Change of Blog Site

Hi

My new Blog site is www.trnicholastan.spaces.live.com.

Notice

No post for the next couple of days, moving house next week. Will keep you informed.

Delong - CIMB call

Delong Holdings (DLNG SP, $3.10, SELL): Time’s nearly up. Just under one month is left before the call/put option between Evraz and Delong's major shareholder, Best Decade expires on 18 Aug 08. We believe the Chinese government is unlikely to approve Evraz's proposed takeover of Best Decade's stake in Delong. We recommend selling Delong given expensive CY09 P/E of 27x against peers' 7.5-10x. Our target price is S$2.09, based on 2.3x CY08 P/BV.

Price is holding up in the hope of a successful takeover. With the expiry of the option, price is likely to drop due to Delong expensive valuation compared to its peers. Do take care.

July 21 (Bloomberg) -- U.S. stock futures tumbled after the close of U.S. exchanges, dragged down by lower-than-estimated earnings at American Express Co. and disappointing forecasts at Apple Inc. Treasury yields and the dollar also dropped.

American Express, the biggest U.S. credit card company by purchases, fell 11 percent from its 4 p.m. close after second- quarter profit trailed analysts' estimates by 32 percent. American Express Co. said profit dropped because more consumers defaulted on loans, raising concern the U.S. economic slowdown will deepen.

Apple, maker of the iPod music player, lost 6.5 percent after saying sales and earnings will fall short of projections. SandDisk Corp. tumbled 12 percent after reporting a loss.

``This whole earnings season will be somewhat choppy,'' said Eric Marshall, who helps oversee $1.4 billion at Hodges Capital Management Inc. in Dallas. ``The technology companies that are more tied to making components or semiconductors or cell phones, those are more likely to be impacted by weakness in consumer spending.''

STI +2.5%; 2945 Cap; Bias Toward Downside - DBSV

Singapore blue chips sharply higher, drawing strength from rally in Hong Kong market (HSI last +3.2%), propelling STI past 2900 for 1st time since July 14. Index +2.5% at 2917.69 midday, with 28 out of 30 components up, Thai Beverage (Y92.SG) unchanged at S$0.225, Starhub (CC3.SG) down 1.1% at S$2.80. STI's resistance expected at 2945, based on 38.2% Fibonacci retracement of rise to May high of 3269 from 2008 low of 2745. Despite gains, DBS Vickers says STI still biased down; "while the pullback in oil and commodities prices bode well for equities, uncertainties surrounding the earnings season and concerns about a slowdown in economic growth continue to weigh down on stocks." FTSE ST All Share Index +2.1% at 729.79. Overall volume slightly more than half of Friday's total of 1.05 billion shares.

Asian Palm Oil Fundamentals Still Bullish - CS

Last week's Massive sell down in Asian palm oil stocks occurred despite any real change in still bullish fundamentals, says Credit Suisse. "This is a reflection of investors unwinding a crowded trade, and the fact that the plantation stocks have been very resilient amidst a global equity sell down," broker says in note. Adds, "but its bullish fundamentals have not changed. Our view is that palm oil stocks will outperform over a 12-month view because there is a real shortage of edible oils and palm oil is one of the few inflation hedges." Says upside catalysts for palm oil price include fact soy oil at big premium, vegetable oil inventories still low, geopolitical risks could send crude oil price higher. Reiterates Overweight call on Asian palm oil sector, says Indofood Agri remains favored palm play. Rates Indofood Agri (5JS.SG) Outperform with S$3.28 target price; Wilmar (F34.SG) Neutral with S$5.40 target price. Latest prices; Indofood Agri down 0.5% at S$1.84, Wilmar +1.0% at S$4.14.

Straits Asia +3.2%; Value Emerging - DBS Vickers

Straits Asia Resources (AJ1.SG) +3.2% at S$2.58, riding market uptick (STI last +2.1%) but struggles to recover Friday's 10.1% fall as investors remain concerned retreating oil prices may signal reduced demand for alternative fuel sources like coal. "We believe the recent price correction is unjustified, which has resulted in value emergence for SAR," says DBS Vickers, which has Buy call with S$4.77 target, based on 20.2X FY08 P/E. While stock remains oversold on RSI, Stochastic Oscillator, Money Flow Index, chance of near-term technical rebound low given subdued volume. Resistance expected at 10-day moving average of around S$2.83.

Right Time To Consider Singapore Value Plays-CIMB

Time is right to look at Singapore value plays, says CIMB; names top value picks as Ascott Residence Trust (A68U.SG), Broadway Industrial (B69.SG), DBS (D05.SG), FerroChina (F33.SG), Ho Bee (H13.SG). "As stocks get pummeled, value is starting to emerge," adds, "after focus in the last few weeks on the attractiveness of dividend yielding stocks in the current environment of EPS uncertainty and negative real interest rates, we now divert our attention to another investing style." Broker uses price/book value as bargain hunting strategy; says its top picks cheap relative to their historical price/book values; also have sustainable, lower risk returns on equity.

CIMB Cuts S'pore Plantations To Underweight

CIMB Downgrades Indofood Agri To Underperform.

CIMB Downgrades Wilmar To Neutral; S$5.20 Target

CIMB Cuts Golden Agri To Neutral; S$0.94 Target

CIMB downgrades Singapore plantation sector to Underweight from Overweight to reflect worries on regulatory environment. Says, "given rising regulatory risks and a slowing earnings momentum, we can no longer justify the large P/E premium accorded to the sector." Latest prices; Wilmar (F34.SG) +0.5% at S$4.33; Indofood Agri (5JS.SG) down 1.4% at S$2.04; Golden Agri (E5H.SG) down 0.6% at S$0.765; First Resources (EB5.SG) down 1.9% at S$1.03.

SPC- Kim Eng's View

Beneficiary of current high oil price environment Singapore Petroleum Company (SPC) has seen its earnings grow by leaps and bounds in the current high oil price environment, from loss-making in FY01 to a net profit of S$508.4m in FY07. While earnings may continue to be highly variable because of volatile refining margins, this will be progressively augmented by its upstream earnings.
Attractive dividend yield of 9.0% SPC has been rewarding shareholders during in its current purple patch, having paid out over 60% of earnings in the last two financial years. We expect SPC to stick to this payout level, which would result in a DPS of 63 cts per share in FY08. Dividend yield is a very attractive 9%.

How Bad Is It? Some Say Crisis Worst Since Great Depression

Just a reminder, dont get carry away.

If crisis (and chaos) breeds opportunity, Tuesday was a prime day to get long stocks -- as Wednesday's robust rally seems to suggest.
In an extraordinary series of events, President Bush and Fed Chairman Ben Bernanke gave dueling presentations as policymakers and politicians tripped over themselves to address the nation's financial crisis.
Some observers, like NYU economist Nouriel Roubini, believe this crisis is the worst since the Great Depression, and the "run on the bank" at IndyMac does evoke that era of bank failures.
But "worst since the Depression" doesn't mean things will get as bad as the 1930s, when the U.S. unemployment rate hit 25% -- or even the S&L crisis of the late 1980s.
While it's critical to note the current situation isn't nearly as bad as past crises, it's also important to keep in mind that the Great Depression was an era, not an event -- meaning the current situation could get a lot worse.

Shares close mixed on Wednesday

Singapore share prices closed mixed on Wednesday as selling pressure eased while investors waited for fresh leads from US financial markets, dealers said. The Straits Times Index (STI) closed 0.16 per cent or 4.57 points higher at 2,835.32. Volume was 927.7 million shares. In the broader market, losers led gainers 275 to 213. Dealers expect the market to trade in a small range, with upside for the STI capped at 2,880 points and the support level at 2,800 points. "Stay defensive. If you have to buy, buy those with high yields like some of the REITs (real estate investment trusts)," said one dealer. US Federal Reserve chairman Ben Bernanke said on Tuesday there was a "high degree of uncertainty" about the US economic outlook.

Bernanke: economy faces 'numerous difficulties'

WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke told Congress Tuesday that the fragile economy is being confronted by "numerous difficulties" including persistent strains in financial markets, rising joblessness and housing problems -- despite the Fed's aggressive interest rate reductions and other fortifying steps over the past year.

At the same time, Bernanke, testifying before the Senate Banking Committee, sounded another warning that rising prices for energy and food are elevating inflation risks. The situation, he said, poses "significant challenges" for Fed policymakers as they try to chart the best course for keeping the economy growing, while making sure inflation doesn't dangerously flare up. All the economy's problems, including slumping home values, which threaten to make people feel less wealthy and less inclined to spend in the months ahead, represent "significant downside risks" to economic growth.

Over the rest of this year, the economy will grow "appreciably below its trend rate" mostly because of continued weakness in housing markets, high energy prices and tight credit conditions. Inflation has remained high and "seems likely to move temporarily higher in the near term," he warned. Indeed, before Bernanke testified, the Labor Department reported wholesale prices jumped 1.8 percent in June. That left inflation rising over the past year at the fastest pace in more than a quarter century. "Given the high degree of uncertainty" about the Fed's economic outlook, Fed policymakers will need to carefully assess incoming information about inflation and economic growth, he said.

The Fed in June signaled an end to its nearly year long rate-cutting campaign because of growing concerns about inflation. Bernanke kept up his tough anti-inflation talk on Tuesday but stressed many other problems that could short circuit economic growth. He seemed to be keeping his options open in terms of rates. Given all the risky cross currents, economists believe the Fed will leave rates alone when they meet on Aug. 5. Righting wobbly financial markets is key to getting the economy back on track, he said. "In general, healthy economic growth depends on well-functioning financial markets," Bernanke said. "Consequently, helping the financial markets to return to more normal functioning will continue to be a top priority," he said. Bernanke's testimony comes just two days after the Fed and the Treasury Department came to the rescue of mortgage giants Fannie Mae and Freddie Mac, offering to throw them a financial lifeline.

The companies hold or guarantee more than $5 trillion in mortgages -- almost half of the nation's total. The Bush administration is asking Congress to temporarily increase lines of credit to Fannie and Freddie and to let the government buy their stock. The Fed has offered to let the companies draw emergency loans. The pledges of aid have raised concerns about the government's role in such financial problems and the risk to taxpayers.

Bernanke said investors are nervous in general because of the cloudy outlook for the economy and credit conditions, feeding a vicious cycle that can be hard to break. "Many financial markets and institutions remain under considerable stress, in part because the outlook for the economy and thus for credit quality, remains uncertain."

Going ahead, market is not likely to be rosy, will be bad for many more months. :(

STI Off 1.8%; May Test 2745 In Weeks - Kim Eng

[Dow Jones] Sentiment in Singapore stock market remains edgy, mirroring risk aversion across Asian bourses, given uncertainty over impact of U.S. housing, credit troubles. STI down 1.8% at 2851.42 midday, after briefly breaching 2850 for 1st time since March 20, hitting 2843.59 intraday low; psychological support eyed at 2830 (March 19 intraday low). "We now accord a high probability that 2745 will be tested in the coming weeks or months as the final defense line at 2946 (61.8% Fibonacci level between March low of 2745 and May high of 3269) has already given way two weeks back," says Kim Eng Securities; expects STI to test 2745 if DJIA corrects to 9500 (DJIA closed down 0.4% at 11055.19 overnight). All 19 FTSE ST sub-indexes in red, with All Share Index down 1.7% at 717.38. Overall volume thin, with 367 decliners vs 99 gainers.

July 15 (Bloomberg) -- China's stocks fell the most in two weeks, led by banks and insurers, on concern they are holding debt issued by Fannie Mae and Freddie Mac, the two U.S. mortgage- finance companies that lost half their market value last week on concern about their ability to refinance.

July 15 (Bloomberg) -- Japanese stocks fell the most in a week amid concern a lack of capital will cause some U.S. banks to collapse and after a rescue package for mortgage lenders failed to stem an equity sell-off.


July 15 (Bloomberg) -- Asian stocks fell for a second day, led by financial companies, as concern mounted credit-market losses will widen after a report said Japan's top three banks hold more than $40 billion in Fannie Mae and Freddie Mac debt.

Region stock market is feeling the effects of Fannie Mae and Freddie Mac. Banks mostly weak on concern of their holding of bond from Mae and Mac.

S'pore Property Stocks Fall; CS Keeps Underweight

Singapore property heavyweights among worst blue chip performers due to slowing property price appreciation, rising construction costs. City Developments (C09.SG) down 3.2% at S$10.86, Keppel Land (K17.SG) down 3.5% at S$4.67 vs STI down 1.2%. Credit Suisse notes potential rescinding of Tampines Court en bloc sale; says this demonstrates current weak environment, "we believe it underscores the risk of increasing construction costs for the developers' bottom lines, as well as developers' weaker confidence and pricing power, even for mass-market projects." Broker reiterates Underweight call on Singapore property sector. Charts show moderate volume, suggests shares could extend fall slightly. Immediate support for City Developments tipped at 30-day moving average of S$10.80; support for Keppel Land eyed at last week's intraday low of S$4.65.

Palm Plays Bounce Back From Biofuel Selloff

Dow Jones] Singapore palm plays heading higher as stocks recover somewhat from recent selloff on worries that political opinion may be turning against biofuels. Wilmar (F34.SG) +0.4% at S$4.74, Indofood Agri Resources (5JS.SG) +1.8% at S$2.24, Golden Agri-Resources (E5H.SG) +0.6% at S$0.79, First Resources (EB5.SG) flat at S$1.10. All outperforming FTSE ST All Share, currently down 0.1%. Credit Suisse notes, U.K. government backtracked from biofuel targets, driven by worries that use of land for biofuels may push up food prices. But says, according to forecasting service Oil World, global edible oil output not currently enough to meet governments' biofuel target in any case; adds surge in soy oil prices should also boost demand for palm oil, given big price gap vs palm. Reiterates Overweight call on Asian Palm oil sector.

STI +1.1% On NY Times Bailout Report; 2950 Cap

[Dow Jones] STI turns higher on New York Times report that Bush administration evaluating plan that could see U.S. government take over Fannie Mae (FNM), Freddie Mac (FRE) or both. STI +1.1% at 2932.11 at midday break vs 2889.66 intraday low; resistance tipped near this week's intraday high at 2950. "That's giving us some comfort," says dealer at local house. Bank heavyweights lead gains, supporting index; DBS (D05.SG) +1.9% at S$19.04, OCBC (O39.SG) +2.5% at S$8.20. Broad market volume remains thin but gainers now outnumber losers nearly 2 to 1.

DJ MARKET TALK: STI Off 0.9%; 2Q GDP Keeps Mood Cautious-Trader

STI heading slightly lower again at start of afternoon session despite mild bullish lead from U.S. pre-market futures; STI down 0.9% at 2890.43, support tipped at last week's intraday low of 2862. STI failing to follow HSI, Nikkei into positive territory; trader at local house says this may be down to weaker-than-expected advance 2Q Singapore GDP; "we might be underperforming because of the GDP figures, although the main problem is there's just no catalyst to buy right now." Broad market volumes remain thin with losers outnumbering gainers 341 to 119.

Large Cap S-Chips Ride High On China Index Rally

Selected Singapore-listed China plays, or S-chips, making good gains as rally in China indexes support local market. Big S-chip gainers include Yanlord (Z25.SG) +7.0% at S$1.98, Synear (Z75.SG) +6.0% at S$0.44, Bio-Treat (B22.SG) +5.6% at S$0.285, Ferrochina (F33.SG) +5.4% at S$1.17. Outperformance of recently launched FTSE ST China Top 20 index vs wider FTSE ST China index, suggests investors favoring large cap China plays over smaller caps; launch of new index may attracted buying interest; FTSE ST China Top 20 +2.3% at 413.56 vs FTSE ST China +1.3% at 406.79 (STI +0.9%). "The new China top 20 index might be causing more people to take a look at these stocks," says trader at local house. Charts show decent traded volume, oversold signals from technical indicators; suggests stocks may have tad more upside.

S'pore Plantation Stocks Mixed Ahead Of CPO Data

[Dow Jones] Singapore plantation stocks mixed as investors still mulling EU's plans to cut back use of biofuel in bid to tame rising food prices, while awaiting Malaysian Palm Oil Board's June CPO data due later today. Wilmar (F34.SG) off 1.1% at S$4.62, Golden Agri-Resources (E5H.SG) flat at S$0.79, First Resources (EB5.SG) +0.9% at S$1.11, Indofood Agri Resources (5JS.SG) off 0.4% at S$2.25. "A high inventory level could further dampen CPO prices and also cap the upside," says UOB KayHian. Adds, any further weakness in share price of sector's leader Wilmar, will offer buying opportunity; suggests entry price of S$4.30. Retains Sell rating on Wilmar for time being with S$4.80 target, keeps Buy call on others, with unchanged target price of S$1.65 for First Resources, S$1.32 for Golden Agri, Indofood at S$3.55

S-Chips Outlook Hazy; Seek Out Value - Citigroup

[Dow Jones] Singapore-listed China stocks, or S-chips, face cloudy outlook due to slowing growth momentum, earnings uncertainty, says Citigroup. Broker notes, 1Q08 results showed downward trend in profit margins, consensus on FY08/FY09 earnings forecasts also suggest slowing growth momentum. Says, recent data shows China consumer confidence dipped; high commodity prices, rising wage costs will add to pressure. Advises investors to seek out oversold opportunities; "in view of the reduced earnings visibility, we prefer to take a value-oriented approach in picking S-chips." Screens S-chips for low PE multiples, net cash position; says on that basis best picks are Li Heng (E9A.SG), China Sky (E90.SG), Fibrechem (F12.SG), Celestial (C56.SG), Sino Techfibre (AD8.SG), JES (EG0.SG), Pan Hong Property (P36.SG), Beauty China (B15.SG) and Longcheer (L28.SG). FTSE ST China index currently +2.3% at 410.74.

S'pore Shrs No Rally Till Inflation Eases - UBS

Singapore shares attractively valued but inflationary concerns will continue to weigh on sentiment, says UBS. "Tactically, the market looks oversold, with trailing PE below the Asian financial crisis low," says broker in note. But adds, "fundamentally, we think inflation needs to roll over to end the bear market." Broker says upcoming data on 2Q GDP, June CPI present headwinds; advises investors to seek out stocks with pricing power, strong balance sheets. Says, top Singapore stock picks are DBS, UOB, Keppel Corp. for their pricing power; CMT, Parkway Life, SPH, M1 as yield plays that should be able to weather inflation; CapitaLand as value play

DBSV bullish on Water companies

Rising costs, difficulty in raising capital may have led to 30% year-to-date fall in Singapore's water-related stocks; but growth outlook for these companies remains firmly supported by record orderbooks, buoyant long-term demand, says DBS Vickers. Expects "already robust" orderbooks to continue expanding given companies' substantial exposure to China's buoyant water sector, ongoing venture into other high-growth markets like Middle East, North Africa, India. Says stronger players which can better handle cost increases, obtain funding for new projects will still be able to eke out decent growth, despite rising labor, material costs. Picks Epure($1.07 as fair value) ,Asia Environment($0.64), Hyflux($3.53), Hyflux Water Trust($0.90) as favorites.

Nomura reduces Captialand Fair Value

Nomura lowers target price for CapitaLand to S$5.13 from S$5.32 to reflect lower valuations for subsidiaries; keeps Reduce call. Says, developer, like peers, finds market conditions this year tougher than expected, with weakness in pre-sale market in Singapore affecting planned launches of residential projects. Expects earnings growth to slow in FY09-10 as weaker-than-expected selling prices for key en bloc developments shrink margins. On developer's retail business, house expects increased risks for achievable rents, capitalization rates for its suburban malls, as new supply enters market.

UBS confirms facing further write-downs

UBS on Friday confirmed it faced further heavy write-downs on exposures to troubled US credits, meaning earnings for the second quarter would be "at or slightly below" break even.

Europe's biggest casualty of the US subprime crisis did not quantify its latest write-downs, which analysts have estimated at up to $7.5bn. The Swiss bank said it had continued to make money in wealth and asset management, but suffered renewed losses in investment banking.

UBS said the impact of the latest losses left its Tier 1 capital ratio at about 11.5 per cent One June 30, and stressed it had no need to raise fresh capital.

The bank has raised about SFr30bn ($29bn) in recent months, mainly through a rights issue and sale of shares to strategic investors.

UBS gave an indirect indication of its latest markdowns by noting that its second quarter results would benefit from a tax credit of about SFr3bn in connection with its massive losses to date.

Working backwards, and assuming roughly normal profitability of up to SFr2bn in wealth and asset management combined, that implies a loss of at least SFr5bn in investment banking to produce break-even.

UBS said its latest write-downs had had stemmed from the effect of "further market deterioration" on previously disclosed positions, particularly adjustments to the value of its exposures to monoline insurers.

At the time of its first quarter results, UBS disclosed it had exposures of about $6bn to monoline insurers, a position viewed as ominous by many analysts given the concerns, and subsequent ratings downgrades of many monolines.

The bank also confirmed fears that its problems with subprime, and broader reputational damage, had eroded its until-recently blue chip private banking franchise. UBS said group net new money had been negative in the second quarter, though it did not distinguish between wealth and asset management.

It added that outflows had been most severe in April, but had improved in May and June, especially in wealth management.

The profits warning had been expected, but for July 1, immediately after the end of the second-quarter trading period and in line with the bank's practice in two earlier quarters. Instead, UBS that day released information about important corporate governance changes, but said nothing
about earnings.

UBS officials said Friday's statement represented "voluntary disclosure", in the sense of refining existing guidance to investors, rather than an obligatory announcement triggered by market rules requiring profits warnings when circumstances showed "material differences" compared with previously available information.

Confirmation that the worst is not over yet. UBS may not be the only one. Other US banks will be affected as well.

FM Holdings +7.3% On Planned Indonesia Coal Buy

[Dow Jones] FM Holdings (5GO.SG) +7.3% at 7-month high of S$0.295 as giftware maker's proposed foray into coal business stirs interest in historically illiquid stock. Company looking to acquire 90% stake in TriStar Global Services, which owns concessions to two coal assets in Indonesia. Deal valued at up to S$160 million, but FM hasn't finalized funding structure as it has engaged a technical adviser to conduct due diligence first. But some question wisdom of chasing up share price, noting among other things FM's net profit of just HK$5 million for FY ended March (down 58% on-year). "How are they going to fund it? On top of that, after Dayen's saga, they still want to go into the coal business?" says foreign house dealer, referring to water treatment firm Dayen Environmental's (5BT.SG) recent snag with its own venture into coal mining business. Orderbook suggests stock unlikely to head much higher than session high of S$0.305.

More question raised than answered

CLSA Singapore strategy - Hide

We think 2H outlook will be worse than 1H. The economy will continue to weaken and inflation will continue to pose risks to margins.We expect YoY GDP growth of 3.6% and decelerate to 2.7% in 2009. Neel reckons there will be more consensus downgrades given this typically last for a few quarters and we have only just started.

While we have already downgraded growth expectations over the last two quarters, and are currently forecasting 4.2% and 13.7% earnings growth for 2008 and 2009 respectively. Could see some 2-4% earnings risks in property and O&M. Property risks lie in the overseas operations and cost overruns for O&M.

Neel's strategy is to remain defensive. Our sector O/W are in banks(UOB, OCBC) and telcos (Singtel, Starhub). For conglos, we likeSembMarine and ST Eng. We remain cautious about property especiallyresidential property. We prefer Capitaland and REIT for propertyexposure. We think CPO will be resilient in this environment; GoldenAgri is our top pick here.

Time to go slow. Market is not easy to pick stock now.

Rising Regulatory Risk For Indonesia Coal Co-UBS

Regulatory risk for Indonesian coal producers has increased since thermal coal prices hit US$172/ton last week, with government considering allocating more coal domestically, UBS says in report. "We think the government will implement a Domestic Market Obligation (DMO) policy in order to meet increased domestic coal demand. This is likely to require producers to allocate 30%-35% of production domestically at below market prices. This could create near-term earnings risk and short-term share price weakness." Notes, however, potentially positive outcomes: Indonesian coal consumption growth to pressure supply and export prices (65%-70% of volume sales). Adds, higher domestic volume allocations could mean lower royalties, currently 13.5% of sales, boding well for earnings.

Singapore Coal Plays Fall On European Coal Prices

[Dow Jones] Coal-related stocks in Singapore tumble in response to sharp fall in coal prices in Europe and U.S. Straits Asia Resources down 9.2% while Noble Group down 6.1%. But decline may be mere knee-jerk reaction, as global coal demand remains robust. Local house dealer says weakness may be opportunity to accumulate as industry fundamentals remain positive for sector; "we do not see any easing in the oil prices in the short to medium term. Higher oil prices potentially make coal a more attractive power source." Near-term support for Noble at S$1.93, based on 61.8% retracement of rise to 52-week high of S$2.87 from August 2007 low of S$1.35.

China's Stock Benchmark Falls to 15-Month Low

http://www.bloomberg.com/apps/news?pid=20601084&sid=anfGaEIEFLLc&refer=stocks


This will apply to S-Shares listed on SGX. With a slowdown, many of these shares will be re-rated lower. Yangzijiang will be sold on concerns that new contracts will be hard to get and exisiting contracts will be erroded by rising cost of steel. The company may turn in a lower set of profit.

Many S-Shares listed are manufacturing companies and will be affected by the manufacturing slowdown.

STI Flat Midday; Best To Exit Market - Broker

[Dow Jones] Singapore shares fail to make headway as investors remain sidelined amid lack of leads, with STI off just 0.04% at 2946.25 midday after drifting in tight 2940-2960 band in morning session; any further downside expected to be capped at 2900, with session high possibly capping gains. "The current bear trend may get some respite, even if it may be a brief one," says Kim Eng Securities, citing favorable technical indicators. But adds, any rebound in near term should be viewed as temporary technical counter trend rally, noting no reason to "paint a bullish picture" for time being; "for investors who failed to exit the market over the past few weeks, the market may now open up new opportunities to exit." Market volume remains anemic, with about 2 decliners for every gainer. Yangzijiang (BS6.SG) most active on SGX and top percentage decliner among STI stocks; off 2.4% at S$0.83 with 14.6 million shares traded, as margin erosion concerns due to high steel prices continue to weigh.


Any respite is likely to be a brief one, with the Dow Jones looking like it will head further south in the next couple of weeks.