May[2] - Market Update

Dollar Index:
Upon FOMC on March, US dollar index has been down sliding. Last week FOMC reaffirmed that no rate hike yet, so the down trend persisted. It has been hitting one year support ~ 93. A weakening USD gave support to commodities price, such as oil, wheat, etc.

Singapore:
Heavyweight in STI constituents has been releasing earning results for past quarter. Earning was generally flat. While more counters will be trading under EX (exclusive of dividend) soon, STI is showing weakness to climb for next high. Conventional saying about "SELL on May" looks convincing meanwhile.

Market Calendar on coming week:
(SG: Singapore; CH: China; US: USA)

May[1] - Financial Highlights

The following counters released respective latest financial results last week. A summary is provided.

Chart[11] - Ying Li

The counter formed double bottom break down at 0.149 on Dec 2015. Since early 2016, it has been gathering strength to push up but retreat from 0.149. Lately, it saw high transaction again with price edging up again. In first chart (daily), EMA10 has cut up from EMA20. In second (weekly), price rest before EMA20. Shall it form double top break up from 0.149, next resistance is 0.168. Trend could have changed if it back down to 0.136.

Apr[8] - Market Update

Oil:
Against the fact of oil glut, crude oil has been riding on a bullish week. Two resistance were broken in one week. A double top breakout was formed at 41.56. The peak ~ 43.12 since Dec 2015 was broken as well.

Dollar Index:
Looking into next week, US dollar index could be in focus. Generally, stronger USD could derail USD denominated commodity prices. Central bank of Japan and Federal Reserve will be deciding their latest monetary policy on next Thursday. USD has been sliding since Yellen downplayed possibility of rate hike in FOMC on March. Asia markets has been benefited as well.

Market Calendar on coming week:

(SG: Singapore; CH: China; US: USA)

Apr[7] - Financial Highlights

The following counters released respective latest financial results last week. A summary is provided.

Apr[6] - Market Update

Oil:

Market has been pretty optimistic towards OPEC meeting on 17 April. Last week saw 15% surge in crude oil price. 

Singapore:

Led by banks, STI has been in short rally last week. In coming weeks, some blue chips will be coming to end of dividend entitlement. It would be interesting to see whether the momentum can maintain after Exclusive Date (EX).

Market Calendar on coming week:

(SG: Singapore; CH: China; US: USA)

Apr[5] - Financial Highlights

The following counters released respective latest financial results last week. A summary is provided.

Chart[10] - China Everbright

The counter saw accumulation volume since mid Feb. On last trading day, it ended at 0.525 with 8m of shares transacted which is pretty bullish. Shall it break up from resistance line at 0.525, next resistance line could be 0.59. 

*** Note: Same counter has been mentioned in Chart[8] @ 2016 ***

Apr[4] - Market Update

Crude Oil:

Unexpectedly falling in last week US crude inventory gave a boost to oil price. It surged >10% in last 3 trading days. Market sentiment is getting bullish ahead of OPEC meeting on 17 April. Weakening USD also gave some support to commodity prices.

Singapore:

STI has been lingering in narrow zone. Past week price range is less than 3%. Coming week will see more quarter results announcement from listed companies. 

Market Calendar on coming week:

(SG: Singapore; CH: China; US: USA)

Apr[3] - ARA (Mothership of REITS)

COUNTER: ARA Asset Management Ltd

OVERVIEW:
ARA is an integrated real estate fund manager in Asia Pacific region. It has built a diverse suite of real estate investment trusts (REITS) and private real estate funds that are invested in office, retail, logistics/industrial, hospitality and residential sectors. The income is generated by earning in percentage of assets value it manages. Its REITS portfolio is listed below:

HIGHLIGHTS:
[1] Its latest result saw FY2015 net profit reached $72m which is up 16% year on year, after taking out one off gain in FY2014. 56% of revenue is generated from recurrent management fees which grew 3% year on year.

[2] Total borrowing is around $150K, which represents low gearing ratio at 3%. It is having cash at $76m now.

[3] Asset under management (AUM) hit $29.8b with annual growth at $2b. The increased AUM will underpin steady growth in revenues and profit in 2016.

INVESTMENT THEMES:
[1] Current valuation is considered pretty attractive for ARA since 2012. Its PE fell below 13 and dividend hit beyond 4%.

[2] In 2015, ARA has raised its private fund size with additional USD2b to invest in various properties in Singapore, Malaysia and Korea. These should drive the growth of its earning in 2016.

[3] Fee revenues from its REITs, private funds are mainly recurring in nature and offer income visibility. Based on SOTP valuation, the counter shall be valued ~ 1.5

PRICE TREND:
The counter is trading with CD (Cum Dividend) now. EX (Exclusive of Dividend) date falls on 21 April. Shall price drop on EX, it might hit next support ~1.015 which represents attractive 5% yield.

Apr[2] - Market Update

Crude Oil:

Crude oil broke down from previous rising channel while sliding in 8 consecutive days. US crude oil inventories broke new record high but under market forecast. Active oil rig counts have been falling over few weeks as well. However the down sliding persists. Immediate support at USD36. Next would be USD34. Market looks forward much concrete resolution from OPEC meeting on 17 April.

USA:

DOW Jones finally bid farewell with annoying oil. Following comment from Yellen that less rate hike is expected in 2016 and stronger gain in non farm payroll last week, it has broken 2016 high. Historical high is 18312.

Singapore:

Following Moody downgrading local bank's outook and sliding oil price, STI has been weakening in past week. Both EMA10 and EMA20 are converging. Following weeks will see 1Q2016 result announcement from local listed entities (First is SPH REIT). Earning from last quarter will be in focus6

Market Calendar on coming week:

(SG: Singapore; CH: China; US: USA)

Apr[1] - UG Healthcare (Away from Disease)

COUNTER: UG Healthcare Corporation Ltd

OVERVIEW:
The counter is a well established natural latex and nitrile examination gloves maker and distributor. These gloves can be used in industries such as healthcare, research, food & beverages. It also distributes vinyl, surgical and cleanroom gloves which are used in healthcare and high tech manufacturing environment.

Currently, it has two manufacturing facilities located in Malaysia. Its distribution network covers worldwide regions, such as US, UK, Germany, China and Nigeria. Through its extensive networks, the products are sold to more than 50 countries under its own brand name.

HIGHLIGHTS:
[1] Its latest half year result saw revenue and net profit up 20% and 30% year on year. This is mainly driven by increase in sales volume. Gross profit margin increased from 20% to 24%, mainly due to reduction in cost of raw material purchased.

[2] It's having positive cash flow with $6m. Total borrowings at $10m which is only less than 20% of its equity value. Short term debt can be fully funded by cash.

[3] The counter is on track to expand its production capacity (>40%) and distribution network. Construction of new production lines should be funded internally. Management shared that production lines have been upgraded to produce surgical examination gloves. New product shall contribute since FY2017.

INVESTMENT THEMES:
[1] Assuming the counter managed to maintain same earning as its previous 6 months. FY2016 PE is estimated to be 10 at current price. At its IPO, the management stated its intention to pay at least 20% of net profit of FY2016 as dividend. Current valuation is attractive among its peers in the region. Average PE in the sector is 19.

[2] Rubber prices has been staying low in recent years. With the overcapacity in the synthetic rubber industry,  glove producers could continue to enjoy with lower raw material cost in near term. The counter is net beneficiary of stronger USD/MYR exchange rate as well.

[3] Glove manufacturing industry is resilient to economic downturns, as it serves as a basic necessity in the healthcare industry to prevent cross contamination and transmission of infectious diseases.

PRICE TREND:
Recent transaction saw surging in buying volume. Immediate support is $0.3. The counter has potential to be next to join rally amount mid-small cap counters lately.