Monday, March 10, 2008
ST Engg. This defensive counter has just appeared on my shortlist not too long ago. Too bad, I'm not so rich as to stock up this counter, but perhaps I might buy in soon.
TA: With the free fall, from my view, I see support at $3.12, which was almost tested today. From my lines, I think those who know a little bit of TA can roughly get what is on my mind. By the way, I drew those lines in 5 mins. Ha! As someone who is not vested, I have this silent hope that it drops more so that I might be able to collect cheaper =x. No offense!
FA: What actually attracts me to this counter is that, this company has a payout ratio of 100%. I mean, which company can boast that? This can only mean 2 thing.
1. The company cannot expand anymore and excess cash is not useful to it's business.
2. The company is just too well supported and such payout is acceptable to the Board.
I have yet to do a detailed study as I'm still "groping" my way around Business/Fundamental Analysis but soon... hopefully, I can share my knowledge with you people.
Oh! And to add to that, the div is increasing Year-to-Year.
Just sharing. =)
3 comments:
Fun With Flows
10 March 2008
Outflow of Billions from Asian Funds Resumes
* Resumption of outflows — With regional markets down 5% in a week, foreigners are again withdrawing money from Asian equity funds. According to EPFR Global, net outflows totaled US$1.1bn in the five days ended March 5. This is the biggest outflow in five weeks and 8% higher than the average weekly redemption from mid-Dec to late Feb. Year-to-date, net outflows add up to US$9.9bn, or 60% of the 2007 net inflows. Also, 94% of the inflow that came in since July is now under water.
* Redemptions are broad-based; Taiwan remains the winner — Unlike May/June 07 when outflows were mainly from China/Greater China and India funds, more fund categories have been suffering from redemptions this time round. That said, Taiwan funds continue to go against the tide, taking in the largest amount of new money. Taiwan has been the only market with a positive return YTD, compared with a 12% decline for the Asia ex region.
* Believe it or not, global funds less affected by widening credit loss concerns — YTD, net outflows from global equity funds have been just US$3.3bn, i.e. onethird of Asian fund outflows. Two possible explanations: first, Asia is over-valued, and second, high-beta markets are still high-beta markets. When investors become risk-averse amid uncertainties, Asia is not a place for them to park their money.
Shanghai may jolt Asia even harder than Wall Street
Runaway inflation in China poses risks investors are just waking up to
By Goh Eng Yeow
March 10, 2008
IT HAS been a year of living dangerously, but pinning the blame on Wall Street might be a case of missing the point.
Investors don’t really need reminding of how their world has changed over the past 12 months, but here goes anyway.
Certainly, few could have predicted a year ago that global bourses would be rocked by one shock after another.
Then, it seemed that markets were in a golden age. Share prices were soaring, private equity funds were snapping up listed companies and taking them private - a sea of calm as far as the eye could see.
But a hint of what was to come surfaced on Feb 27 last year, when the Shanghai stock market crashed, falling 9 per cent in a single day.
The shock waves, sharp as they were, receded quickly, once the bulls recovered their footing and investors regained confidence.
However, the Shanghai crash turned out to be an important turning point for global equities markets - then into their fifth year of the bull run.
It woke many investors up - to a none-too-appetising prospect of risk - and introduced into the market something that has become fearfully frequent since - wild price swings.
Investor confidence, needless to say, has been badly shaken, and the notion of a global stock market rally that could stretch into eternity has been shattered.
The irony is that investors have not been fretting over why Shanghai crashed. They seem to have turned a blind eye to the risk that China’s overheating economy poses to the rest of the world.
True, they have had other things to worry about - the weakening greenback, the mortgage crisis in the United States and the credit crunch it has spawned.
These problems emerged during the selldown sparked by the Shanghai crash and have diverted attention away from other issues.
For almost a year, China’s runaway inflation has slipped under the radar screen and has been ignored by all but the most astute investors.
After the Feb 27 sell-off, Shanghai soared by more than 120 per cent - an exuberance that rubbed off on Hong Kong and Singapore in September and October, after China proposed allowing its citizens to buy shares overseas directly.
Some might say this is an excellent illustration of how Chinese growth can keep the rest of Asia in the pink even with the mighty US economy slowing to a standstill.
But realists have countered that this is just wishful thinking and, now, it seems they might be right.
First came Chinese Premier Wen Jiabao’s move in November to effectively put the overseas investment proposal on the backburner.
He cited a tough set of conditions that would need to be satisfied before such a scheme would be given the go- ahead.
Now, fast forward to last week. The Shanghai index has plunged by nearly 30 per cent since November, while mainland plays in Singapore have nosedived by more than 50 per cent, as inflation in China hit its highest levels in 11 years.
In contrast, US stocks - racked by all manner of scares, swings and spectres - have fallen by only 15 per cent.
As Mr Wen sounded warnings about the dire threat that inflation posed to China’s double-digit economic growth, investors finally started to recognise the perils that price distortions were posing for the many small and medium-sized mainland firms listed in Singapore.
China darlings from sectors as diverse as food industries and building materials are falling by the wayside, as their tattered full-year profit and loss accounts reflect the heavy blows they have taken from rising costs.
Mr Wen’s threat to use powerful measures to combat rising inflation is exacerbating fears that price controls will be imposed, curbing manufacturers’ ability to pass on soaring raw material costs to consumers.
Inflationary pressures in China can only get worse in the months ahead, given the way prices of soft commodities like wheat and hard commodities like iron ore have soared in world markets.
This will have grim implications for the large number of retail investors who loaded up on mainland stocks last year, seduced by their sexy growth stories.
Asian decoupling from Wall Street might simply mean that markets across the region will come under double jeopardy - having to cope with a US recession and runaway inflation in China at the same time.
This might not be the desired outcome that investors are hoping for as the Beijing Summer Olympics approaches.
Interesting look at a very interesting company.
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