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SembCorp Marine - Ending 2015 on a low

Shared By Stock Fanatic on Wednesday, December 2, 2015 | 2.12.15

■ Company guides for net loss in 4Q15

■ Impact of order deferral/cancellation likely to flow into 2016

■ Reiterate Sell (5); lower target price to SGD1.73

Asia Gaming - Where are Chinese mass gamblers going?

Shared By Stock Fanatic on Tuesday, December 1, 2015 | 1.12.15

Survey indicates mediocre interest in regional casinos, but high in US ones
UBS Evidence Lab interviewed 510 Chinese gamblers from Macau's base mass segment (average Rmb12,000 spending on chips per person) and found some awareness of and interest in visiting casinos in other jurisdictions. However, for Asian destinations, the difference between players who intend to visit and those who have not visited is small; we therefore believe only the US has a meaningful opportunity. We think other Asian casinos will unlikely be able compete with Macau for base mass gamblers until at least 2019, when quality products and critical mass might form in markets such as Korea. However, we believe competition for VIP players has begun and will continue.

Asia Pacific Equity Strategy - 2016 Outlook: A year of positive returns?

Three reasons why 2016 could be a year of positive returns. With MSCI Asia ex-Japan up just 1% in 2014 and down 10% in 2015, we highlight three reasons why 2016 could be a year of positive returns.

One, Figure 1 highlights that while MSCI Asia ex-Japan has historically corrected in the run-up to the first Fed tightening in 1994 and 2004 and during the 2013 Fed taper, MXASJ has historically rallied in the six months after.

Two, Figure 2 highlights that MXASJ P/B has dropped to 1.37x. This is the lowest P/B start since 2008-09.

Three, MXASJ ROE appears to be bottoming at 11%.

Key risks to our call. With the Fed tightening against a weaker macro backdrop globally and particularly so in China and 2004 (the episode with the 37% return for MXASJ) associated with NJA ROE rising from 10% to 15%, the key question is whether these differences are big enough to negate history. The other risk is whether global policy divergences (Fed tightening versus ECB and BOJ easing) mean the DXY does not fall as it did in prior episodes. We believe a modest 10% return though is still likely.

Overweight Cheapest 4. While past performance is not necessarily a good guide to the future, the Cheapest 4 outperformed the Expensive 4 by 7% YTD in 2015. We continue to Overweight the Cheapest 4, which are Korea, MSCI China, Taiwan and Singapore.

Singapore Strategy - Bumpy road ahead, but opportunities exist‏

A year of two halves
2015 was a challenging year of two halves. The first half benefited from spillover optimism from 2014, but this quickly evaporated as the market entered into the second half of the year. Sentiment was dragged down by several key events including Yuan devaluation, the sell-down in Chinese equities, slower growth from Emerging Markets and weakness in commodities. Global markets reacted and led to panic selling of equities by Aug/Sep before a recovery in Oct.

Singapore banks - A temporary "hiccup" on the path of normalization?

A potential break in "outperformance" pattern
With only one month remaining in 2015, the SG banks could underperform the STI for the first time since 2010. Despite delivering a better-than-consensus set of 3Q15 earnings, investors may have more concerns ahead as negative sentiment has largely overshadowed their defensive qualities and still steady fundamentals. Though loan growth may moderate with a continued normalization trend in asset quality deterioration, we currently do not see significant downside in earnings. Within SG banks, DBS remains our top pick.

Top pick for the day - SGDMYR

3.00 is here to stay?

The SGDMYR cross appears to be in consolidation mode for the next couple of months but the stronger SGD uptrend is likely to continue into 2016.

The SGDMYR has been swinging above and below the 3.00 mark since end September and we expect this sideways pattern to continue for a few more months before we see a resolution to the upside as the larger trend remains in favour of a stronger SGD.

Singapore Land Transport - 2016 Could Be a Year Of Many (Positive) Changes

Amidst expectations of increased pace of reforms, we upgrade Land Transport sector to OVERWEIGHT; we estimate ComfortDelGro and SMRT to receive SGD710m and SGD207m of cash inflow from sale of bus assets. Competitive intensity in taxi business should drop as Uber/GrabCar are brought under regulatory purview. There are reasons supporting the implementation of a new rail financing framework before 2019; LTA could provide clarity on rail reforms as early as 2017.

Midas Holdings - Recovery underway

Maintain BUY; more substantial recovery from 2016 onwards. We see value in Midas’ share at 0.5x FY16 P/BV currently as we project that the Group’s earnings will to start to recover more substantially from 2016 onwards, as contribution from its new aluminium plate and sheet plant kicks in. We see the stock rerating towards our TP of S$0.49, based on 0.9x FY16 P/BV as earnings improve and ROE increases.

OIR BITES: Neptune Orient Lines Ltd – CMA CGM reported to seek bank financing to acquire NOL

Bloomberg reported this morning that CMA CGM is in talks with lenders to finance its potential acquisition of NOL, according to people with knowledge of the matter. The banks named to be involved include BNP Paribas SA, HSBC Holdings Plc and JPMorgan Chase & Co.

Recall that CMA CGM has until 7 Dec to complete due diligence and negotiate definitive offer with NOL and Temasek.

BreadTalk Group - Marrying dough with tech

■ Unveils 5 th gen bakery outlet concept and 50 new items

■ Potential cost savings via better raw material and staff management

Reiterate Outperform (2) and TP of SGD1.29 (2016E PER of 19.6x)

Telecoms Sector - Maintain OVERWEIGHT in uncertain times

Shared By Stock Fanatic on Monday, November 30, 2015 | 30.11.15

• Yields largely recovered above 5%

• Defensive businesses, strong cash-flows

• M1 has the highest expected total return

Top pick for the day - Australia’s ASX200

The rebound is still ongoing

The rebound on the Australian ASX200 (ASX200) may still have a tad more upside to go before the larger downtrend resumes in our opinion.

Our LT view has been bearish on the ASX200 SET (see 18th September, 10 th August and 24th July issues) and our last ST call came up a tad short.
**** Recommendation ****
Modified by : Stockfanatic
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