Posted by admin on November 5, 2009 under Articles | 
– Lippo-Mapletree Indonesia Retail Trust announced distributable income of S$13.1 million for the quarter ended 30 September 2009, 23.1% below the distributable income of S$17.0 million recorded in the quarter ended 30 September 2008. DPU for 3Q 2009 is 1.22 cents compared to 1.60 cents in 3Q 20081. The lower distributable income year on year is due to lower specialty, casual leasing, carpark and miscellaneous income as the portfolio felt the impact of the global economic crisis in the form of retailers reducing the amount of expenditure on rent and promotional activities
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– Multi-Fineline Electronix, Inc. reported financial results for the fourth quarter and fiscal year ended September 30, 2009. Net sales in the fourth quarter of fiscal 2009 were $199.2 million, a 6.5 percent decrease from net sales of $213.1 million in the same period of the prior year. The decrease in net sales was primarily due to substantially lower sales to two customers, partially offset by significantly higher sales to one other major customer with new product launches. Net sales in the fourth quarter of fiscal 2009 grew 14 percent sequentially from $174.5 million in the third quarter of fiscal 2009 due primarily to higher sales of flex assemblies for smartphones and other consumer electronic devices that are experiencing strong marketplace demand…
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– Parkway Life Real Estate Investment Trust is pleased to announce a strong set of figures for the third quarter and nine months ended 30 September 2009. For 3Q 2009, PLife REIT saw gross revenue increase by 23.6%, from S$13.3 million in 3Q 2008 to S$16.5 million in 3Q 2009. Net property income grew from S$12.5 million in 3Q 2008 to reach S$15.4 million this quarter, which is a 23.3% rise. PLife REIT’s continued growth for 3Q 2009 is a result of increased rental income from the Japanese properties and the upward rental revision of the Singapore Hospitals
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Impact of Currency Appreciation
Yen has been stronger (against USD) than ever. Japanese companies have been crying foul of their stronger currencies eroding their earnings. Nikkei 225 was, at times, thrashed or pulled down by the exporters due to rising yen. Yet, the above survey seems to point to a majority not being affected substantially. Stronger currency makes exports expensive and therefore, net exporting countries may suffer. However, it helps to curb inflation, which can be bad if not contained too. ~ So, is a particular currency appreciation good or bad for a particular stock market? It depends..
SGD / STI
From the onset of the finanacial crisis, the USD has generally been weakening against S$. The recession (happens to both US and S’pore), therefore, it’s the interest rates (downward revision by Fed Reserve), and printing of USD for large bailouts and stimulus that put depreciation pressure on USD. A lower interest rate provide a impetus to exchange USD for better yields in other currency.
First impression is that a stronger SGD makes Singapore’s exports more expensive i.e. other countries importing from us will feel the pinch and may reduce imports or look elsewhere. Businesses dependent on exports to overseas may suffer. So why is STI still near its recent high (around 2700) when SGD has strengthened?
~ Singapore banks are well captialised by International Standards
~ Adequate amount of reserves / savings
~ US funds mgr may buy equities listed in Singapore if the exchange rate remains favourable. Everything else equal, they can get more USD when they liquidate the equities (assuming weakening of USD).
Nevertheless, there is a threshold to any theory. Continuous appreciation of SGD will significantly erode our competitiveness of our exports and MAS has to step in to moderate this at some point, while buying time ~ hoping that USD can find its own footing when the US starts to revise interest rates upwards. However, do note that any support will also has its limits e.g. British government gave up their support on pounds eventually.. Other governments, esp China are diverifying their portfolios to non-USD holdings, which signify that their faith in USD is not as strong.
Conclusion
A delicate balance is required in managing the SGD/USD exchange rate. A strong currency curbs inflation while limiting exports. While a ‘floor’ will be there when central banks buy in USD and/or sell their own currencies, but in the longer-term, the general economic well-being of the US is crucial.
With the STI at around 2640 currently, any substantial swing will be driven by fundamentals rather than further appreciation / caps on SGD, which can be managed to a certain extent.
Franklin
RMAO
11.10am ~ 8 Oct 2009
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Short-term Bullishness
Good economic data, GDP’s upward revision, upbeat corporate earnings, etc seems to have tip the scale towards bulls’ favour ~ STI just broke and closed above 2,700 today, while U.S. futures and European markets are substantially positive due to out-performing corporate results from Intel & JPMorgan..
Can’t help but feel an urge to lean towards the bulls’ camp from a neutral position. BUT wait a minute! Aren’t we just talked about fragile recovery and conflicting indicators not too long ago?
This crisis has brought STI from its high of 36xx to its low of 14xx. A quick reflection will tell us that we are about 900 points from its peak, and about 1,300 from its low. Well, that’s a remarkable recovery even if u consider that the low was a result of ‘market oversold’ due to the market’s perception of possible depression then.
Not too long ago, I wrote that the STI is likely to be range-bound (2550 to 2750). It is now at the upper level of this range. In fact, the new found bullish momentum is likely to reach or even breach 2750..
Despite the possibilities of ‘greener pastures’ ahead, I am staying put i.e. no additions to what I already have. Yes, I will still ride on this up-wave, but no more no less.
Stay alert. Stay focused.
Franklin
RMAO
8.20pm ~ 14 Oct 2009
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Generally, stocks have risen and fallen just as quickly recently… because it’s no longer about recovery. With latest US GDP resuming growth, it marks the end of recession unofficially. Yet, the challenge / question now is about “passing the stimulative baton” to the private sectors.
Sustainability (of recovery) can only be achieved thru upbeat private economy, which at this point, is still relatively weak. Meanwhile, governments and central banks need to carefully ease off the pedal. Any significant premature withdrawals will be a turning point.
Look out for changes / directions in monetary and fiscal policies as I feel that the overall private economy is not ready to take over the baton.
Franklin
RMAO
9.50am ~ 30 Oct 2009
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“Tough Times”
The market is filled with pessimism and “loud cries” at the moment. Stock prices “seem to be” descending, particularly for pennies and small caps. Time to fully exit the market? I believe TA-wise, things are looking bad. Some are anticipating a big correction or even a crash bigger than previous.
While I concur that there’s nothing at the moment for STi to scale new heights, I do no expect another “crash” soon. TA’s measurements and forecasts are generally within shorter term context. For example, the change in market sentiments is “measured” from its peak (2739 if I am not wrong). Not hitting a new high and starts reversing imply bearishness? FA-wise, there is no concrete basis for a substantial dip though prices should not have gone so high earlier…
While the sentiments are currently based on “good news is bcos there is nothing bad now”, a consistent climb for indices will be difficult. In fact, we are at a stage where good news (from individual companies, countries or regions) are beginning to be ignored. Economic situation has becomes complex, requiring delicate balance in transfer of “stimulative economic baton”.
During such periods (downwards drifting), it’s not advisable to take new longs, especially with money that you are not supposed to or comfortable to use for investments. For traders, perhaps your number of profitability bids should also be reduced when doing intra-day or within T + 5. My unrealised profit for remaining 3 counters is reduced to nil but will not be liquidating my counters (for now) due to these reasons:
* Businesses and profitability are not affected.
* I believe it’s a passing dark cloud for now. ~ of course, this comes with a need to review closely
* Shortists are also having a difficult trading period.. else you would have seen numerous messages in big caps or hear their loudest bragging rights.
Franklin
RMAO
1.00pm ~ 5 Nov 2009
