The Edge has highlighted that some local REIT which issued commercial mortgage-backed securities (CMBS). They are Ascendas, CapitaCommercial, CapitaMall and Suntec.

We can access the yield percentage and gearing level quick conveniently by historical data. However, we may need more financial knowledge to understand the source of fund or borrowing which has propelled REIT in the last few years. The word ‘mortgage-backed’ has triggered the alarm bell.

In pursuing the high yield distributed by REIT today, the question of sustainability has not been answered. As highlighted in the report, there are plenty of debt maturing next year and the subsequent years, thanks to the booming of acquisition in the last 3 years. With the refinancing need in the region of multiple billion, REIT will not get cheap refinancing again for sure.

High Yield carry High Risk too. Nonetheless, REIT with strong parents will most likely survive the credit crunch.

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If you are tired of bad news, then read good news here:

The House rejected the plan by a vote of 228 to 205, that means the plan need only another 12 votes to cross over to get through.

Obama called for calm after the House vote, saying the plan ``will get done.'' Republican John McCain urged lawmakers to ``go back to the drawing board'' and come up with legislation that will pass.

P/S: Those lend the hand when market need help-the-most time will be rewarded handsomely. It work!

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Wilmar International – No change in downtrend
At $2.76 now. Broken $3.50 earlier, indicated target $1.50. Rebound resistance at $3.10.
(Most bearish--looking stocks from TA pt of view!!)

First Resources – Drifting lower
At $0.42 now. Support 36 cents, next measured move if break is 18 cents.

Golden Agri – Resuming decline
At 36.5 cents. Rebound resistance at 42 cents. If break 33 cents, target 23 cents.

Noble Group – Unlikely to break out
At $1.45. Support at $1.30, resistance at $1.60

Olam International – Resuming retreat
At $1.86 now. Resistance at $2. Support at $1.70, if break, target $1.30

Del Monte Pacific – Testing Support
At 51 cents now. Support 46 cents, resistance at 55 cents.

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After the heavy sell down of Keppel T&T yesterday, let’s digest some news from The Straits Times today:

CIMB-GK: There were rumours circulating that there was ‘force selling of a major shareholder’s stake’.

Dealer said that this could have been due to margin call.

Keppel T&T biggest shareholder is KepCorp with 80.27% stake, next is Kapital Asia with 9.19%. (Very small free float in the market, barely exceed 10% only!)

What aggravated the steep drop in Keppel T&T price was a lack of demand for the shares.

It came as a shock to many investors that a well-run company like Keppel T&T could be the subject of such a ferocious bear raid.

There are 2 forum members telling the rumours at CNA.

What happen yesterday on Keppel T&T reminded me on Dayen force selling not long ago.

KepCorp is unlikely to face margin call. Now the limelight shall be on Kapital Asia.

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Published September 27, 2008
Source: Businesstimes.com

Some of the yield figures have been inflated by exceptional dividend payouts last year by many smaller companies. Several small firms had dished out dividends to use up their tax credits, which expired at the end of December last year.



'Investors should look at bigger companies with a dividend policy, strong earnings over the past few years,' said one analyst from a local bank.

Profits are tied to the dividend payout as the latter is dished out from the company's retained earnings. Firms which are more established typically do not need to reinvest their profits for expansion purposes and hence choose to pay them out to shareholders.

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If this is a wayang, then they all deserve a Oscar award for their thrilling show.

1. Treasury secretary knelt before the House speaker and appealed for her support.

2. "If money isn’t loosened up, this sucker could go down,” President Bush declared Thursday as he watched the $700 billion bailout package fall apart before his eyes

3. It was an implosion that spilled out from behind closed doors into public view in a way rarely seen in Washington.

4. The talks broke up in angry recriminations

5. Followed by dueling news conferences and interviews rife with partisan finger-pointing.

6. Treasury secretary, Henry M. Paulson Jr., literally bent down on one knee as he pleaded with Nancy Pelosi, the House Speaker, not to “blow it up” by withdrawing her party’s support for the package over what Ms. Pelosi derided as a Republican betrayal.

7. Denounced the session as “a rescue plan for John McCain,” and proclaimed it a waste of precious hours

8. Bush: Our country could experience a long and painful recession

9. Another late-night meeting with Mr. Paulson and many other lawmakers to see whether they could restart the negotiations — and ward off a Friday morning bloodbath in the markets.

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When a lot of investor has his wealth deeply soaked in blue chip stocks, there are some bright spark in penny stocks went unnoticed.

One of this is Magnus.

This is a stock closed at merely 3 cents on 18 September but trading at the offer and bid range of 5.5 cents and 6 cents at this moment. A whopping gain of 2.5 cents or 83% in a week times. Impressive!

The breakout point is on 23 September when it closed up 4.5 cents from 3.5 cents with huge transacted volume.

The lesson here is: There is gem among penny stocks even in the bear market.

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Beaten-down cyclicals
1. Jaya Holdings
2. Pan-United Corp
3. SIA Engneering Co
4. Singapore Airlines
5. Singapore Exchange

Steady-dividend payers
1. Hong Leong Finance
2. Singapore Food Industries
3. Singapore Petroleum Co
4. Singapore Post
5. Thai Beverage

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Your generals are fighting a war which the whole country cannot afford to lose and they are requesting bullets from you now.

The message is loud and clear: Give me bullet, we will fight. No bullet, prepare to die.

Delays the deliveries of ammo will just expediting the down fall.

The enemy is town now. In my personal view, the plan will eventually get through no matter how the Congress playing difference ‘patterns’.

The market seems has not priced in the rescue now.

The question now is: When?

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They seems to be less then perfect honest or just perfect honest mistake when the history is scutinized.

US authorities are investigating Fannie Mae, Freddie Mac, Lehman Brothers Holdings Inc and American International Group Inc as part of a probe into the collapse of the sub-prime-mortgage market, a senior law-enforcement official said.

Fannie and Freddie, as well as AIG, already restated their books earlier this decade and corrected billions of dollars in accounting errors.

Fannie Mae paid a record US$400 million fine to the SEC and its regulator in 2006 to settle charges that executives fraudulently used 'cookie jar' reserves and other accounting gimmicks to hide US$10.3 billion in losses from 2002 through 2004 and maximise bonuses.

Freddie paid US$125 million in fines in 2003 and restated earnings from 2000 through 2002 after it replaced long-time auditor Arthur Andersen and discovered errors related to derivatives. Regulators accused the company of manipulating its accounting to push of some US$5 billion in earnings to future quarters.

Freddie ousted chief executive Leland Brendsel in June 2003 and Fannie's Franklin Raines left in December 2004.

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'Bio-Treat trades at less than one third of its NAV and maybe four times earnings. That's what I call a giveaway valuation.'
-“Mr Shah- Shah Capital “

This ‘water-play’ has lot of value if not being play down by convertible bonds issue.
As there is news that BIO-TREAT Technology is in advanced discussions to get a bank loan to settle the convertible bondholders, the reversal may come home not too far now.

My personal accumulation will start when STI hit a new low in coming days.

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Property stocks hit earth

Capitaland – Attempt Recovery
Not as technically roubust as Wheelock Properties and UOL, the candle stick chart formed a hammer, which is the equivalent of a Western system key reversal day, followed by a push up – confirming that the hammer is bullish. On the indicator front though, momentum is still somewhat moribund. RSI has turned up after a positive divergence, so prices may attempt an upmove to $4.50. If so, support may rise to $4.

City Development – No breakout yet
Hasn’t broken out like UOL, it has managed to move higher on expanding volume. The underlying tone is a little weak, though it is stronger than Keppel Land. MA are still falling, and the 50 day MA at $10.29 will likely provide resistance for any further rebound. On the downside, prices should hold above $9.

Keppel Land – Lacklustre move
The move looks totally lackluster and without conviction. You only hv to glance at UOL to witness a real break out. Kepland couldn’t do it. At best, expect some sort of a rebound. Resistance is at $3.50. The counter is unlikely to do much more unless RSI breaks out and quarterly momentum turns up. The lows at $3.11 should hold

UOL – Breaks above resistance
A successful break indicates an initial target of $3.60. Price were above $4 a few months ago, and if this is a real reversal, then who knows high prices can go.

Wing Tai Holdings – Temporary rebound for now

Wheelock Properties – Rebound at last

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As all of us enjoy the rebound, we hope that US taxpayer don't mind to pay the bills!

Source: MoneyNews
The Bush administration sketched out a multi-faceted effort on Friday to confront the worst U.S. financial crisis in decades, outlining a program that could cost taxpayers hundreds of billions of dollars to buy up bad mortgages and other toxic debt that has unhinged Wall Street.

President Bush, flanked by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, acknowledged that the program will put a "significant amount of taxpayers' money on the line."

The administration is asking Congress to give it sweeping new powers to execute the plan. Paulson said it "needs to be big enough to make a real difference and get to the heart of the problem."

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When the market dump bank preference shares here last week, we should know that the market is in great panic mode.

Bank preference shares are considered to be one of the ‘safest fixed income deposits’ comparable to bank’s fixed deposit. How could a person just bank in $100 into a local bank account willing to settle with just getting back $94.40? And this is what happened to OCBC Cap Corp preference shares which suppose to pay 5.1% annual coupon or interest.

Despite the great rebound yesterday, the shares still languish at $96.50 in an illiquid market.

The confident level is low, not only on the particular bank, but the world banking systems now.

The immediate victim: Preference Share, get a bad name which it does not deserve. This pain may take many years to cure.

Continue to read more...

Published September 20, 2008
Source: Businesstimes.com
By CONRAD TAN

STOCKS in Asia soared yesterday, after news that the US government is preparing a plan for a mass rescue of the financial sector and regulators in the US and UK moved to ban the short-selling of stocks.



Hong Kong's Hang Seng Index jumped 9.6 per cent, erasing almost all its losses earlier this week, led by Chinese banks and insurers that rose more than 16 per cent.

Here, the Straits Times Index ended 5.8 per cent higher after climbing as much as 6.5 per cent earlier in the day, recouping all its losses suffered during four straight days of declines earlier in the week. The jump was the biggest in percentage terms since August 20 last year.


But interbank lending rates here and elsewhere remained unusually high, although they fell from earlier peaks. That suggests strains from the crisis sweeping through global financial markets have not gone away, a day after central banks worldwide flooded the banking system with billions of dollars in additional liquidity in a desperate bid to keep interbank markets functioning properly.

The Singapore interbank offered rate or Sibor for overnight US-dollar loans halved to 3.25 per cent from 6.58 per cent. US-dollar domestic interbank rates for longer maturities also eased, following similar declines in US-dollar interbank rates in Europe and elsewhere on Thursday. But interbank rates in most markets, including Singapore, are still much higher than they were a week earlier - a sign that banks remain cautious about lending to each other amid worries about more financial institutions failures.

The Singapore Exchange said last night that all of investment bank Lehman Brothers' trading positions here have been settled or transferred to other brokers and that Lehman - which filed for bankruptcy in the US on Monday - no longer has any outstanding financial obligations to the exchange.

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Published September 17, 2008
MONEY MATTERS
Based on both fundamentals and technicals, US financials are likely to retest and break below July lows
Source: Businesstimes.com
By LIM SAY BOON
The writer is the chief investment strategist for Standard Chartered Bank's Group Wealth Management and Private Bank.

Small note: Always find the concept of capitulation very interesting: the feeling is like meeting the end of universe!

The snippet of the article:

Against this dismal backdrop, capitulation has started for US equities. Technically, the charts had been signalling loss of momentum by the S&P500 from the August highs.

The irony of all this is that US equities - at the epicentre of the global financial markets crisis - have been relatively resilient compared with the emerging markets.

That extreme divergence between the losses in the US and emerging markets is unlikely to be sustained. In the emerging markets, Chinese stocks have seen the destruction of some 70 per cent of their value from their cyclical peak. Shanghai Composite was down 66 per cent as of Monday's close with losses mounting through the course of yesterday.

But it is too late to be selling. Warren Buffett famously urged investors to be 'fearful when others are greedy' and to be 'greedy when others are fearful'. There is now real fear in the markets. And while we are not tempted to be greedy just yet, we would caution against selling into what could be the final stages of capitulation.

A final word: stay disciplined and avoid following the herd. Nothing lasts forever - neither bull markets nor bear markets. Typically, fund flows into stock markets tend to be at their strongest when markets are peaking and deeply negative when markets are near their lowest points. This is what causes the common agony of the retail investor - the 'buy high/sell low' syndrome. Avoid running with the herd as it is jumping off the cliff.

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In a proposal to get China Ghost Town (CNT) out of 1.1 billion renmnbi convertible bonds nightmare, the bond holder as the new financiers has imposed terms that are categorized as ‘pretty onerous’.

One prominent brokerage house in town has called that the share price of CNT will ‘snap back smartly’ with refinancing pressure out of the way.

With the resolution passed last weekend in EGM, the share price has slipped further from 7 cents to 0.55 vs 0.60 cents offer and bid range.

So, something is not ‘smart’ enough or someone get the direction wrong?

Putting a buy call in a bear market shall carry more serious check.

Continue to read more...

Bio-Trick have outstanding convertible bonds of about 909.5 million renminbi and these bond holders have exercised their bond’s put option since January 2008.

Bio-Trick has to sort out the refinancing of its convertible bonds as soon as possible. The share price has slide from over one dollar mark to as low as 15 cents today.

It is interesting to observe how creative financial engineering can rescue once the market darling in the good times.

Share placement/ Right Issue/Warrant Issue
- Highly dilutive in today’s share price. How many share they have to issue to raise that amount? If Bio-Trick still trading at $1 mark, all problems shall have been resolved long ago with this method.

Setup public-listed business trust
- The management claimed that there are ‘some enquires from pension funds in Europe and the US’ who are looking for long-term and consistent returns. These sound fantastic but why Bio-Trick? Why not Hyflux with similar business trust, proven track record, strong parent backing, large capitalization and idol CEO ?

White Knight
- Not heard of after the death of the white knight from Hong Kong. Lehman Brothers also looking for one now.

Bridging loan
- Will you loan to a stranger deeply in debt? While, no way, not even you are running a charitable fund. Even if the loan deal is on, Bio-Trick is expected to service the interest for many years to come.

Asset Sale
- Strip the asset for fire sale one by one.

In my guess, the combination of asset sale with bridging loan is the most likely outcome. Of course, we will see the gloom face of many shareholders.

This article is not means to advise or encourage you to buy/sell or to do whatsoever. Caveat emptor!

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The market has experienced 2 major relief rallies this year.

First is the bail out of Bear Stern,

Second is the rescue of Fannie Mae and Freddie Mac

And the Third is still in ‘making’ in Wall Street for Lehman Brothers which shall materialize before Monday market open.

The expected sharp temporary rebound shall help to correct the oversold condition and trigger another tumble very soon.

Therefore, the game plan is to short when market rally to resistance and wait at the support level to close position. All, shall be within one week.

The hot stock from The Edge can serve as a good guide as Singpaore financial sector stocks are least affected until now and 'have a lot of meat left'!

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DBS- Poised for a breakdown
Hanging on the support now but likely break down by week below $17. Expanding volume indicating some big institutional player is selling out. Three times tested $16 provide temporary support.

UOB- Breaks support
Fell below key $18.50 level last week accompanied by a noticeable increase in volume. A downturn from equilibrium line is another negative signal. Immediate support is at $16, although the break points to a much lower target.

OCBC Banks- Technical Break
Has broken an important support at $7.90 and that indicates a target of $6.10, a level that looks quite attainable. As prices fell, volume expanded, an indication that selling is strong. Indications are suggesting that prices are likely to fall. ADX is rising from a low level and the DIs are negatively placed. However, short term stochastics is rising, suggesting that prices may attempt a bounce. Any such moves are temporary, and find resistance at the breakdown level of $8.20.

SGX- Oversold but drifting lower
Is probably the least negative-looking of the financial sector counters. That’s not to say it’s bullish. But, having more than halved in price since the start of the year, the rate of decline has slowed dramatically in the past two months. In fact, stochastics is rising, and RSI is attempting to rebound. ADX is still falling. In a better market, these could be construed as relatively positive signals. Not now, though. Watch for support at $5.90. A breakdown could set a strong decline in motion. Resistance for any rebound is at $6.30.

Great Eastern Holdings- Prices fall as volumes rise
Probably the endgame for the company’s minority shareholders as OCBC likely crossing 90% ownership soon. The fall in prices on what looks like a huge increase in volume is a negative sign techinically.

Hong Leong Finance- Holding on to support
Prices are within what looks like a base formation, except that the market for financial counters isn’t conductive to a recovery. Interestingly, volume surged, which could be a sign that prices are ready to move out of its sideways consolidation. The candlestick formation is that of a doji, which means prices could go either way. Support is at $3.16, a level that has been tested twice in the recent past.

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STX, Berlian Laju is facing challenge from shipping slump but Berlian Laju seems to be least affected.

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Based on the cover page headlines on the Business Times today, it is ‘unofficially official’ that new kings have taken over Peter Lim’s throne.

What really catch my attention are not free Lexus/ BMW etc, but their biggest corporate deals cited: Half a billion dollars they raised via placement for China Hongxing Sports last year.

The placement is priced at $1.18 and this has contributed to the strong balance sheet with China Hongxing current net cash of RMB2.6bn. Good job done for China Hongxing.


The placees shall be very happy too at that time because they got to buy the placement share at a discount of 5.14% to the weighted average price of S$1.2439 per Share. China Hongxing is a market darling.

China Hongxing last closed at $0.29 on 12 Sept 2008.

This is a wobbling 75.4% lost, if the placees have hold on to the placement shares as so call ‘long term investment’.

A disservice?

Nonetheless, the ability to market placement at the peak before a deep and long plunge is something admirable, really.

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I think Singapore is the best nation in the world to handle public transport fare hike.

When the public transport system's total fare revenue will rise about $10.1 million, the transport operators will give up more than $30 million on an annual recurrent basis for transfer rebate.

Is that means a net lost of about $20 million to public transport operator?

The article from The Business Times
Published September 13, 2008

Net increase in annual fare revenue to come to $10.1m but operators to forgo $30m a year from rebate hike
By SAMUEL EE



BUS and train fares will rise 0.7 per cent - much less than the 3 per cent cap allowed under the fare adjustment formula for 2008, the Public Transport Council (PTC) said yesterday.


From Oct 1, there will be a flat increase of four cents per ride for adult ez-link fares on buses and trains. Adult cash fares will rise 10 cents across the board.

But for 92 per cent of bus and train journeys, the actual cost can range from a seven-cent reduction to a four-cent increase. The lower fares will result from a higher transfer rebate, which will be raised from the current 25 cents to 40 cents for adult ez-link fares. Of the 15-cent increase, the public transport operators will absorb 10 cents.

Commuters who transfer between buses, or between bus and MRT, get a transfer rebate on the fare paid when boarding the subsequent vehicle. This rebate is being increased so commuters only have to pay for the extra distance travelled, instead of being penalised for making a transfer journey that can be faster than a single direct trip. The aim of distance-based through-fares is to give patrons more route choices.

Based on the current pattern of journeys made using ez-link cards, the PTC said that 64 per cent of commuters will benefit directly from the transition to distance-based through-fares.

Two-thirds of this group will see no change or a reduction in their weekly public transport expenditure. The remainder will see an average increase of 18 cents a week, or about $10 a year. As a result of the overall net adjustment of 0.7 per cent, the public transport system's total fare revenue will rise about $10.1 million.

But the public transport operators will give up more than $30 million on an annual recurrent basis to absorb 10 cents of the 15-cent increase in the transfer rebate.

The PTC said that it considered the economic outlook and the affordability of public transport when reaching its decision. It said that the economy was growing at a slower pace of 4-5 per cent.

It added that the public transport affordability indicator has been on a downtrend for five years, falling from 7 per cent in 2003 to 6.2 per cent in 2007. This indicates that fares have remained affordable for most commuters.

To ensure that commuters' interests are safeguarded, the PTC looked at the public transport operators' Rota or return on total assets. In 2007, SBS Transit's Rota was 8.6 per cent, while SMRT's was 11.1 per cent.

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It is Lehman Brothers Holdings, this year's worst-performer on the Standard & Poor's 500 Index. Lehman fell to US$4.22 in composite trading on the New York Stock Exchange after a record US$3.9 billion loss for the third quarter.

Lehman Brothers is for sale as the threat of potential exodus of clients and trading partners is real.

Not too long ago Lehman Brother has just recommends investor to catch possible upturn by a portfolio combining high-yield and high-beta stocks.

The portfolio consists of:


1. ST Engineering (ST Engg)
2. Keppel Corp
3. Suntec Real Estate Investment Trust (Reit)
4. United Overseas Bank (UOB),
5. StarHub
6. Singapore Press Holdings (SPH)
7. Singapore Exchange (SGX)
8. CapitaLand

Please do not take this recommendation for real, the analyst who wrote the report may be out of job tomorrow.

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An excerpt of newsletter from Investment U which I subscribed through their advertisement in Google Ads is quite interesting.

They have highlight 4 high risks of investing world as follow. What really attracts my attention is a sentence read: Investing can be one of the most frustrating experiences in life.

When UBS Investment Research yesterday described this as the 'Toughest Market in 35 Years', I pledge everyone to open their eyes to observe how this naughty market unrolls the next chapter. There are plenty to learn from here then book.


The Four High Risks of Investing

What are the four dangers? In his new book, Alex identifies the following.

1. Being too conservative, so that your hard-earned savings don't keep up with inflation.

2. Being too aggressive, so that you end up losing your shirt or blowing up part of your portfolio.

3. Trying to time the market. Study after study has shown that no one can consistently time the market.

4. Unwisely turning your money over to a money manager who loses your wealth, slowly or quickly.

Investing can be one of the most frustrating experiences in life.

Continue to read more...

Published September 10, 2008
Businesstimes.com

DESPITE the correction in energy prices, some analysts remain bullish on local oil and gas stocks, citing factors such as strong fundamentals and overselling.

Deutsche Bank analyst Kevin Chong said in a report yesterday: 'In the past five days alone, about $4.4 billion of market value has been wiped out, but our checks with management indicate that fundamentally, nothing has changed. We believe the plunge has been overdone and that a great buying opportunity has emerged.'

The investment bank reiterated 'buy' calls on Keppel, Sembcorp Marine, Sembcorp Industries and ST Engineering with respective price targets of $13.50, $5.05, $5.50 and $4.


Similarly, DMG & Partners called an 'overweight' on yards Keppel, SembMarine and Cosco Corp, pointing to their strong Q2 results and firm fundamentals.

For example, Keppel Offshore & Marine posted Q2 net income of $155.8 million - up 18.5 per cent year on year - on $1.8 billion of offshore & marine (O&M) revenue, while SembMarine's net profit surged 50.7 per cent to $128.3 million, buoyed by revenue of $1.4 billion, said analyst Serene Lim.

'There are still possible contract inflows for Semb- corp Marine, such as Petrobras's new production platform P62 and Atwood Oceanics' option on its third semi-submersible drilling rig,' she said. 'While we remain concerned that new orders for jack-up rigs and semi-submersibles may be slowing as a result of influx of newbuilds, we believe the next demand cycle (floating production units) may be emerging. Singapore rig builders are well-poised to garner new contracts.'

DMG reckons the industry is now mainly concerned with execution risks and margin pressure, so it believes that SembMarine will fare better than Cosco due to its strong track record and timely deliveries. Its price target for SembMarine is $4.28.

CIMB-GK sees no signs of a slowdown at SembMarine, pointing to a US$425 million jack-up rig contract. This 'brings SembMarine's year-to-date new orders to about $5 billion, almost matching its record of $5.4 billion in 2007', it said. 'Net order book has grown to $10.2 billion from $6.9 billion at end-2007.'

SembMarine already has two jack-up orders from Egyptian Drilling Company, due for delivery in Q309 and mid-2010. CIMB-GK expects more orders from the Middle East, owing to a shortage of shallow-water jack-ups there.

Indeed, CIMB believes the order-book build-up and continued margin expansion are key catalysts for stock performance, and issued an 'outperform' on SembMarine with a price target of $5.25.

Continue to read more...

Published September 9, 2008
Businesstimes.com

By KEN TAI CHEE MING,
technical analyst,
Kelive Research



The Singapore market staged an impressive rally yesterday cheered by news of the US government's bailout plan for beleaguered home mortgage giants Fannie Mae and Freddie Mac. This is the biggest rescue plan in US history and it gave Asian equity markets a much-needed shot of confidence after successive weeks of losses.


Responding to the weekend announcement, the STI surged 122.82 points or 4.8 per cent in its biggest single-day move since Jan 23 to 2,697.03. Around the region, the Hang Seng Index jumped 4.3 per cent, the Nikkei rose 3.4 per cent while both the Korean and Taiwan market indices leapt more than 5 per cent. Only the Shanghai Composite and KLSE Composite ignored the positive news, slipping 2.7 per cent and 1.3 per cent respectively.

Although yesterday's STI performance may have cleared the storm clouds for now, it remains to be seen if the recovery can be sustained. To put things in perspective, the STI has clawed back two-thirds of its losses late last week and is rebounding from a deeply oversold level. Upside resistance is seen at the 2,827 level, which represents a 38.2 per cent retracement of the May-Sept correction. While the US action may have alleviated systemic risks to some extent, many large mutual funds are also heavily invested in these two government-sponsored enterprises. Their seizures by the US Treasury may potentially lead to more redemptions and possible fund closures.

Technically, the selling pressure on the STI has eased as reflected by its falling ADX. While the STI has broken our mid-term objective of 2,650 last week and touched the longer-term support at 2,554, which is also the 50 per cent retracement of the 2003 to 2007 bull run, our long-term bearish view remains unchanged. On average, a bear market will typically last about two years, which would infer that the STI should only bottom out next year.

Notwithstanding, we see some opportunities. The securities with potential corporate actions include Portek, Goodpack, SMRT and Dairy Farm.

Continue to read more...

Swiber Holdings
Published by BT on 8 Sept 08

Offshore engineering, procurement, construction, installation and commissioning (EPCIC) contractor Swiber Holdings bought back shares for the first time since listing in November 2006 with 200,000 shares purchased on Sept 5 at $1.32 each.

The initial buyback was made on the back of the 59 per cent fall in the share price since the second half of May from $3.20.

There were sales by two substantial shareholders prior to and during the price fall.


JPMorgan Chase sold a net 8.1 million shares from April 4 to June 9 at estimated prices of $2.53 to $2.64 each, which lowered its deemed stake by 22 per cent to 29.5 million shares or 6.9 per cent.

The group also sold 700,000 shares in November 2007 at an estimated price of $3.40 each.

Prior to the disposals since November 2007, the fund manager acquired 7.4 million shares from July 10 to 20, 2007 at estimated prices of $3.22 to 3.32 each.

JPMorgan became a substantial shareholder on July 9, 2007 following the purchase of 20.4 million shares at $2.19 each, which raised its interest by 195 per cent to 7.3 per cent.

Pang Yoke Min, on the other hand, unloaded 4.9 million shares from May 14 to 16 at estimated prices of $2.85 to $3.08 each, which reduced his deemed holdings to 54.7 million shares or 12.9 per cent.

He previously reported an initial filing in September 2007 of 38.8 million shares at $2.62 each, which raised his interest from 4.9 per cent to 14.1 per cent.

The stock closed at $1.31 on Friday.

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Commodities is presumed to be overvalued due to speculation and now their turn for commodity crunch.

Wilmar International – Further downside likely
Golden Agri – Break support
Noble Group – Likely to make new low
Indofood Agri- Oversold but drifting lower
Olam International – Poised for breakdown
Strait Asia Resources- Break down


Wilmar
-not done with its decline. broke below support at $3.50 and setting an initaial target of $3 and an eventual target of $1.50 (Scary?!) This may now look impossible, but in bear markets, nothing is impossible (wah lao eh!). Volume expanded substantially on the breakdown, ADX is rising, DI are negative, MA and momentum are falling.

The longer term chart shows prices breaking down from a double top formation. If so, then palm oil prices hv probably peaked and embarked on the bear makert as well. (hv to run road liao)

Noble
-broke below support $1.79, initial target $1.5 and eventual target $1. 50 days MA set to meet dead cross with 200 days MA.

Golden Agri
-broke below support at 59 cents. Earlier break below 80 cents indicated target of 40 cents which yet to be met. (Long way to go??)

Indofood
- was above $2.5 in June and more then halved in past 2 mths. Overstretched on the downside that it should attempt a rebound (THIS IS THE ONLY POSITIVE STATEMENT OVER THE WHOLE COMMENT!!! WHAT A PITTY).

Olam
- is set to break support at $1.80 shortly. Indicate minimum measuring objective of $1.50 and may well exceed this level (Really jialat). It is a time to brace yourselves for a fall.

Strait Asia
- Broke below a series of support last week. An immediate target $1.75. Any rebound will finds resistance at $2.20 but may go lower first before rebounding.

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New Generation, New Phones, Old Topic!




The market is tired of oil and gas sector now, but dot.com is hardly a revivable corpse.

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Top Print Edition Stories
By R SIVANITHY
Source: Businesstimes.com
6 September 2008

STI falls 2% to hit its lowest since Oct 2006; Merrill says markets are oversold, will be 20% higher in a year

ALREADY left tottering on Thursday after a region-wide selloff, Asian markets had the rug yanked from under their feet yesterday following a blowout a day earlier on Wall Street where the major indices lost an average of 2 per cent.

The US sub-prime-related economic slowdown that is now spreading across the globe, rising joblessness and a worsening earnings outlook were said to have been responsible for the US market's selloff, this despite oil prices showing signs of retreat.

'The warning signs were there mid-week when Wall Street did not react to a large drop in oil,' said a dealer here. 'Instead, it struggled to hold on to minor gains so people should have known that trouble was brewing.'


Oil dropped US$8 a barrel on Tuesday to US$107, prompting a large run-up in regional stocks in the hope that Wall Street would react that day. Instead, it surrendered a large early rise to close weaker that day.

Since then, the US market has displayed persistent instability and a preference for focusing on bad news instead of the good. Higher labour productivity reported on Thursday, for instance, was brushed off in favour of a focus on the US Federal Reserve's Beige Book report on the economy, which cited weak housing, difficult credit and slowing consumer spending.

Here, the Straits Times Index plunged to a 22-month low on Thursday, and a 51.84-point or 2 per cent loss yesterday took it to 2,574.21, the lowest since it ended at 2,559 on Oct 4, 2006. It fell four of five days, losing 6 per cent in the process.

Elsewhere in the region, Hong Kong's Hang Seng Index lost 456 points or 2.2 per cent to close at an 18-month low of 19,933.28, while Japan's Nikkei 225 lost 345 points or 2.8 per cent at a six-month low of 12,212.23.

Merrill Lynch in its Asia-Pacific Investment Strategy yesterday said its technical indicators show Asian markets are oversold and so predicts markets will be 20 per cent higher in 12 months.

'The MSCI Asia-Pacific ex-Japan Index fell to two standard deviations below its 200-day moving average in mid-July and is 1.5 standard deviations below currently. On average since 1994 when Asian markets have become this oversold, they have risen 22 per cent over the next 12 months,' said Merrill. 'A falling oil price also benefits Asia as its economies are much more energy-intensive than the US.'

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Google Chrome has arrived and looking forward to compete with IE 8 now. The market is ready for grab when the old machine like mine who using IE 6 upgraded to better machine (hopefully near future).

Those 'outdated browser' like IE 6 take 30% and Firefox 2 take 5% of market now. Room for Chrome expansion is big.

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Perspective from two analyst on their latest move into sale and lease back agreements with asset light funding strategy. The sell down momentum is still very strong. Can this rescue the share price which is technically consider very oversold?

DBS Group Research . Equity
We expect the sales-and ease back agreement to strengthen Swiber's balance sheet, and to alleviate any lingering concern on financing constraint for its new deepwater drilling business.

As a recap, we have presented in previous reports that the group has already secured the bulk of financing needs for its impending constructions of more offshore vessels and the Equatorial deepwater drilling vessel.


CIMB
Successful financing could alleviate financing concerns.

We believe that Swiber’s ability to raise funds at similar terms with previous lease agreements could alleviate the financing fear which caused the drop in its share price recently.

In addition, the delay in announcement of Equatorial Driller construction yard also posted concerns that Swiber may not be able to get a back-to-back contract for the driller to finance the construction.

We believe that with some financing plans in store, we are likely to see construction yard announcement to follow.

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The rumour is confirmed!
Google launched beta of its own Web browsing software named Chrome.



Google claimed that “Chrome is a browser that combines a minimal design with sophisticated technology to make the web faster, safer, and easier”.

The expectation is that the web browser shall have a design good at handling of video rich content (benefit their own YouTube) and other complex Web programs.

We will be able to put our unlimited broadband plan in good use again!

I am still expecting the first visit from Google Chrome as Internet Explorer still dominate more than three quarter of browser used here.

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Trading should be focused on blue chips in sectors which are often in the news as a technical bounce is long overdue

The old Jan 2000 peak of 2608 and May 2006 high of 2599 will act as strong support and traders should not wait for this level to be seen before taking positions.

At least 3 to 4 sectors – banking, offshore, commodities and property (due to its close link with banks and the economy) have and will continue to be subject to big price swings as they react to unceasing news on the US financial/housing turmoil, interest rates as well as oil price/commodity price movements.


To trade successfully we should be prepared to buy when these counters slump to near their year’s lows and be disciplined to wait for rebounds which never fail to come especially now that the STI is at year’s lows.

The market has been down for nearly 4 months after its strong 7-week rally in mid-March to early May and has been without any meaningful bounce since the brief 170-point rebound from around 2830 to near 3000 in mid-July.

Judging from the track record of almost monthly rebounds since the index peaked at 3831 on Oct 11 last year, the time for another technical rally should be near. The index rebounded in December, late January after the 700-point new year mini-crash from 3466 at year end to 2866 on Jan 22 (intra-day low of 2746).

The 400-point bounce to 3160 was short-lived but strong and the market continued to offer exciting trading chances in February before a quick plunge to 2750 again in mid-March. This was followed by the best rally so far this year taking the STI to near 3300 in early May.

Since then one after another support gave way and when the key 3000 psychological mark was finally lost in June it was downhill almost all the way with 2900, 2800 and 2750 falling like nine pins.

A new closing year’s low of 2691 (2688 intra-day) was recorded last week with the next strong support around 2600 area.

Although some traders prefer to wait for further falls, the smart trader should realise that the market has been without a bounce for more than a month and last Friday’s near 50-point rally is a signal that a good 150-200 point uptick should be coming soon.

The rebound could start from the May 2006 low of 2666 on the old STI or even if it is 2650, a 150-200 point rally should bring the market back to 2800-2850.

It is unlikely that DBS ($17.84) will fall back to its year’s $16.40 low if the STI finds support around 2650 and its trading range should be around $17.50-$18.50. UOB ($18.76) is also a buy around $18.50 and a trading sell when it moves above $19.50.

OCBC ($8.02) is close to its strong $8 support and can recover to $8.30-40. SGX ($6.25) should find strong support around $6 and could rally back to $7-$7.50 in anticipation of a bigger year-end rally.

Keppel Corp ($9.90) is unlikely to test its $9.29 March low before a rebound to around $10.50.

CityDev ($10.02) is again entering its strong $9.80-90 support with rebounds to $10.50-70 usually taking place.

Wilmar ($3.78) has also defended $3.50-60 support well and should move back to $4-$4.20 during the market rally.

Cosco ($2.24) should have bottomed out last month at $1.97 and rebound to $2.40-50.

The bottom line is that traders must be focused and be bold to see support coming in strongly at 2600-2650 which is obvious as this is has historical backing which implies it will not break easily.

Even 2750-2800 which has no multiyear support was defended so strongly in January and March and only gave way last month. In fact the STI (at 2720-2709 today) is closer to 2750-2800 than 2600-2650.

Whether the STI will break 2600 later should not be the issue now as the index is likely to bottom out at 2500 at worst or more likely at 2600 this year barring any unforeseen developments on Wall Street and the upside should be a minimum of 2900-3000 at year-end or early 2009.

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The IPO champion of the year is Healthway Medical!

Healthway Medical is the worst performer in this year IPO market.

No surprise as Healthway Medical has priced their new shares at more then 27 times price earning ratio a share in IPO.


Market darling stock with proven track record like Raffles Education is trading at about 22 times PER. Do not expect any new the challenge to this exorbitant pricing in rest of year 2008.

Healthway Medical debut at 36 cents and promptly trading under water and now trading at 12.5 cents only.

For the vendor, there is not much an issue as most of them get the share at merely 0.73 cents per share. Not even 1 cent, mind you!

Watch out for the expiry date of the lock in period.

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IPO is the beginning and delisting is the ending.

Today marks a special day for all shareholder of a SGX listed company, ATM (Automated Touchstone Machines Limited).

ATM is to be delisted today with the last traded price of 10.5 cents. There is no exist offer and the company will thereafter continue to exist as an unlisted public limited company.


Since the company has no business, no asset and in net debt position, why dispose the subsidiary TISS which is their ‘only asset’ for $500,000? This will just left the company with liability only with no asset.

Who will RTO a delisted company?

This left no room for hope. Nothing, really nothing!

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Local property counters have suffered hammering for the last few months, but not full blow yet as the ‘hope’ factor for the sector to sustain price slump still high.

The opening of IR, BFC and a few high profile projects surrounding it have been praised as factors to lift the market in coming few years instead of depressing it.

This seems to against the principle of market supply and demand. The truth remain to been seen.

The focus of The Edge this week look at the China property plays. Not surprisingly, most of the counters are penny stock except Yanlord.


China New Town was wearing an IPO price tag of 83 cents a share but last close at 9 cents. IPO investors who continue to hold on to their allocated shares until now will have their capital cut by 89.2%.

China Property plays start discounting bad news

Brother Holdings – Hanging on to support
$0.18

Centraland – Testing Resistance
$0.495

China New Town – Could drift lower
$0.09

China Yuanbang Property- Temporary rebound
$0.15

Capitaretail China Trust – At support
$0.99

Yanlord – Rebound is temporary
$1.60

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