Wednesday, July 04, 2007


Brief Equity Report Card

Interest Rates
- Headed lower in US
-Headed up in Japan
- Flat or up in UK and Europe

Imploding Risks
- Subprime: some bodies being uncovered but ghastly deeds have been done and murderer caught already ... room for more anxiety but should be controlled
- Yen carry trade: Risk getting higher as BOJ very likely to raise rates at least once maybe twice over the next 6 months ... however unwinding may not turn into an avalanche, it is more likely to be gradual ... expect yen/usd to reach 118 again over the next 3 months


Asia & Emerging Markets

- Bubbles not evident either in equity markets or housing except in China
- Best looking in Asia: Japan, South Korea and Taiwan
- Best Currency Play: Malaysia, Taiwan

- Best Theme For Rest Of The Year
- Oil & gas as I expect oil to stay btw US65-80 for rest of year, with a bias on the high side

Best Malaysian Holdings For 2H2007 (6 month view - not for trading purposes)

- Sapuracrest

- UEM World

- Ekovest

- Epic

- Samudra
- Petrochina-CWs (any)
- China Mobile-CWs (any)


Best Thai Holdings For 2H2007
- Somboon Advance
- Bangkok Land

- Thanachart Capital


Best Singapore Holdings For 2H2007

- Techcomp

- Hong Fok Corp
- Hiap Seng Engineering

Best HK Holdings For 2H2007

- China Everbright

- Xinyi Glass

- Soundwill Holdings

9 comments:

SAMMY MU said...

For the 2H2007 - O&G sector, another exciting potential is Ranhill. Believe once the company strikes black gold, the group is poised for another re-rating.

solomon said...

Agreed. But susceptible to unexpected external shock.

Other than the plantation, O&G remain the only few international investors interested in. My bet still Petra or Samudra.

Else, Pilecon worth to watch out. It is worth to note that the majority shareholder is Singaporean. This company is holding the Johor water concession? Another catalyst is the potential upside if Johor Water Front project revived. I can see value in this company. Who else can see will share the intrinsic value......Salvatore, any comment?

sopskysalat said...

dali,

you mentioned, "Best Theme For Rest Of The Year - Oil & gas as I expect oil to stay btw US65-80 for rest of year, with a bias on the high side"

I do agree with that O&G will continue to benefit from the continuing investment into the sector, but with crude staying high, CPO and related downstream products such as biodiesel should reap good gains esp. for crude palm operator having mature planation.

Wilmar, having acquiring PBO, indo agri on Sumatra London and Golden Agri all being the largest in SEA, of course synergy if deal is through, will will be good counters to watch out. CPO futures hit a peak and corrected since.

Salvatore_Dali said...

not much comment on ranhill, its an ok company I guess... Pilecon has some johor waterfront, not part of the IDR inside kakis, may be going it alone, still ok to play at current price ...

biodiesel is under water owing to high CPO px, outlook for CPO still good but not as good if someone had entered 12 months back, upside not great from here on ... wilmar is diversified enough upstream downstream, takes a lot to move such a big stock

high oil px means activity for exploration and drilling will get more intense, and they will go for deeper wells and more hard to find wells, companies with "unique assets and capacity" will do very well..

Jomaropol said...

Hi Dali, a reader posted this question about ekovest in www.hotstocks.com.my .

I wanted to ask you this because you seem to cover a lot about IDR counters.

Ekovest is buying Danga Bay Sdn bhd from Danga bay HOLDINGS sdn bhd.
Which one holds the land? I presume it is Danga Bay Sdn Bhd without the holdings?

Danga Bay HOLDINGS sdn bhd holds a huge stake in the KST Sdn Bhd. So did Danga Bay Holdings inject land into KST?

IS Ekovest buying the co with the danga bay land or not?

cheers dude

Salvatore_Dali said...

jom,

pls read posting on Ekovest dated 22nd march 2007 for clarification, currently the proposal involves Danga Bay Sdn Bhd only ... this is step one, which is to inject DBSB into Ekovest first probably in exchange of new Ekovest shares ...
second step will be the Kota Selat deal announcement which involves DBSB and UEM World ... you cannot do step two without doing step one first... watch ekovest fly on second announcement, plus uem world as well cos step two will reveal the actual land deals signed and the terms of participation, analysts will be able to put a more solid number on land banks and potential revenue and earnings

Jomaropol said...

I see I see. On 17 January Danga Bay Holdings (which owns Danga Bay Sdn Bhd) and Kumpulan Prasarana signed an agreement to form the KST with Danga Bay Holdings owning 36.5%.

Step one Ekovest buys Danga bay sdbd. Probably going to emerge as controller of KST. The UEM thing is a new thing though to me. So far I thought only SJIC (51.2%), Dangabay (36.5%) and Kumpulan Prasarana (12.3%) are involved in KST.

Salvatore_Dali said...

my bad,
i got ahead of myself, its actually khazanah/uem world seperately from kota selat, KS will not be able to move without khazanah, and kota selat movements will impact progressively on uem world

Jomaropol said...

Thanks Dali for the info. Posting a reply to our reader. cheers!