Chart - BanyanTree

This is a very ‘nice’ evening doji star formation (for candlesticks) on Banyan Tree, which will likely see short term weakness and correction back to the 105 region.  Happy trading.

Chart - StarHub

This is another counter in my SRS account which I bought some time back when it was 2.08 for my retirement account.  Sometimes I wonder why I can’t be as patient when I have a  bigger position vis-à-vis a smaller one.  The counter looks bullish as it breaks new high and I am also not complaining about the generous dividend which it gives out every quarterly.

Dividend – This is one key criteria I have for long term investing for my SRS account.

Chart - Biosensors

Biosensors is a beneficiary of DBS buy call recently but beware of chasing the highs as the fall can be painful as well.  The counter looks likely to face correction pressures down to the 90c levels again in the coming weeks.

Chart - Yangzijiang

YZJ is showing signs that it has run out of steam and is facing short term correction pressures. A possible swing ‘short’ trade with a target around 160-165 and a cut loss above recent high.

Chart - Straits Times Index (STI)

Let’s take stock of how the STI is performing. STI is showing signs of corrections and it will be confirmed by the parabolic being triggered together with the bearish crossover of the MACD. Watch out for those 2 technical signals, which I use regularly for swing trades.

Chart - Hiap Seng

It is extremely amazing how powerful DBS research is these days. It started with its buy call on Biosensors, followed by JES, followed by Hi-P and today it is Hiap Seng. All the stocks it covered “gap up” upon coverage.  Are the good old days are back?!?!  Anyway, Hiap Seng showed a long red candle today where it gap up on opening and then closed at its low. This is a bearish candle where short sellers can short with a buy stop slightly above today’s high. Do be careful if you are those who ‘buy at whatever opening price’ cos the good times won’t last forever.   

Chart - SATS

A possible swing trade back above $2.90-$3.00. With SIA doing so well, SATS shouldn’t be too far off as well. Happy trading.

Chart - FTSE ST China Index

This is the long term (5 years) weekly chart of the FTSE ST China Index. SGX is introducing the trading of ADRs next month where top China companies listed in the US will be allowed to trade on the SGX during the trading hours and you can then square off that same position in the US market. This is likely to boost interest from traders and investors who can trade in the more decent Asian hours and may also rekindle the “S-chip” sector. If you just look at the 52 weeks chart, you can see that the index is actually at one of its highest level but if you zoom out to a longer period, you can see that it is still a long way from its bubbly peak of 1,000 set a few years ago. Happy trading.

Chart - STI ETF

If you are someone who don’t believe in buying unit trust with expensive management fees (which rightly so), index investing is a much cheaper option and its performance is much better than most unit trust fund managers after including management fees. STI ETF is one of the method of “index investing” and is gaining popularity as a great diversification tool and yet participating in the market movement at the same time. Happy investing.

Chart - SPH

$4.20 for SPH proved to be a formidable resistance as it tested that price a few times. A break above that price will be extremely bullish as you can see a “cup-and-handle” formation. However, fundamentally, there doesn’t seemed to be any catalyst for it to do like unless it announce some “special dividends” due to its cash generated from property development?  The share price looks weak in the near term and likely to weaken in the coming days. Let’s see if can break the resistance in the next upswing.

Chart - TigerAir

Despite all the recent news report that Tiger is facing a shortage of pilots and a series of downgrades from research analysts, the share price of the company actually appeared to be resilient. The share price of Tiger Airways look set to ‘roar again’. A potential swing trade back to its recent high of $2.20.

Chart - Straits Times Index (STI)

Further to my post on 27 Aug 2010, STI managed to break its all time high today at closed at 3,066.

Let’s see how far higher it can move on from here. Cheers.

Chart - JES

JES is showing signs of “breaking out” towards 24-26 level after a long period of consolidation. It is in ‘tandem’ with other shipbuilders like Yangzijiang and Cosco which have been performing quite well lately. I guess investors are still not convinced if the company has managed to turnaround after a loss in 2009.

Chart - Genting SP

Further to my earlier posting on 16 Aug 2010, Genting hit the technical target mentioned on 1 Sep 2010. It is now showing signs of weakness with bearish divergences and dojis appearing. While it is not showing any reversals of trends, it is possible that the stock might take a short breather in the near term before resuming its uptrend.

Chart - Consciencefood

The company IPO recently at 22c and rose to a high of 30c before coming down back below its IPO price. A possible swing trade at 22c yesterday with cut loss below 20c and a swing target of 24-26c.

Chart - Hyflux

Back from my overseas trip and a quick update for Hyflux.

A possible swing trade back to the $3.20-$3.40 area with a cut loss below the $3 mark.

Valuation wise, it is trading at EV/EBITDA of 17.6x and PE of 21.3x for FY2010F and EV/EBITDA 13.1x and PE of 18.7x for FY 2011F at today’s closing price. Not exactly cheap.

Chart - CoscoCorp

 Cosco looks like a possible swing trade target with a target of $1.70 to $1.80 and a cut loss below the recent low.

Valuation wise, the company is trading at a consensus PER of 21x for FY2010 and 17x for FY2011. Not exactly a cheap stock unless it can continue to win contracts.

This blog will take a break for a few days as I will be travelling for work.

Chart - FTSE ST Real Estate Holding and Development Index

The government announced a new slew of measures with immediate effect to curb property speculation and to cool the red-hot property market for the 3^rd time in 12 months to prevent a property bubble from happening.  Some of the changes include:

·         Private property owners to sell their homes within 6 months of buying an HDB flat;

·         Buyers of second property have to fork out at least 10% cash (instead of the previous 5%) and can only loan up to 70% of the value of the 2^nd property (instead of 80%)

·         Seller stamp duties will apply for a period of 3 years instead of 1 year.

 

The government does not rule out further action to “cool” the market but is “very reluctant” to impose capital gains tax. I guess they still remember clearly how the previous capital gains tax crashed the Singapore property market. The property stocks were understandably affected after the news were announced and this is reflected by the charts as well. Let see if the measures are ‘effective’ in curbing property prices from rising further.

 

The property market is actually one of the places you should look at if you want to achieve financial freedom. I am not advocating that you buy blindly or buy now but it is an asset class that can help you to retire earlier. But remember there are a few things you might need to do take note of:

 

(1) buy close to the bottom of the cycle and ride up the cycle;

(2) you need at least 2 properties to ride the cycle. No point cashing out at the peak of the cycle and then buying into it again;

(3) property allows you to “leverage” at a one of the lowest interest rate.

(4) Location is important.

 

Happy investing.  

Chart - Kep Corp

A potential swing trade back to $9 (first target) followed by $9.40 (second target) with a cut loss below the recent low.

Chart - Straits Times Index (STI)

Lets do a quick update on STI, which is surprisingly resilient. The STI looks like it is ready to do a short term rebound in the coming days and if it can break above the recent high, It will negate the bearish views I previously had.

Chart - SPH

Singapore Press Holdings is one of my “dividend paying” stock held in my SRS account for a period already. The financial year end for this company is 31 Aug and FY2010 is coming to a close. The company has been paying out more than 90% of net income as dividend for the last few years and I believe this year will be no exception. The yield is not exciting at approximately 4% at current prices but our bank deposit rates is even more “unexciting”.

The print business is still rather stable but don’t expect “significant” growth from it and it still enjoys monopolistic position in Singapore but is threatened by the new media such as internet “Channel News Asia” and free papers such as “Today”.

Unless there is major change to the landscape here, I guess it will continue to be the dominant news provider in Singapore earning stable income from advertisements….zzz…

Technically, the share price looked quite well supported. Perhaps this counter has always been regarded as a “defensive” stock.

 What would be definition of “defensive”??? Does defensive means good dividend yield but no growth and boring business?....hmmm..

Chart - KepLand

A potential swing trade back to $4.20 with a cut loss around $3.80. All the indicators seemed to be pointing to a short term rebound.

Fundamentally, the company is trading at FY2010 PE of 17.7x and a price-to-book ratio of 1.5x. I wouldn't call it a cheap stock.

Chart - Straits Times Index (STI)

My view on STI remained the same, I think the correction is not over yet and is heading towards the 2800-2850 levels in the coming weeks.

Let’s see how it goes in the coming days.

Happy trading.

Chart - Beng Kuang

Beng Kuang closed with a doji and on high volume.

Doji is formed when the opening price is the same (or close to) the closing price. Alone, doji are neutral patterns. Any bullish or bearish bias is based on preceding price action and future confirmation. Thus we will need the price action on Tuesday to determine if the upward price pattern is ready to reverse downwards. The extremely high volume traded but with no significant price movement is also a warning sign and signals that ‘distribution’ has taken place. Traders who are long on this stock will start to tighten their moving stops.

With the resistance at around 30c and oversold indicators, my personal view is that the uptrend is going to end soon and correction back to 24c is on the cards in the near term. Happy trading.

Valuation wise, at current price, the historical PER is around 13.1x, which in my view, is at fair valuation.

Chart - China Fish

China Fish – A potential swing trade with a target price around $1.9-$2 and cut loss at $1.75.

Broadway - Technical and Fundamental Analysis

Broadway Industrial Group Limited engages in the manufacture and sale of foam plastics and packaging products. It provides expandable foam plastics primarily for customized protective packaging of consumer electronics, household appliances, telecommunication, and information technology products; insulation material for industrial and general construction applications; and absorption component parts for the automotive industry. The company also manufactures and distributes actuator arms and related assembly for the hard disk drive industry; and precision machined components for industrial products used primarily in automotive and semi-conductor sectors. It operates in the People's Republic of China, Singapore, Thailand, and the United States.

The chart showed an amazing recovery from beginning of 2009 where it was trading at around 15c in March 2009  to the current price of 113c in Aug 2010. That is a whopping 7.5x return in less than 2 years. (sigh, why didn't I buy it at that price.. haha). Technically, the share price looked well supported at around the 95-100 levels.

Valuation

At today's closing price, it is trading at PER of 5.1 based on 2010 estimated earnings and an EV/EBITDA of only 3x! DMG has a target price of $1.46 in its 2 Aug 2010 report. I would think that the company is still trading at attractive valuation at current price.  In my view, a fair value of EV/EBITDA of 5x would mean a price target of $1.86.

Q&M Dental - Fundametal and Technical Analysis

The company operate a chain of dental clinics in Singapore and recently It signed some agreement to venture into China, which many believed the sector is still in its infancy.

This counter is one of the most “well controlled” counter I have seen. It can moved up and down in an orderly manner. The way to play this is you need holding power but it requires a lot of patience to wait for the big boys to play this counter up again. Fundamentally, the company is not cheap and investors may do well to wait for a better entry point.

Financials

Valuation

The company is not cheap. Based on today’s closing price, it is trading at EV/EBITDA of 24x and a price-earnings ratio of 27x. 

Chart - CapitaComm

Capital Commercial Trust looked bullish as it closed at 141 today. It seemed likely to continue its uptrend and head towards 150-160 in the coming days. The other indicators are cutting up nicely as well. Seemed like the defensive REITS are back in favour this week as market become wary of a possible recession again.

Chart - HL Asia

HL Asia – The long bearish candle with high volume, coupled with bearish divergences in the MACD and Stochastic indicate more downside bias for this counter. Possibly back to the $3 support level.

China GDP Surpasses Japan, Capping Three-Decade Rise

Here is an article from Bloomberg today which might interest you.

 

+------------------------------------------------------------------------------+

 

China GDP Surpasses Japan, Capping Three-Decade Rise (Update1)

2010-08-16 08:12:05.77 GMT

 

 

By Bloomberg News

     Aug. 16 (Bloomberg) -- China surpassed Japan as the world's

second-largest economy last quarter, capping the nation's three-

decade rise from Communist isolation to emerging superpower.

     Japan's nominal gross domestic product for the second

quarter totaled $1.288 trillion, less than China's $1.337

trillion, the Japanese Cabinet Office said today. Japan remained

bigger in the first half of 2010, the government agency said.

     China led the world out of last year's global recession

with an economy that's more than 90-times bigger than when

leader Deng Xiaoping ditched hard-line Communist policies in

favor of free-market reforms in 1978. The country of 1.3 billion

people will overtake the U.S., where annual GDP is about $14

trillion, as the world's largest economy by 2027, according to

Goldman Sachs Group Inc. chief economist Jim O'Neill.

     China's surpassing of Japan "is a marker of its

increasingly dominant role in the global economy," said Eswar

Prasad, a senior fellow at the Brookings Institution and former

head of the China division at the International Monetary Fund.

"The resilience of China's growth during the crisis enabled a

number of other countries, particularly commodity-exporting

economies, to ride on its coattails."

     The benchmark Shanghai stock index rose 2.1 percent at the

3 p.m. close today, climbing the most this month.

 

                         Tricky Comparison

 

     China overtook the U.S. last year as the biggest automobile

market and Germany as the largest exporter. The nation is the

world's No. 1 buyer of iron ore and copper and the second-

biggest importer of crude oil, and has underpinned demand for

exports by its Asian neighbors.

     While China's output was also larger in the fourth quarter

of 2009, Japan's GDP rebounded to exceed China's in the first

quarter, according to data compiled by Bloomberg News. According

to IMF data using purchasing-power-parity calculations to adjust

for exchange-rate differences, China overtook Japan in 2001.

     Quarterly comparisons between China and Japan are "a

little tricky because they do not take account of different

seasonal patterns between the two countries," said David Cohen,

head of Asian forecasting at Action Economics in Singapore.

     China's economy is cooling as the government trims credit

growth from last year's record $1.4 trillion and discourages

multiple-home purchases to cool surging property prices. July

industrial output rose the least in 11 months, retail sales

growth eased and new loans climbed less than estimated. China

Petroleum & Chemical Corp. said last month that its crude-oil

processing increased at a slower pace in the second quarter as

fuel demand faltered.

 

                         Property Collapse

 

     The country's property market is beginning a "collapse"

that will hit the nation's banking system, Kenneth Rogoff, a

Harvard University professor and former chief economist of the

IMF, said July 6.

     Still, China is on course to overtake the U.S. as the

world's largest economy around 2020, PricewaterhouseCoopers said

in a January report.

     With China's growth surging 10.3 percent in the second

quarter from a year earlier and Japan expanding 2 percent, the

"gap is going to widen" in future, said Shen Jianguang, a Hong

Kong-based economist at Mizuho Securities Asia Ltd. "It is not

likely that Japan will retake the No. 2 spot given the likely

growth rates."

     Four of the world's top 10 companies by market

capitalization are from China, including PetroChina Co.,

Industrial & Commercial Bank of China Ltd., China Mobile Ltd.

and China Construction Bank Corp.

 

                         Agricultural Bank

 

     Agricultural Bank of China Ltd. boosted the size of its

initial public offering to $22.1 billion this month after

selling more stock in Shanghai, making it the world's largest

first-time share sale. The IPO made the nation home to four of

the world's 10 biggest banks by market value, half a decade

after the country's first major state-owned lender went public.

     China may be the biggest IPO market in 2010 as companies

are likely to raise 500 billion yuan ($74 billion) in Shanghai

and Shenzhen, PricewaterhouseCoopers forecast last month.

     Since introducing free-market policies, China has lifted

300 million citizens out of poverty, according to the United

Nations. The country remains a developing nation, with its per

capita gross national income ranked 127th in the world at $2,940

at the end of 2008, behind Angola and Azerbaijan, according to

the World Bank.

 

                         Cultural Revolution

 

     In the first three decades of Communist Party rule before

Deng took power, China's economy was hobbled by the chaos of the

Great Leap Forward, a failed attempt to transform the agrarian

nation into an industrial powerhouse, and the Cultural

Revolution, a decade of political upheaval led by Mao Zedong's

Red Guards.

     "China has a large population, a weak economic foundation,

relatively few resources and a large poverty population, which

remains our basic situation," Ma Jiantang, head of China's

statistics bureau, said in January. "Therefore, while we take

note of our expanding size of economy and enhancing economic

strength, we should also have a sober understanding that China

remains a developing nation."

     China's future influence on the global economy will

increase, said Shen at Mizuho. The country's "double-digit"

expansion will contribute a third of global growth this year,

the Organization for Economic Cooperation and Development said

in March.

     "Japan had a huge impact on the global commodities market

and foreign direct investment flows in the 1980s" as China is

doing now, Shen said. "The major difference is that China's

population is 10-times bigger than Japan's, its economy is still

growing at above 9 percent per year, and Chinese investors are

just beginning to invest abroad. You can imagine that China's

impact will be so much bigger."

 

 

Chart - Genting SP

The weekly Genting chart is very bullish as it broke through its multi-year high. This is an amazing recovery from its low as Resort World Sentosa is “firing” at all cylinders. 

Let’s see if it can head towards the $1.75 technical target in the coming months.

Armstrong - Fundamental Analysis

Armstrong announced a strong set of Q2 results where 2Q2010 net profit soars 125.9% to $7.1m. The first half net profit of $14.168m already exceeded the 2009 full year net profit of $14.1m! This was achieved on increased revenue and improved margins and the management has for the first time recommended an interim dividends of 2 cents per share! Assuming a full year dividend of 4 cents per share and based on today’s closing price of 41.5 cents, that will translate into a yield of 9.6%!

  

The analysts are bullish on this counter and  are summarised as follows based on 41.5c closing price:

31 Dec 2010F	Kim Eng	CIMB	DMG	1H 2010 x 2
Sales ($m)	213.6	231.4	215.7	222.4
Net Profit ($m)	24.6	26.6	23.1	28.3
EPS (S cents)	4.9	5.2	4.62	5.66
PER	8.5x	8.0x	9.0x	7.3x
EV/EBITDA	7.5x	5.1x	5.6x	5.0x
Target price	$0.57	$0.56	$0.49
Date of report	21 Jun 10	18 Jun 10	18 May 10

(Source: respective research reports adjusted for current share price).

Fair value

The high yield of 9.6% will provide support to the current share price as it is much higher than the deposits as well as some REITs!

PE – Assuming a fair value range of 8-10x PE, the fair value will range between $0.45 to $0.57.

M&A – Private Equity firms are acquiring or privatising listed companies at around 7x EV/EBITDA. Assuming a similar benchmark for Armstrong, the potential ‘buyout’ price will be around $0.58.

Chartwise

Chart-wise, the charts doesn’t look pretty in the near term (with down side bias) but is likely to trade sideways between 40c (Support) and 44c (Resistance) based on today's results and dividend announcement. From a longer term perspective, the company does look attractive from a fundamental perspective.

Chart - SoundGlobal

The chart of Sound Global looks extremely bearish with a critical support at 73 cents. The 2^nd quarter profits fell short of expectations due to dual listing expenses incurred. DBS lowered its target price to $0.84 (from $1.20 previously) and the $0.84 was based on 12x historical PE average!

A break of 73c support will likely see it heading towards the 65c levels.

Chart - Straits Times Index (STI)

A test posting via email.

The STI looks weak in the short term and likely to face correction pressure back to the 2900 levels in the short term.