Thursday, October 25, 2012

Gaylin Holdings IPO Balloting Results

Balloting Results of the Gaylin Holdings IPO is out as of 24 Oct 2012 and are summarised as follows
  • 110,000,000 shares for public and placement tranche
    • 5,000,000 for public tranche
  • 5.5x oversubcribed overall (reflected in official balloting results statement)
    • 0.997x subscribed for placement tranche shares
    • 100x (because of small public offer amount) over subscribed for the public tranche shares
  • Shares at S$0.35 each
Shares have commenced trading on a "ready" basis at 9am on Thursday, 25 Oct 2012 and have closed at $0.365.




Official announcement document of the Gaylin Holdings IPO is available on the company website here.


On a side note, Dynasty REIT has unexpectedly pulled out of their announced listing citing unfavorable market conditions that are developing. For those of you still in the IPO gunning mode in anticipation for future listings (which I believe is highly likely given the high liquidity phase we are entering into), check out my blog page on "Guide to IPO Investing" to help you navigate around especially if you are a new investor or new to the IPO bidding system of SGX. Help yourself to help yourself!

To also have a feel of the local demand for IPOs, do check out my compiled "IPO SG Statistics" page for a good detailed but yet bite-sized organisation of the statistics.


Also, do bookmark this page // add Healthytrading blog to Twitter // subscribe to RSS feed // subscribe to email feeds to receive the LATEST IPO/market news that will move your money. Why wait, add them now! Links are available all on the right of the page (at the navigation bar).

Monday, October 22, 2012

Initial Pop or Long Term View? - Gaylin IPO

Gaylin Holdings is the 4th IPO to list on the SGX in a space of 2 weeks following Courts, Geo Energy, and Religare. Not a bad week for cash-rich investors seeking the extra investment opportunities in a saturated property market, overpriced REITs soon-to-form-bubble and lack of global growth leading to stagnation in stock prices. Underwriters and company managements seem to be expecting the market to pick up in the final quarter of the year to spur up some more stock demand. The flood of liquidity from US and Europe (all the bond buying activities) and in anticipation of that from China has finally caught up with companies seeking that extra equity to drive growth in this intrepid environment.

Here's a quick summary of the offering. For more information, please refer to the prospectus lodged with SGX here.
  • Established since 1974
    • Expanded to Vietnam in 2001
  • One of the largest Singapore-based multi-disciplinary specialist providers of rigging and lifting solutions to the global offshore Oil & Gas industry
    • Manufacture lifting equipment
    • Ancilliary related services
    • Provision of ship supplies
    • 3 warehouses - 2 in Singapore, 1 in Vietnam
    • 1 fabrication facility in Singapore
    • Sales and distribution network spanning Asia, Oceania, Europe, the Middle East and Africa.
  • Business plans
    • Further expand into Asia
    • Expand Malaysian operations
      • Will be commencing construction on new facilities in Tanjung Langsat in Dec 2012
      • Setting up representative office in KL, Malaysia
  • Figures and numerics
    • $0.35 per share
    • 5,000,000 offer shares for public subscription
    • 110,000,000 new shares
    • S$38.5 million in gross proceeds to be raised
      • S$35.4 million after deducting listing expenses
      • 51.9% expansion of operations in Asia (ie. possible future acquisitions)
      • 5.2% expansion into Malaysia
      • 34.7% working capital
    • 'No formal' dividend policy
      • Intention is to distribute dividends of not less than 30% of net profits for FY2013 and FY2014
        • Net profit after tax is ~$12-13 million (for the last 2 FYs)
        • ~1c/share (based on 410 million shares after offering)
        • ~2.7% dividend yield over offer price of $0.35/share
  • Major shareholders
    • All shareholders stated below have pledged not to attempt to sell any of the post-offering share capital for up to 6 months from listing. This represents 73.1% of the company paid-up share capital.
    • Comfort shipping - 8.4 million shares (paid average 29.8c/share)
    • Amhoist - 8.4 million shares (paid average 29.8c/share)
    • Wee Seng - 6.49 million shares (paid average 30.8c/share)
    • Rhodus - 12.3 million shares (paid average 22.4c/share)
    • Keh Swee - 264.41 million shares 
  • Timeline for offering





Definitely considering this IPO as a hit-and-run IPO for the moment and not as a long term value investor. Reasons are as follows below
  • > 30 years of industry experience with Singapore-based operations represents some form of stability and continuity that the company can bring.
    • However, a quick check with Spring Singapore shows that the company faces strong competition to rise up as a global brand representing the Oil & Gas support services sector in Singapore. [Spring Singapore 2009 report]
    • The article also speaks volume of the intense competition in this saturated business environment although the Singapore brand name helps with overseas collaboration.
  • No 'formal' dividend policy gives me the vibe that the management may be uncertain of the future performance of the company and are unwilling to make any commitment.
  • Low liquidity stock except for the listing time fireworks. Only 26.9% of the shares are tradable in the next 6 months, representing 110 million shares or $38.5 million in value.
On the bright side,
  • I like the company's geographical and business focus. The management probably sees huge energy growth emanating from Asia and is keen to explore the developing demand.
    • LNG was sort of mentioned as a passing remark in the IPO prospectus but I suspect there would be more interest going forward to harness that demand that is developing sure fast in Asia and especially so, Singapore.
      • Coincidentally, Malaysia is a net exporter of LNG
    • Oil & Gas sector is ever-expanding together with energy demands. Let's remind ourselves that Japan is totally eliminating nuclear power and requires yet more oil & gas to sustain its energy needs. China is growing, albeit more slowly this time but Indonesia, Myanmar are up and coming.
  • PE ratio of 8.5x seems reasonable for a growing company
With Dynasty REIT also in the focus this week, I would still be tempted to put my money with Gaylin Holdings for the initial pop at the start of the listing. It is not an easy IPO to get too, given just 5 million shares on offer for a very active IPO market this period.


PS. for a statistical breakdown of all SG-listed IPOs in 2012, do visit "SG IPO Statistics" on this Healthytrading blog. It presents an easy snapshot of all the IPOs at a glance for your analysis and comparisons.

For those of you gunning for the Gaylin Holdings or Dynasty REIT IPOs, check out my blog page on "Guide to IPO Investing" to help you navigate around especially if you are a new investor or new to the IPO bidding system of SGX. Do not waste time; time is ticking away to those offer deadlines!


Also, do bookmark this page // add Healthytrading blog to Twitter // subscribe to RSS feed // subscribe to email feeds to receive the LATEST IPO/market news that will move your money. Why wait, add them now! Links are available all on the right of the page (at the navigation bar).


Friday, October 19, 2012

Geo Energy Resources IPO Balloting Results

Balloting Results of the Geo Energy Resources IPO is out as of 18 Oct 2012 and are summarised as follows
  • 289,264,000 shares for public and placement tranche
    • 3,000,000 for public tranche
  • 2.9x oversubcribed overall (reflected in official balloting results statement)
    • 0.9896x subscribed for placement tranche shares
    • 184x (because of small public offer amount) over subscribed for the public tranche shares
  • Shares at S$0.325 each
Shares will commence trading on a "ready" basis at 9am on Friday, 19 Oct 2012.

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Official announcement document of the Geo Energy Resources IPO is available on SGX here.


On a side note, Dynasty REIT and Gaylin Holdings have subsequently announced their IPO listings that will be due on the SGX mainboard next week. The IPO scene is truly heating up!

For those of you gunning for the upcoming 2 more IPOs, check out my blog page on "Guide to IPO Investing" to help you navigate around especially if you are a new investor or new to the IPO bidding system of SGX. Do not waste time; time is ticking away to those offer deadlines!

To also have a feel of the local demand for IPOs, do check out my compiled "IPO SG Statistics" page for a good detailed but yet bite-sized organisation of the statistics.


Also, do bookmark this page // add Healthytrading blog to Twitter // subscribe to RSS feed // subscribe to email feeds to receive the LATEST IPO/market news that will move your money. Why wait, add them now! Links are available all on the right of the page (at the navigation bar).

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Thursday, October 18, 2012

Religare Health Trust IPO Balloting Results

Results of the Religare Health Trust IPO is out as of 18 Oct 2012 and are summarised as follows
  • 567,455,000 shares for public and placement tranche
    • 12,000,000 for public tranche
  • 2.3x overscribed for placement tranche shares
  • 14.5x over subscribed for the public tranche shares
  • IPO raising with 567.455 million shares at S$0.90 each
Shares will commence trading on a "ready" basis at 2pm on Friday, 19 Oct 2012 (instead of 9am on 22 October as previously stated) [CNA Official]

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Official announcement document of the Religare Health Trust IPO is available on SGX here.


On a side note, Dynasty REIT and Gaylin Holdings have subsequently announced their IPO listings that will be due on the SGX mainboard next week. The IPO scene is truly heating up!

For those of you gunning for the upcoming 2 more IPOs, check out my blog page on "Guide to IPO Investing" to help you navigate around especially if you are a new investor or new to the IPO bidding system of SGX. Do not waste time; time is ticking away to those offer deadlines!

To also have a feel of the local demand for IPOs, do check out my compiled "IPO SG Statistics" page for a good detailed but yet bite-sized organisation of the statistics.


Also, do bookmark this page // add Healthytrading blog to Twitter // subscribe to RSS feed // subscribe to email feeds to receive the LATEST IPO/market news that will move your money. Why wait, add them now! Links are available all on the right of the page (at the navigation bar).

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Wednesday, October 17, 2012

It's the IPO Season - Geo Energy, Religare

What a huge 2 weeks of IPO activities that have taken the market by storm amid all the global growth slowdown gloom! Here is a quick review of some of the IPOs that have been announced and are about to be confirmed.

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  1. Courts Asia
  2. Geo Energy Group
    • S$0.325/share
    • Applications close 17 Oct Noon
    • Check out my article on "To invest in Geo Energy Group IPO?" Fundamental view has not changed and I would be tempted to use my cash for Religare Health Trust listing instead of Geo Energy Group at such times.
    • BTimes Coverage
  3. Religare Health Trust
  4. DeClout (Catalist)
  5. Dynasty REIT
    • To raise $1 billion
    • TodayOnline Coverage
    • Pending confirmation announcement of public tranche offer


For those of you gunning for the Geo Energy Group or Religare Health Trust IPOs, check out my blog page on "Guide to IPO Investing" to help you navigate around especially if you are a new investor or new to the IPO bidding system of SGX. Do not waste time; time is ticking away to those offer deadlines!

To have a feel of the local demand for IPOs, do check out my compiled "IPO SG Statistics" page for a good detailed but yet bite-sized organisation of the statistics.


Also, do bookmark this page // add Healthytrading blog to Twitter // subscribe to RSS feed // subscribe to email feeds to receive the LATEST IPO/market news that will move your money. Why wait, add them now! Links are available all on the right of the page (at the navigation bar).


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Saturday, October 13, 2012

Courts IPO Balloting Results

Results of the Courts Asia IPO is out as of 8pm 12 Oct 2012 and are summarised as follows
  • 85,795,000 shares for public and placement tranche
  • 24.4x over subscribed for the public tranche shares
  • 77,920,000 shares for cornerstone investors
    • JF Asset Management
    • New Silk Road Investment
    • Target Asset Management
    • Value Partners
  • IPO raising of $137.1million
Shares will commence trading on a "ready" basis at 9am on Monday, 15 Oct 2012.



Complete results of the Courts Asia IPO is out as of 8pm 12 Oct 2012 and is available on SGX here.

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Thursday, October 11, 2012

To Invest in Geo Energy Group?

Geo Energy Group is the 13th publicly offered IPO to list on the SGX this year, 2012. Not a bad week for cash-rich investors seeking the extra investment opportunities in a saturated property market, overpriced REITs soon-to-form-bubble and lack of global growth leading to stagnation in stock prices. It is the 2nd to announce its listing this week apart from the Courts IPO. Looks like the underwriters and company management are expecting the market to pick up in the final quarter of the year to spur up some more stock demand.

Anyway, here's a quick summary of the offering. For more information, please refer to the prospectus lodged with SGX here.
  • Coal mining group with operations that started in 2008
    • Operations are primarily located in Kalimantan, Indonesia
    • Mine operator
    • Mine owner cum operator
    • Mine contractor providing services to third party mine owners
  • Figures and numerics
    • $0.325 per share
    • 3,000,000 offer shares for public subscription
    • 289,264,000 invitation shares
    • S$94.0 million in gross proceeds to be raised
      • S$77.8 million after deducting listing expenses
      • 41.9% general working capital
      • 39.3% to acquire mining equipment and machinery
      • 15.7% business expansion including acquisitions, joint ventures and/or strategic alliances
      • 3.1% construction of jetty and barge loading facilities
    • No dividend policy
  • Timeline for offering


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Have yet to digest the prospectus completely but here are my fleeting thoughts on the offering as it is portrayed on first impressions.
  • Relatively new company with an eye on consolidating operations with what they currently have but not too overly ambitious with expansion plans.
  • No dividend policy makes it a high risk investment in the long run given that share price fluctuations will largely be dependent on its profitability.
  • However attractive the prospectus makes the coal business look to be, it does not seem to have a solution to China's infrastructural development slowdown. The rest of the world is also in malaise and fiscal debts are being tackled internationally. It is difficult to envisage the same heydays for coal at least for 1 year down the road before the financial stimulus does find its way to prop up China and lead emerging markets and Europe out of the abyss by 2014.
  • Expect highly volatile earnings. Competition is very strong in the mining industry and profits are largely dependent on coal prices.
  • PE ratio seems a little on the high side 
    • Sakari Resources, a mine operator with presence in Indonesia, trades with a 11.7x P/E TTM (Source: Bloomberg Businessweek)
    • Energy sector in Asia has a 5.5x P/E TTM for 168 companies (Source: Bloomberg Businessweek)
    • Singapore's stock market trades at a ~9x PE (Source: Mystockinvesting.com)
In conclusion, with both Courts and Geo Energy Group on offer today, I would still be more tempted to head for Courts with a local presence and feel where I can better gauge its financial health and business performance. It has been a stable player with room for expansion in Malaysia, and coincidentally, Indonesia, as their next destination. Retail growth potential seems far greater than that of coal in Indonesia too.

PS. for a statistical breakdown of all SG-listed IPOs in 2012, do visit "SG IPO Statistics" on this Healthytrading blog. It presents an easy snapshot of all the IPOs at a glance for your analysis and comparisons.

Tuesday, October 2, 2012

Good News for IPO Investor Community

SGX has just released a statement today on plans to allow more retail investors to participate in IPOs. That means raising the allotment available for the public tranche and hopefully, increase liquidity of IPO stocks early on (since IPOs typically have a placement and cornerstone tranche offer that already stipulates certain embargo on selling within a specific period) and more importantly to allow a greater chance of being allocated successfully.

Proposal details in summary (http://bizdaily.com.sg/newsite/sgx-proposes-to-raise-ipo-shares-available-for-retail-investors/)

  • Minimum of 5% of total underwritten shares to be available under the public offering tranche
  • Clawback mechanism to allow shares to be transferred between public and placement tranches to better cater to demand from either side.
Public are welcome to share views and feedback to SGX on the proposed changes.

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Monday, October 1, 2012

Upcoming Dates that may Move Your Money - Weekly Update

Last week recap
The market seemed to have fully digested the impact of QE3 on the economy. After continued euphoria from the week before, stock prices staged a short-lived Monday-to-Tuesday rally before retracing lower for the rest of the week.
  • STI surged to 3075 in early week before tumbling to 3040 in mid week. Closed at 3060 by friday.
  • Hang Seng index continued its strong rebound with QE3 funds expected to give boost to its property prices and financial sector, touching 20850 on Friday.
  • Dow opened the week strongly to hit 13610 by Tuesday before turning down on Wednesday and remaining flat until Friday at around 13440.
US stock exchanges suffered on Friday, closing much lower on the back of fears that the US economy is stalling despite a slightly better than expected Spain capital requirement stress test of banks.


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Week ahead
  • Monday
    • China, Italy, France, Germany, UK - Sept Manufacturing PMI
    • Euro-zone - Sept Unemployment Rate
    • Ben Bernanke speech at the Economic Club of Indiana in Indianapolis
  • Tuesday
    • SG - Sept PMI
    • South Korea - Sept Manufacturing PMI
  • Wednesday
    • Nil
  • Thursday
    • US - Aug Factory Orders
    • US - Sept Initial Jobless Claims
    • US - Sept Continuing Claims
    • UK, Europe - Interest Rates Announcements
  • Friday
    • US - Minutes of FOMC Meeting
    • US - Sept Change in Nonfarm Payrolls
    • US - Sept Unemployment Rate
    • Germany - Aug Factory Orders

Source: SGX MyGateway Economic Calendar
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Sunday, September 30, 2012

Are We Setting Up for A Fall? - Weekly Update

Exuberance aside, the market seems to have fully digested the QE3 impact and traders have already began looking for other news sources to fuel their trading activities. In Singapore, the STI has done fabulously well over the last 3-4 weeks, outperforming the Dow and HS indices. 

Market participants that I have generally been speaking with these days seem to have a changed perspective of the upcoming 4th quarter of the year of one being optimistic and rally-like. Reason being: QE3 money will finally find its way into the money system globally and start to push up prices of commodities. Growing tensions in the Middle East and a looming war between Israel and Iran are threatening oil prices to levels past 100$US per barrel. This is still slightly good news for the badly battered commodity stocks and oil counters in Singapore and a rally in these pillars of Singapore economy looks imminent. 

Prices do not lie, don't they? And the fact that they are at their highest levels since the year start rally for most stock markets surely must tell us that people are predicting further upside. 

But wait, things are never as simple as they are usually. Traders know with ample information that the fiscal cliff is around the corner and it may be a rocky road ahead. Very rocky indeed should US politics fail to achieve a sort of consensus and delay action, as we have seen from their polarized political scene over the last decade. 

Technically, the STI (see chart below) seems to be redo-ing a pattern it was familiar with in the year start rally. With prices hanging at high levels and the MACD decreasing, it soon found itself in a huge slide back down to 2700 by June. Chances are people are jumping fervently onto the bandwagon today with smarter traders winding down positions in hordes lately. That explains the relatively unchanged levels since 3-4 weeks ago as well as the high volumes. MACD has been sliding downwards despite being provided a short respite by QE3. In the short run and near term, I am definitely not betting against the downtrend. Just so that I am on the safe side.

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Wednesday, September 19, 2012

Follow the Smart Money - My Investment Thesis Today

I have been asked way too often these days on what's my investment thesis and where the smart money is heading to. 

To answer that, the simplest question to do is to Ask ourselves what sectors are hot today? What sectors have been shaped by news that have constantly grabbed the headlines. Take a look at a YTD chart of the different key sectors on the Singapore exchange (not limited to these sectors though), and it will be clear that Real Estate, Oil & Gas and Financial sectors are outperforming the other sectors. Yes, with a 8 month view of the market, this is what the market has been reacting to. Fundamentally, we ask ourselves also if such trend is validated. In fact, these 3 industries are key to Singapore's economy. The economic restructuring has seen us, over the last 2 decades, move away from over reliance on manufacturing and pure export oriented country. We have learnt our lessons well as a country to avoid the 1997 crisis but have you as an investor made the right call with our simplest state of economy?


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We can take a look at another chart detailing the last 2 months before the turn of the year and 2-3 months after the turn of the year, which happened to be the start of a mega New Year rally. In fact, on closer inspection, Basic Materials (metal, coal) and the Maritime sectors seemed to have been badly battered and then vividly revived. Which draws me to another point: Volatility. Ride it out, what do you get? (See the chart above). After 1 full year, eliminating temporal volatility, in fact, these 2 sectors are the most volatile of late and price swings are huge, as with their 'possible profits'. It is your take if you decide to hang on to this risk returns balance. 


Now, consider the recent rally (chart below), that I am treating to have started since June albeit secretly until the release of plenty of quantitative and monetary stimulus measures from major economies (China, Europe, US and latest today, Japan with its central bank). It is the same old sectors in Basic Materials and Maritime absorbing the volatility but this time in divergence. Basic Materials have been doing tremendously well, helped on by the correlation between China's stimulus package and demand for steel and coal mainly. Maritime has however, gone way too oversold (unnecessarily in my opinion) this time round. But that is the name of the volatility game. You win big or lose big.


What has been performing steadily upwards are still Real Estate, Oil & Gas and Financials. Of course, if you are plotting a long-period portfolio, it is very obvious what needs to be in your portfolio as mainstays. This will allow a steady appreciation in time to come with balanced risks and volatility. Build a core around it and then if you are still cash-rich and ready for more risks, get in to the more volatile industries and make a decent bet. In this case today, the bet is also obvious - Maritime, given its pretty oversold nature. Don't take my word for granted here though, nothing is constant. Very obviously, you know what you should be doing.

HealthyTrading!

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Tuesday, September 18, 2012

Jump on the Oil & Gas Bandwagon? Part 2 - Ezra, Kreuz, Rotary

A favorable news article on the Straits Times on Saturday offered some insights into trading this period of quantitative easing from major economies by targeting the (usual) Oil & Gas sector. However, it was highlighted that the favourite pick was not big cap stocks such as Semb Corp, Keppel Corp or Semb Marine. Instead, the article focused on mid cap stocks with good order books and growth potential such as Ezion, Ezra and Swiber. 

Ezion has definitely caught the attention of many traders over the last 1 plus year owing to a managerial and strategy turnaround that has been yielding very decent cash flows, increasing stockpile of cash as well as orders. It was also mentioned in the article that its strategy to have one of the most innovative fleet of jack-up liftboats that provides for offshore industries was a real gem in its managerial direction. Other players such as Swiber and Ezra are companies that been there and done that, very solidly and stably run over the years with a very localised culture but yet international presence. Swiber has an order book of $1.5billion in the pipeline, definitely more than sufficient revenue to last the next 3-5 years.

Of course, there are many other hidden gems that are Oil & Gas players that were not mentioned in the article such as Kreuz, Swissco and, the almost forgotten, Rotary.

Let's take a look at how you can participate in the Oil & Gas rally that has really mimicked the STI's performance over the last year (as seen from the ST news article on Saturday). Listed are technical charts of Ezra, Kreuz and Rotary. For charts on Ezion, Swissco and Swiber, refer to part 1 of this article here.








Jump on the Oil & Gas Bandwagon? Part 1 - Ezion, Swiber, Swissco

A favorable news article on the Straits Times on Saturday offered some insights into trading this period of quantitative easing from major economies by targeting the (usual) Oil & Gas sector. However, it was highlighted that the favourite pick was not big cap stocks such as Semb Corp, Keppel Corp or Semb Marine. Instead, the article focused on mid cap stocks with good order books and growth potential such as Ezion, Ezra and Swiber. 

Ezion has definitely caught the attention of many traders over the last 1 plus year owing to a managerial and strategy turnaround that has been yielding very decent cash flows, increasing stockpile of cash as well as orders. It was also mentioned in the article that its strategy to have one of the most innovative fleet of jack-up liftboats that provides for offshore industries was a real gem in its managerial direction. Other players such as Swiber and Ezra are companies that been there and done that, very solidly and stably run over the years with a very localised culture but yet international presence. Swiber has an order book of $1.5billion in the pipeline, definitely more than sufficient revenue to last the next 3-5 years.

Of course, there are many other hidden gems that are Oil & Gas players that were not mentioned in the article such as Kreuz, Swissco and, the almost forgotten, Rotary.

Let's take a look at how you can participate in the Oil & Gas rally that has really mimicked the STI's performance over the last year (as seen from the ST news article on Saturday). Listed are technical charts of Ezion, Swissco and Swiber. For charts on Ezra, Rotary and Kreuz, refer to part 2 of this article here.



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Sunday, September 16, 2012

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The Rally is Finally Here? - STI

Finally the long overdue, investor-centric, QE3 was launched by Ben Bernanke for the USA in tandem with monetary easing policies adopted in key economies around the world such as China (last weekend, on restarting rail and infrastructure projects) and Europe (unlimited bond buying programme to stabilise debt markets). Markets have been in rally mood over the last 2 days clearly appreciative of the actions taken by these economies to restart sluggish growth in the world that has been badly plagued by political inefficiency and inability.

Key market movers on Thursday and Friday on the STI included commodity counters such as Wilmar, Noble Group and Olam as well as property stocks such as Capitaland, Ho Bee and Yanlord. Interestingly, it has been mentioned on Reuters that QE3 may 'spur China's central bank' into more action' albeit with a smaller probability of happening. However, that has clearly not stopped investors from punting bets in favour of a China's recovery, hence such attention on key commodities and property counters that will be huge beneficiaries to any further Chinese bank actions. 


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STI Outlook Buy. Singapore will be a key beneficiary when money from US, Europe and China trickles down into the economy, restarting trade activities. Extra cash on hand also spurs investment into Singapore, something at which has already been at a high this year with the Sing Dollar strengthening tremendously due to demand. The STI will also be buoyed by any further Chinese Central bank actions in the coming weeks, if any.
  • MACD - MACD trending upwards and positive divergence is back.
  • RSI (25d) - RSI just rebounded from 50% and headed to 70%. Still room for play.
  • Bollinger Bands - Prices are already closing in on the upper bollinger and possibly pulling the bollinger bands further wide apart for more upside volatility.
  • 20d MA - Prices have just crossed the 20d MA on the back of a huge gap up on Friday.
  • Volume - High volume accompanying the gap up in the STI on Friday, further signalling strong upwards buying pressure from market participants and more potential upside bets being placed.


Friday, September 14, 2012

The Shipping Conundrum - NOL

Today, NOL, on the back of a 2.75% day rise, had been removed as a component of the STI and replaced with the newly SGX-listed IHH trust. Changes will take effect on 24th Sept.

The news for shipping counters really just gets worse and worse, doesn't it? In the public focus is China's slowdown where the biggest hit industry has to be that of commodities. After all, when the biggest importer of goods starts to consume less, the first hit will be raw materials and food that has been fueling its meteoric rise in the last decade. And with Europe in deadlock, and US import/export imbalance swaying without much consensus, it is no wonder that the next most correlated industry - shipping - will also bear the brunt of this economic tide.

However so, it is both good and bad news that shipping industry has been battered since 2008 owing to a supply glut, much far ahead in time than last quarter's China hard/soft-landing quibble. In fact, prices of NOL, Cosco, Yangzijiang seemed so floored that China and US slow down in the last quarter almost failed to decrease its stock prices much further. 

Now, with investors coming in to buy on the cheap, as some people have started to buzz about, shipping counters are soon to be in the spotlight again as the 'cheap buy'. 
Is it really the cheap buy?


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Thursday, September 13, 2012

Third Largest IPO 2012 - Religare Health Trust

So, the anticipated third-largest IPO this year will finally be underway. It is none other than Religare Health Trust, aiming to raise $500 million in a initial public offering on the SGX. [Reuters link; Today online link

Here are some important details about the IPO that are available at the moment

  • $500 million to be raised to reduce debts
  • Medical and healthcare assets
  • End Sept is the rumored listing period
  • Business trust style
  • Minimum dividend yield of 8.5% (impressive number but more details required on its sustainability and conditions)
  • Assets taken from Fortis Health Care Group; aim to buy third-party assets in future
  • Religare Capital Markets, Citigroup, Nomura, Standard Chartered and CIMB are acting as the IPO's bookrunners

Of course for now, details are sketchy and as much as you and I can guess from these few news sources. But on first impression, it does seem somewhat similar to that of Ascendas Hospitality Trust that listed last month in the second-largest IPO this year. Impressive dividend yields but somewhat not a very compelling investment given the IPO proceeds are mainly to service debts. Nonetheless, instutitional response over the next few weeks will give a better indication of its market depth and more details along the way will definitely help to make a better judgement. 

On a side note, it is interesting to note that none of the IPOs that listed on the SGX this year had made a loss on the first trading day. The best performers were Neo Group (Catalist listing) with a first day return of 55% on its offer price and Civmec (Mainboard listing) with a gain of 39%. The worst performer was Ascendas Hospitality Trust with a return of 0% on its first day's closing price.


For more statistics such as the one above on the performance of this year's IPO, do head to the dedicated IPO SG Statistics section of this blog.

Happy and healthy trading!


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Wednesday, September 12, 2012

Weekly Update - of Stimulus and Steel

The market has turned pretty optimistic since ECB's bond buying initiative was announced last Thursday. In response, China also issued a stimulus packaged that was unveiled over the APEC meetings over the weekend that aimed to restart its national rail projects that were in limbo ever since last July due to the Wenzhou rail incident. 

Now, the flooding of money into this global malaise does seem to require some sort of concerted shake given the lengthy 'depression-like' conditions that the world has endured since 2008. Similar to the response in 2008, a flood of money from major superpowers would definitely give the economy a good boost in the short run in order to allow it to prop up and get moving on its own again. Cynics against the stimulus idea must surely take lessons from the 2008 crash that such a organised effort may will be required this time around. We must not forget that all talk but no action on the fundamental restructuring required for our global and local economies to get moving again is going to be a protracted process, cynically, may not even occur in time to come.

Then, surely, Mr Bernanke and his aides, after declaring and hinting that a stimulus package is not far-fetched in their latest Fed meeting minutes, will be putting together their pieces for a follow up to the week's actions. No wonder the market has been responding optimistically, rallying day to day. It is coming, after way too long.


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On a side note, steel play has clearly been dominant again with Midas, a steel producer with strong business foothold in China's rail industry. Its share price has already risen some 16% over the last 5 trading days on the back of very strong volumes. OCBC research has Midas at a TP of $0.435, which was just revised. Maybank just upgraded Midas to Buy with a TP of 0.48. Also, I had written a blog post over the weekend on my own analysis of Midas, with a TP of 0.45.


Monday, September 10, 2012

Steel play heating up? - Midas

Midas is a steel company that comes to direct consideration for more upside given the current resumption of rail development by the Chinese govt. It is a recovering stock that has seen a vast inprovement in its fortunes in the later half of thia year with impact expected in its 2013 FY earnings. It has sealed several successful contract wins over the 2nd half of the year as opposed to a very poor first half of 2012. In fact, a small table below has been compiled regarding its contract wins in 2012. There has been increased optimism too that it will be able to secure more rail contracts given the recovering China rail industry after the recent rail incident.

Midas contracts history for 2012 so far:




Fundamental Outlook - Buy. It is clear that the Chinese government are indeed ramping up rail development once again after a hiatus from the Wenzhou railway incident 1 year ago. Let's not forget that it is in the interest of the Chinese government to link up cities and continue the economic boom, although possibly at a slightly lower pace from before. Nonetheless, resuming of the rail development business is definitely going to be a boon for Midas. 
On top of that, Midas is clearly diversifying in light of their recent troubles to restructure their business to also incorporate power. Their first contract of 2012 in the power industry has been secured in 5 Sept, a few days ago, to positive market acceptance. 

Technical Outlook - Buy. Chart is looking good with a breakout on 7 Sept on the back of news of 2 contracts being secured in the week. Not overly expensive either. TP ~$0.44.
  • MACD - Has just turned upwards again and is in positive territory. Divergence also just turned positive when MACD crossed its signal line.
  • RSI (25d) - Bounced off the 50% level and has some room to maneuver before the 70% levels.
  • Bollinger Bands - Prices have just broken through the upper bollinger band to signify further upwards momentum.
  • Breakout - A large white candlestick appeared on 7 Sept on the back of a breakout through the $0.38 major resistance. Expect this level to form good support for further challenging of the $0.44 levels for Midas.
  • Volume - A huge surge in volume occured on 7 Sept accompanying the major white candlestick. 




Saturday, September 8, 2012

Weekend Alert - Dow Breakout!

Alright, it was coming - a rally that would be based on the ECB's decision. Luckily for the market, it was good news on Thursday when ECB announced an unlimited bond buying programme that will supply liquidity to cash-strapped banks and to restart economic growth in the region. Whether this plan clearly works in the long run or not, or whether structural problems still inherent in the system needs to be weeded quickly, the market has responded quite favourably to this piece of news.

By Friday 7 Sept, Dow Jones index managed to mildly break the psychological 13280 level to close at 13320. Quite impressive given the short span from Thursday's ECB announcements. Market volumes have also returned in anticipation of more uptrend.





Thursday, August 30, 2012

A Selling Market Offers Opportunities - Genting SP, Biosensors

As the old adage goes - "Buy when people are fearful, Sell when people are overly optimistic" - has a certain truth if you really look at it in perspective. What is more salient about this concept is the fact the market may not be totally efficient at any point in time. 
Our job as an acute investor is hence to identify market opportunities and make an intelligent 'bet' with all available information. In more obvious words, we always seek the cheapest buy with the highest potential for returns. That is by definition the meaning of a trader. 


Genting SP had been badly sold down since its early year highs due to its rumored take-over bid for Echo, an Australian casino player. The bidding war against Packer for Echo has not really materialized after much concern about Genting's strategy. Its prices had taken another nose dive on China growth concerns and poor tourism numbers from high-roller countries. However, in the last 2 weeks, its prices have recovered some 10% from Aug lows.

Outlook - Watch and Buy; cyclical accumulation. Tourism traditionally peaks towards the year end given the school holidays in Singapore as well as in neighbouring countries. Festive period in Christmas and New Year will definitely help to pump up some numbers both in tourist receipts around Genting assets as well as its casino. The cyclical nature of Genting's business is notoriously well known and observed in its stock prices over the last 3 years.
Technically, the stock has taken a beating and is recovering. While selling pressure day on day is still present, it is of the opinion that it will wane over the next 1-2 weeks with the broader market performing much more poorly. Weekly charts show good upwards momentum still.
  • MACD(weekly) - About to cross its signal line and headed upwards
  • RSI (25w) - Still below 50%, offering cheap opportunity to accumulate. Off RSI lows in late July.
  • Bollinger Bands - Prices just rebounded off the lower bollinger bands in late Jul when the stock was badly oversold in light of poor China economy figures and slowdown in Asia as well as Singapore tourism.
  • 20w MA - Prices are still headed to 20w MA.
  • 200w MA - Prices are still a good 30% away from 200w MA.
  • Volume - Thin volumes were observed over the last 5 trading days with the stock prices in decline. Fear factor is very high and perhaps it gives a good time to explore a cheap opportunistic bet.






Biosensors is a medical stent research company with global operations. A review of its latest operations has been provided in an earlier blog article - Stable Growth Intact - Biosensors . In summary, 
  • Strong revenue growth
  • Maintained operating income
  • Operating cashflow has improved (US$36.3m inflow)
  • Attractive valuations given the recent fall in stock price.
  • Been meeting analyst expectations as a very solid company.
  • Operating cashflow has been on a steady rise over the last 4 quarters.
  • Cash pile has increased steadily over the last 4 quarters.
  • Medical sector will continue to improve in SEA/Asia region given the improving incomes especially form neighbouring countries that are fast developing and attracting investments. A recent OCBC research report offers more insights.

Outlook Buy. Selling pressure seems finally subsiding given a stabilisation in recent prices. While the broader market had been in decline, its prices have relatively stayed constant together with declining volumes. More importantly, bollinger bands have narrowed significantly that points to a soon sharp move highly possibly in the upwards direction barring any unfortunate news events. Kim Eng recently reiterated a buy call on the stock with TP at $1.42.
  • MACD - Divergence turning up again with MACD line showing some form of a minimum. Still some nominal positive momentum as MACD is above 0.
  • RSI (25d) - Hovering well around 50% for the last 3-4 weeks.
  • Bollinger Bands - have narrowed tremendously. Volatility in prices have reduced with some anticipation for a future big move coming.
  • 20d MA - Prices are moving in tandem with the 20d MA.
  • 200d MA - Prices are a good 11% below the 200d MA line, offering good upside potential.
  • Volume - Thin volumes were observed over the last 5 trading days. Buy when people fear excessively.


Tuesday, August 28, 2012

Far East Hospitality Debut - Above Expectations

Far East Hospitality Trust listed on SGX mainboard on 27th Aug, 1 day ago, to a end day closing price of S$0.95. That represented a jump of 2cents from its IPO offer price. The 'pop' was also quite considerable considering that it reached a high of 0.98 before closing at 0.95. Today, the stock saw further buying pressure to close at $0.975 with a high of $0.98. That represents a 4.83% gain from IPO offer price of $0.93

Pretty impressive debut for a REIT-styled counter factoring into consideration that its IPO was priced on the top of the indicative range offered to the institutional tranche of $0.93, citing strong institutional and then, later, retail demand. Clearly, its Singapore-based hotel assets are a plus in gaining popularity with local investors.

Of course, the question is how did FEHT compare with the Ascendas Hospitality Trust? Both were marketed and packaged as stapled business trust and reit securities and the IPO response should give us a good picture to their future prospects and more importantly, as I always mention, market validation of their future earnings. On a side note, this comparison also value-adds to itself given the proximity of listing dates (exactly 1 month from each other) and almost similar market conditions (declining uptrend). 






The results of the comparison speaks for itself in the table below.



Of course, this is not the end to the comparisons of all IPOs in this year. Head over to "IPO SG Statistics" for a complete story of all IPO listings on the SGX this year.

Saturday, August 25, 2012

Apple Triumphs over Samsung

And so, the news for world's most valuable company by market capitalisation just keep getting better! Good news after good news despite a small blip in its last quarter earnings has been continuing on and on for the last decade. Today, Apple has been awarded US$1 billion in lawsuit damages by the Federal court in Califonia state in a landmark suit against Samsung for breach of propietary rights. (Link here: http://www.bbc.com/news/technology-19377261)

What does this mean to investors like you and me in Singapore?

In short, for us investors, this bodes well for Apple on the short run and on the long run. Buy Apple.
  • Validation of competitive advantage + product differentiation
    • Both are key valuation metrics to top IBs to evaluate company proposition and investment potential over competitors
    • More black and white reason for price target upgrades.
    • More reasons for overweighting in portfolio
  • Gives its R&D department another 1-2 years of time to really deliver more innovation for new products in an otherwise saturated environment where smartphones are all pretty much similar.
  • Financial power increases yet again
    • Again the cash kitty swells, enough said.
    • More chances of another special dividend

And for us you and I as general phone users, it just means even wider range of products to choose from rather than the similar looking phones that have been populating the market. Cheers!




Friday, August 24, 2012

Far East Hospitality Trust IPO Balloting Results

Far East Hospitality Trust IPO balloting results are finally out as of 9:08 PM SG time. A snapshot of the Public tranche offer balloting result is available below. For more information, the full balloting announcement is available via SGX website here.

Some key points summarizing this IPO exercise

  1. 14.6 times subscribed
    • 732,338,000 stapled securities was bid for
    • 50,000,000 only available (an additional 1,800,000 shares on top of the 50,000,000 is also in the public tranche but only available for subscription by directors etc.)
  2. 267,566,000 stapled securities offered to institutional and other investors via placement tranche.
  3. DBS Bank is acting as the stabilising manager with over-allotment of 65,873,000 shares from the placement tranche.

Note that shares for FEHT will start trading on the SGX mainboard on 27th Aug 2012, Monday.







Tuesday, August 21, 2012

Compiled Table of IPO Statistics

Owing to the IPO scene heating up due to the biggest IPO this year by Far East Hospitality Trust, I have compiled a table of IPO statistics for investors to have a snapshot of current 2012 data, and hopefully formulate a good and optimal strategy for use during IPO applications. The table can be found via the navigation bar above under "IPO SG Statistics" or you may also click here for a redirect to that tab.

On a side note, the Far East Hospitality Trust prospectus and information can be found here through SGX. Do note that the deadline for application is 23 August 12 noon, Thursday.

HealthyTrading!



Monday, August 20, 2012

Attention on IPO Scene Again with Far East HT

The Far East Hospitality Trust is the latest IPO to heat up the local IPO scene and the 2nd hospitality trust to be seeking a listing in this year. In fact, Far East Hospitality Trust (FEHT) will be listing almost exactly 1 month after another hospitality trust, Ascendas  Hospitality Trust (AHT) got officially welcome to the SGX Mainboard. 

I have compiled a table of IPO statistics relating to all Mainboard and Catalist-listed counters for 2012. It can be found in the "IPO SG Statistics" section of this blog for reference. It also details the varying amounts of cash used for balloting and the percentage success rate and expected profits for the initial listing day 'pop'. Do check it out here.

Back to FEHT listing, certainly investors will be wary of the potential 'pop' with this IPO given the lacklustre performance of AHT a month ago. Well, lacklustre seems slightly too unforgiving given the fact that trusts and REITs often get pretty unceremonious welcomes into the listing fray. Indeed, AHT closed on offer price ($0.88) and has gone below listing price only to close at $0.875 last friday ostensibly due investors betting on its earnings report come Thursday in this week. 

Now the question is will FEHT outperform that flat result seen with AHT? 

From news responses and institutional subscription, FEHT does indeed look like a stronger proposition backed up with much better local presence and management leading up to this IPO. There was a slight blotch on the AHT scoresheet even before listing due to the pull of a considerable asset - its Korean hotel - from its portfolio.It seems smooth sailing with the FEHT so far. Of course, the drawback must be its premium that an investor must now pay for a visibly 'better' trust and management where it has been priced at the top of its indicative range at $0.93. Investors must also stomach the slightly lower dividend yield of 6% promised for this financial year as compared to that of AHT at 7-8%. 

I have honestly not immersed myself in the documents of the Far East HT yet and will be doing so tomorrow or the day after next. For now, I am not keen on taking this stock for a 'pop' given the history of AHT and its similarities. The premium further reduces the possibility of a 'pop' on first day. 

For those of you yet to subscribe for the Far East Hospitality Trust IPO, the deadline for application is 23 August 12 noon, Thursday.



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