Wednesday, August 4, 2010
US: Fed may pass on more stimulus amid signs of weakness
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: To further open gold market to trading, imports
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
Tuesday, August 3, 2010
Maybank : The lowest Transaction fee?
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| Maybank2u.com |
"Trade anywhere, anytime with M2U online stock"
•Save money on trading fees•Earn interest on your credit balance
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- Comments
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!
Malaysia : Maybank
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.
Valuation:
Rating : BUY
Share Price : RM7.74
Target Price : RM8.80
Upside : +12%
Recommendation:
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.
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.
Valuation:
Rating : BUY
Share Price : RM7.74
Target Price : RM8.80
Upside : +12%
Recommendation:
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 Maritime PCL : Opportunities on Big Sell Down...
Mermaid's current share price has plunged 48-50% since the beginning of 2010.
Financial Analysis:-
Year 2005 2006 2007 2008 2009
Sales 1,241.4 3,167.4 4,131.3 5285.4 5,209.9
Net Profit 45.67 538.3 541.1 1,156.3 714.5
ROE 4.05% 24.07% 19.92% 17.44% 7.53%
2011 PE Ratio:-
10.4 times FY11E EPS @S$0.48
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
Financial Analysis:-
Year 2005 2006 2007 2008 2009
Sales 1,241.4 3,167.4 4,131.3 5285.4 5,209.9
Net Profit 45.67 538.3 541.1 1,156.3 714.5
ROE 4.05% 24.07% 19.92% 17.44% 7.53%
2011 PE Ratio:-
10.4 times FY11E EPS @S$0.48
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
SMRT : 1Q profit declined 21%
SMRT Corp (MRT SP)'s 1Q profit declined 21% YoY to S$38.2m. The stock was downgraded to "sell" from "hold" at Deutsche Bank and reached a new 3-month relative low against the Straits Times index.
Manufacturing: Better Than Expected In July
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.
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.
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