation.

Source: Reuters

Corporate News

2008-01-16T08:22:00.000+08:00

Afor Limited

(IPO booth at Raffles Place. It was unusually crowded due to freebies offered by the launch of My Paper).

Afor Limited is a one-stop premium retailer specialising in the sale of Apple brand products and its complementary products.

1m public shares at $0.33 each
22.5m placement shares.
Issue Manager: DMG & Partners and Primepartners Corporate Finance
Closing date: 16 January 2008

FY2007 ended 30 June 2007

Revenue - S$60m
Net profit - S$3.47m
EPS based on post share cap of 93.5m = 3.71 cents
PE based on IPO price - 8.9x

(Read More...)

Source: Singapore IPO

Corporate News

2008-01-15T11:53:00.001+08:00

Phillip Research
Seen this report from Phillip Research among those was Cacola. The stock was flying high at $0.47 just on Friday (11 Jan) and now at a low of $0.355. Anyone care to share what happen?

Source: Phillip Research

Corporate News

2008-01-15T11:33:00.000+08:00

ASIAN MARKETS

Asian markets, with the exception of Taiwan, will likely have a rough start following Wall Street’s sharp fall last Friday as a result of warning by American Express of rising credit card defaults, confirming fears of the spread of the credit market contagion. Dow was down nearly 250 points or 1.9%. (KMT, the opposition party in Taiwan, scored a landslide victory at the legislative elections on Saturday, representing a repudiation of incumbent President Chen’s call for a referendum on Taiwan’s UN application. Taiwan’s presidential election will be held on Mar 22nd.

ELLIPSIZ

Ellipsiz warned that profit for H1 ended Dec ’07 will be “significantly lower” than a year ago, when the profit was a robust $10.89 mln. (Profit in H2 ended Jun ’07 had already slipped to $4.14 mln.) Ellipsiz has also appointed Melvin Chan as the new CEO, as Xavier Chong gives up the role to remain as Executive Chairman. Ellipsiz’s share price has dropped 70% since the prospective buyer terminated talks with the company in June; at 30.5 cents, Ellipsiz is at its lowest since 2003.

STATS

Even though the Temasek name would help STATS borrow cheaply, investors were certainly not impressed with its plan to distribute US$813 mln to shareholders, which works out to 37 US cents / Singapore cents per share by taking on more borrowings: the stock rose by “only” 4 cents on Friday before closing 2 cents higher at $1.52.

Assuming the plan goes ahead, STATS’ borrowings will rise to US$1.41 bln from US$683 mln and gross gearing to 2.2x from 0.5x. (As at end Sept ’07, STATS had cash of US$260 mln.) Those hoping to see Temasek take STATS private will just have to wait till the scheme is completed, a process that is likely to take months. (Temasek owns, at the close of its S$1.75 cash offer on May 18 ’07, 1,693,700,099

shares or 83.1% of STATS’ issued capital.)

CHEMOIL ENERGY

Chemoil has appointed Clyde Michael Bandy as Chairman / CEO with immediate effect. Bandy, Lead Independent Director of Chemoil since Aug ’06, has >35 years of experience in the energy industry, mainly with the Texaco / Chevron group. This is positive for Chemoil after the tragic demise of founder Chairman / CEO R Chandran last week, except that investors are likely more interested in the possibility of Chemoil becoming a takeover candidate. As we had commented last week, it may be premature to speculate on this, given the legal

implications arising from Mr Chandran’s demise - bulk of Chemoil Chandran owned are held in a trust.

SIA

Reflecting the first official response to the SIA / Temasek / China Eastern saga, the Xinhua News Agency said on Saturday that China “needs to urgently unify its civil aviation market and create a national network of aviation routes that can act as runway for the country to soar globally”. This is taken to signal the central government’s change of mind, now wanting to consolidate the key domestic players (Air China, China Eastern and China Southern) to create a super-carrier”. An official was also quoted as saying the lack of competition resulting from such a consolidation would not be an issue. This is obviously negative news for SIA as far as its China aspirations go.

Source: Lim & Tan Securities

Corporate News

2008-01-15T08:32:00.000+08:00

First Ship Lease Trust - Purchase and Analysis of Purchase

I purchased some FSL Trust today at a market price of S$1.17 to add to my portfolio. After doing some research on the Internet and on forums for high-yielding stocks, I chanced upon shipping trusts. There are 3 of them currently listed on SGX, namely Rickmers Maritime Trust, First Ship Lease Trust (FSL Trust) and Pacific Shipping Trust (PST). Since this was a relatively new asset class and promised high yield, I decided to do my research to see what I could sniff out in terms of yield and returns.

(Read More...)

Source: SG Music Whiz

Market News

2008-01-14T17:28:00.000+08:00

DBS Vickers Report

Stay cautious this week, as the market is likely to continue its downward bias. The play on recent IPO listings has waned while S-chips could suffer more downside amid concerns about margin pressures as investors unwind.

The impact of the credit crisis on the corporate earnings of US financial companies will be accessed. Expect financial companies to announce more losses stemming from their exposure to mortgage-related investments.

Citigroup releases results on Tuesday, JP Morgan Wednesday and Merrill Lynch on Thursday. The releases of December US PPI and CPI will also shed more light on inflationary pressures given the weakening USD.

(Read More...)

Source: Extraordinary Profits

Market News

2008-01-14T12:18:00.000+08:00

Commercial REITs

I got interested in Commercial REITs after reading in The Edge and learnt that Allco Commercial REIT was selling at a discount. If we agree with the concept of buying at discount, then AllcoComReit would have been a bargain! Wanting to find out more, I began what was to become a study into the financials of the various Commercial REITs listed in SGX.

Commercial REITs or Office REITs are essentially business vehicles deriving income from operation of office spaces. In my opinion, REITs are useful for being able to deliver stable income returns to investors, with potential to deliver on valuations upside, and commercial REITs are no exception.

My search reveal that there are altogether five Commercial/Commercial-retail REITs listed locally.

(More...)

Source: Million Dollars Dream

Corporate News

2008-01-14T09:45:00.000+08:00

STATS ChipPAC to distribute US$813m by capital reduction
STATS ChipPAC, South-east Asia's largest provider of chip testing and packaging services, plans to return up to US$813 million to shareholders through a proposed capital reduction.

Old Chang Kee's success: it's no puff
UNDAUNTED by failed attempts to enter Japan, Myanmar, China, New Zealand and South Africa in the early 1990s, F&B group Old Chang Kee is now launching a second wave of overseas expansion - this time with a firmer hand.

Second A380 jet joins SIA fleet
SINGAPORE Airlines' second Airbus A380, which was handed over to the company in Toulouse, France, yesterday, will join the first one on the Singapore-Sydney route.

One-time gain lifts Ezra Q1 net profit to $188.4m
A HUGE one-time gain lifted offshore support and marine services company Ezra Holdings to a net profit of $188.4 million for its first quarter ended Nov 30, 2007.

(More...)

Source: Economics, Investing & Personal Finance Zone

Market News

2008-01-11T17:02:00.000+08:00

Giant Write-Down Is Seen for Merrill

Merrill Lynch is expected to suffer $15 billion in losses stemming from soured mortgage investments, almost double its original estimate, prompting the firm to raise additional capital from an outside investor.

Eric Thayer/Reuters
John A. Thain, the chief of Merrill Lynch, is urging change.
Times Topics: Sovereign Wealth Funds

Merrill, the nation’s largest brokerage firm, is expected to disclose the huge write-down when it reports earnings next week, according to people who have been briefed on its plans. The loss far exceeds the $12 billion hit many Wall Street analysts had forecast.

To shore up its deteriorating finances, Merrill is now in discussions with investors in the United States, Asia and the Middle East, including American private equity firms, to raise about $4 billion in the coming days, these people said.

The developments underscore the rising toll that the mortgage crisis is taking on many once-proud Wall Street banks. In recent months Merrill and several other firms have grabbed financial lifelines from wealthy foreign governments. Further investments by so-called sovereign wealth funds could prompt scrutiny by Congress.

The latest moves at Merrill come as John A. Thain, who became the company’s chairman and chief executive in December, struggles to bolster the firm’s capital, burnish its reputation and avoid the toxic internal battles that have hurt the firm in the past.

Mr. Thain, who won plaudits as head of the New York Stock Exchange, has wasted little time. After he took over last month, Merrill Lynch promptly sold a $5.6 billion stake to Temasek Holdings, which is controlled by the government of Singapore, and Davis Selected Advisers, a money management firm based in Tucson.

During a meeting in December in London, Mr. Thain told anxious employees that Merrill expected further losses after an $8.4 billion write-down in the third quarter. He also said the firm would require additional capital. He said the fourth quarter would be a “very bad quarter,” those attending recalled.

Mr. Thain has made clear that Merrill would not sell its 49 percent stake in BlackRock, the global money management firm. But he has said that Merrill is considering selling noncore assets like its stake in Bloomberg, the financial news and information company founded by Mayor Michael R. Bloomberg of New York. In a research report, Brad Hintz, a securities analyst at Sanford C. Bernstein & Company, said that stake was worth about $4 billion.

Mr. Thain also said at the London meeting that Merrill’s management style needed to change. Recalling his days as a co-president of Goldman Sachs, Mr. Thain said that he wanted employees to build consensus.

Among other things, that means Merrill will now pay fewer bonuses based on individual performance and instead focus on the performance of a team. Many employees received bonuses this week that included a greater portion of stock than in the past.

Merrill is hardly alone in seeking capital from overseas. United States financial institutions have raised more than $29 billion from foreign governments and their related investment entities, according to the market research firm Dealogic.

In recent months, the Government of Singapore Investment Corporation, Singapore’s lesser-known government fund, invested $9.7 billion in UBS; Citigroup sold a $7.5 billion stake to the Abu Dhabi Investment Authority; and the China Investment Corporation poured $5 billion into Morgan Stanley.

If a foreign government takes another big stake in Merrill, Congress might ratchet up its scrutiny of sovereign wealth funds, which have ballooned thanks to rising oil prices and booming emerging markets.

On Thursday, SenatorCharles E. Schumer, Democrat of New York, expressed concern about the amount of money American financial institutions are contemplating raising from sovereign wealth funds.
“Foreign investment, in general, strengthens our economy and creates jobs,” Senator Schumer said. “Because sovereign wealth funds, by definition, are potentially susceptible to noneconomic interests, the closer they come to exercising control and influence, the greater concerns we have.”

So far, none of the foreign investors that have bought into United States banks have sought management roles. “All have been very consciously structured to be passive,” said H. Rodgin Cohen, chairman of Sullivan & Cromwell, who has worked on a number of these deals. “None have asked for directors.”
In addition to seeking funds from outside investors, which heavily dilutes the stakes of existing shareholders, Merrill Lynch has sought alternative ways to raise capital. In December, it agreed to sell most of its commercial finance business, Merrill Lynch Capital, to General Electric, raising about $1.3 billion in equity.

Mr. Hintz, the securities analyst, suggested another option would be to reduce the firm’s fixed-income business by a third, which would add about $3 billion in capital.

He estimates that Merrill will write down its $27 billion of combined collateralized debt obligation and subprime-related exposures by $10 billion and report a loss of $5.10 a share for the fourth quarter. Any write-down above $20 billion, he said, would “significantly increase leverage and would threaten the credit ratings of the firm.”

During the London meeting, Mr. Thain said that Merrill would have to build its presence in China as well as expand its principal investing businesses, including private equity, commercial real estate and infrastructure.

(Link...)

Source: new york times

Market News

2008-01-11T11:02:00.000+08:00

JEL Corp

The latest scandal to hit the stock market belongs to JEL Corp, which was suspended in September 2007 following news that SGX suspected something was wrong with their reporting and financials. The CAD were called in and KPMG was appointed as the independent forensic auditor to investigate into the affairs of the company (the usual procedure). Needless to say, SGX had to suspend trading in the counter as it would not create a "fair and orderly" market.

Now, on January 8, 2008, the auditors have issued their audit report and it's not a pretty picture. Basically, the gist of it is saying that there were deliberate attempts to falsify documents, create fictitious invoices (hence boosting revenues), use creative accounting entries to reduce expenses (hence inflating profits) and non-disclosure of related party loans. The main culprits which were named include Mr. Eric Tan (former Chairman), Mr. Eric Leow (Director) and Mr. Wee Teck Han (CFO). After reading the KPMG report, I must say it's quite appalling how these "irregularities" have…

(More...)
Source: Value Investment

Market News

2008-01-10T10:18:00.000+08:00

New Revamped STI Index

The new revamped STI index will be launched tomorrow.
The new index will be slimed down to 30 stocks. Some notable companies that have been removed include Creative Technology, Venture Corp and Chartered Semiconductor, either for failing to meet the minimum market cap requirement or because their shares were not sufficiently liquid over the past year. It comes at no surprise as the electronics sector once the pillar of our economy growth is now past its prime. In their place come two hugely popular China stocks - Yangzijiang Shipbuilding and property firm Yanlord, together with SIA Engineering and commodities/palm oil firm Wilmar International.

New STI Index

(More...)

Source: The Finance

Corporate News

2008-01-09T17:58:00.001+08:00

SIA Engg - TP $4.92

I am neither a pure fundamentalist nor a technician but surely I have a little bit of knowledge on both. I am pretty surprised on the performance of SIA Engg past few days. Puzzled as to why it recoverered while the others have gone down, I tried to look at its chart. This is my first technical analysis on any company, and I shall give a try. Fundamentally I know SIA Engg is a good company.

As you can see, the stock has been hovering around its support and resistance of $4.14 and $4.95 respectively. It seems to have recently rebounded from its support with good volume and macd histogram. Expect the stock to hit $4.90 soon.

(More...)

Source: STI-Stocksinfo

Market News

2008-01-09T17:34:00.000+08:00

Well, Look What The Cat Dragged In

Analysts believe CNAC's hostile acquisition of China Eastern's stake would push Air China into heavy debt, although there is hope for long-term financial returns, while it will almost have no impact on Cathay Pacific's balance sheet. Even so, you cannot deflect a higher bid based on that conclusion. It is CNAC's strategy, who is to say their planning is improper. If CNAC can muster a higher bid that is funded, everyone else eat crap and shuddup.

"We are not considering any other deals and will continue pushing the partnership with Singapore Airlines," said Li Fenghua, president of China Eastern after the vote at a special meeting. In November, Singapore Airlines and its parent, Temasek Holdings, signed definitive agreements with China Eastern to take a 24% stake in the carrier worth HK$7.2 billion or HK$3.80 per share.

The battle between Air China's (0753) parent China National Aviation Corp(CNAC) and Singapore Airlines over SIA's potential partnership with China Eastern Airlines (0670) took a new twist yesterday after China Eastern shareholders voted against the deal.

The deal was voted down yesterday with 77.61% of attending minority shareholders going against it. Altogether, 75% of H-share and 94% of A-share voting power opposed the deal.

(More...)

Source: Malaysia Finance

Corporate News

2008-01-09T17:24:00.000+08:00

Old Chang Kee IPO

Closing date of application: 14 January 2008
Commencement of trading: 16 January 2008

Established in the 1986, Old Chang Kee is engaged in the maufacture and sale of affordable food products under their "Old Chang Kee" brand name.

Beginning with just their signature product curry puff, they have now introduced more than 40 other food products sold through their takeaway retail outlets.

They also have dine-in operations at our Old Chang Kee Take 5 retail outlets located at Icon Village, Square 2, Ogilvy Centre, Golden Shoe Car Park, Eastpoint Mall and West Mall, which offer a suite of local delights such as curry chicken or beef stew in loaf/rice, sambal fish rice, curry noodles and nasi lemak as well as our food products.

At present, they have 54 retail outlets in Singapore, 2 retail outlets in KL, and 3 retail outlets in Chengdu....

(More...)

Source: Extraordinary Profits

AIO Finance Analysis

2008-01-08T18:59:00.001+08:00

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