How APPLE become most valuable company in America?

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 Plc : Project Debt Refinancing

Refinancing project debt.

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.

(Source : DB Research)

Marc Faber : Recovery

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.

US: Job openings in US rise, pointing to payroll gains

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)

Daily Commodities

COMMODITIES


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.

Tong Herr: EC proceeding 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.

Weekly Market Commentary

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.