Ernest’s market outlook (24 Mar 17)

Dear all, After 109 trading days, S&P500 finally staged a 1% drop on 21 Mar 2017. Is this the start of a correction? Let’s take a look at the charts. S&P500 Just to recap what I have mentioned on 10 Mar 2017 (see HERE), I wrote “All the EMAs are rising steadily. Since 8 Nov 2016, S&P500 has not traded below its 20D EMA for more than one trading session. Amid positively placed … [Read more...]

Significant Expansion of Singapore’s Coal Mining Stocks

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The number & combined market cap of SGX listed stocks focused on thermal coal mining in Indonesia has grown fourfold over the past three years. Following Geo Energy’s listing in 2012, three RTOs have seen Resources Prima Group, BlackGold Natural Resources and Golden Energy and Resources list on SGX. Two of these four stocks - Geo Energy Resources & BlackGold Natural Resources - have … [Read more...]

Technology Hardware Stocks form a Firm Foundation for Industry 4.0

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Singapore Manufacturing Sector represents 20% of Singapore’s 2016 GDP. The Government is focusing on key growth areas such as advanced manufacturing and Industrial IoT. SGX’s Technology Hardware companies form a firm foundation for the paradigm shift to Industry 4.0. These companies are mostly cash-generative and dividend payers. The 10 highest yielding stocks within the Technology Hardware … [Read more...]

Straits Times Index attempting a breakout

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  Straits Times Index attempting a breakout Straits Times Index continued to its bullish streak while US Federal Reserve announced its first interest rate hike for this year. The week was first greeted with cautiousness as many chose to stay sidelines ahead of the announcement of the interest rate hike last Wednesday. Some traders anticipate the possibility of bearishness ahead of the … [Read more...]

Economists raise Singapore growth forecast for 2017: MAS survey

Economists have raised their forecasts for Singapore’s gross domestic product (GDP) growth in 2017, according to a survey by the Monetary Authority of Singapore (MAS) unveiled on Wednesday. The median forecast of 23 economists surveyed in mid-February pointed to a 2.3% GDP growth this year. This is an improvement from the 1.5% growth forecasted in the previous MAS survey published in … [Read more...]

Recent Corporate Activities of Gold Mining Stocks

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Singapore’s trio of gold plays have averaged an 3% return in the 2017 year to date. The three miners, CNMC Goldmine Holdings, Wilton Resources Corporation and Anchor Resources are in different stages of the gold exploration, development and production. CNMC Goldmine Holdings recently completed a subscription of 51% of the shares in the enlarged share capital of Pulai Mining Sdn.Bhd. Pulai … [Read more...]

Blessing in Disguise: US Interest Rate Hike

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US has just increased the interest rate to 0.75-1%.  The global stock markets respond positively.  When the interest rate hike has become a predictable pattern, eg. 0.25% quarterly or 1% yearly, global investors would have priced in the impact, fear will be overcome by greed until the arrival of next global financial crisis. We could observe the emotions of market, how it affects the stocks in … [Read more...]

Expectations of March Fed Hike Near 100%

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Expectations of a March Federal Reserve rate hike are near 100% as economic data strengthens. Federal Reserve policy rate decision expected on Thursday, 2.00AM, Singapore time.  Cyclical sectors typically have strongest positive correlations to a rising interest rate environment. Singapore banks have generated an average total return of 17.8% (vs STI’s 12.2%) since 8 Nov-16, on the back of … [Read more...]

Straits Times Index boosted by property cooling measures

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  Straits Times Index boosted by property cooling measures Straits Times Index managed to end another week bullishly and continued to head towards its strong resistance at 3160 level. Volatility was seen during the week; moving like a headless creature. The highest that STI had attempted to reach is at 3150 level which was clocked on Wednesday. However, this gain was quickly given back on … [Read more...]

Why Fresh Water is Such an Important Commodity – Something to ponder about with the Singapore Budget annoucement

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One of the changes announced in the 2017 Singapore budget was that we would be paying a higher tariff if we do not conserve water. This is especially so for those businesses or household who spends more than 4 cubic meters of water. The changes can be summarized by the table above. In the future we won’t have a sanitary appliance fee. The sanitary appliance fee is really stupid if you ask … [Read more...]

What Bruce Greenwald Thinks of Current Market Valuation

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Bruce Greenwald is one of the renowned professor of finance at the Columbia University and is personally one of my favorite personnel. Back late in Dec 2014, I've read books about him and tried to understand and replicate his financial modeling of the Earnings Power Value (EPV) method in great detail. You can read my past articles here if you are interested in the EPV method for valuation. It … [Read more...]

Ernest’s market outlook (10 Mar 17)

Dear all, S&P500 has dropped 28 points, or 1.2% from its intraday high of 2,401 on 1 Mar 2017. Is a correction coming? S&P500 Just to recap what I have mentioned on 24 Feb 2017 (see HERE), I wrote “S&P500 continues to be entrenched in an uptrend, as evidenced by its rising exponential moving averages (“EMAs”). ADX started to rise from 18 on 10 Feb 2017 to 34 on 24 Feb 2017, … [Read more...]

Average 19% YTD Gain in Key Mining Stocks

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SGX lists four stocks mining industrial minerals including tantalite, phosphate, limestone and marble, four coal mining stocks and three gold mining stocks. These 11 stocks are at different stages in the exploration, development, production cycle and have averaged a 19.0% gain in 2017 YTD. Of the three segments, mining industrial minerals has been the strongest performer in the 2017 YTD with an … [Read more...]

US Market- On a Roll?

With the US indices (Dow and S&P) scaling all time highs, the Trump presidency has led to a surprisingly positive outcome for the equity markets. In a recent seminar, I was going through the US market outlook and i summed it up through the following points: 1) Valuation 2) Quantitative Easing Ended 3) Trumpnomics 4) Debt Levels 5) Monetary Policies 6) Global Economic … [Read more...]

Food inflation in Malaysia and Singapore.

We are always saying how things are cheaper across the Causeway and I do it too. I have said it often enough to get rebuked by some of my Malaysian friends. "You Singaporeans only find it cheap because of the strong S$. Life is actually very difficult for common Malaysians, you know. And you people come here and drive prices up. You think the people in Johor like higher prices?" I grew up … [Read more...]

Ascendas REIT is now Singapore’s Largest Capitalised REIT

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Ascendas REIT has recently replaced CapitaLand Mall Trust as Singapore's largest capitalised REIT – and has been the second-best performing REIT in the YTD with an 11.9% total return. The capitalisation of Singapore’s REIT Sector has almost doubled over the past five years. Singapore’s REIT Sector also maintains a competitive edge with higher average yields and lower average gearing ratios than … [Read more...]

Thoughts On The BluePrint For Singapore’s Future

For the past couple of weeks after Budget 2017 was released, everybody’s mind was fixated on the 30% water price hike. In my humble opinion, if the intention of the water price hike is to shock Singaporeans into realising how valuable water should be, the government should probably be considering an even bigger percentage hike. Afterall, for the average Singaporean family (the 4-room dwellers), … [Read more...]

March: The Month of Financial & Political Minefields

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One and a half month after the inauguration of Donald Trump as the President of United States of America, the world is still trying to figure out his stand in foreign affairs. The immediate concern of the financial market right now, is to see whether President Trump is able to pull off his promise of lowering the US tax rate and increasing government spending at the same time. With US budget … [Read more...]

Straits Times Index hovering at 3100 level for now

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Straits Times Index hovering at 3100 level for now Straits Times Index attempted to reach for a higher level this week but it faced profit taking pressure during the week. The week started off weak with brought over selling pressure from the previous week. This allowed STI to test its support at 3100 level again. This support level broke briefly on Tuesday but support at 20ma weekly line was … [Read more...]

Fed Officials Indicate Rate Increase Is Likely in March

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Federal Reserve Chairwoman Janet Yellen and her top deputy signaled the central bank is on course to raise short-term interest rates as soon as this month and will seek to pick up the pace as the year wears on. Boosting the benchmark federal-funds rate at the Fed’s mid-March meeting would signal greater confidence in the global economic backdrop and give officials a chance to space out … [Read more...]