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.
Sunday, October 10, 2010
Friday, October 8, 2010
Oct Market Commentary : Asset Bubble..
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.
Special Situation Call : TongHer.KL(5010)
Profile:-
Makes Stainless Steel Fasteners.
Major Shareholder: All Star International Holdings Ltd
Tong Herr business is cyclical in nature. Nickel is one of material use in Stainless steel fasterners production. Nickel price should be higher in coming months.
See the Nickel Price Chart...
The Nickel Price as precious metal, expect to go up because of high inflation trend.
High Nickel price allow TongHerr sell its product at higher price and increase profit margin.
With RM1.2 cash per share, Tong Herr is really an attractive investment for Savvy Investor.
Makes Stainless Steel Fasteners.
Major Shareholder: All Star International Holdings Ltd
Tong Herr business is cyclical in nature. Nickel is one of material use in Stainless steel fasterners production. Nickel price should be higher in coming months.
See the Nickel Price Chart...
High Nickel price allow TongHerr sell its product at higher price and increase profit margin.
With RM1.2 cash per share, Tong Herr is really an attractive investment for Savvy Investor.
Thursday, October 7, 2010
Bank of America : New Banking Crisis !
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)
“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)
Monday, September 27, 2010
Golden Agri
Breaching RSPO policies
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.
Maintain Hold on the stock.
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.
Maintain Hold on the stock.
Friday, September 24, 2010
Malaysia - Advanced Emerging Markets
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)
Sunday, September 19, 2010
Genting Hong Kong Ltd : High Hopes for Philippines
Profile :-
• 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.
Watch RWM
• 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.
Interim Financials
• 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.
Profit Momentum Returning
FY 08 - -101.1
1H FY09 - -35.3
2H FY09 - 7.0
1H FY10 - 11.3
Technical Analysis
• 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.
• 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.
Watch RWM
• 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.
Interim Financials
• 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.
Profit Momentum Returning
FY 08 - -101.1
1H FY09 - -35.3
2H FY09 - 7.0
1H FY10 - 11.3
Technical Analysis
• 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.
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