Baker Tech has accepted the offer to sell its stake in PPL Holdings (PPLH) to a consortium led by Yangzijiang Shipbuilding (YZJ), which is not surprising given the attractive offer price. The sale is subject to shareholders’ approval in an EGM (to be convened) and we note that Saberon Investments Pte Ltd, Baker’s controlling shareholder with about 69.63% stake, has agreed to vote in favour of the sale. However, not
everyone is happy with the deal, Sembcorp Marine (who has a 85% interest in PPL Shipyard) has alleged that the sale would be a circumvention of its pre-emptive rights by not giving it a first right-of-refusal over the sale. On this note, Baker Tech’s lawyers have said that Sembcorp Marine “has no basis for its claims”. A drawn-out tussle for PPLH may affect YZJ’s offshore initiatives. We maintain our HOLD rating on YZJ with S$1.60 fair value estimate.
(Low Pei Han)OCBC.
This blog is a selections of my investment views to my client. If you find it useful or have additional information to share, please do let me know. These blogs are my personal views and is not meant to solicit any sales or investment on any securities or investment. I may have vested interest in some of the counters or investment products, hence please invest at your own risk. As usual invest in what you understand and do your own homework. ML is a licensed stockbroker with one of Asia Leading Stock Broker firm. To contact him, please email: icewolfmike@gmail.com
Monday, April 26, 2010
Friday, April 16, 2010
Noble Group - Macarthur's major shareholder warm toward Peabody latest bid
Macarthur has received responses from POSCO and ArcelorMittal as follows:
POSCO
“Subject to the Macarthur Board recommending Peabody’s proposal to its shareholders (in the absence of a superior proposal), and to POSCO considering and agreeing the key terms of its ongoing investment in Macarthur (a process which we could complete in a timely manner), POSCO confirms its in-principle support for a Peabody-led privatisation of Macarthur in the absence of a superior proposal. POSCO presently intends to retain its existing economic interest in the resultant private company structure.
For the avoidance of doubt, POSCO does not have, and it does not propose to enter into, any agreement arrangement or understanding (binding or otherwise) with Peabody relating to Macarthur, any power to exercise (or control the exercise of) a right to vote Macarthur shares, or any power to dispose of (or control the exercise of a power to dispose of) Macarthur shares.
POSCO will continue to carefully monitor and analyse all developments ahead of the EGM and reserves the right to vote its shareholding at the EGM in any manner that it determines in its absolute discretion.”
ArcelorMittal
“Although not providing [a] specific decision as to how ArcelorMittal will vote at any shareholders' meeting, ArcelorMittal does recognise that the Peabody offer is one that warrants MCC giving it due consideration and providing them the necessary time for the 5 days due diligence that [Peabody] have sought from MCC Board. ArcelorMittal will continue to carefully monitor developments in relation to MCC.”
A response from CITIC has not yet been received.
The Directors of Macarthur are meeting today, Friday 16 April 2010 to consider Peabody’s Further Proposal.
The Macarthur Board is committed to being in regular contact with shareholders and will keep you informed of future developments. The Macarthur Board reminds shareholders to not have any regard to public statements issued by any third party. Should you have any queries, please contact Macarthur’s shareholder enquiry line on 1300 160 409 (or +61 3 9415 4147).
This blog is a selections of my investment views to my client. If you find it useful or have additional information to share, please do let me know. These blogs are my personal views and is not meant to solicit any sales or investment on any securities or investment. I may have vested interest in some of the counters or investment products, hence please invest at your own risk. As usual invest in what you understand and do your own homework.
ML is a licensed stockbroker with one of Asia Leading Stock Broker firm. To contact him, please email: icewolfmike@gmail.com
POSCO
“Subject to the Macarthur Board recommending Peabody’s proposal to its shareholders (in the absence of a superior proposal), and to POSCO considering and agreeing the key terms of its ongoing investment in Macarthur (a process which we could complete in a timely manner), POSCO confirms its in-principle support for a Peabody-led privatisation of Macarthur in the absence of a superior proposal. POSCO presently intends to retain its existing economic interest in the resultant private company structure.
For the avoidance of doubt, POSCO does not have, and it does not propose to enter into, any agreement arrangement or understanding (binding or otherwise) with Peabody relating to Macarthur, any power to exercise (or control the exercise of) a right to vote Macarthur shares, or any power to dispose of (or control the exercise of a power to dispose of) Macarthur shares.
POSCO will continue to carefully monitor and analyse all developments ahead of the EGM and reserves the right to vote its shareholding at the EGM in any manner that it determines in its absolute discretion.”
ArcelorMittal
“Although not providing [a] specific decision as to how ArcelorMittal will vote at any shareholders' meeting, ArcelorMittal does recognise that the Peabody offer is one that warrants MCC giving it due consideration and providing them the necessary time for the 5 days due diligence that [Peabody] have sought from MCC Board. ArcelorMittal will continue to carefully monitor developments in relation to MCC.”
A response from CITIC has not yet been received.
The Directors of Macarthur are meeting today, Friday 16 April 2010 to consider Peabody’s Further Proposal.
The Macarthur Board is committed to being in regular contact with shareholders and will keep you informed of future developments. The Macarthur Board reminds shareholders to not have any regard to public statements issued by any third party. Should you have any queries, please contact Macarthur’s shareholder enquiry line on 1300 160 409 (or +61 3 9415 4147).
This blog is a selections of my investment views to my client. If you find it useful or have additional information to share, please do let me know. These blogs are my personal views and is not meant to solicit any sales or investment on any securities or investment. I may have vested interest in some of the counters or investment products, hence please invest at your own risk. As usual invest in what you understand and do your own homework.
ML is a licensed stockbroker with one of Asia Leading Stock Broker firm. To contact him, please email: icewolfmike@gmail.com
Monday, April 12, 2010
Chart for ST Engineering, Sembmarine and Keppel Corp
I have attached here the chart (6 April 2010) for ST eng, Sembmarine and Kepcorp for your information. Sorry for this late posting...
ST Eng
I like the look of it. The recent upmove is supported by good volume. Also, chart wise it seems like the move is still not exhausted and should have more room for further upside.
3.28 turn from resistance to support with 3.37 as the next resistance level. If 3.37 breach, I expect the counter to attempt 3.55 next.
Keppel Corp
After the strong recent upsurge (which took me by surprise in term of its strength), I believe it may have reached or will be reaching an exhaustion point even thou the RSI is only slightly overbought. However, the surge over the past few days is not really accompanied by good volume. In fact, volume seems to be tailing off which mean that buying may be drying up.
9.60 immediate resistance with next support at 9.50. Expect this to give way for counter to retreat to 9.25 - 9. 12 region. Here it may present good buying opportunity again.
Sembmarine
Showing similar pattern to Kepcorp. May have reached its exhaustion point. Looking toppish at 4.44 and may retreat to 4.25 region. Falling volume as in the case of Keppel Corp.
This blog is a selections of my investment views to my client. If you find it useful or have additional information to share, please do let me know. These blogs are my personal views and is not meant to solicit any sales or investment on any securities or investment. I may have vested interest in some of the counters or investment products, hence please invest at your own risk. As usual invest in what you understand and do your own homework.
ML is a licensed stockbroker with one of Asia Leading Stock Broker firm. To contact him, please email: icewolfmike@gmail.com
ST Eng
I like the look of it. The recent upmove is supported by good volume. Also, chart wise it seems like the move is still not exhausted and should have more room for further upside.
3.28 turn from resistance to support with 3.37 as the next resistance level. If 3.37 breach, I expect the counter to attempt 3.55 next.
Keppel Corp
After the strong recent upsurge (which took me by surprise in term of its strength), I believe it may have reached or will be reaching an exhaustion point even thou the RSI is only slightly overbought. However, the surge over the past few days is not really accompanied by good volume. In fact, volume seems to be tailing off which mean that buying may be drying up.
9.60 immediate resistance with next support at 9.50. Expect this to give way for counter to retreat to 9.25 - 9. 12 region. Here it may present good buying opportunity again.
Sembmarine
Showing similar pattern to Kepcorp. May have reached its exhaustion point. Looking toppish at 4.44 and may retreat to 4.25 region. Falling volume as in the case of Keppel Corp.
This blog is a selections of my investment views to my client. If you find it useful or have additional information to share, please do let me know. These blogs are my personal views and is not meant to solicit any sales or investment on any securities or investment. I may have vested interest in some of the counters or investment products, hence please invest at your own risk. As usual invest in what you understand and do your own homework.
ML is a licensed stockbroker with one of Asia Leading Stock Broker firm. To contact him, please email: icewolfmike@gmail.com
Yangzijiang - Dual listing plan. Another one sailing away from SGX.
Yangzijiang Shipbuilding Holdings Ltd (YZJ SP; S$1.29) |
| Yangzijiang requested for a trading halt this morning. |
| Over the lunch break, Yangzijiang clarified that it has received proposals for dual listing on the Stock Exchange of Hong Kong and TDR listings. However, all talks are only exploratory at this juncture. If Yangzijiang does proceed with alternative listing options, our recent meeting with management suggests that a TDR listing in Taiwan is more likely as the listing process may be faster. However, as TDRs are non-fungible, there is a low likelihood for a sustained surge in trading multiples for the SGX-listed shares from higher TDR valuations. Moreover, the closest peer in Taiwan is trading at a lower valuation. |
| Still, we remain bullish on the Company, due to management’s excellent execution record as the company had coped well with industry negatives with zero order cancellation to date, on-schedule deliveries, and ability to secure new contracts of about US$460m in 2009 despite the industry-wide drought and relatively superior margins. |
| Catalysts for the stock include stronger-than-expected order wins and share of profits from its new ship-breaking JVs, and confirmation of TDR listing. |
| YZJ remains one of our two top-picks among S-Chips with potential for dual listings. At the current price, the stock offers 16.3% upside to our target price. |
| Maintain Outperform, target price of S$1.50. CIMB |
This blog is a selections of my investment views to my client. If you find it useful or have additional information to share, please do let me know. These blogs are my personal views and is not meant to solicit any sales or investment on any securities or investment. I may have vested interest in some of the counters or investment products, hence please invest at your own risk. As usual invest in what you understand and do your own homework.
ML is a licensed stockbroker with one of Asia Leading Stock Broker firm. To contact him, please email: icewolfmike@gmail.com
Ausgroup - benefit from new Iron ore pricing regime?
CIMB-GK MAINTAINED its “Buy” call with a target price of 96 cents on Ausgroup last week, citing its relatively cheap valuation in the offshore & marine universe.
The report was triggered by a structural shift in iron-ore markets in the past couple of weeks as the world’s largest 3 mining companies, Vale, BHP Billiton and Rio Tinto, announced a switch to setting the price of iron ore contracts every 3 months, ending a 40-year system of annual pricing.
The new price system will lift the cost of iron ore to Asian steelmakers to about US$110-$120 a ton for April-June contracts, up 80% to 100% from the US$60 level at which the 2009-10 annual contracts were settled.
CIMB-GK analyst Yeo Zhibin believes that higher iron-ore prices could accelerate capex spending in the mineral resource sector in Western Australia, benefiting specialist construction service companies like Ausgroup.
However for the high profile Gorgon oil & gas project, Australian fabricators such as Ausgroup have been priced out by Asian competitors due to a rising A$.
CIMB-GK expects Ausgroup’s earnings for the financial year ending Jun 2010 to grow 90% year-on-year, given its strong order book of A$470 million.
It has a target price of 96 cents based on 13x CY11 P/E, Ausgroup’s trading average since listing.
”We see stock catalysts from an acceleration in orders wins from LNG and mineral projects, improved margins and further sets of strong results.
”Key risks to our call are execution slippages and lower than-expected order wins,” according to the CIMB-GK report.
CIMB-GK’s bullish report contrasted with OCBC Investment Research's (OIR) update on the Aussie mining resources infrastructure specialist issued 2 weeks ago.
While OIR analyst Meenal Kumar believes that Ausgroup’s 4Q10 (Apr-Jun 2010) revenue will grow sequentially because of completion of works at several LNG projects, she is bearish because of Western Australia’s subdued project tendering activity.
”There is a large potential pool of projects but many players are still taking their time to resume or launch projects due to continuing economic uncertainty.
”Rising costs (especially labour) may be another concern,” according to the her report.
LNG projects that contribute to 2H10 revenues (Jan-Jun 2010) include Woodside's Pluto and BHP Billiton's Rapid Growth Project 5.
OIR has a ‘Hold’ rating and a relatively conservative target price of 60 cents.
This blog is a selections of my investment views to my client. If you find it useful or have additional information to share, please do let me know. These blogs are my personal views and is not meant to solicit any sales or investment on any securities or investment. I may have vested interest in some of the counters or investment products, hence please invest at your own risk. As usual invest in what you understand and do your own homework.
ML is a licensed stockbroker with one of Asia Leading Stock Broker firm. To contact him, please email: icewolfmike@gmail.com
The report was triggered by a structural shift in iron-ore markets in the past couple of weeks as the world’s largest 3 mining companies, Vale, BHP Billiton and Rio Tinto, announced a switch to setting the price of iron ore contracts every 3 months, ending a 40-year system of annual pricing.
The new price system will lift the cost of iron ore to Asian steelmakers to about US$110-$120 a ton for April-June contracts, up 80% to 100% from the US$60 level at which the 2009-10 annual contracts were settled.
CIMB-GK analyst Yeo Zhibin believes that higher iron-ore prices could accelerate capex spending in the mineral resource sector in Western Australia, benefiting specialist construction service companies like Ausgroup.
However for the high profile Gorgon oil & gas project, Australian fabricators such as Ausgroup have been priced out by Asian competitors due to a rising A$.
30% hike in iron ore prices in Western Australia in just 3 months.
CIMB-GK expects Ausgroup’s earnings for the financial year ending Jun 2010 to grow 90% year-on-year, given its strong order book of A$470 million.
It has a target price of 96 cents based on 13x CY11 P/E, Ausgroup’s trading average since listing.
”We see stock catalysts from an acceleration in orders wins from LNG and mineral projects, improved margins and further sets of strong results.
”Key risks to our call are execution slippages and lower than-expected order wins,” according to the CIMB-GK report.
CIMB-GK’s bullish report contrasted with OCBC Investment Research's (OIR) update on the Aussie mining resources infrastructure specialist issued 2 weeks ago.
While OIR analyst Meenal Kumar believes that Ausgroup’s 4Q10 (Apr-Jun 2010) revenue will grow sequentially because of completion of works at several LNG projects, she is bearish because of Western Australia’s subdued project tendering activity.
”There is a large potential pool of projects but many players are still taking their time to resume or launch projects due to continuing economic uncertainty.
”Rising costs (especially labour) may be another concern,” according to the her report.
LNG projects that contribute to 2H10 revenues (Jan-Jun 2010) include Woodside's Pluto and BHP Billiton's Rapid Growth Project 5.
OIR has a ‘Hold’ rating and a relatively conservative target price of 60 cents.
This blog is a selections of my investment views to my client. If you find it useful or have additional information to share, please do let me know. These blogs are my personal views and is not meant to solicit any sales or investment on any securities or investment. I may have vested interest in some of the counters or investment products, hence please invest at your own risk. As usual invest in what you understand and do your own homework.
ML is a licensed stockbroker with one of Asia Leading Stock Broker firm. To contact him, please email: icewolfmike@gmail.com
Let the earning season begin....
Earnings Season Is a No-Trading Zone
Published: Friday, 9 Apr 2010 | 10:14 PM ET
By: Tom Brennan
Web Editor, Mad MoneyOn Monday, Alcoa takes the earnings stage, marking the ceremonial start of the season. Cramer’s expecting a “parade of positive reports” this time around, and he’s warning investors not to get lured in.
Of course, strong earnings are a good thing. But when beat after beat is announced they can be too tempting not to trade. One thing Cramer’s learned over his 30 years of trading, though, is that you just can’t make money on these reports. Too many companies are reporting and there’s too little time to do the necessary homework. The Game Plan going forward then is to just sit tight and listen. Cramer on Friday discussed the most important earnings releases of the coming week and what investors should look for. Here they are:
Again, Alcoa [AA 14.39 
-0.48 (-3.23%) 
], the largest aluminum producer in the US, goes first on Monday. The two markets – aerospace and industrial gas – that failed to hit their targets last quarter are at the beginning of “long, positive cycles,” Cramer said. And Alcoa has the cash flows and cost controls necessary to capitalize on them. He recommend maybe buying some AA after the Street dumps it, because he’s expecting the two markets to have a strong second half in 2010.
Among the banks, JPMorgan Chase [JPM 45.98
0.22 (+0.48%) 
]and Bank of America [BAC 18.59 
-0.06 (-0.32%) 
]report in the coming week. Cramer expects vast improvements over last year, enough to possibly push JPM past the $45 level its been stuck at for a while. And while BAC’s report won’t be as clean, with asset write-downs and provision expenses still a problem, Cramer thinks we’ll see a second straight quarter of better credit costs. That could take Bank of America to $20, he said.
Also, one of Cramer’s favorite regional banks, First Horizon National [FHN 15.02
0.15 (+1.01%) 
], releases its numbers. He’ll be looking to see if we can finally confirm that worst is over, he said, “and FHN is now on its way to becoming one of the best banks.”
In tech, Intel [INTC 22.55
0.24 (+1.08%) 
]and Advanced Micro Devices [AMD 9.30 
-0.12 (-1.27%) 
]will gives us a read on the semiconductor cycle. Cramer’s a fan of INTC – his charitable trust owns it – for its new products, the balance sheet and the 3% dividend yield. He thinks the stock right now is cheap too. Also tech in the coming week is Google [GOOG 566.22 
-1.27 (-0.22%) 
]. Cramer wants to hear more about China and what the company thinks about Apple’s move into what was once largely GOOG’s turf: advertising.
Yum! Brands [YUM 40.70
0.63 (+1.57%) 
]will report more than earnings on Wednesday. It will tell us about the strength of the consumer, too. Are they eating out again? Cramer’s only concern is whether or not people are choose Yum’s Pizza Hut if they do. He thinks KFC will save the quarter, thanks to a new spurt in growth in China.
The rails are always some of the best barometers of economic health – because of the products they carry – which is why Cramer’s watching CSX [CSX 52.96
-0.02 (-0.04%) 
]on Tuesday. And the company’s coal loadings, in particular. If those are up, then it might be a chance to buy more Walter Energy [WLT 96.75 
1.24 (+1.3%) 
], Mad Money’s favorite play on metallurgical coal. Cramer likes it up to $100.
PPG Industries [PPG 68.68
0.75 (+1.1%) 
]is the way to play the continued chemical side of the rebound. The “polys” and “ethyls” of this industry are the building blocks of the economy, and they’ve been performing well. Cramer said we’ll probably get more good news about them from PPG on Thursday. If Asia’s has become more than 20% of the company’s business, Cramer thinks the stock could run past $70.
Lastly, there’s General Electric [GE 18.52
-0.04 (-0.22%) 
]– parent company of CNBC. This conglomerate touches on a number of industries, and good earnings from GE often translate into great investments in related companies. Also, GE will give us an idea of worldwide credit conditions, which Cramer said should be “the best they’ve been in three years.”
This blog is a selections of my investment views to my client. If you find it useful or have additional information to share, please do let me know. These blogs are my personal views and is not meant to solicit any sales or investment on any securities or investment. I may have vested interest in some of the counters or investment products, hence please invest at your own risk. As usual invest in what you understand and do your own homework.
ML is a licensed stockbroker with one of Asia Leading Stock Broker firm. To contact him, please email: icewolfmike@gmail.com
Published: Friday, 9 Apr 2010 | 10:14 PM ET
By: Tom Brennan
Web Editor, Mad MoneyOn Monday, Alcoa takes the earnings stage, marking the ceremonial start of the season. Cramer’s expecting a “parade of positive reports” this time around, and he’s warning investors not to get lured in.
Of course, strong earnings are a good thing. But when beat after beat is announced they can be too tempting not to trade. One thing Cramer’s learned over his 30 years of trading, though, is that you just can’t make money on these reports. Too many companies are reporting and there’s too little time to do the necessary homework. The Game Plan going forward then is to just sit tight and listen. Cramer on Friday discussed the most important earnings releases of the coming week and what investors should look for. Here they are:
Among the banks, JPMorgan Chase [JPM 45.98
Also, one of Cramer’s favorite regional banks, First Horizon National [FHN 15.02
In tech, Intel [INTC 22.55
Yum! Brands [YUM 40.70
The rails are always some of the best barometers of economic health – because of the products they carry – which is why Cramer’s watching CSX [CSX 52.96
PPG Industries [PPG 68.68
Lastly, there’s General Electric [GE 18.52
This blog is a selections of my investment views to my client. If you find it useful or have additional information to share, please do let me know. These blogs are my personal views and is not meant to solicit any sales or investment on any securities or investment. I may have vested interest in some of the counters or investment products, hence please invest at your own risk. As usual invest in what you understand and do your own homework.
ML is a licensed stockbroker with one of Asia Leading Stock Broker firm. To contact him, please email: icewolfmike@gmail.com
Retail investors not in the recent stock market gain...
ML's take:
This is an interesting observation which is largely emulated in many other markets except perhaps Hong Kong, China and Taiwan.
Singapore market itself has been largely quiet since Chinese New Year and this is despite thr un up in Blue Chip stocks. Retailers are largely defensive preferring to keep their cash than to speculate in a highly volatile market. There is also no denying that the bouyant property market may have kept some of these players away from the stock market.
Anecdotal evidence continues to point that economies are indeed recovering worldwide with talk of a double dip abating. With retailers largely out, it means that funds have been buying up.
What this mean to you is it may be worthwhile entering the market NOW rather than waiting for a clear signal of a mkt recovery...as by then it may have been all too late. I continue to prescribed a buy on weakness strategy, picking up good blue chip name during technical corrections as a mean to stay ahead of the pack, while protecting your downside risk.
Average Investors Are Finally Returning to Stocks—Slowly
Published: Friday, 9 Apr 2010 | 2:06 PM ET
By: Jeff Cox
CNBC.com Appearances to the contrary, the 13-month runup in stock prices has been absent one critical element—participation from mom-and-pop investors.
Trillions in cash are sitting on the sidelines because investors are still afraid of the market after seeing half the value sucked out of stocks during the financial crisis.
And while pros think retail investors are starting to come back, they see the process as a slow one that will only accelerate when people feel safe again.
"If you go back to 2000, think about how much money was lost, then think about how long it took for retail investors to come back into the market," says Quincy Krosby, general strategist at Prudential Financial.
"The gains in the equity market will compel the retail investors to move from the diminishing returns from bond funds and reallocate" to equities, she adds. "Ultimately the retail investor realizes that the equity market is doing well. They want part of those gains, so they start allocating money."
Indeed, market yardsticks are showing a grudging move off the sidelines as Wall Street strives to surpass the psychological milestone of Dow 11,000.
Money market assets hit $2.964 trillion for the week ended April 7, the Investment Company Institute reported this week. That marks the first time money market accounts have held less than $3 trillion since October 2007, when the financial markets began to implode and set the stage for a calamitous bear market that crested in March 2009. Money market inflows were $14.3 billion for the week, according to Lipper data.
The good news is that the lack of participation from average investors sets up for another leg higher in the market, likely in the staircase fashion that has marked much of the move higher in 2010.
The bad news is that as retail investors finally realize they have missed a large portion of a 75 percent rally in stock prices and start to pile back in, that likely will signal the top of the market.
"We know in the last 10 years or so that when the retail investor moves into an asset class and moves in with force that is very often the beginning of the end of that asset class's gain for that cycle," Krosby says.
Brian Belski, chief investment strategist at Oppenheimer, said in an interview with CNBC this week that the strong flow of Main Street investors into the market will be his signal to get out.
But he doesn't see that point happening anytime soon.
"We as investors are still kind of sitting in the bunker because we're scared of what happened in 2007 and 2008...so we're acting and investing very defensively and not seeing the forest through the trees," Belski said (see video below). "What that's telling us is we're seeing a classic recovery. It has its issues, but we still think we head higher through the year."
Still, advisors remain baffled over the lack of participation and worry whether that in itself could be setting up a correction—usually defined as a 10 percent drop in stocks—that has yet to materialize.
"This could be the most significant, least-satisfying bull market to Wall Street itself in the stock market's history," Rick Bensignor chief market strategist at Execution Noble in New York, said in a note to clients. "[I]t's the biggest party ever that no one showed up to."
Market bears are growing increasingly reluctant about stepping in front of the Wall Street bull.
Short interest on the New York Stock Exchange—often considered a contrarian sign for market direction—is at 14.1 billion shares, ahead of the December 2009 total by 1.1 billion shares but well short of the 2007 mark.
"At this point any of us who have been bearish are just too tired of being wrong that it's hard to stick your neck out," said Kathy Boyle, president of Chapin Hill Advisors in New York.
Boyle sees clients who are still leery of the stock market, and are thus likely only to get back until well after the major gains have been realized.
"How will we know we're at the top? I don't think we're going to until after the fact," she said. "The average person is still disenfranchised. Individual people just got out of the market and they don't have the risk tolerance. They see their future looming. They don't trust the market, they feel it's being manipulated. Bond funds look safe."
Bond investing continues to far outpace stocks.
Equity fund inflows excluding exchange-traded funds were at $1.2 billion, compared to $3.5 billion for bond funds in the week ended April 7, according to Lipper. Both figures represent gains approaching 50 percent from the previous week.
While retail investor participation is only one factor in what determines the broader movement of the market, the trends suggest that hesitance is likely to remain and the market could be looking at more of the same for months to come.
"In terms of the entry of retail investors, it's clear we're early in that cycle," says Lawrence Creatura, equity market strategist and portfolio manager at Federated Clover Capital Advisors in Rochester, N.Y. "Those investors flooded the zone in terms of investing in the bond market."
"The shift from bonds to equities is at its very early stages, because investors are tentative about the economy, the jobs market," he continues. "Out there in the real world, the all-clear sign has not been given."
© 2010 CNBC.com
This blog is a selections of my investment views to my client. If you find it useful or have additional information to share, please do let me know. These blogs are my personal views and is not meant to solicit any sales or investment on any securities or investment. I may have vested interest in some of the counters or investment products, hence please invest at your own risk. As usual invest in what you understand and do your own homework.
ML is a licensed stockbroker with one of Asia Leading Stock Broker firm. To contact him, please email: icewolfmike@gmail.com
This is an interesting observation which is largely emulated in many other markets except perhaps Hong Kong, China and Taiwan.
Singapore market itself has been largely quiet since Chinese New Year and this is despite thr un up in Blue Chip stocks. Retailers are largely defensive preferring to keep their cash than to speculate in a highly volatile market. There is also no denying that the bouyant property market may have kept some of these players away from the stock market.
Anecdotal evidence continues to point that economies are indeed recovering worldwide with talk of a double dip abating. With retailers largely out, it means that funds have been buying up.
What this mean to you is it may be worthwhile entering the market NOW rather than waiting for a clear signal of a mkt recovery...as by then it may have been all too late. I continue to prescribed a buy on weakness strategy, picking up good blue chip name during technical corrections as a mean to stay ahead of the pack, while protecting your downside risk.
Average Investors Are Finally Returning to Stocks—Slowly
Published: Friday, 9 Apr 2010 | 2:06 PM ET
By: Jeff Cox
CNBC.com Appearances to the contrary, the 13-month runup in stock prices has been absent one critical element—participation from mom-and-pop investors.
And while pros think retail investors are starting to come back, they see the process as a slow one that will only accelerate when people feel safe again.
"If you go back to 2000, think about how much money was lost, then think about how long it took for retail investors to come back into the market," says Quincy Krosby, general strategist at Prudential Financial.
"The gains in the equity market will compel the retail investors to move from the diminishing returns from bond funds and reallocate" to equities, she adds. "Ultimately the retail investor realizes that the equity market is doing well. They want part of those gains, so they start allocating money."
Jeff Cox Staff Writer CNBC.com |
Money market assets hit $2.964 trillion for the week ended April 7, the Investment Company Institute reported this week. That marks the first time money market accounts have held less than $3 trillion since October 2007, when the financial markets began to implode and set the stage for a calamitous bear market that crested in March 2009. Money market inflows were $14.3 billion for the week, according to Lipper data.
The good news is that the lack of participation from average investors sets up for another leg higher in the market, likely in the staircase fashion that has marked much of the move higher in 2010.
The bad news is that as retail investors finally realize they have missed a large portion of a 75 percent rally in stock prices and start to pile back in, that likely will signal the top of the market.
"We know in the last 10 years or so that when the retail investor moves into an asset class and moves in with force that is very often the beginning of the end of that asset class's gain for that cycle," Krosby says.
Brian Belski, chief investment strategist at Oppenheimer, said in an interview with CNBC this week that the strong flow of Main Street investors into the market will be his signal to get out.
But he doesn't see that point happening anytime soon.
"We as investors are still kind of sitting in the bunker because we're scared of what happened in 2007 and 2008...so we're acting and investing very defensively and not seeing the forest through the trees," Belski said (see video below). "What that's telling us is we're seeing a classic recovery. It has its issues, but we still think we head higher through the year."
Still, advisors remain baffled over the lack of participation and worry whether that in itself could be setting up a correction—usually defined as a 10 percent drop in stocks—that has yet to materialize.
"This could be the most significant, least-satisfying bull market to Wall Street itself in the stock market's history," Rick Bensignor chief market strategist at Execution Noble in New York, said in a note to clients. "[I]t's the biggest party ever that no one showed up to."
Market bears are growing increasingly reluctant about stepping in front of the Wall Street bull.
Short interest on the New York Stock Exchange—often considered a contrarian sign for market direction—is at 14.1 billion shares, ahead of the December 2009 total by 1.1 billion shares but well short of the 2007 mark.
"At this point any of us who have been bearish are just too tired of being wrong that it's hard to stick your neck out," said Kathy Boyle, president of Chapin Hill Advisors in New York.
Boyle sees clients who are still leery of the stock market, and are thus likely only to get back until well after the major gains have been realized.
"How will we know we're at the top? I don't think we're going to until after the fact," she said. "The average person is still disenfranchised. Individual people just got out of the market and they don't have the risk tolerance. They see their future looming. They don't trust the market, they feel it's being manipulated. Bond funds look safe."
Bond investing continues to far outpace stocks.
Equity fund inflows excluding exchange-traded funds were at $1.2 billion, compared to $3.5 billion for bond funds in the week ended April 7, according to Lipper. Both figures represent gains approaching 50 percent from the previous week.
While retail investor participation is only one factor in what determines the broader movement of the market, the trends suggest that hesitance is likely to remain and the market could be looking at more of the same for months to come.
"In terms of the entry of retail investors, it's clear we're early in that cycle," says Lawrence Creatura, equity market strategist and portfolio manager at Federated Clover Capital Advisors in Rochester, N.Y. "Those investors flooded the zone in terms of investing in the bond market."
"The shift from bonds to equities is at its very early stages, because investors are tentative about the economy, the jobs market," he continues. "Out there in the real world, the all-clear sign has not been given."
© 2010 CNBC.com
This blog is a selections of my investment views to my client. If you find it useful or have additional information to share, please do let me know. These blogs are my personal views and is not meant to solicit any sales or investment on any securities or investment. I may have vested interest in some of the counters or investment products, hence please invest at your own risk. As usual invest in what you understand and do your own homework.
ML is a licensed stockbroker with one of Asia Leading Stock Broker firm. To contact him, please email: icewolfmike@gmail.com
Earning Season begin...time to buy or sell stock?
ML's take:
Earning season usually provide the volatility catalyst to market, and it is a period whereby as a trader..i love. Short term trading strategy, with a sell on news bias is my preferred execution method, with a technical stop in place.However, this time round, I am a tad cautious, with the recent run up in stock prices. Somehow it means that the market (funds) have already started factoring in the earning upside, and the risk presented are more on the downside going forward. Banks stock for example has seen a good run of late, and this may present some vulnerability if results came in below expectation. Watch: Citibank and BoFA.
Most analysts are expecting a good set of numbers for 1Q, with some even think that the economy may have out-performed what the market is expecting. I agreed. However, note that if most upside has already been factor in, even a slightly better number is unlikely to push the market much further during this earning season. In contrast, if the number came in below expectation or on expectation, you can expect some selling to take place.
Hence for those of you, who have missed the boat of late....perhaps it is time that you take advantage of any weakness in price this earning seasons to pick up your lot.With retail participation largely missing and the economy firmly on track, this may be a good chance to jump on board before the rest of the skeptic.
So my take: Buy on weakness and sell on news this earning season.
Week Ahead: Earnings and Economic Reports Tell Tale of Recovery
Published: Friday, 9 Apr 2010 | 8:34 PM ET
Text Size 
By: Patti Domm
CNBC Executive Editor
CNBC Executive Editor
Alcoa [AA 14.39
-0.48 (-3.23%) 
], Intel [INTC 22.55 
0.24 (+1.08%) ], JPMorgan Chase [JPM 45.98 0.22 (+0.48%) ], Google [GOOG 566.22 -1.27 (-0.22%) ], AMD [AMD 9.30 -0.12 (-1.27%) ], and General Electric [GE 18.52 -0.04 (-0.22%) ] are among the companies reporting first-quarter earnings this week. "Last quarter we saw a lot of beats. I think we'll be in the same ball park. We're looking at growing evidence the economy is on better footing," said Ed Keon, portfolio manager at Quantitative Management Associates. Last quarter, 72 percent of the companies in the S&P 500 beat analysts' earnings estimates, according to Thomson Reuters.
 |
Oliver P. Quilla for CNBC.com |
Citigroup chief U.S. equities strategist Tobias Levkovich also expects some knock out earnings reports. "I think earnings are going to look very strong...It's going to be a combination of cost cutting and top line revenue growth," he said. "The operating leverage in businesses is usually quite dramatic at turning points."
The coming week has a heavy calendar of economic data -- from international trade, to retail sales and industrial production . All of that should provide a better look at how the economy performed in the first quarter. Another highlight will be Fed Chairman Ben Bernanke's Congressional testimony on the economy Wednesday.
The Greek debt crisis will stay in focus, as speculation swirled in markets Friday that there could be a weekend bailout. China and its move to let its currency float is also dominating market chatter, as President Hu is expected to join other world leaders at a nuclear summit hosted by President Obama in Washington. China also releases GDP and other indicators on Thursday.
In the past week, there were a number of positives that suggest the economy may be a bit stronger than some economists expected. One of those was strength in the ISM nonmanufacturing survey, as well as wholesale inventories. Chain stores also reported better than forecast sales for March.
"I actually think the scope for the biggest surprise will be in international trade and inventories," said LaVorgna of the coming week's data. His current GDP forecast is 4.5 percent for the first quarter. "It just seems to me that the inventory numbers with the trade will be more important than some of these other figures in terms of how GDP plays out in Q1."
J.P. Morgan economist Bruce Kasman, in a note Friday, said for the first time since last summer, J.P. Morgan is raising its outlook for global growth. He noted that his first quarter U.S. GDP forecast of 4 percent is at risk of being too low. He expects March retail sales, reported Wednesday, to show that consumption is gaining momentum.
One report in the past week that was not encouraging was the weekly jobless claims data, which showed an unexpected increase of 18,000 to 460,000. Economists say there needs to be a real turn in the employment situation in order for the economy to heal, and the question is when will the stronger corporate profits result in hiring.
Major U.S. Indexes |
| Last | Change | Today's % Change | 1 Week % Change | YTD % Change | |
| Dow | 10997.35 | 70.28 | 0.64% | 0.64% | 5.46% |
| NASDAQ | 2454.05 | 17.24 | 0.71% | 2.14% | 8.15% |
| S&P 500 | 1194.37 | 7.93 | 0.67% | 1.38% | 7.11% |
| Russell 2000 | 702.95 | 3.31 | 0.47% | 2.77% | 12.40% |
| CBOE VIX | 16.18 | -0.30 | -1.82% | -7.38% | -25.37% |
| FTSE CNBC Global 300 | 4700.50 | 55.22 | 1.19% | 1.05% | 3.54% |
The Dow in the past week crossed 11,000 for the first time since Sept. 29, 2008. It finished the week at 10,997, with a 70 point, or 0.6 percent gain. The S&P 500 was up 16, or 1.4 percent at 1194, and the Nasdaq gained more than 2.1 percent to 2454. The S&P energy sector was the best performer, gaining 1.1 percent, followed by the telecom and consumer discretionary sectors, both up 0.8.
Nymex crude for May delivery gained $0.05 per barrel this week, or 0.06 percent to $84.92.
Treasury prices rose on the week, pushing yields lower after the 10-year yield topped 4 percent on Monday. The 10-year finished the week with a yield of 3.890 percent, and the 2-year was unchanged, at 1.072 percent. The dollar lost 0.03 percent against the euro this past week, despite volatility around Greek debt worries.
Marc Chandler, chief foreign exchange strategist at Brown Brothers Harriman, said he thinks the speculation about a Greek bail out over the weekend will prove false, as Greece has enough financing in place for April. "I don't think we've reached the point where their feet are on the fire, and they've got to do something now," he said.
This blog is a selections of my investment views to my client. If you find it useful or have additional information to share, please do let me know. These blogs are my personal views and is not meant to solicit any sales or investment on any securities or investment. I may have vested interest in some of the counters or investment products, hence please invest at your own risk. As usual invest in what you understand and do your own homework.
ML is a licensed stockbroker with one of Asia Leading Stock Broker firm. To contact him, please email: icewolfmike@gmail.com
Tuesday, April 6, 2010
Noble Group offer all cash for Gloucester; Peabody up the ante to A$14 for Macarthur
Noble has once again taken the initiative in the Gloucester-Macarthur deal, by offering a all cash deal to Gloucester shareholder in the event that the deal fell through.
This is even after Macarthur has rejected a Peabody last minute attempt to scuttle the deal. However, Peabody has now up the ante with a A$14 bid for Macarthur, showing its determination to scuttle the Noble deal or at least to further postpone the April 12 EGM by Macarthur.
By offering an all cash deal to Gloucester, I believe Noble is making it very clear to Macarthur that it is in no mood to renegotiate the deal, and is prepare to go in alone and go head on with Macarthur if the deal did not go through, and a warning shot to Macarthur and anyone else that it will be even more expensive in the future, should they attempt to buy out Gloucester next time.
I putting my bet that the deal will still go ahead (to create one of the largest coal company in the world) that will benefit Noble. Noting that for Peabody to succeed, it will have to get the nod of Citic, Posco and Mittal - the major shareholders of Macarthur. Citic by the way also own 15% of Noble.
Will still look to buy on any weakness related to this deal.
This blog is a selections of my investment views to my client. If you find it useful or have additional information to share, please do let me know. These blogs are my personal views and is not meant to solicit any sales or investment on any securities or investment. I may have vested interest in some of the counters or investment products, hence please invest at your own risk. As usual invest in what you understand and do your own homework.
ML is a licensed stockbroker with one of Asia Leading Stock Broker firm. To contact him, please email: icewolfmike@gmail.com
This is even after Macarthur has rejected a Peabody last minute attempt to scuttle the deal. However, Peabody has now up the ante with a A$14 bid for Macarthur, showing its determination to scuttle the Noble deal or at least to further postpone the April 12 EGM by Macarthur.
By offering an all cash deal to Gloucester, I believe Noble is making it very clear to Macarthur that it is in no mood to renegotiate the deal, and is prepare to go in alone and go head on with Macarthur if the deal did not go through, and a warning shot to Macarthur and anyone else that it will be even more expensive in the future, should they attempt to buy out Gloucester next time.
I putting my bet that the deal will still go ahead (to create one of the largest coal company in the world) that will benefit Noble. Noting that for Peabody to succeed, it will have to get the nod of Citic, Posco and Mittal - the major shareholders of Macarthur. Citic by the way also own 15% of Noble.
Will still look to buy on any weakness related to this deal.
This blog is a selections of my investment views to my client. If you find it useful or have additional information to share, please do let me know. These blogs are my personal views and is not meant to solicit any sales or investment on any securities or investment. I may have vested interest in some of the counters or investment products, hence please invest at your own risk. As usual invest in what you understand and do your own homework.
ML is a licensed stockbroker with one of Asia Leading Stock Broker firm. To contact him, please email: icewolfmike@gmail.com
Where is DJIA and STI heading next??
JIA and STI reach new high of late, while HS lagged this upward move.
While I maintained my bullishness on the market overall, I am also growing cautious over the recent uptrend which comes with falling trading volume. If trading activities do not pick up soon, my view is that some technical correction may once again be in the horizon, albeit unlikely to be a very fierce one.
Did up a quick chart overview of the latest trend for HSI, DJIA and STI, to provide a general perspective of the latest trend.
This blog is a selections of my investment views to my client. If you find it useful or have additional information to share, please do let me know. These blogs are my personal views and is not meant to solicit any sales or investment on any securities or investment. I may have vested interest in some of the counters or investment products, hence please invest at your own risk. As usual invest in what you understand and do your own homework.
ML is a licensed stockbroker with one of Asia Leading Stock Broker firm. To contact him, please email: icewolfmike@gmail.com
While I maintained my bullishness on the market overall, I am also growing cautious over the recent uptrend which comes with falling trading volume. If trading activities do not pick up soon, my view is that some technical correction may once again be in the horizon, albeit unlikely to be a very fierce one.
Did up a quick chart overview of the latest trend for HSI, DJIA and STI, to provide a general perspective of the latest trend.
This blog is a selections of my investment views to my client. If you find it useful or have additional information to share, please do let me know. These blogs are my personal views and is not meant to solicit any sales or investment on any securities or investment. I may have vested interest in some of the counters or investment products, hence please invest at your own risk. As usual invest in what you understand and do your own homework.
ML is a licensed stockbroker with one of Asia Leading Stock Broker firm. To contact him, please email: icewolfmike@gmail.com
Subscribe to:
Posts (Atom)