Joseph Yam: Worried About 3rd Financial Crisis Brewing

Former HKMA Chief Executive Joseph Yam, in an interview, expressed his concern that the third financial crisis may already be in the womb of time, as woes brought by previous financial crises remain unresolved. However, the US Fed and central banks worldwide continue to adopt quantitative easing and inject more funds into the economies.

Seeing huge debt, high deficit and no deposits in the United States, Yam is worried over a sharp USD downturn, rather than depreciation pressure on HKD.

Source: http://www.aastocks.com/en/stocks/news/aafn-con/NOW.1030558/popular-news

Another item to take note is the rise in Corona virus in Hong Kong which the city state has been swift in its action to close many activities but noting the potential impact to the economy again... 

Barclays to launch £5bn-plus rights issue

Getty Images

Barclays will on Tuesday launch a rights issue to raise more than £5 billion as the UK bank moves fast to come into line with British regulatory requirements on leverage, according to two people briefed on the transaction.

Antony Jenkins, who took over as Barclays' chief executive a year ago, will also unveil details to shrink the bank's balance sheet.

(Read more: Barclays to fight $453 million power fine in US court)

The moves, which echo initiatives at Deutsche Bank in recent months, will leave Barclays with a core tier one capital ratio of around 9.5 per cent under "fully-loaded" incoming Basel III rules, according to one person briefed on the plan. That ratio – which measures equity as a proportion of risk-weighted assets – brings Barclays back into line with global rivals, after a period of underperformance.

Barclays was spurred into the capital and balance sheet measures when the UK's Prudential Regulation Authority last month said it had a leverage ratio of only 2.5 per cent, after factoring in expected losses and other costs, compared with a requirement of 3 per cent.

Full Article here: CNBC

When The US Thrives, The World Prospers!

Global equity markets have sold off over the past month, on the back of fears that the Fed will begin to tighten monetary policy. What is good for the US is usually good for the rest of the world; we think investors should consider some of the attractively-valued equity markets today.

Author : Fundsupermart EQUITY MARKETS SOLD OFF ON FED TAPERING CONCERNS Global equity markets have been sold off heavily over the past month as investors worry about a potential tapering of bond purchases by the US Federal Reserve. As detailed in Top Markets 2Q 13: Taper Temper, Asia and the Global Emerging Markets have been some of the worst-hit segments as global investors withdrew capital from the region, leaving valuations of many of these markets at rather attractive levels. Curiously, investors who have been fleeing equities on fears of potential Fed tapering seem to be missing the crux of the matter – that the impending cutback in bond purchases is based on economic strength, a vote of confidence for the once beleaguered US economy. WHEN THE US THRIVES, THE WORLD PROSPERS! What is good for the economy tends to be good for stock markets (see Rising Yields: Implications for Investors), as improving economic growth boosts corporate earnings, which isthe key driver of stock market performance. Also, the sheer size and economic importance of the US economy means that any positive developments there usually results in a positive spill-over effect for the rest of the world (compare this to the often-quoted “when the US sneezes, the world catches a cold”). Continued improvement in both the housing and job market has seen US consumer confidence improve tremendously, aided also by the recovery in household net worth to a new record high on the back of rising stock and home prices. These factors have helped US consumption to remain resilient, with personal consumption expenditures (the largest component of GDP) posting 13 consecutive quarters of gains since the 2008-2009 recession. Improving US consumption is thus likely to spur various export-driven Asian and Emerging Market economies, owing to the significant proportion of exports from these countries which eventually end up in the US (the large trade deficit between the US and China is a case in point). Many economists also point to the sustained US demand for Asian exports in the aftermath of the 1997-1998 Asian Financial Crisis which allowed many of the troubled economies to post strong recoveries following the deep recession, highlighting the importance of US demand on the global trade environment. BUILDING TOWARDS THE NEXT PHASE OF PROSPERITY The recent stock market weakness suggests that investors appear to be ignoring the positive implications of an improving US economy, and have been overly-focused on the “risk” of a cutback in Federal Reserve quantitative easing, akin to a healthier patient worrying that the doctor has now prescribed a lower dose of medication. As a result of these unfounded concerns, the more cyclical markets of Asia and the Global Emerging Markets have been unfairly penalised in 2013, leaving valuations lower and making these markets more attractive for investors with a long term view. Improving economic momentum in the US has sown the seeds for the next phase of economic prosperity, and it is clear to us that as investor confidence improves, it will only be a matter of time before many of the undervalued equity markets see a swift valuation multiple re-pricing, which should translate to strong returns for investors.   SEE ALSO: Funds Promo: When US Thrives, The World Prospers! Source: Fundsupermart

Interested in unit trusts or mutual funds?

Currently I have invested in Schroder Singapore Trust Cl A, an unit trust that invests mainly in Singapore Equities. You will probably be wondering, why buy during this period where the markets are so volatile due to so many factors like Portugal, weak China PMI, Fed easing of tapering etc.

STI has fallen from its high of close to 3,421 points to the current state of around 3,100 - 3,133 and holding pretty well against the 3,100 mark. I think that this correction of around 8% is pretty much a healthy re-adjustment and we may see a slight consolidation during this period. There are quite a number of reports that actually indicated that STI may break down and reach all the way to 2,800 but my take is the support at 3,100 is pretty strong as it bounced off a couple of times from there.

Looking at the US markets as well, it has been rebounding off the 15,000 mark, trading within range and there are signs that US as a whole is truely recovering since 2007/2008.

While I have avoided HK markets for this period of time, it seems that HK is heavily tagged to the China market which suffered a heavy beating for the past few months.

3 Reasons Not To Ignore Global Emerging Markets

Full article here: FSM

KEY POINTS

• With the growing importance of the region, EM economies will make up nearly half the global economy over the next five years, making the region too large to ignore by investors
• EM equities also continue to have little representation in global investor portfolios and equity benchmarks
• The growth disparity between EM and developed economies is even more stark in the current environment, which should see EMs find favour amongst global investors
• Stronger economic growth should translate to superior rates of earnings growth, driving stock market returns
• While the growth prospects of EMs are invariably stronger, investors are currently not paying a premium for these positives; EMs actually trade at a discount to their developed market peers at present
• We forecast strong potential upside for EM equities, and reiterate our 5.0 star “very attractive” rating on the market

Even as the IMF and World Bank recently downgraded their forecasts for global growth in 2012 and 2013, emerging markets (EMs) remain a bright spot, with long-term structural themes of increasing urbanisation, favourable demographics and a growing middle-class expected to propel their economies forward. In this update, we look at three reasons not to ignore EM equities which are currently our favourite regional equity market with a 5.0 star “very attractive” rating.

REASON 1: TOO LARGE TO IGNORE

Even as many investors still view EM equities as a peripheral “satellite” investment, the representation of EM countries in the global economy has grown by leaps and bounds. Based on the latest forecasts of the IMF, EM economies will increase their representation in the global economy to 43% by 2017, up from 38% presently (in 2012), and significantly more than the 23.5% in 1980 (see Chart 1), a function of their quicker pace of economic expansion. Simply put,over the course of the next five years, EM economies will make up nearly half the global economy, which will make the region too large to ignore by investors.

CHART 1: INCREASING REPRESENTATION IN THE GLOBAL ECONOMY

Investment Implications:

Despite their rising importance to the global economy, EM equities remain under-represented as a percentage of global equity market capitalisation, as well as within investor portfolios. As mentioned earlier, EM economies (based on the IMF classification) will make up 38% of the global economy (in nominal USD terms) in 2012. In contrast, their respective stock markets had a market capitalisation of USD10.6 trillion (as of 12 October 2012), making up just 21.1% of global stock market capitalisation.  

Are These Equity Funds The Most Actively-Managed?

While gains or losses of the broader equity markets ultimately drive returns of equity funds, the component of active management can also make a difference to an investor’s returns. The majority of funds on our platform are actively-managed funds, where the fund manager makes specific investment decisions with the aim of outperforming a benchmark (like Singapore equity funds trying to outperform the FTSE STI).

The extent to which a fund’s performance deviates from its benchmark is often referred to by the investment community as “active risk” or “tracking error”, terms which seem to carry negative connotations - this is simply a result of modern portfolio theory’s definition of the market (ie. the benchmark) having only “market risk”, so by deviating from the market, an investor is thus being exposed to additional investment risk.

While there are those who prefer to have less “active risk” in their investments, it is also logical that managers who deviate more from the benchmark can offer investors a better chance at obtaining stronger investment returns, which may appeal to some investors. In this article, we run a simplified quantitative “tracking error” screening of several popular categories of funds on the platform, highlighting some which appear to be more actively-managed, and others which have less tracking error.

METHODOLOGY

Our screening process utilised monthly returns (in SGD) for the funds compared against that of the benchmark, and calculated over 3-year and 5-year periods which ended in August 2012. The formula used was the “root mean square” of active returns (defined in our case as the difference in monthly returns, whether positive or negative), while we also used the same benchmark across each category – while this approach disregards the subtle “style” differences in benchmarks for different funds, it allows for a fairer peer-to-peer comparison. In addition, we also omitted funds which are principally invested in specific sectors, or small/mid-cap stocks.

RESULTS

Table 1: Average Tracking Error by Category
Category 5-Year Tracking Error 3-Year Tracking Error Benchmark Used US 8.5% 6.0% S&P 500 Asia Pacific ex-Japan 7.2% 4.6% MSCI AC Asia Pacific ex-Japan China 7.2% 6.0% MSCI China Asia ex-Japan 6.5% 5.8% MSCI AC Asia ex-Japan Europe 6.0% 4.7% Stoxx 600 Global 5.8% 4.6% MSCI AC World Global Emerging Markets 5.8% 5.0% MSCI Emerging Markets Japan 5.1% 4.0% Topix Singapore 4.3% 3.1% FTSE STI
Source: iFAST compilations, as of end-August 2012

Among the 9 categories of equity funds we examined, funds invested in the US, Asia, and China had some of the highest tracking error figures over a 5-year period, while Japan and Singapore equity funds had the lowest. With the exception of Asia Pacific ex-Japan equity funds, the trend was fairly consistent over 3 years as well. That US equity funds posted the highest tracking error amongst the various equity fund categories is somewhat surprising, since the US equity market is often viewed as one of the most efficient in the world, which would be an argument for US managers to take a more passive approach; our data appears to suggest otherwise. We now take a closer look at some of the categories to highlight funds which have demonstrated larger or smaller deviations vis-à-vis the benchmark, an indication of how actively managed the strategy is.

Full article here: FSM

Just When Investors Thought Europe Was Fixed...

Investors spent most of the summer believing that central bankers would protect them from the looming European debt threat, only to find in recent days that they may be wrong.

Getty Images

Volatility has returned both on Wall Street and in the streets of Europe, where Spaniards have been protesting austerity measures, and, in doing so, sparked the realization that the sovereign debt crisis is far from over.

Stock markets around the world have been trading lower, generating some worries that Europe could put a halt to what has been an otherwise powerful 2012 rally.

"When everybody is all-in and all-long, the market is priced for perfection," says Walter Zimmerman, senior technical analyst at United-ICAP in Jersey City, N.J. "The market will only be able to tolerate good things happening. Anything that starts unfolding in the other direction, the market is going to be extremely vulnerable."

The increased nervousness has come even though European Central Bank President Mario Draghi has assured the markets that he stands at the ready to provide help to euro zone countries struggling with debt issues.

At the same time, Federal Reserve Chairman Ben Bernanke recently announced a third round of quantitative easing with the goal of driving down the U.S. unemployment rate.

 

Full article here: CNBC

Take Your Portfolio To The Next Frontier

KEY POINTS

• Frontier markets offer great investment potential with their strong economic growth, low volatility, low correlation with major indices as well as a more "pure play" approach to gaining emerging market exposure
• Risks include political and regulatory risks and illiquidity risks
• Investors may gain exposure to frontier markets throught the Templeton Frontier Markets Fund

FRONTIER MARKETS: “THE NEW EMERGING EMERGING MARKETS”

Frontier markets are considered a subset of emerging markets. Compared to the majority of economies classified as “emerging markets” however, frontier markets consist of less developed, less liquid economies with companies of smaller market capitalisation. Examples of countries that are considered frontier markets include Argentina, Croatia, Romania, Kenya, Nigeria, Qatar, United Arab Emirates, Sri Lanka and Vietnam.

Frontier markets are a relatively new class of investment; of the three major frontier market index providers, the earliest was only launched in May 2009 by MSCI Barra – the MSCI Frontier Markets Index. The FTSE Frontier 50 Index and the S&P Frontier BMI were launched in September 2010 and April 2011 correspondingly.

For the purpose of this article, we will compare the investment merits of frontier markets by comparing the MSCI Frontier Markets Index against its US, developed markets, and emerging markets counterparts. The indices used are the MSCI US Index, MSCI World ex-US Index and the MSCI Emerging Markets Index respectively.

Full article here: FSM 

Idea Of The Week: Gaining Access To Frontier Markets

As described in Take Your Portfolio To The Next Frontier, frontier markets offer investors the potential to reap healthy investment gains, helped by their strong projected economic growth, while also providing some portfolio diversification benefit from lower correlations with other financial markets. Nevertheless, their small market capitalisations, lower liquidity and less-developed stock markets mean that there are precious few options for investors who want exposure to this fast-growing segment within the broader global emerging markets. In this week’s “Idea of the Week” segment, we highlight several funds which offer investors exposure to the frontier markets.

TEMPLETON FRONTIER MARKETS FUND

Among the various funds on the platform, the Templeton Frontier Markets Fund offers investors the most direct exposure to the segment. The fund was launched only in October 2008, but has since impressed with its strong outperformance of its benchmark, the MSCI FM Frontier Markets index. As of 31 July 2012, the fund’s largest holdings (by country) were in Nigeria, Kazakhstan, Qatar and Vietnam, deviating significantly from the benchmark (which had almost a third in stocks from Kuwait), and coupled with the strong outperformance since inception, suggests that the manager employs a highly active (benchmark-agnostic) approach to managing the portfolio.

MENA FUNDS

The three MENA (Middle East and North Africa) funds on the platform may also be interesting for investors seeking exposure to the various frontier markets located within the region (which includes markets like Jordan, Qatar, Kuwait, the UAE and Oman). Nevertheless, these three funds have had rather different fortunes in 2012 so far, owing to the disparity in their investment approaches. The Schroder ISF Middle East SGD A Acc  has delivered a rather strong 19.6% year-to-date return (as of 12 September 2012), helped by its fairly large allocation to Turkish equities – the fund held 35.1% of the portfolio in Turkey, as of 31 July 2012; the Turkish equity market has delivered a 34% return over the same period. The fund’s benchmark is 80% MSCI Arab Markets and Turkey + 20% Saudi Arabia Large/Mid Cap.

In contrast, the Amundi Oasis MENA Fund SGD and ING Inv MENA USD have delivered returns of 5.7% and 4.3% year-to-date, a function of not owning strong-performing Turkish equities (as compared to the Schroder ISF Middle East SGD A Acc). Both have allocation to Qatar and Kuwait, while the ING Inv MENA USD’s fairly large allocation to each of its top-10 holdings suggests a more high-conviction approach vis-à-vis the Amundi Oasis MENA Fund SGD.

EMERGING EUROPE, MIDDLE EAST & AFRICA EQUITY FUNDS

With Nigeria being one of the larger investable frontier markets at present, it is worth mentioning the “Emerging Europe, Middle East and Africa” equity funds on our platform. We have previously highlighted the Fidelity EmEur MidEast & Africa A USD in “Idea of the Week: 3 Recommended Funds You Haven’t Heard Of Yet [13 July 2012]”, highlighting the use of the fund alongside a Latin America equity fund for allocation to global emerging markets, to avoid over-concentration in Asia ex-Japan. As of 31 July 2012, we note that the fund held 7.3% of its assets in Nigeria (along with 1.7% in another frontier market, Kenya). Its peer, the JPM EmEu MEast & Africa SGD A Acc, held 3.6% of its assets in Nigeria, with a further 2.2% and 2.1% in Kazakhstan and Qatar respectively.

LIONGLOBAL VIETNAM FUND

Within Asia, Vietnam is one frontier market which is gradually opening up its doors to overseas investors. On the platform, the LionGlobal Vietnam SGD provides exposure to Vietnam stocks, and is benchmarked against the FTSE Vietnam Index. While the fund has generally not fared well since its inception in February 2007, the fund has still delivered outperformance against its benchmark, highlighting the positive impact of an actively-managed strategy (the fund manager has the option to invest in companies listed outside of Vietnam, but which derive part of their revenue from Vietnam and the Indo-China region). 

While the fund has the dubious honour of being one of the worst-performing funds on the platform (over a 5-year period), this may be attributed to the excessive valuations of the Vietnam equity market previously (see Chart 1). Valuations have since receded, and the market currently trades at 9.9X 2012 earnings (as of 14 September 2012), a far cry from the 30 – 40x PEs seen in 2007, suggesting that the market is a far more interesting investment proposition currently.  

CHART 1: VIETNAM EQUITY VALUATIONS

Full article here: FSM

Equities still rules?

To be honest, Equities would be the most easiest product that everyone could buy isn't it? There was quite a few articles previously that analysts were all talking about being bullish on Equities and here's another view.

Full article here: Why We Remain Bullish On Equities

Equity markets have had a fairly volatile year, with most markets recording strong gains at the start of the year before giving up gains in a poor 2Q 12 as Eurozone concerns were reignited. Nevertheless, most markets under our coverage remain in positive territory in 2012 so far, with a few (like technology stocks and Singapore equities) having delivered stellar returns on a year-to-date basis. Given that equity markets have fared relatively well over the past month, some investors may be wondering if it is now time to take some money off the table, while others are wondering if it is alright to get back in now. We attempt to address some of these concerns in this piece which reiterates our positive view on equities, and offers our take on specific equity markets.

1. BONDS HAVE DONE FAIRLY WELL IN 2012 SO FAR, WHY OVERWEIGHT EQUITIES?

While we continue to encourage investors to hold both fixed income and equity funds in their portfolios in a proportion commensurate with their investment objective and risk appetite, we still maintain a strong preference for equities vis-à-vis fixed income for several reasons. First, we believe that from a returns perspective, equity markets are likely to deliver far superior long-term returns compared to bonds, aided by a re-rating of PE multiples (from their current depressed levels), alongside decent levels of earnings growth. In contrast, yields on most bond segments remain near historical lows, representative of poor long-term returns for bond holders.

CHART 1: LONG-TERM DECLINE IN YIELDS BOOSTED PERFORMANCE

Also, we caution that investors should not look to historical returns for fixed income segments to project investment returns going forward. Historically, the strong (even “equity-like”) returns for many fixed income segments has largely been driven by the long-term decline in interest rates to current levels; this has aided in the performance for bonds on the whole (see Chart 1). However, from current yield levels, there does not appear to be much more room for yields to decline, which warrants a more cautious approach to investing in the fixed income space. To guard against potential increases in interest rates in the future, investors may wish to consider lower risk short-duration bond funds like the United SGD Fund Cl A or Nikko AM Shenton ShortTerm Bond(S$). We also favour high yield and emerging market bonds which are less sensitive to interest rate changes due to their fairly high coupon rates.

Fear Is Creeping Back Into Equity Markets

Full article here: Fear Is Creeping Back Into Equity Markets 

Are equity investors getting worried? Are they turning bearish after weeks of optimism?

Yes, they are, indicates the latest movement in the Volatility Index also known as the “fear index,” which measures investor sentiment and their expectations of stock market volatility.

Bryce Duffy | Stone | Getty Images

The Chicago Board Options Exchange’s Volatility Index [VIX  16.35  ---  UNCH    ] , better known as the VIX, has risen over 20 percent from a low hit on August 17.  It jumped 13 percent last week alone, suggesting fear is creeping back among investors.

Analysts say a rise in the VIX, which is a good indicator of risk appetite, points to a likely correction in equity markets.

“Historically, when you get the VIX at these levels there is usually a pull-back of around 10-15 percent (in stock markets),” Steven Brice, Chief Investment Strategist at Standard Chartered Wealth Management Group told CNBC Asia’s“Squawk Box” on Tuesday.

Fidelity: Asian Credit : Views Across The Spectrum

Full article below: Fidelity: Asian Credit : Views Across The Spectrum

Asian credit has seen strong demand so far this year as investors continue to look beyond the traditional safe havens for more attractive risk-adjusted returns. Bryan Collins, portfolio manager of the FF Asian High Yield Fund, the FF Asian Bond Fund and the FF China RMB Bond Fund, shares his latest market outlook.

As the Asian markets continue to develop, more opportunities are becoming available for investors.
The FF China RMB Bond, FF Asian Bond and FF Asian High Yield Funds each offer unique risk/return profiles giving investors the ability to blend and tailor risks to suit their individual needs.
In light of current market conditions, investors who seek margins of relative safety should consider
higher quality investment grade corporate debt given reasonable yield levels and the predictability
that stems from good credit quality. This is an especially important consideration when investing in
burgeoning markets such as Dim Sum or offshore RMB bonds, where investors would be welladvised to seek better structural protection as market standards are still developing. For this very
reason, our China RMB Bond Fund, along with our Asian Bond Fund, maintains a core focus on
higher quality investment grade bonds. For investors with a higher risk appetite, Asian high yield
bonds still offer attractive levels of regular income, however the asset class is subject to higher
volatility from the market’s risk-on risk-off tendencies. Nevertheless, periods of higher volatility
generally prove to be attractive entry opportunities into high yield for more seasoned investors. 

CNMC

Here's some analysis on CNMC as one of the stocks that we are looking at:

Company name: CNMC Goldmine Hldg Ltd
Company code: CNMC.SI
About: CNMC Goldmine Holding Limited is engaged in the business of exploration and mining of gold and the processing of mined ore into gold dore for subsequent sale. The Company operates in two segments: gold mining and other operations. The gold mining includes exploration, development, mining and marketing of gold. Other operations include investment holding company and provision of corporate services. Its projects include Sokor Gold Project and Nalata Project. The Sokor Gold Project is approximately 80 kilometers southwest of Kota Bharu, the state capital of Kelanta. In July 2010, CMNM achieved its maiden gold pour from the Sokor Gold Project, producing approximately 93.018 ounces of gold dore, which contained approximately 76.252 ounces of refined gold.

Chart source: Reuters

Being listed on October 2011, it has fallen from its high of $0.67 till its current price of $0.35 as of today's closing. Volume is kinda thin for this counter but looking at the trend it's going into since June, it is bending towards a slight uptrend and based on our technical analysis model, we are looking at a possible target price of $0.41. However, we want to be wary of current market conditions as well, as we wanted to be in a more favorable position to enter into this stock. 

Possible good entry price: $0.33 - $0.345

Target price: $0.41

Cut price for us: $0.29 

Estimated holding time: 1-2 months

What's your thoughts on this stock? 

Do you like Kimchi or Fast food?

Sorry for the punt in the title. 

This is more to Samsung vs Apple. As we all can see, Apple has been the crown prince of Nasdaq where its market cap is close to US$623.5 billion, closing on a record high of $665.15 on Monday! Microsoft didn't even come near during the 1999 dot-com boom for the record. 

Now back to Samsung - interestingly they have become a very powerful force over the past few years with consumer electronics ranging from LCD TVs, monitors and their most powerful product, their mobile phone series. It has been rivaling the iPhone since it came out and pretty much the only big contender against Apple (this is my personal view!). 

Now which is more worthwhile to put your money in? More analysis would need to be done before we can say anything but take a look at this article which probably give you some insight on the two giants. 

Full article here: Is Samsung a Better Bet Than Apple?

Samsung Electronics may not be able to lay claim to being the world's most valuable company ever, a feat accomplished on Monday by its rival Apple, but the South Korean maker of smartphones to TVs is a better buy, according to one analyst.

Bloomberg | Getty Images

Mark Newman Senior Analyst, Global Memory & Consumer Electronics at Sanford C. Bernstein says while Apple [AAPL  665.15    17.04  (+2.63%)  ] may be the more valuable company, Samsung's stock is cheaper and therefore more attractive.

"Samsung is a much bigger company [than Apple] in terms of revenues, assets and in terms of employees. But Apple's P/E (price to earnings ratio) is much, much higher than Samsung's. Samsung is quite cheap right now," Newman told CNBC's "Cash Flow" on Tuesday.

Nasdaq listed Apple is trading at 12.6 times forward earnings, while Seoul listed Samsung at 7.5 times, making now a good time to buy the stock, according to Newman.

A recent report from technology research house Gartner showed Apple is still lagging Samsung in terms of market share in the global smartphone sector. Samsung's global market share rose to 21.6 percent in the second quarter of this year from 16.3 percent a year ago, while Apple's slice of the pie increased to a more modest 6.9 percent from 4.6 percent in the same quarter of 2011.

Observations on Wilmar

As I mentioned about Wilmar earlier, this is another counter that we have a position in as well. Looking at the results it posted recently, profits were down almost by 70% on its 2nd quarter results and it could be seen in the charts below where it dropped from $3.40 to close to around $3.10 on 15 Aug opening. 

Good entry price: $3.17 - $3.20
Target price: $3.8
Cut price for us: $2.92 (close to 10% fall)
Estimated holding time period: 2 months

Company name: Wilmar International Ltd 
Company symbol: WLIL.SI
About: Wilmar International Limited operates in seven segments: palm and laurics, comprising the merchandising and processing of palm oil and laurics; oilseeds and grains segment, comprising the merchandising and processing of edible oils, oilseeds and grains; consumer products, which comprises packaging and sales of consumer pack edible oils, rice, flour and grains; plantation and palm oil mills, which comprises oil palm cultivation and milling, and milling segment, which comprises milling of sugarcane to produce raw sugar and by-products. In May 2012, it established Wilmar Switzerland SARL; increased its interest in Natalie Shipping Co Pte. Ltd. to 100%, and Wilmar Europe Holdings B.V. transferred its interest in Wilmar America Inc. In June 2012, it established Biochim SA Yihai (Lianyungang) Speciality Fats Industries Co., Ltd, PT Wilmar Air Indonesia and Piermont Holdings Limited. In July 2012, it established associated companies.

Chart source: Reuters


However, we also want to look at the sell down that occurred in May after it's 1st quarter results. If we look at the volume that occurred, the sell down in Aug is relatively lower than in May even though profit fall in May was 34% compared to 70% in 2nd quarter! 

Looking at the charts for the past 3 years, Wilmar has hit its 3 years low and alot of negative sentiments have been brewing around them. The last time it was at this lows was in Apr-May 2009 period! 

This is some fundamental analysis here, now back to why we entered a position in this counter. We probably look at 2 resistance point in the charts, one at $3.30 (20d moving average) and one at $3.46 (50d moving average). Looking beyond that, we probably look at some resistance here and there between $3.46 to $3.80 (still below 100d moving average). Based on our model that we derived, we are looking at $3.80 which is around 20% gain and around 10% cut price which has to break below $3 (an imaginary resistance). With much upside and downside that we envisioned, we took the bite and enter this counter! 

That's pretty much on Wilmar but as I always say, trade with caution as markets can swing both ways and we can't wait for things to happen! Let us know your thoughts on this counter! 

Do you believe this?

Being in and out of the stock markets for a few years, do you believe that a bank will tell you to do the right thing by getting out or it has some other objectives to achieve by posting such comments, especially from Wall Street's finest, Goldman Sachs. 

Full article here: Goldman to Clients: Get Out of Stocks Before Fiscal Cliff Hits

You can sense almost an air of desperation from David Kostin, Goldman Sachs chief U.S. equity strategist, in his latest note to clients as he pleads with them to take money out of stocks before they fall off the fiscal cliff.

Steve McAlister | Photodisc | Getty Images

In the note, Kostin vehemently defends his year-end S&P 500 [.SPX  1418.13    -0.03  (0%)   ] target of 1250 despite the benchmark’s recent rise to above 1400. The strategist still sees a 12 percent drop ahead, believing that Congress will fail to address the fiscal cliff before the election, and maybe even before the end of the year.

“Political realities and last year’s precedent suggest the potential that Congress fails to reach agreement in addressing the fiscal cliff is greater than what most investors seem to believe based on our client conversations,” said Kostin.

Interesting view on the company Google's fears

Here's an interesting article I read today on the potential upcoming company that could rival Google. Amazon has been ramping out different channels of engaging the world with Kindle phones and tablets and making online purchasing as easy as a few clicks away. Are we expecting the next Google here? It all depends on what their focus is and how they are deploying their marketing strategy for the next few years. 

Full Article here: Forget Apple, Forget Facebook: Here's The One Company That Actually Terrifies Google Execs

By Nicholas Carlson | Business Insider – Thu, Aug 16, 2012 2:42 AM SGT

RELATED QUOTES

Symbol	Price	Change
GOOG	677.14	4.27
AMZN	241.17	-0.38
AAPL	648.11	11.77

It's very easy to get caught up in the Android versus iPhone duel and Google's recruiting battles with its newly-public Silicon Valley neighbor, Facebook.

But neither one of those companies worry Google executives as much as another that is actively taking money out of their pockets.

This company is from Washington, but no, it's not Microsoft.

Google's real rival, and real competition to watch over the next few years is Amazon.

Google is a search company, but the searches that it actually makes money from are the searches people do before they are about to buy something online. These commercial searches make up about 20 percent of total Google searches. Those searches are where the ads are.

What Googlers worry about in private is a growing trend among consumers to skip Google altogether, and to just go ahead and search for the product they would like to buy on Amazon.com, or, on mobile in an Amazon app. 

There's data to prove this trend is real. According to ComScore, Amazon search queries are up 73 percent in the last year. But it makes intuitive sense doesn't it?

Why go through these steps …

• Google search "rubber galoshes,"
• Analyze some text links,
• Click on one to go to a product page on some e-commerce store,
• Click to add the item to your cart,
• Input your credit card,
• Input your address,

… when you can just …

• Search amazon for "rubber galoshes,"
• Click one button to buy the product with your usual credit card and have it shipped to your normal address.

On mobile, where Amazon has its own app and Google is just a search bar for a smaller-screened browser, the equation tips further in Amazon's balance.

The scenario gets even scarier for Google if Kindle phones and Kindle tablets gain ubiquity.

If you have a Kindle phone, which comes with free movies and books because you have an Amazon Prime account, which also gives you free shipping, why in the WORLD would you ever search to buy something through anything but Amazon?

You wouldn't.

That's why Amazon is practically giving its hardware away.

It's also why Amazon scares Google more than anything Facebook or Apple are up to.