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Showing posts from September, 2008

U.S. House Rejects $700 Billion Financial-Rescue Plan

The financial-rescue plan intended to restore confidence in the U.S. banking system collapsed in partisan wrangling as the House of Representatives voted down the proposal backed by the Bush administration and congressional leaders of both parties.
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Bailout Fails

The defeat of the extraordinary $700 billion financial rescue package represented a perfect collision of the forces of modern politics -- a fast-moving Internet campaign, vulnerable incumbents, a weakened and unpopular president, and a roiling presidential campaign -- all working against the so-called Masters of the Universe.

U.S. Stocks Plunge After House Votes Against Bailout Plan

U.S. stocks plunged and the Standard & Poor’s 500 Index tumbled the most since the 1987 crash after the House of Representatives rejected a $700 billion plan to rescue the financial system.
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US Stocks Down On Bailout Vote; DJIA Has Biggest Point Drop Ever

NEW YORK -- Looks like another Black Monday.
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Steel Industry in China Crumples

THE head of China’s leading steel company says the Chinese economy and steel industry are both “heading for a downward slide”, as hopes fade that China can insulate Australia’s resource-dependent economy from the widening global downturn.
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Paul J. Markowski

I am hearing from Fed sources that two things are under consideration. One is a coordinated rate cut. Without the ECB and BOE joining the Fed it does not make sense for the Fed to go alone. The other is dollar intervention along with a rate cut.

The decline in stock prices is hardly the problem today - except for equity managers. It is the frozen credit markets that have to be unglued.

Hedge Funds are Bracing for Investors to Cash Out

First, the money rushed into hedge funds. Now, some fear, it could rush out.
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Wall Street’s Slow Demise

With breathtaking speed, the world of large Wall Street investment banks has vanished. Fabled firms, some more than a century old, have been merged out of existence (Bear Stearns, Merrill Lynch), gone bankrupt (Lehman Brothers), or sought asylum as commercial bank holding companies (Goldman Sachs, Morgan Stanley). Why on earth did this happen?
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Fresh Challenges for Asian Banks

Banks in Asia mostly dodged the ravages of the subprime mortgage meltdown but now must contend with depressed markets and a darkening economic picture resulting from the financial crisis plaguing the West.
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STI Technical Analysis - UOBKH

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Metals & Mining Coal - GS

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How to Position in this Market - OCBC

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Baptism of Fire - DBSV

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Technical Recession Confirmed - CIMB

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Hong Kong Property - UOBKH

It doesn’t rain, it pours
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HSBC to Raise Rates for New Home Buyers - Citi

Limited positive impact on banks but more headwinds for property market
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China: Cash is King - GS

The rise of "cash" premium
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“Looks like we’re in a financial crisis,” says Marc Faber

Speaking at the CLSA conference in Hong Kong, bearish Dr Marc Faber refrains from saying ‘I told you so’, and remains pessimistic about the global outlook for markets and economies.
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Red Indians and Weather Forecast

It was autumn, and the Red Indians on the remote reservation asked their new chief if the winter was going to be cold or mild. Since he was a Red Indian chief in a modern society, he couldn’t tell what the weather was going to be. Nevertheless, to be on the safe side, he told his tribe that the winter was indeed going to be cold and that the members of the village should collect wood to be prepared.

Brokers Hanging on Despite Market Turmoil

Management says business resilient, but dealers tell of ebbing confidence
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Market News Access

I take time and effort to gather and put up information at my blog.

I like to share with people who appreciates my time energy spent.

I will continue to share with people who shares and/or communicate with me in any way.

Hence, I will remove access to Market News blog for those passive reader.

Who Wins, Who Loses Under Proposed Bailout Plan?

WASHINGTON - The proposal to bail out U.S. financial markets to the tune of up to $700 billion creates a lot of potential short-term winners, as well as some losers.
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Grade A Office Rents in CBD Slide for First Time in Years

Average monthly rent at Raffles Place slips 1.4% to $17.64 psf in Q3
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Continued Outflows Bar US - Nomura

Figures for the latest week suggest that Asia ex-Japan, especially Taiwan, saw consistent net outflows via mutual funds and foreign investors. We note that only China-related funds attracted net buying, while India- and Korea-related funds saw further steady net selling.
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Asia Faces a New Reality - Nomura

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PC: Signs of Cracks Emerging - Nomura

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Agribusiness in Asia: getting out of the Malthusian Trap

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Recession Probability Remains Very High - Wachovia

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Recessionary Winds Intensify - BNP

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SingTel - ABN

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Singapore Offshore Marine - CS

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Singapore Banks - CS

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Singapore Banks - JPM

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Real Estate - ABN

Value Trap
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China Steel - UOBKH

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Bank of East Asia - CS

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Asian vs Western Comparison

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Blue = Western
Red = Asian
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2009 Chinese Zodiac

Wilmar - DB

Extracting margins at every part of the value chain; Buy
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Screening for Winners - DMG

Straits Asia Resources - GS

S-Chips - Citi

Opportunities in a Bear Market Rally
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Factors for Recovery - Citi

Strategies for Successful Bottom-fishing
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Comments on US Distressed Debt Purchase Plan - CS

Positioning for a Bear Market Rally - Citi

Inlfation Fears Plunge as Recession Looms - ML

Falling oil and commodity prices prompted a dramatic fall in inflation expectations across all regions in the September survey and led to a sharp shift away from inflation-sensitive sectors, such as Basic Resources, toward defensives.
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Fund Managers Brace Themselves for Recession - ML

Fear about the global economy is increasingly evident, with many managers believing the global economy is already in recession (44%) or is likely to go into recession in the next 12 months (61%).
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2009 Chinese Horoscope for the Year of the Ox

DOW 10,000 It Has Begun

China Pondering Fundamentals - BCA

Crisis FAQ from Standard Chartered Bank

Intervention could move market 20pc

Confidence to soar after Beijing places buy orders
More in comments...
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Guangzhao Industrial Forest suspends trading, cites DEFAULT RISKS

(XFN-ASIA) - Singapore-listed Guangzhao Industrial Forest Biotechnology Group said it has suspended trading amid a steep decline in its share price, adding that a prolonged suspension has raised the risk of default on a convertible notes issue.
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Science unveils hidden drivers of stock bubbles and crashes

Proponents of rival concepts say that primitive emotions, herd mentality and raging hormones are among the invisible motors that help inflate an asset bubble and then prick it.
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Singapore-listed China stocks - JPM

View with a cautious eye
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Time for SGX to consider disclosure of short sales

The Commoodities Meltdown - Citi

Stress-testing the STI - DBSV

Markets - Early Stages of Capitulation

China Strategy - UOBKH

Liquidation-driven forced selling will continue to put pressure on Hong Kong and China stocks in the near term. The interest rate cut by China should help, but it is not enough to turn around the current jittery market sentiment. If history is anything to go by, now is time to buy on dips.
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Golden Agri-Resources - UBS

Upgrade to Buy from Sell
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Singapore Real Estate - JPM

Singapore Banks - MS

Credit Events May Invoke Vicious Credit Capital Cycle
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Neptune Orient Lines - JPM

Maintain Underweight
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Will my money be safe? Experts tell who is at risk

AMID all the mayhem on Wall Street, many ordinary bank customers here are wondering: How does all this affect me?
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Redemption Pressure Likely To Stay - Fund Manager

[Dow Jones] Redemption pressure with foreign funds likely to rise in November, December as US financial sector crisis will continue “minimum for the next six months,” says a fund manager at a global fund with about $2 billion exposure in Asia. FII’s have sold about net $8.2 billion in India shares since start-2008. “We are very cautious, and we don’t want to increase exposure (in Asia) right now. Our fund net asset value (in Asia) remains negative from beginning of 2008 as we have lost out on fall in shares and also weakening Asian currencies,” he says. Adds, “As long as the US financial sector crisis stays, stock markets are likely to stay weak.” Sensex down 0.9% at 13,396.36, 37% off all time high of 21,206.77 on January 10, 2008.

Stocks with AIG Exposure

DBSV issued note to avoid 4 stocks that AIG has exposure in:

10.9% 104m shares MMP Reit8.1% 40.4m shares First Shipping Lease6% 37.2m shares Frase Centrepoint Trust3.9% 64m shares Jiutian

SGX Top 10 CFD Counters

Yangzijiang (Net Short)GoldenAgr (Net Long)FerroChina Limited (Net Short)StraitsAsia (Net Short)Noble Grp (Net Short)China Hongx (Net Short)Cosco Corp (Net Short)JiutianC (Net Short)Wilmar (Net Short)China Sky (Net Short)

Top Economist, Nouriel Roubini, Says American Depositors Should Worry

The “run” could continue once more Americans realize the Federal Deposit Insurance Corporation has only about $50 billion to “insure” about $1 trillion in assets at the nation’s financial institutions.
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On Wall Street, a Problem of Denial

How can this be happening?

Inflation Fades, Rising Risk to Growth - DB

Singapore Banks - UBS

Minimum exposure to Lehman
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The Need for Buyer of Last Resort?

In August 1998, in the throes of the Asian financial crisis, the Hong Kong Monetary Authority (HKMA) spent over US$15 billion scooping up the territory’s blue-chip stocks and stocks futures.
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US Banks Fallout Implications - Citi

Investors Should Tread Cautiously in the Bank Stocks
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Stress-testing Banks and Developers in a Property Meltdown

Our theoretical stress tests on Chinese property developers and banks paint a rather gloomy picture
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SingTel - ML

Reducing PO on Telkomsel revaluation; remains Buy
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SIA Engineering - JPM

Wins A330 maintenance contract
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Olam International - JPM

Investing US$129MM to become a major importer of sugar and wheat in Nigeria
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Singapore Airlines - JPM

August Traffic Monitor: Declining load factor trend continues
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Keppel Corp - ML

First step towards unlocking value of infrastructure assets
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Dr. Marc Faber Commentary

The US dollar is strengthening (and is now short-term overbought) and some stocks and commodities have become oversold from a near-term perspective. So, what could happen in the next few weeks is a rebound in the Euro, which is oversold near-term, and a rebound in equities and selected commodities.
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Correlation of Crude Oil price & Crude Palm Oil Price

Analyst said the correlation of Crude Oil price & soyabean oil price (SBO) & consequently Crude Palm Oil Price (KPO) is 80 to 100% correlation.

He used Oil at US$113/barrel: TP Wilmar S$3.10; TP First Res S$0.55

If Oil at US$80 average for the year, then TP for Wilmar S$2.19; TP for First Res S$0.39

If Oil at US$60 average for the year, then TP for Wilmar S$1.16; TP for First Res S$0.29

No FED Rate Cut Expected

AIG’s ratings downgrade poses a systemic threat that could force a Fed lifeline under rule 13.3 if Goldman and MS cannot put together a loan consortium in 48 hours. The $75 billion may need to be raised to $100 billion if the counterparties force more collateral to be put up. Otherwise, there is a high probability of another Chapter 11 that will have global ramifications in, perhaps, the $trillions.

On another note, there was not one former FOMC member who expects a rate cut. Current Fed officials are supposed to be in a blackout before today’s meeting. I do not expect a cut but anticipate a change in the statement that notes the potential economic fallout from the current crisis. That could be the setup for a possible rate cut by year end if the economy shows no signs of improving.

My contacts tell me also that there has been no discussion of the Fed, ECB and BOE coordinating a rate cut.

Paul J. Markowski

STI Technical Analysis

SGX Sell - Citi

The FED

If the Fed really wants to make a bold statement, using rates as the device, it should lower rates by 50 bp, not 25 bp. Does that solve the problems at hand? No.
By Paul Markowski
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2nd Order Effects of the Lehman Crisis - Staying Liquid

By Paul J. Markowski
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A Timeline in Memory of Lehman Brothers

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TIMELINE: U.S. financial rescues, failures in last century

The federal government has a long history of involvement with financial institution rescues. Following is a chronology of key events over the last century.
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Beware the Asian equities bust-up

For all the drama on Wall Street, US stocks are scarcely in bear territory yet. The Dow Jones Industrial Average is down only 13.8 per cent this year. In contrast, Asian equities are the world’s worst performing stocks.
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Is it all over for cut-price China?

THE huge container ships are still a fine sight as they weave through a maze of islands and head out to the South China Sea, but their cargoes are no longer made in the world’s bargain basement.
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Tug of the theme park tourists

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How will a formidable mega resort in Singapore affect Hong Kong’s market share?
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Golden age of hedge funds dims

NEW YORK: over for hedge funds?
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Financial repression sires dangerous imbalance

This “implied tax” imposed on households by low state-regulated interest rates amounts to the financial repression of consumers by the government
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Single stock derivatives set for year-end debut

SGX eyeing spike in hedging, trading, arbitraging chances
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Remisier kings

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The cousins who have taken over Peter Lim’s throne
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Bargains lure foreign cash into A-shares

Foreign institutions bought heavily into mainland-listed stocks last month, a fresh sign that overseas investors are hunting bargains as two-thirds of the market’s capitalisation have evaporated
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China Strategy/Stress-testing Banks and Developers in a Property Meltdown

Investment conclusion: Our theoretical stress tests on Chinese property developers and banks paint a rather gloomy picture. The tests show that all developers have earnings and solvency issues if property sales volume and prices fall at the same time (past experience). They also show that all banks have earnings risks, although not one of them appears to have solvency issues (the only good news).
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Not Time for Bottom-Fishing - Andy Xie

Further, when markets hit rock bottom, they will remain at the bottom for a long time. The odds on a quick recovery, as occurred in 1999 and 2003, are extremely low. I think that, after hitting bottom, stock markets will remain low for one year and property for two years. Investors can take their time.
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China Hongxing Sports - DB

We believe current valuations for China Hongxing are attractive, trading at 8.0x and 6.1x FY08E and 09E PE respectively. The stock is currently trading at a 40% discount to Li Ning and China Dongxiang. The company has about RMB1.7bn net cash or a net cash/share of S$0.12 and ex-cash FY09E PE of 4x. Maintain our Buy recommendation.
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When S-shares Bubble Burst

Many people ask why has the China stocks fallen so much, and how much is enough.

“Every time bubbles pop, they tend to go down 80%, even as much as 90%,” says Nicholas Vardy, who edits the Global Guru and Global Stock Investor newsletters from his home base in London.

Many S-shares have fallen 80-90% from the peak in 2007. The latest victim is Guangzhao having fallen 87% from 0.465 to 0.06. There may be more room to fall for those S-shares that have fallen much less.
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Cosco Corp - ML

We downgrade Cosco Singapore to Neutral from Buy. Despite the severe 71% drop in share price YTD, we see no potential near term re-rating catalysts. We expect limited order wins in 2H08, margin pressures, potential order cancellations and delivery delays together with uncertainty regarding management change to continue to overhang share price performance. We cut our earnings estimates and reduce our PO from S$4.80 to S$1.75/share. We have also increased our volatility rating from medium to high.
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Indofood Agri Resources

We cut our target price for Indofood Agri Resources (IFAR) by 33% to S$2.60 from S$3.90 on reduced earnings assumptions for FY08–10E and a higher discount rate. The lower earnings also stem from reduced earnings estimates for 64.4%-owned London Sumatra. Our new target price implies an FY09E PER of 11.4x.
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FTSE STI semi-annual review

This review features three investability weight (IW) changes. There are upgrades in the IWs of Singapore Telecom, to 50% from 40%, and Genting, to 40% from 30%. Wilmar, by contrast, has its IW downgraded to 20% from 40%, resulting in a circa 2.4% weighting cut.
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HSI Technical Analysis

However, do observe that the 10-day Rate of Change (ROC) of the index on the daily chart has not yet reached its support. The index is inclined to decline further before any short-lived rebound.

On the positive front, the index could see a potential corrective rally set up at the 19,351-19,387 area. 19,387 was the prior low on the daily chart while 19,351 is 0.618x swing target on the weekly chart.

We expect any corrective rally to be contained by the downtrend resistance near 20,800. Our stance is SELL into rallies...
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Singapore Banks by JPM

S&P analyst still bearish on Financial sector

An 'L' for a Recession

Are we seeing a V, W or L shape recession? We are not as impressed as the markets by the bailout of Fannie Mae and Freddie Mac.
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The Toughest Market in 35 Years

In summary, though we think the markets have limited potential downside, the volatility in the market is likely to keep investors sidelined until some direction becomes more apparent.
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Revamped FTSE China-related indexes

Capitulation Phase

Despite the GSE package announced by the U.S. authorities over the weekend, emerging market share prices have remained under siege. There are two undercurrents driving the accelerating sell-off: massive liquidation by long-term investors; and concerns about the next casualty in the U.S. financial system (like the Lehman Brothers, whose stock price is collapsing amid speculation the firm could be heading into bankruptcy).
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6 deadly investing mistakes

Remember: If the headlines are full of it and everyone else is doing it, you’re probably too late.”
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