Wilmar International has entered into a master JV agreement with Kerry Properties Ltd and Shangri-la Asia for real estate development, operation, sale, leasing, property management and hotel development, operation and management in Bayuquan, Yingkou City in China’s Liaoning Province. The JV parties have successfully bid for three sites totaling 200k square metres in Bayuguan for USD36m. The total project cost is estimated at USD386m, of which Wilmar’s portion is USD134m by virtue of the group’s 35% stake in the venture.
We are negative on Wilmar’s entry into the property market. The investment amount of USD134m is small relative to the size of Wilmar’s balance sheet, which boasts of shareholders funds of USD11.5bn, and we have no doubt about the eventual profitability of the project given Kerry Properties and Shangri-la’s knowledge of the property market.
Nevertheless, the entry into the real estate business represents Wilmar’s first ever deviation from its core agribusiness. In the past several years, all of Wilmar’s expansions have been in related businesses such as sugar, rice, flour and mineral water, which leverage on its vast distribution network. We fear this foray into property could mark the start of Wilmar’s loss of business focus and corporate discipline, and do not think that this venture will be well received by the market.
We are maintaining our Buy call, however, as we view Wilmar as being inexpensive at 13.5x CY11 earnings.
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Apple (NASDAQ: AAPL) is the second largest company in America based on its market value after oil giant Exxon Mobil (NYSE: XOM). Apple is ahead of other public corporations with higher revenue, including Wal-Mart (NYSE: WMT), Procter & Gamble (NYSE: PG), Berkshire Hathaway (NYSE: BRK.B) and AT&T (NASDAQ: T). Wall Street analysts say that Apple’s value is based on its rapid growth which is not matched by any other huge US company. The extremely brisk sales of Macs, iPhones, and iPad are likely to accelerate as Apple picks up more sales overseas and takes market share in the US from companies such as Research In Motion (NASDAQ: RIMM), maker of the Blackberry, and Dell (NASDAQ: DELL).
The case for a continued rise in the value of Apple’s shares is compelling. It posted record revenue of $20.34 billion and net quarterly profit of $4.31 billion, or $4.64 per diluted share in the quarter that ended September 25. Revenue was up 66% from the same quarter a year ago. iPhone sales rose 91% to 14.1 million. Many analysts who cover Apple’s stock believe that the iPhone growth rate will continue at a similar pace. The total value of Exxon Mobil’s shares creates a market cap of $362 billion. Apple’s is $284 billion. Exxon’s quarterly revenue is over $90 billion, but that figure is not growing very fast. Neither is the world’s largest company’s stock price. It has risen by 5% in the last year. Apple’s stock is up 65% over the same period.
Apple’s share price is $321, very near an all-time high. A number of analysts who cover the stock say it will go higher. Research firm Piper Jaffray recently raised its price target for Apple to $438, about 36% above its share price today. Apple’s market cap would eclipse Exxon’s if its shares hit that level.
Piper is not alone in its aggressive prediction about Apple’s share price. Goldman Sachs recently set a $430 target. Stifel Nicolaus & Co. has a target price of $390. Caris & Company’s target is $400. Many of these price forecasts are raised often as Apple’s sales numbers seem to rise sharply from earlier predictions.
Apple is expected to post a extremely good quarter for the holiday season. That, by itself, may push its stock high enough to make it the most valuable company in America.
Genting Singapore has recently signed a commitment letter to refinance S$4.1925bn of RWS project debt facilities obtained in 2008. The proposed refinancing is for the exact similar amount, comprising of S$3.5bn of term loans, S$0.5bn in revolving credit facilities and S$192.5m banker's guarantee facility. Tenure of the term loan remains 7-year, i.e.,from 2011-2018 (previously 2008-2015).
The refinancing exercise aimed to achieve the followings:-
(1) Lower funding cost to Singapore Dollar Swap Offer Rate (SOR) + 1.2% to 1.6% (depending on the debt/EBITDA ratio) from SOR +1.75% currently. However, given existing interest rate swap arrangement, RWS effective funding cost for its loan averages at about 4.75%. There will be an associated cost to unwind the SWAP and any interest savings is only expected to kick in from FY12 onwards. Assuming effective funding cost of 2.4%, the refinancing savings could enhance FY12E PBT projection by 3.7%.
(2) Remove/ease stringent project debt restrictions imposed on RWS
(3) To stretch out last repayment in 2015 to progressive payment over 2015-2018. The progressive repayment for 2011 to 2014 remains the same. The exact repayment structure was not disclosed.
Given that near term debt repayment structure remains the same and with Genting Singapore eyeing for Integrated Resort investment opportunity in Japan, we do not think the above refinancing would significantly change the company's dividend policy. Maintain buy and TP of S$2.60 on 14x 2011 EV/EBITDA. Key risks: prolong delay in junket licensing, regulatory changes and lower than expected gaming market share.
Marc Faber : “The Europe and US stabilizes and also recovers somewhat, in which case the demand for oil will go up and drive up prices,”
“If I look around markets, we had a very negative sentiment about the euro six months ago. Recently, we had a very negative sentiment about the US dollar. From this very low sentiment level for the US dollar where everybody hated the US dollar, in other words we can have somewhat of a recovery.” Marc Faber told India’s CNBC TV channel recently.
Job openings in the US rose in October for the first time in three months, a sign gains in payrolls will accelerate in early 2011. The number of positions waiting to be filled increased by 351,000 to 3.36 million, the most since Aug 2008, the Labor Department said. Excluding a drop among government agencies, the 369,000 increase in openings at companies was the biggest in four years. Combined with declining claims for jobless benefits and surveys showing hiring at manufactures and service providers is picking up, report may help ease concern the labor market lost momentum in November. The government reported last week that the world’s largest economy created 39,000 jobs for the month, fewer than the most pessimistic forecast of economists surveyed by Bloomberg News. (Bloomberg)
Crude Oil prices (January contract) dropped below $89 a barrel after an intraday high above $90. The EIA said supplies from countries outside the OPEC are seen rising by 1 million barrels a day in 2011.
Gold declined below $1405 an ounce after a new record high just above $1430 while Silver came back below $30 an ounce as a firm U.S. dollar sparked a profit taking move on precious metals.
Copper (March contract) rose above $4.04 a pound. A strike in a Chilean mine that lasted more than 30 days has ended.
PETALING JAYA: Tong Herr Resources Bhd said the European Commission had terminated the anti-dumping and anti-subsidy proceeding concerning imports of certain stainless steel fasteners and part thereof originating in India and Malaysia.
“The company is of opinion that the termination of the anti-dumping and anti-subsidy proceeding will have a positive effect for the sales to Europe,” it said in a filing with Bursa Malaysia.
Markets rebounded last week with better economic data from the US, and an easing in concerns over the European debt crisis. The Hang Seng index was up 1.94%, the KOSPI index was up 2.92%, Nikkei was up 1.38%, the S&P 500 index was up 2.2%. Only the STI index was marginally down 0.8%. Oil prices also rose to a 25 month high of 91.42 USD per barrel. Pending sales of U.S. existing houses unexpectedly jumped a 10 percent in October, according to the National Association of Realtors. It was widely expected to fall. Also, retail sales rose the most in 8 months in November, going up 6% year on year.(based on a survey of close to 30 retailers by Thomson Reuters.) Adjusting for shifts in when holidays occurred, it was the biggest increase since September 2006. The conference board also reported that its main US consumer confidence index rose to a 5 month high of 54.1, up from a revised 49.9 in October. This was a big jump in US consumer confidence.
Overall, the various indicators were showing that the US economy was doing better than what many economists were expecting. The only negative indicator was jobless rate, which rose to hit 9.8% in November, despite the US economy continuing to add jobs. However, as we mentioned before, unemployment numbers tend to be a lagging indicator rather than a forward one, so we don’t see this as an indicator that the US economy is about to slump. Ben Bernanke, the US Federal Reserve Chairman said that the economy was barely expanding at a sustainable pace and that it’s possible that the Fed may expand bond purchases beyond the 600 billion USD announced last month to spur growth. This was seen as positive amongst equity markets in Asia, as the additional liquidity was likely to find its way into emerging markets, including Asia. His comments also caused the US dollar to weaken and commodity prices accordingly strengthened, especially oil prices.
Oil prices have continued their upward trend, as we anticipated, and this is likely to continue as the dollar weakens. This is because the global economy is recovering, and demand for oil is likely to rise gradually. However, as oil is usually denominated in US dollars, then as the US dollar weakens, it will then cause oil prices to move up.
There was some easing of concerns in Europe over the ongoing debt crisis. Spain finance minister Elena Salgado said that Spain would not need international aid. The ECB president Jean‐ Claude Trichet also challenged the region’s political leaders to do more to get their budget deficits under control.
Overall, we expect to see many of these years concerns start to subside next year, and when they do, investors will refocus on corporate earnings, which are forecast to be very strong. So, we continue to expect equities to outperform bonds going forward, well into next year, with attractive valuations further underpinning a strong potential for a bull run next year.
Global Market is entering another stage of development, which is called "Bumpy Recovery" with some panicky investor. With strong economy fundamental in China,Australia, Indonesia, Thailand, Malaysia, Singapore, and US, i expect a strong global recovery and high inflation coming soon. Going Forward 2011, we will see a recovery in US job market, which turn the economy to "growth" stage.
Hong Kong will face higher inflation next year as it attracts more capital because of US monetary easing policies, and the appreciating Chinese Yuan increases food costs, Financial Secretary John Tsang said. The US measures may also boost energy prices, and the city’s government is “closely monitoring” the impact on low- income residents, Tsang said. Hong Kong, which pegs its currency to the US dollar, imports most of its fresh food from China. Hong Kong policy makers have said the US Federal Reserve’s plan to buy USD600 billion of Treasury securities will contribute to an asset bubble risk in the city because of excess liquidity. (Bloomberg)
9MFY10 core net profit of RM253.6m accounting for 66.9% and 61.6% of our and consensus full-year estimates. We consider this within our expectation as we expect a stronger 4Q arising from higher CPO prices (which has risen by 12.6% since Oct).
Still undervalued despite recent share price run up, P/E and P/B still not demanding, relatively high and quarterly net dividend yield, double-digit earnings growth in FY10-11 and market yet to fully appreciate the hidden values.
Target price maintained at RM6.82 (at 10% holding company discount to unchanged SOP of RM7.58).
Author has an interest in Boustead Holding Bhd
GENS reports 3Q EBITDA of S$347.6m (-31% QoQ), ex UK operation. RWS 3Q Ebitda of S$346.5m came in 8.8% below DB's S$380m and at lower end of consensus range of S$340-420m. RWS revenue fell 15% QoQ to S$731.8m on normalised VIP hold (vs hold heavy in 2Q). Property EBITDA margin fell to 47.3% (vs 2Q at 58.5% and DBe of 50.8%). NP of S$187.8m came in 11% below DB's S$212m. Bad debt provision was S$23.5m in 3Q (similar to 2Q). For 9mFY10, GENS achieves EBITDA of S$995.1m (inc UK) vs consensus S$1.35bn for FY10E. Despite weaker 3Q results and a seasonally stronger 4Q, street est which implies 4Q EBITDA of S$356m, is still too low. Given the weaker than expected 3Q results, any share price weakness offers good buying opportunity for exposure to Singapore's robust gaming market. We maintain RWS full year Ebitda projection of S$1.426bn, suggesting 4Q Ebitda of S$470m. On margin, GENS guided EBITDA margin of 47-50%, lower than DB's 54% projected for 2011 onwards.
S$9.4m/day gross gaming revenue in 3Q. We est that Singapore gaming market expanded c 8% QoQ to S$17.2m/day in 3Q. RWS continued to lead with c 55% market share (vs 69% in 2Q). For the Q, RWS has 470 tables and 1200 slots (vs 631 tables and 1798 slots at MBS). Hotels achieved AOR of 71%; ARR of S$250/nite (vs S$263 in 2Q) and USS daily visitation rose slightly to 7,500 with avg spent of S$81/pax (vs S$84 in 2Q).
Continuous ramping up. Started with 300 tables, GENS now has 470 and likely to end the year with more than 500 tables. The reopening of Battlestar Galactica is scheduled for early next year while two more new USS rides will be introduced by mid and 2H 2011, bringing USS capacity to 18,000 from 8,000 currently. West zone is scheduled to start operations progressively from mid 2011, beginning with the Maritime Xperiential Museum.
Genting Singapore reported 3Q2010 core net profit of S$191mn, down 38% qoq, after market closed on November 11. Core profits were weak, mainly on sharply lower EBITDA profits at Resorts World Sentosa (RWS), down 32% qoq. RWS net revenues fell 15% qoq to S$732mn vs. GSe S$759mn and EBITDA was S$344mn vs. GSe S$370mn, both missing our expectations.
Similar to 2Q, there was not much disclosure on RWS’ gaming operations. Excluding non-gaming top-line estimates, we estimate RWS had S$622mn net gaming wins in 3Q – adjusting for VIP rebates (still at 1.2%), gross gaming revenues were S$823mn or S$8.9mn/day (2Q: S$10mn/day, 1Q: S$8.3mn/day). Compared with Marina Bay Sands’ (MBS) 3Q S$8.1mn/day, RWS lost market share in 3Q to 53% vs. 2Q’s 67% on MBS’ strong ramp-up. RWS attributed the weaker top-line to below-industry VIP win rate, a complete opposite to 2Q; while some investors may see this as purely “down to luck,” we believe it highlights Singapore’s VIP gaming market weakness of generally low volume, high bet stakes, which can swing VIP rates either way. Mass market play was also flattish due to competition (only MBS grew); we think we could be hitting near-term cap. Combining both MBS/RWS revenues, Singapore is annualizing US$4.6bn, 15% higher than 2Q and currently 20% of GS 2010E Macau gaming market. RWS 3Q EBITDA margins also fell to 47% vs. 58% in 2Q. Though this was somewhat expected – given 2Q was inflated by high VIP win rate – it was still lower than our 49% forecast. Bad debt provisions were flat, though we note receivables are creeping up, now 1.9% of VIP rolling chip volume (vs. 2Q’s 1.5%).
We view the results as disappointing, and believe it could lead to negative price reaction. 2Q results were clearly one-offs, and investors extrapolating that momentum will need to lower expectations. Our estimates and price target are under review pending further details.
Crude palm oil (CPO) production rose just 4.7% in Oct 10 which was expected to be the peak in the production cycle. The increment in Oct 10 was lower than market expectation of 15% mom.
Based on ground checks, Indonesia’s production for Oct 10 also grew below expectation, in the range of 13-15% mom.
• Average CPO price at RM2,853/tonne to date, slightly above our full-year 2010 expectation of RM2,600/tonne. Thus, we are confident of meeting our estimate, which could be slightly better for 2010 as a result of the current tight supply-demand situation.
• Expecting the return of China to the export market. Exports dipped 0.5% mom in Oct 10 and current export numbers were reportedly 1.1% lower in the first 10 days of Nov 10. Despite this, we still expect China to resume an increase in edible oil purchases to replenish its inventory and take shipments before the weather starts turning cooler by end-November.
• The peak in production has passed. CPO production rose 4.7% mom as expected, but the pick-up in Oct 10 after the return of workers from Indonesia was not as strong as last year’s (i.e. Oct 09: production +27%mom). Beyond this, we expect production to fall moving into the lower production cycle in 1Q11.
KUALA LUMPUR: MCA yesterday announced it has bought a 42.4% stake in Star Publications (M) Bhd for RM1.28bil, or RM4.09 a share, from its wholly-owned subsidiary Huaren Holdings Sdn Bhd and is in the process of maintaining its beneficial interests in Star.
“The transfer is effected for the purpose of reorganising MCA’s investments, whereby Huaren Holdings will divest its passive investment in Star and increase focus on its investments in unquoted shares and other assets, in order to achieve greater management efficiency and provide maximum return to stakeholders,” said MCA in a statement.
“MCA’s investments in Star will continue to be passive and long-term in nature” it said.
(Source: The Star)
When we invest in Stock, we should consider long term investment. For those investor, who always looking for short term gain, it will not make you rich in stock investing. It makes you greedy and heading to huge losses in long run.
I like their concept "Be Passive and Long Term in Nature"...
According to its parent's 3Q results, Marina Bay Sands (MBS) Singapore saw aggressive operations ramp, with gross gaming revenue rose 58% QoQ to S$7.8m. We estimate that Singapore gaming market may have grown 11-12% QoQ to S$17.5m a day based on our S$9.7m/day est at Resorts World Sentosa (RWS). Annualised, this suggests Singapore gaming market size of S$6.4bn. In terms of market share, we believe MBS has gained share to roughly 45% vs 31% in 2Q. More importantly, management indicated strong gaming revenue growth in October to S$10.9m/day (up 40% from 3Q) partly due to Golden Week holiday and heavy VIP hold. We maintain our view that Singapore could end the year at S$7.0bn annualized, with upside risk. Genting Singapore will report on 11 November. For 3Q, we expect RWS to report EBITDA of S$380m vs S$503m in 2Q due largely to low VIP hold. DB forecasts 3Q RWS EBITDA of 50.8%. Beyond the weak 3Q, we remain positive on the longer term outlook of Singapore market and maintain our forecasts of US$6.0n market in 2011. Our TP of S$2.60 TP values Singapore gaming at 14x 2011 EV/EBITDA. Key risks: prolong delays in junket licensing, regulatory changes and lower-than-expected market share.
Key statistics at MBS. MBS reported US$414.5m of net casino revenue or c. US$549m of gross gaming revenue in 3Q. This implies gross daily gaming revenue of US$6.0m or S$7.8m, up 58% QoQ (or S$8.0m on normalized hold of 2.85%, up 45% QoQ). Gross gaming revenue breakdown - 50% VIP; 36% mass and 14% slots. Growth were underpinned primarily by higher VIP rolling which rose 89% QoQ, averaging at US$113m a day vs US$60m in 2Q. VIP rolling grew further to US$168.3m in October (+50% vs 3Q). Property EBITDA margin stood at 49.7% in 3Q (or 51% on normalized hold).
Legendary Legg Mason fund manager Bill Miller is seeing a variety of factors aligning to make this the best time for long-term investors to buy stocks since the early 1980s. Miller, who beat the S&P 500 for 15 straight years before falling on hard times in recent years, also tells CNBC that he’d “be surprised if the market isn’t up 20% in the next 12 months”, thanks to Federal Reserve policy, a strengthening economy, and “the fact that stocks are incredibly cheap” relative to bonds.
'First of its kind' case spins web of deceit that includes fake policy and forged signatures
By Lorna Tan, Senior Correspondent
THE police and insurance giant AIA are investigating claims by a semi-retired Indonesian businessman that his insurance agent sold him a non-existent insurance policy that cost a whopping US$5 million (S$6.5 million).
The sensational case, which industry experts say is the first of its kind in Singapore, is currently before the courts.
The businessman, Mr Ong Han Ling, 72, is suing the agent, Ms Sally Low Ai Ming, for about $3.6 million plus loss of use of his funds. The $3.6 million is the amount left outstanding after the agent made restitution for some of the policy premiums.
In her defence, 33-year-old Ms Low, who was sacked by AIA in September last year, has alleged that the fake insurance plan - called the 'AIA Thank You Policy' - was part of an elaborate ploy conceived by Mr Ong to defraud AIA. She claimed she was merely an accomplice.
The Sunday Times obtained legal documents filed by both parties and they revealed intriguing claims that included a fake policy schedule and forged letters from AIA officials such as Mr Mark O'Dell, then the insurer's general manager in Singapore.
In his suit, Mr Ong said that the trouble began when he and his wife Enny Ariandini Pramana, 71, bought several policies from Ms Low, from 2000. Over time, Ms Low became a trusted friend to the Ong family and visited their home in Scotts Road regularly, he added.
Marc Faber is out with his monthly report in which he discusses quantitative easing, equity markets, the dollar, gold, and other commodities. Here are a few highlights:
1. Equity Markets--Faber was correct last month in predicting a rally based upon extremely negative investor sentiment. He is more cautious about October because stocks are very overbought according to the % of stock above their 50 day moving average. Another reason for concern, is that after a strong September, markets often fall sharply in October and November. He is underweight equities right now.
2. Emerging Markets--Countries like Indonesia, Malaysia, etc are likely entering a price bubble thanks to worldwide money printing. Faber would not be buying these high-flying markets right now even though they could enter a final parabolic phase. He would be selling positions.
3. Dollar and Currencies--The dollar is extremely oversold and investor sentiment is very bearish. Conversely, investors are very bullish on the Euro (96% bullish according to DSI). Faber believes that a inflection point could be at hand leading to a nice move upward move in the dollar. He would not be short the dollar right now.
4. Gold and Commodities--Because he is bullish on the dollar right now, Faber believes there could be a significant correction in gold and other commodities. This could be a rather large decline, but would represent a buying opportunity. Why? More QE would be on the way.
5. Bonds--If the market declines and the dollar surges, this would be good for treasuries. However, upside is limited to 2.08% on the ten year. Faber does not expect yields to fall to new lows.
6. QE--Almost a slam dunk, according to Faber. The decline in asset markets will provide cover for the Fed to print more money.
The surge in global liquidity now underway is likely to provide further fuel to the next major asset bubble, which is likely to already be in the process of forming. Potential candidates are gold and commodity prices, emerging markets and resources shares. But the absence of obvious overvaluation suggests we are still in the foothills of the next bubble, which likely has years to run, providing plenty of opportunities for investors in these assets in the interim.
WASHINGTON (MarketWatch) — The U.S. banking industry is entering a new crisis where operating costs are rising dramatically due to foreclosures and defaults, an analyst said in remarks prepared for Wednesday afternoon.
“We are less than one-quarter of the way through the foreclosure process,” said Christopher Whalen, managing director at Institutional Risk Analytics in remarks prepared for an American Enterprise Institute event.
“Rising operating costs in banks will be more significant than in past recessions and could force the U.S. government to restructure some large lenders as expenses overwhelm revenue.”
Markets focus on central banksA day after Tuesday's big rally, Paul Vigna looks at what may be driving Wednesday's markets, with much of the focus on the possible actions of global central banks, as well as the ADP report, which was less-than-expected.
He added that recently agreed-to foreclosure moratoriums by GMAC, Bank of America Corp. /quotes/comstock/13*!bac/quotes/nls/bac (BAC 13.42, -0.14, -1.03%) and J.P. Morgan Chase & Co. /quotes/comstock/13*!jpm/quotes/nls/jpm (JPM 39.71, +0.07, +0.18%) are “only the start of the crisis” that threatens the financial foundations of the entire U.S. political economy. See earlier story on 'robo-signer' crisis.
The three lenders announced recently they would halt some foreclosures until they could determine whether or not employees signed off on affidavits without verifying the information in the paperwork.
Whalen argues that the largest U.S. banks remain insolvent and must continue to shrink. “Failure by the Obama Administration to restructure the largest banks during 2007-2009 period only means that this process is going to occur over next three to five years – whether we like it or not. The issue is recognizing existing losses -- not if a loss occurred,” he said.
The U.S. government recently wound down its Troubled Asset Relief Program, one that the Treasury Department said was effective but has been largely scorned by the broader public. Analysts say it would be politically difficult for the government to adopt a similar program. See story on Treasury's estimate of TARP costs.
Whalen is speaking at an AEI event, entitled, “Living in the Post-Bubble World: What’s Next.’ In addition to Whalen, other participants include Nouriel Roubini, the famous pessimist and economics professor at New York University, and UBS Investment Bank’s Thomas Zimmerman.
Ronald D. Orol is a MarketWatch reporter, based in Washington.
(Source : MarketWatch.com)
The Roundtable On Sustainable Palm Oil (RSPO), an industry organization that promotes the growth of sustainable palm oil products, said that Smart has breached its policies and that the palm oil producer's membership with RSPO is at risk. Smart is a subsidiary of GAR. RSPO said on its website that its Grievance Panel has reviewed Smart's independent verification report and found that there has been non-compliance with RSPO Code of Conduct. RSPO also urged GAR not to publicly suggest that it is in the process of obtaining certifications for its operations and not to claim that it is planning to become a member of RSPO. GAR is currently not a member of RSPO and the latter has yet to receive any membership application from GAR. Responding to this, Smart said it is committed to sustainable palm oil production and will work towards RSPO's requirements. Boycotting palm oil purchases
Since the release of the report in August, where its findings have been widely challenged by Greenpeace, Burger King has announced its decision to cancel palm oil purchases from Smart while IOI Crop has decided not to resume its purchases from the company. Global food companies Nestle and Unilever have earlier suspended their sourcing of palm oil from Smart.
More complications The comments by RSPO will further complicate GAR and Smart's efforts to regain customer confidence after Greenpeace accused the group of unsustainable oil palm development. Collectively, these food companies only accounted for less than 3% of GAR's total revenue. Although financial impact is marginal, GAR's reputation has been significantly affected. This longdrawn issue on sustainability may cap GAR's share price performance.
FTSE Group has promoted Malaysia to its Advanced Emerging Market status in the FTSE Global Equity Index Series. All Malaysian indices and sub-indices would migrate from June next year. Malaysia was previously ranked Secondary Emerging Market indices, Bursa Malaysia said in a statement yesterday. Meanwhile, Securities Commission chairman Tan Sri Zarinah Anwar in a statement said the move underlined the global recognition of the regulatory framework of the Malaysian capital market and could lead to greater international participation in the Malaysian market. (Starbiz)
• Genting HK was formerly known as Star Cruises Limited. The Company is a leading global leisure, entertainment and hospitality enterprise, with core competences in both land and sea-based businesses:
• Key brands are 1) Star Cruises - Asia-Pacific, 2) Norwegian Cruise Lines (“NCL”) - A 50% joint ownership alongside Apollo and TPG and 3) Resorts World Manila (“RWM”) - Manila, Philippines; joint partnership with Alliance Global Group under Travellers International Hotel Group, Inc.
Strong Interest in Genting HK
• CIMB hosted Genting Hong Kong Ltd (Genting HK) last Thursday for 2 sessions over lunch. The first session was for high net worth clients and the second session was for retail investors. Participants managed to learn more about Genting HK’s restructuring and future plans as well as the outlook for the gaming industry in the Philippines.
• How’s the response? As you can see from the pictures we took, interest in Genting HK was overwhelming. Interestingly, despite no lunch being provided, retail investor participation was strong and the Q&A session ended at 2.50pm. Amazing, considering that the retail session started at 1.30pm.
• RWM is Genting HK’s first foray in a land-based attraction. RWM opened its doors to the public in August 2009, and is part of the premier leisure brand, “Resorts World”, representing a flagship integrated leisure and entertainment complex featuring 3 hotels including a six star all-suite Maxims Hotel, an iconic shopping mall, 4 high end cinemas and a multipurpose performing arts theatre.
• The land-based casino operations bear watching as lower operating cost in the Philippines and lower gaming tax could see faster payback for the investments in RWM.
• In addition to a captive local gaming population, RWM will also be able to attract players from South Korea, coastal China and Taiwan.
• 1H10 turnaround with profit of US$11.3m versus FY09 loss of US$28.3m and 1H09 loss of US$35.3m.
• Annualised EPS is 0.32 US cts which translate into a P/E of 137.5x which is typical of companies staging a turnaround.
• Historical BVPS is US$0.27 or a historical P/BV of 1.6x.
• No interim DPS declared.
• The stock broke out of its bullish flag pattern in July and has rallied about 123.6% of the previous run prior to the flag pattern. The stock should have more upside in the longer term, likely to test US$0.505, the 138.2%FR level.
• However, its RSI is showing a bearish divergence and already overbought, suggesting that a minor pullback is likely.
• Support is seen around the US$0.40 levels.
• If prices fall below US$0.37, it would mean that a deeper correction is taking place.
We rate BANK OF AMERICA CORP (BAC) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally poor debt management and disappointing return on equity.
Net operating cash flow has increased to $15,475.00 million or 43.10% when compared to the same quarter last year. In addition, BANK OF AMERICA CORP has also vastly surpassed the industry average cash flow growth rate of -32.89%.
The gross profit margin for BANK OF AMERICA CORP is rather high; currently it is at 59.50%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 8.80% trails the industry average. BAC, with its decline in revenue, underperformed when compared the industry average of 0.4%. Since the same quarter one year prior, revenues fell by 13.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
The debt-to-equity ratio is very high at 3.73 and currently higher than the industry average, implying that there is very poor management of debt levels within the company.
The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Diversified Financial Services industry and the overall market on the basis of return on equity, BANK OF AMERICA CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
SAN FRANCISCO (MarketWatch) -- Berkshire Hathaway Inc. Chairman Warren Buffett dismissed concern about a double-dip recession, while noting the businesses he oversees are recovering, according to media reports on Monday.
Sept. 3 (Bloomberg) -- Harvard University historian Niall Ferguson talks about the outlook for the U.S. and global economy. The August payrolls report may show the U.S. economy lost 105,000 jobs, the third straight monthly decline, according to the median forecast of 81 economists surveyed by Bloomberg News. Ferguson speaks in Cernobbio, Italy, with Francine Lacqua on Bloomberg Television's "Global Connection."
In a phone interview from Thailand Marc Faber told Bloomberg that : "It is a fallacy to believe that easy money and the purchase of treasuries will boost economic activity in the US,"
"Money will flow into equities at least over the next couple of weeks, and into commodities," Faber added.
"Over the last two years we eased massively in the US and where did the growth take place? In Asia".
"So when we talk about job creation, do you think that Intel or a small businessman will hire more people in the US because of further monetary printing?" he asked.
"No! they will build factories in Asia and hire people in Asia and all the monetary policies in the US create mis-allocation of capital and unintended consequences," Faber explained.
Market Review :-
The FSSTI advanced 5.4% in local terms in July. Higher beta stocks led the market recovery with property stocks outperforming the index. Defensive names such as ST Engineering and SMRT lagged and declined in absolute terms mom. The SGD strengthened 2.4% against the USD to end the month at 1.362. Singapore's 2Q advanced GDP rose 19.3 yoy, exceeding all expectations. This led the government to upgrade its 2010 GDP growth forecast to 13-15% from an earlier forecast of 7-9%. Growth was led by the manufacturing secotr which surged 45% yoy, including the volatile biomedical sector. Services showed double digit growth too, as the opening of the integrated resorts created record visitor arrivals.
Residential property prices and transaction volumes moderated in the second quarter but show sign of picking up of late, with strong interest in some mass market condominium launches. The Singapore market is currently trading on a 14x earnings multiple which is slightly below its histroial mean.
Business Background :-
TONG group is an international stainless steel fastener manufacturing group with several manufacturing bases in Malaysia, Thailand and China. Tong Heer, with the experience and advantages from the TONG group, not only brings the latest manufacturing technologies and inspection equipment, but also brings the best management experience and the concept of customer service to our customers. It uses advanced imported equipment and automatic manufacturing system with scientific process design and a mass production line. These systems provide the highest competitiveness and the lowest production cost.
Tong Heer was established by the Tong group in 1989 (Malaysia's factory) and 2005 (Thailand's factory) for manufacturing stainless steel fasteners. Tong Heer's products are widely used in many different industries including the solar energy industry, the petrochemical industry, machine assembling, food machinery, telecommunication, construction, etc.
Business Structure :-
Tong Heer Bhd (100%) - located in Malaysia
Tong Heer Co. Ltd(50.01%) - located in Thailand
Fuco International Ltd (37.04%) - located in Vietnam
Major Shareholder :-
ALL STAR INTERNATIONAL HOLDINGS LTD (57.03%)
The FBM KLCI index advanced 3.6% in local terms in July. Top performers for the month were Plus Express and Genting while plantation stocks and utilities stocks underperformed. The ringgit strengthened slightly against USD to 3.19 as the central bank raised the overnight policy rate by another 25 bps to 2.75%. The government took its first step towards the rationalization of its subsidy program by hiking petrol, gas, diesel and sugar prices. Corporate action was plentiful with Genting Malaysia proposing to acquire Genting Singapore's UK operation for a cash consideration of GBP 340m. Khazanah won the battle for control of Singapore listed Parkway Holdings after it raised its offer from S$3.78 to S$3.95 per share. Ananda Khrishnan announced plans to take Measat Global and Tanjong Plc private.
Interest in the plantation sector may return as crude palm oil price rebounced 7% in July after a lackluster performance in the past quarter.
Vietnam and Indonesia are the top investment destinations in Southeast Asia for US businesses, according to the American Chamber of Commerce.
Companies are “much more positive” on the prospects for regional growth, even as dissatisfaction over corruption increased, according to a business outlook survey published by the chamber Thursday. Improved economic links within Southeast Asia and higher profit expectations are among the reasons prompting businesses to consider expansion, the survey showed.
Asia’s rebound is outpacing much of the rest of the world as exports boost earnings and domestic demand strengthens, benefitting companies including Singapore Airlines Ltd. and Malaysia’s Sime Darby Bhd. The Association of Southeast Asian Nations said its 10-member nations drew 3.6 percent of global foreign direct investment in 2009, up from 2.8 percent in 2008.
Most companies surveyed “continued to expand or expand significantly in Asean over the past two years” and more plan on doing so over the next two years amid optimism about growth, the chamber said. “This business expansion is directed most strongly towards Vietnam, Indonesia, Thailand and Singapore.” US businesses were mostly satisfied with the availability of low-cost labor except in Singapore and Malaysia, the report showed.
The greatest concern for companies in most countries is corruption, except for Singapore and Thailand. Respondents cited the city-state’s housing costs and the stability of the Thai government as the main worries in those two nations.
“Corruption continues to be a source of great dissatisfaction for respondents, many of whom cited it as a barrier to doing business in Asean,” the chamber said. “The level of local protectionism also remains a concern in a range of countries -- Malaysia, Thailand, Vietnam, and Indonesia.”
Marc Faber the publisher of the Gloom, Boom & Doom report, said at a forum in Seoul on last June that cash and bonds will be “very dangerous” in the next 10 years as governments increase money supply to cover fiscal deficits “There’s no other way out but to print money,” . “In the long run, all paper money will go exactly to its intrinsic value, which is zero.” Marc Faber as usual advised investors to protect themselves with assets such as gold and silver.
Our pivot point stands at 3.7.
Our preference: As long as 3.7 is not broken down, we favour an upmove with 4.4 and then 5.05 as next targets.
Alternative scenario: Only the downside breakout of 3.7 will invalidate our bullish scenario. In this case, a decline should shape towards 3.35 at first, and then 3.12.
Comment: Daily indicators are positive but losing momentum.
Trend: ST limited rise; MT range.
Supports and resistances:
1) Fed has run out of policy options 2) Asset reflation failed for housing, worked for stocks, very successful for bonds
3) Inventory restocking fizzling out 2H-10
4) Coincides with fading ARRA: ARRA to subtract from GDP growth in 2011
5) Structural unemployment in US caps consumption recovery
6) Rising trade deficits amidst a weak Euro will depress US growth
7) Sub-par 2-3% trend growth for US over next 10 years
8) Shorter economic cycles (~4 years between recessions): bad for business
9) China tightening, if overshoots to hit Asia badly
10) European austerity good for Germany and France, bad for others in Eurozone
11) Implications for export dependent Malaysia not good: trend GDP slow to 4%
12) Private sector withdraws as government involvement in economy grows
13) Rising taxes, removal/lowering of subsidies diverted to Japan-style stimulus
14)Renewed monetary easing very possible later
15) Decade of low interest rates, high house/land prices, weak Ringgit post crisis
16) Rising household leverage/more taxes/less subsidy amidst slow growth will bite
Why i like Maybank?
Among the Malaysian banks, Maybank has the highest contributions from Indonesia via its 97.5% stake in Bank Internasional Indonesia (BII), the ninth largest bank in Indonesia. Its Indonesian operations account for about 7%+ for the group's net earnings and total loans and this proportion is set to increase to 8-9% in the next two years. BII’s established operations with a wide branch network of more than 100 branches will enable it to benefit from the swift loan growth of 18-20% in Indonesia. Furthermore, BII has a net interest margin of about 6%, way above the circa 2.3% for Maybank's domestic operations. We are projecting a strong FY09-12 CAGR of 57.1% for BII’s net profit. We are also going for 16.4% CAGR for its loan base, almost double our projected loan CAGR of 8.4% for the group. The strong growth of its Indonesian operations underpins Outperform call on Maybank.
Technology Profile :
Established in 1995, Notion VTec has grown into one of the country's largest suppliers of high precision, complex, ready-to-assemble precision-turned, milled and ground parts to MNCs in the HDD and digital camera industries.
52 Week High : 3.52 52 Week low : 1.45
As a result of a downward revision in earnings guidance by 34-36% for FY10, negative guidance on Notion's new 2.5" HDD business for FY11 and uncertainty over its 3 antidiscs programs, analyst FY10 and FY11 EPS have been cut by a drastic 40% and 55.5% respectively. The rather high operating and financial leverage nature of the business compounded the drop in earnings revision. Notion only posted earnings of RM3m for 3QFY10 and there may be more negative earnings surprises compared to analyst's FY11 forecast going forward.
Risk Analysis : 1.Mainly weighed down by start-up costs.
The 9MFY10 earnings came in 24% below consensus. The variance was mainly due tohigh operating costs as R&D, depreciation and amortization, materials as well as labor incurred by the company’s new 2.5” HDD business and strengthening RM against USD and Euro. While 3QFY10 revenue was up by 7% q-o-q and 36% y-o-y, the quarter’s earnings plunged 76% q-o-q and 73% y-o-y. There were also quality issues related to one of its HDD components, which gave rise to rectification and compensation costs.
2.Major production problems.
Orders for antidiscs in one program were stopped following a hydrocarbon contamination problem, which led to the customer cutting orders on the affected component, and the final cleaning of the 2 remaining antidiscs models. Notion has had to outsource to a Singapore vendor at higher cost. Management spent substantial resources in relocating and upgrading the final washing facilities in order to comply with the customer’s requirements. The other production issue involved its 2.5” HDD baseplate project, which has not been performing to expectations, resulting in delays to production targets, excessive start-up costs and high rejection at the die casting and machining stage, as well as rejection by a customer vendor based in Dongguan, China. The project incurred >RM80m capex, which will add to production cost in terms of depreciation and finance cost as it is 80% funded by bank borrowings. Factory 3 is being retrofitted and the manufacturing currently distributed between Factory 1 and 2, and a coating supplier in Banting. This gave rise to cost inefficiency and losses. Management needs time to reorganize the manufacturing for this project. Factory 3 will be operational by Sept 2010.
3. Potential slowdown in the HDD sector.
Price Recommendation :- Pegging a 7x FY11 PER, which is its historical 5-year average PER, fair value is RM1.45. Currently price is still trading at premium 31% (above its fair value RM1.45).
The rise in short activity in Bank of America shares is consistent with the stock's performance over the past month. Bank of America shares have lost 11%, while the other three U.S. banking giants have all seen their stock prices drop by less than 3%.
A significant reason for the negativity around Bank of America appears to be management comments regarding lost revenues from so-called interchange fees--which banks charge to retailers for every debit card transaction. Bank of America said new legislation that caps those fees will cause it to take a $7 to $10 billion goodwill impairment charge in the third quarter and are likely to reduce revenues by $1.8 to $2.3 billion annually.
-We think average earning assets will continue to shrink as the company reduces its Holdings portfolio and its loan book shrinks. A higher net interest margin should help net interest income rise in 2010, but a flattening yield curve and lower loan balances will likely reduce net interest income in 2011.We expect an improvement in trading and principal investment revenues will more than compensate for lower card and banking fee income due to new regulations, helping revenues climb about 15% in 2010 before declining in 2011.
-We think a moderation in credit losses will allow C to reduce loan loss provisions significantly in 2010, although chargeoffs will likely remain elevated. Expense discipline should allow for significant pretax margin expansion during the year, and operating costs should settle at near 50% of revenues in 2011.
- Acknowledging limited earnings visibility and regulatory uncertainties, we think the company can achieve EPS of $0.46 in 2010 and $0.47 in 2011.
-C has restructured its business into Citicorp and Citi Holdings, with Citi Holdings carrying mostly non-core and distressed assets. The plan is ultimately to unwind Citi Holdings, which should lead to a more stable revenue stream. Tangible capital levels now seem adequate to us, but credit losses on loans held will likely remain elevated throughout 2010, in our view. The success of C's loan modifications will likely determine whether chargeoffs escalate from current levels.We think that dilution and asset shrinkage will prevent C from regaining the earnings power it once had. Still, with the shares trading at a discount-to-peers valuation, we see rising long-term value in the franchise.
- Risks to our recommendation and target price include a worse-than-expected downturn in global economic conditions, greaterthan- expected credit losses, and an inability to execute C's business plan.
- Our 12-month target price of $5.50 is equal to roughly 1.0X projected book value, below C's historical average and peers, reflecting market uncertainties.
EL-ERIAN: You know, Tom, all this speaks to what Ben Bernanke coined last week as the unusually uncertain outlook. Whether you look at the data, which is pointing in all sorts of directions, whether you look at the earnings, what we’re getting right now is very, very noisy picture. And it points to an uncertain outlook. Now, there’s two ways to think about this. One is, as you mentioned, certain data of backward looking, others are forward looking. The other thing – way to think about it is the reality that during regime shifts, data gets very noisy because you’re shifting from one regime to another and our inclination is the latter. Our inclination is to think of this as natural for a regime shift and we’re moving from a regime of high growth, leveraging, debt and credit entitlement to a more delivered, slower-growing, higher unemployment world.
Marc Faber : "If you look at the different investment alternatives Equities, bonds, real estate, commodities and precious metals ... I think that equities should be represented in a portfolio, in particular, if you are very bearish about the world long-term, you probably be better off in Equities than in bonds.
Somebody said before that markets are now highly correlated and that’s true to some extent but not true from other perspective. Say 2008 everything went down and the US dollar rallied and the US government bonds rallied and more recently it’s been when you have a strong day in the stock market bonds go down and so forth. So not everything is correlated and the same applies to agricultural commodities." in a recent interview with CNBC
Transocean Ltd (RIG +8.16% to $57.93) reported 2Q net income of $715m ($2.22 per diluted share) on revenues of $2.505bln compared to respectively $806m ($2.49 per diluted share) and $2.882bln in the same period a year ago.
Marc Faber : "Investors should have listened to me already six months ago , when I wrote that the Fed would continue to monetize and this is my view...they will never let up. They will print and print and print, until the final crisis wipes out the entire system. They are very bad forecasters of economic events in particular that was the case for Mr Greenspan but Mr Bernanke is in the same boat. He has no clue what the economy is doing and so they misread in 2007 the severity of the forthcoming crises and then they misread the last few months the strength of the economy, which shows no signs of strengthening but signs of weakening everywhere in the world and therefore I would argue that the Federal Reserve with its policy, and with the writings and papers Mr Bernanke has published about the great depression, that more quantitative easing will be forthcoming and significantly more.
Let’s say they push money into the system that is true it may not go into stimulating capital investments, it may not go into consumption but it will go somewhere. Now this somewhere in the last few years has been mainly emerging economies that have accumulated huge foreign exchange reserves as a result of the US trade and current account deficit that led to the surpluses in these emerging economies. There isn’t outlet for excessive money creation. It can be in agricultural commodities or it can be in emerging economies or one day it could in wages in the United States I do not think it will happen. But we have inflationary pressures in emerging economies and eventually I suppose that this labor arbitrage in the world and the imbalances over-consumption in the US and capital spending and essentially savings in emerging economies , that this will lead to a readjustments of currencies and also to a readjustments of cost in other word that labor cost in emerging economies will go up substantially whereas in the Western world they will be flat to down in other words that real wages in the Western world will decline. But in this environment, you can’t be overly dogmatic. There will be a lot of bouts of inflation ...sudden explosions in prices like last year. Everybody in the world has some concerns about the ultimate value of the US dollar and also obviously about the value of US government bonds, because if the fiscal deficits stay at this level and in my opinion, they are likely to actually increase over time, then you will have a credit problem in US, sooner or later. It will not happen in next three years, but thereafter. So I think that the diversification out of US dollar treasuries is desirable and that’s why I am not all that negative about equities.
If you look at the different investment alternatives Equities, bonds, real estate, commodities and precious metals ... I think that equities should be represented in a portfolio, in particular, if you are very bearish about the world long-term, you probably be better off in Equities than in bonds. Somebody said before that markets are now highly correlated and that’s true to some extent but not true from other perspective. Say 2008 everything went down and the US dollar rallied and the US government bonds rallied and more recently it’s been when you have a strong day in the stock market bonds go down and so forth. So not everything is correlated and the same applies to agricultural commodities.
I wrote already six months ago that unlike any other commodity the agricultural commodities had gone down in 2009 certainly unlike the industrial commodities and that wheat was, at the beginning of the year, at 200 years low in real terms and when food prices move they move a lot and they have a huge impact on the world because there are studies that have been made by the Federal Reserve Bank of St Louis that show that actually food prices are a leading indicator of inflation. So I think that at the agricultural sector is actually quite attractive. There are two factors in agriculture ...obviously demand, expanding when you have people moving from poverty to the middle class and than to more affluent class they eat more specially protein rich types of food and then you have the other impact that is more meaningful and this is supply interruptions by droughts and floods and so forth. This year we have a lot of unusual weather. We have floods in Pakistan and we have heat waves in Russia and so forth that may disrupt crops."
*To acquire 80% for indicative RM138.1m (blended P/B of 1.7x) with option to acquire another 18.01% (for 3.15x P/B).
*Bank Ina is small with 22 branches as well as FY09 net profit of RM4.7m but has strong asset quality.
* Marginal impact (-0.2%) on earnings while it has ample excess capital to complete the deal without jeopardizing its capital ratios.
* Neutral – gains access to fast growing market with low penetration at decent pricing and potential M&A in Indonesia in the future (given Bank Ina’s strong capital position). Offset by marginal impact on earnings and lack of size to compete with the big players.
* Maintain HOLD, TP: RM3.19 (Gordon growth – ROE of 9.8% and WACC of 9.9%).
Federal Reserve policy makers signaled they will probably pass on providing more stimulus at their 10 Aug meeting and wait to see if signs of a weaker economic growth persists. Chairman Ben S. Bernanke told lawmakers that consumer spending is “likely to pick up” amid a “moderate” expansion.
China will let more banks import and export gold and open trading further to foreign companies as near-record prices and falling stock markets spur demand in the world’s second-largest buyer of the metal. Gold prices gained. China may “increase foreign members on the Shanghai Gold Exchange and will also study ways to allow foreign qualified bullion suppliers to deliver to the exchange,” the People’s Bank of China said
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Maybank2u.com is looking for expanding its securities brokerage business. The commission fee is lower than HLebroking.com (min RM12). They actually folllowed HLebroking's step to lower the transaction fee to attract more investors/traders. Price war, will benefit investor/trader!
Company Description :-
The largest banking group in Malaysia in term of asset size. Lending is mostly channelled to the consumer segment, which accounts for almost half of its local loan portfolio. Maybank also has sizeable exposure to foreign markets, with foreign loans, mainly in Singapore and Indonesia, making up 33% of its total loan base.
Maintain BUY with a target price of RM8.80, pegged at 2.2x P/B (at its 10-year mean), which is also the banking sector’s P/B. At RM8.80, we value Maybank at 18.8x FY10F PE and 16.0x FY11F PE. Maybank gives great exposure to a revival in loan growth from a resilient domestic economy coupled with strong overseas growth, especially in Indonesia, and strong treasury income.
Stock Impact: 1)Better communication and coordination to drive businesses.
It is repositioning its operations to capture more value from its existing large customer base. Improving communication between its investment banking and global markets units is translating into greater business volume. This should be seen in the next financial year (FY11), when management is likely to guide better-than-industry loan growth.
2) Domestic economic recovery play.
The above developments come at the right time to make it a Malaysian economic recovery play, especially to capture the resilient consumer loans and the strong recovery in business loans. This comes with the advantage of being the bank with the largest network in Malaysia. Investment banking is also finally making more aggressive moves, with a few initial public offerings (IPO) and big share placements recently to lead to greater pre-tax profit (PBT) contribution (9MFY10: 3%).
3)Indonesia is next growth story.
Contribution from Bank Internasional Indonesia (BII) is expected to grow 20-25% p.a. for the next five years to bring its contribution to the Group’s PBT from 5% currently to 15% by end-FY15. This strong growth will be supported by strong loan growth of 18-20% and high net interest margins of 6-7% (vs 2.3% in Malaysia) in the next 2-3 years.
Mermaid has strong balance sheet with low debt level. The temporary sell-down is just panic selling. From biz point of view, it should grow rapidly after major O&G contractors getting more projects and a lot orders coming soon. The low debt and potential high return should protect investor from downside.
Why Buy Mermaid?
1)Subsea engineering and drilling division underperforming, profitability in FY2010 is more likely to decrease. Current share price is trading at discount 40% to its average P/E ratio.
2)Current share price has stabilised in the USD70-USD80 per barrel range. When market condition improve, day rates in the subsea engineering division can adjust rapidly to any upwing in market rates.
3)Investment in offshort support vessels and ROVs at distressed price.
4)Right Strategies to turn around its business
The U.S. economy, badly in need of some better-than-expected business data, appeared to get some this morning in the form of the monthly report on manufacturing activity across the country. The report was issued by the ISM, or the Institute for Supply Management, some 30 minutes into the trading session, and it sparked some additional buying activity by the bulls.
Specifically, the ISM reported that growth in manufacturing eased to a reading of 55.5 in July, down from 56.2 in June. Still, that was somewhat better than the reading of 54.2 that had been expected. It also calmed fears that the manufacturing sector might be getting closer to an overall contraction. (Note that a survey reading of 50.0, or better, signals that manufacturing activity is expanding, while one that is below 50.0, but above 42.0, suggests that such activity is contracting, but that the aggregate economy may still be growing. A survey result below 42.0 is seen as consistent with a recession.)
The ISM, meanwhile, also released the various components of the overall index. Here, as well, the news was mixed, but a little better than expected. For example, the latest report showed that new orders increased last month, registering a score of 53.5; however, that was less than June's rate of gain, which was 58.5. The same story held true in production, where the index came in at 57 0, which was less than June's increase of 61.4. However, employment's growth increased to 58.6 from 57.8; supplier deliveries also gained more than in June (58.3 versus 57.3); and prices increased further (57.5 versus 57.0).
This report, notwithstanding the differing rates of improvement, is consistent with the rest of the data being issued, namely that the economy is still growing, but that it is doing so in an uneven, and often lackluster fashion. The nation's GDP, for example, which grew by a tepid 2.4% in the second quarter, was typical of the uninspiring inprovement now under way in the economy, at large. Our sense is that data in the upcoming weeks will be similarly unexciting.
Meanwhile, the ISM will also be reporting on non-manufacturing activity on Wednesday. Here, as well, we would expect some expansion, with a prospective reading of 53.3. That would be slightly below June's 53.8, though.
As for the stock market, it rallied further, adding to an opening gain that saw the Dow Jones Industrial Average climb by better than 100 points. That index is currently up be around 175 points, following a gain of better than 7% in July. Apparently, the bulls continue to see the economic glass as half full rather than half empty. Time will tell if they are correct.
Recovery is real or false? Big question for everyone in investing. Nobody can guess what's happening, but a lot of individual investor/non-institutional investor, who are trying to time market and now, they can't find direction of stock market.
Time will tell us whether is real recovery but you might missed this V shape Recovery trend.
If you looking at US productivity, it shows improving. To investor, they're too rush to see quick improvement. For me, i would rather wait for 2 quarters to see Real Recovery on US Employer Hiring...
It makes no sense for productity up but unemployment rate is still high because NObody HIRE ! When overload the employee too much, the employers are forced to hire again...
Recently, there're many CFD providers in Singapore. What's the most important criteria when you would like to open CFD trading account?
1) Foreign Market
If you're an active investor, you must make sure that the CFD provider gives free access to USA,HK and London Stock Exchange. Please make sure the data feed fee is comfortable for you.
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A user friendly platform and analysis tool are very important when you use CFD trading account. You need certain advanced charting to determine your entry point and some fundamental data to determine the stock valuation.
After you make sure these 3 components meet your requirement, then kinldy proceed to open CFD trading account. Learn slowly when you start trading.
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Maraputra S/B (Maraputra) has filed a writ of summons against the company's subsidiary, Boustead Naval Shipyard S/B(BNS) for damages arising from a contract dispute. Maraputra is claiming for damages totalling RM10.37 mln plus interest at 8% p.a. and other relief that the high court deems fit. BNS is disputing the amount claimed and is currently preparing a statement of defence and counter-claim against Maraputra.
Its wholly owned subsidiary, Parkson Properties Holdings Co. Ltd has subscribed for 1 ordinary share of US$1.00 each at an issue price of US$1.00 in recently incorporated Parkson Properties Hanoi Co. Ltd, making it a wholly owned subsidary of the company.
Refer to Above Table, it shows Malaysia Equities Market/Investment Capital Inflow is decreasing rapidly. What happen if your RM currency value divided by 5? Food & Oil price x5? International Fund Manager is worrying about Malaysia Equities + Government Debt and they started to underweight Malaysia Equities to reduce their risk.
WASHINGTON (MarketWatch) -- The Treasury Department announced Friday that it intends to sell an additional 30% of its remaining 5.1 billion Citigroup common shares. Treasury said has given its agent, Morgan Stanley, the authority to sell 1.5 billion shares. Treasury has already sold 2.6 billion Citi /quotes/comstock/13*!c/quotes/nls/c (C 4.01, -0.08, -1.96%) shares in return for $10.5 billion in gross proceeds. Treasury said the trading plan will end on Sept. 30 even if all shares have not been sold because of the blackout period set by Citi in advance of its third quarter earnings release. The government received 7.7 billion shares of Citigroup common stock last summer, the result of several bailouts of the financial-services giant
Adolf Merckle (March 18, 1934 – January 5, 2009) was a businessman, and one of the richest people in Germany.
Merckle was born in Dresden, Germany into a wealthy family. Most of his wealth came from inheritance. He developed his Bohemian grandfather's chemical wholesale company into Germany's largest pharmaceutical wholesaler, Phoenix Pharmahandel. His family also owns the generic drug manufacturer Ratiopharm, and large parts of cement company HeidelbergCement as well as vehicle manufacturer Kässbohrer.
He was educated as a lawyer but spent most of his time investing. He lived in Germany with his wife and four children.
Merckle made a speculative investment based on his belief that Volkswagen shares would fall; however, in October 2008, Porsche SE's support of Volkswagen sent shares on the Xetra dax from €210.85 to over €1000 in less than two days, resulting in losses estimated in the hundreds of millions of dollars for Merckle.
In 2007 he was worth US$12.8 billion by most estimates (Forbes), and by December 2008 he was worth $9.2 billion, a loss of $3.6 billion. In 2006 he was the world's 44th richest man, dropping to 96th place by December 2008, but still one of Germany's five richest men.
Adolf Merckle committed suicide on January 5, 2009 by throwing himself in front of a train near his hometown of Blaubeuren. It was believed that his cement company was unable to make payments on a huge loan taken out to purchase an English competitor, Hanson
Pursuant to the its proposed joint venture with Shin Yang Holdings S/B to develop oil palm plantations on 3,380 hectares of land in Sarawak, both companies have entered into a deed of variation to vary the terms of the share subscription agreement dated 25 Jun 2009.
ConocoPhillips (NYSE:COP) has announced a quarterly dividend of 55 cents per share. The dividend will be payable on September 1, 2010, to stockholders of record at the close of business August 2, 2010.
ConocoPhillips (NYSE:COP) has headquarters in Houston, Texas, and is the world’s third largest integrated energy company. At the end of March 2010, and including interests worldwide, ConocoPhillips had $155 billion of assets and $179 billion of annualized revenues.
ConocoPhillips employs approximately 29,900 people worldwide.
China’s export growth may slow over the rest of the year to less than half the pace of the first six months.Weaker export growth may exacerbate a second-half slowdown in the expansion of the world’s third-biggest economy, encouraging the government to limit gains by the yuan against the dollar. (Bloomberg)
In an interview with The Huffington Post, Warren Buffett says the economy is “coming back”, and that we are not in the early stages of a depression, as some have suggested. Buffett says it takes time to recover from a crisis like the one we saw in 2008. “But we’re coming back,” he says. “There’s no question in my mind we’re coming back.”
In relation to a propsed acqusitio announced on 11 Jun 2010 that the company had entered into with UEM group berhad (UEM) for the acquisition of UEM's entire 86.81% equity interest in Pharmaniaga, Affin Investment bank berhad has, on behalf of the company, submitted an application to the Equity Compliance Unit of Securities Commission.
Singapore forecasts an annualised 2Q GDP growth of 19.3% YoY (an increase of 17.3% expected) vs a 16.9% rise last quarter. The Country's Ministry of Trade and Industry expects economic growth to expand by 13%-15% in 2010 from an earlier forecast of 7%-9%.
BAC completed a nice rebounce on its $13.50 support line and upward trendline after its share price has rallied for more than a week. This indicates that the counter has prepared well for further upside gains. Its share price is now back towards the moving average while its weekly MACD and DMI are bullish. As its RSI(47.96) is getting closer to the overbought level, a minor pullback is expected in near term. Place relevant stop loss.
Trading Target Price : 17.50-18.50
12-month Target Price : 22.43
Disclosure of Interest:-
Author has an interest in Bank of America share.
Risk Rating : 5/10
S&P : Expect 1080-1100
Alternative Scenario : the downside breakout of 1054 will open the way to 1037 & 1032.
Comments : A support base has shaped @1054 and allowed for a further rise. Expect 1080-1100.
Notion VTEC is poised to begin first-phase operations at its largest HDD manufacturing plant in Klang. The plant is being developed over 2 years at a cost of RM150m and will eventually have a production capacity of 85m 2.5-inch HDD baseplates annually from 4m baseplates currently. The first-phase entails a production capacity of 24m.
Notion VTEC is poised to begin first-phase operations at its largest HDD manufacturing plant in Klang. The plant is being developed over 2 years at a cost of RM150m and will eventually have a production capacity of 85m 2.5-inch HDD baseplates annually from 4m baseplates currently. The first-phase entails a production capacity of 24m.
It has completed the establisment of the joint venture (JV) between its wholly owend subsidar, Boustead Hotels and Resorts S/B (BHR) and Tacorp Holdigns S/B (TH) as well as the acquisition of two piece of land in Kuantan, Pahang by the JV company from TH. BHR and TH have also agreed to vary their equity structure in the JV company from 70:30 to 80:20.
Disclosure of Interest:
The author has an interest in Boustead Holding Berhad
WRT – Wilmar International: Good news = higher share price? – We feel upside for Wilmar may be limited as we expect CPO prices to be range bound in the near term. As such we feel it might not be in the best interest of investors to buy a call warrant on Wilmar now. However for those with a greater risk appetite and possess a bullish outlook for Wilmar, we feel the most attractive Wilmar call warrant in the market at the moment is Wilmar MBLeCW101102 with an exercise price of $5.80.
Bruce Berkowitz, whose Fairholme fund has returned close to 13% per year over the past decade while the S&P 500 has been in the red, says he’s still finding a good deal of value in one of the market’s unloved areas — financial stocks.
“Investors have lost much of their wealth from financial institutions over the past couple of years and are not prepared to risk more,” Berkowitz tells Investment News. “Meanwhile, the Great Recession has forced our surviving institutions to fortify their balance sheets and practices in preparation for continued stress. Thus, they are priced for more stress and prepared for more stress. We try to protect against the downside and let the upside take care of itself. Such is the case with our holdings in large banks and brokers.”
Berkowitz also offered advice for financial advisors, which would seem to apply to individual investors as well. “Invest with managers that have superior long-term track records during tough times and invest most of their money alongside their clients’ money — under the same terms and conditions as their clients,” he says. In addition, they should invest with those who have an “understandable strategy, one that will keep clients sane during the inevitable difficult times”.
Berkowitz says he doesn’t try to predict the future of a particular company or industry, let alone the economy as a whole. He says he instead tries to price securities and their underlying businesses “for difficult times so that we can survive those one-in-100-year catastrophes that appear to happen every decade, and prosper during more-normal times.”
The group announced that it has entered into a sale and purchase agreement for the disposal of its entire equity stake in its UK casino operations to Genting Worldwide (UK) Limited, a wholly owned subsidiary of its sister company Genting Malaysia, for a cash consideration of GBP340m, or SGD688.8m. Maintain BUY.
We view the disposal positively for Genting Singapore as
1) the transacted valuation at 11.2x FY11 EV/EBITDA is attractive compared with the peer valuation in UK for Rank Group PLC, which although being a larger company is trading at only 6.3x FY11 EV/EBITDA,
2) the UK casino assets are considered non-core as they contribute less than 5% of group earnings, whereby the EBITDA margin of 15% is significantly lower than Resorts World at Sentosa casino’s 30%,
3) the sales proceeds can be channeled into higher yielding future strategic growth opportunities, and
4) unlocking of resources that can be channeled into improving the operations of RWS
Marginal immediate term impact on core earnings. The group’s net debt to EBITDA is expected to decline to 0.8x from 1.4x upon completion of the disposal. Assuming that the entire proceeds were to yield an average return of 2% from a combination of fixed deposits and other money market instruments, we estimate the net impact on earnings post disposal of the UK operation at a marginal 2.6% decline as the ultra low returns of fixed deposits and money market instruments would be insufficient to fully offset the loss in earnings from the disposal. The disposal will, however, give rise to a one off non-recurring gain of SGD103.6m. Focus on larger scale future ventures. More importantly, the disposal of its UK operation signals management’s focus on leveraging on its expertise to develop future large scale integrated casino projects which provide more compelling growth for the group, in our view.