Friday, 27 February 2009
End of Feb 2009 Share Portfolio Review
Latest Holding of My Portfolio ~ February 2009
Cacola Furniture
China Taisan
Courage Marine
China Zaino
Courage Marine
FSL Shipping Trust
Lizhong Wheel
Pacific Shipping Trust
Qianhu
Jiutian Chemical
Sihuan
Swiber
Asia Enterprise
Midas
Raffles Education
Cacola Furniture
China Taisan
Courage Marine
China Zaino
Courage Marine
FSL Shipping Trust
Lizhong Wheel
Pacific Shipping Trust
Qianhu
Jiutian Chemical
Sihuan
Swiber
Asia Enterprise
Midas
Raffles Education
Thursday, 26 February 2009
Monday, 23 February 2009
Sihuan FY 2008 Results Press Release
PRESS RELEASE: SIHUAN'S ROBUST BUSINESS MODEL TURNS IN RECORD NET ATTRIBUTABLE PROFIT OF RMB237M IN FY08
Friday, 20 February 2009
Courtesy of Hock Lock Siew
Published February 20, 2009
Extraordinary times call for extra clarity
By CHEW XIANG
WHERE do you hide a tree? In a forest. Where do you hide a poor quarter's performance? In the full-year results.
Six years after quarterly reporting was made mandatory for all but the smallest listed companies, a number of blue chips still did not separately reveal fourth quarter results in their financial statements for the full year ending Dec 31.
These aren't fly-by-night companies with things to hide. They include blue chips such as ST Engineering, Hyflux, ComfortDelGro, Singapore Land and its parent United Industrial Corporation. No doubt there are plenty more.
In normal times, separate figures for the fourth quarter along with the full year results would be something nice to have, rather than a necessity. Not having them doesn't breach SGX listing rule 705, which sets out companies' continuing obligations with regards to financial statements.
But, as Members of Parliament were keen to stress in the Budget debates this month, these are 'extraordinary times'. During the three months to December, every conceivable economic and financial indicator sank without trace; confidence went through the floor and is still puddling in depression; trade, jobs, clients and accounts receivable have all but vanished.
How companies fared in this disastrous quarter is important because that is likely to be a far better guide to their performance in the coming months than their full-year showing, which for many would have included three quarters of strong results. When Oct-Dec results for many companies are likely to be poor, focusing on full-year results can be misleading.
For instance, Hyflux on Wednesday reported a record net profit (up 79 per cent) and sales (up 187 per cent) for FY2008, a fact highlighted in a number of media reports. But much of the boost came in the first three quarters of the year; Q4 net profit actually fell 32 per cent year on year, from $19.6 million in 2007 to $13.4 million, due to higher impairments and cost of sales.
Both ChannelNewsAsia and Today stressed Hyflux's record full year earnings without mentioning its quarterly performance. But investors need to know the full picture, especially retail investors without access to professional data suppliers or a good range of analyst reports.
And not disclosing the quarter's performance runs the risk that mistakes get made. Predictably, some of those that tried to ferret out Q4 data got it wrong: DBS Vickers issued a report yesterday which said that net profit fell 42 per cent year-on-year; this newspaper reported a 41.7 per cent drop in Q4 earnings and so too did Bloomberg (42 per cent) and The Straits Times, which had quoted Bloomberg. The problem was that 2007 earnings had been restated and those that relied on the original financial statements were caught out.
Mistakes can be corrected in due time, but the confusion, especially for traders or investors in the stock, is indelible.
And right now, it's not just headline and bottom line figures that matter. Investors also need to know how balance sheets, debt levels and cashflows have been affected by the gyrations of the past four months, as well as details of how line items have responded. For instance: how much has receivables changed? How heavy were the impairments taken over the period?
They can of course compare nine-month financial statements with the full-year version and do some simple arithmetic, but why should they have to?
Published February 20, 2009
Extraordinary times call for extra clarity
By CHEW XIANG
WHERE do you hide a tree? In a forest. Where do you hide a poor quarter's performance? In the full-year results.
Six years after quarterly reporting was made mandatory for all but the smallest listed companies, a number of blue chips still did not separately reveal fourth quarter results in their financial statements for the full year ending Dec 31.
These aren't fly-by-night companies with things to hide. They include blue chips such as ST Engineering, Hyflux, ComfortDelGro, Singapore Land and its parent United Industrial Corporation. No doubt there are plenty more.
In normal times, separate figures for the fourth quarter along with the full year results would be something nice to have, rather than a necessity. Not having them doesn't breach SGX listing rule 705, which sets out companies' continuing obligations with regards to financial statements.
But, as Members of Parliament were keen to stress in the Budget debates this month, these are 'extraordinary times'. During the three months to December, every conceivable economic and financial indicator sank without trace; confidence went through the floor and is still puddling in depression; trade, jobs, clients and accounts receivable have all but vanished.
How companies fared in this disastrous quarter is important because that is likely to be a far better guide to their performance in the coming months than their full-year showing, which for many would have included three quarters of strong results. When Oct-Dec results for many companies are likely to be poor, focusing on full-year results can be misleading.
For instance, Hyflux on Wednesday reported a record net profit (up 79 per cent) and sales (up 187 per cent) for FY2008, a fact highlighted in a number of media reports. But much of the boost came in the first three quarters of the year; Q4 net profit actually fell 32 per cent year on year, from $19.6 million in 2007 to $13.4 million, due to higher impairments and cost of sales.
Both ChannelNewsAsia and Today stressed Hyflux's record full year earnings without mentioning its quarterly performance. But investors need to know the full picture, especially retail investors without access to professional data suppliers or a good range of analyst reports.
And not disclosing the quarter's performance runs the risk that mistakes get made. Predictably, some of those that tried to ferret out Q4 data got it wrong: DBS Vickers issued a report yesterday which said that net profit fell 42 per cent year-on-year; this newspaper reported a 41.7 per cent drop in Q4 earnings and so too did Bloomberg (42 per cent) and The Straits Times, which had quoted Bloomberg. The problem was that 2007 earnings had been restated and those that relied on the original financial statements were caught out.
Mistakes can be corrected in due time, but the confusion, especially for traders or investors in the stock, is indelible.
And right now, it's not just headline and bottom line figures that matter. Investors also need to know how balance sheets, debt levels and cashflows have been affected by the gyrations of the past four months, as well as details of how line items have responded. For instance: how much has receivables changed? How heavy were the impairments taken over the period?
They can of course compare nine-month financial statements with the full-year version and do some simple arithmetic, but why should they have to?
Wednesday, 18 February 2009
Transactions of My Portfolio
Sold:
Challenger Technologies
Added more:
Raffles Education
Swiber
Courage Marine
China Taisan
Challenger Technologies
Added more:
Raffles Education
Swiber
Courage Marine
China Taisan
Tuesday, 17 February 2009
Monday, 16 February 2009
Tuesday, 10 February 2009
Monday, 9 February 2009
Courtesy of Business Times
Still, using market-cap weights is probably a much better way to capture what's going in a stock market, at least for most of the time and over longer time periods. The alternative is to use price weights, which has been shown to lead to even more inaccurate conclusions.
On this last point, local investors - chartists and fundamentalists alike - would do well to take into account just how distorted a picture the price-weighted DJIA paints of the US economy and market, while also pondering whether 8,000 is really where its 'support' lies. If Dow at 8,000 is artificial, where does this leave the STI?
Published February 2, 2009
Why the Dow is holding at 8,000
By R SIVANITHY
TO MOST casual observers, the fact that the Dow Jones Industrial Average (DJIA) has bounced back every time it dipped below 8,000 points over the past few months - even when there is bad news - suggests that the 8,000 mark is where the 'support' or the magical 'market bottom' lies. This means that as soon as the index nears 8,000 on the downside, chartists and traders will start calling a 'buy' on the market.
The divisor: For every dollar an index stock falls, the DJIA falls 7.964782 points, regardless of the stock's capitalisation
Why the Dow is holding at 8,000
By R SIVANITHY
TO MOST casual observers, the fact that the Dow Jones Industrial Average (DJIA) has bounced back every time it dipped below 8,000 points over the past few months - even when there is bad news - suggests that the 8,000 mark is where the 'support' or the magical 'market bottom' lies. This means that as soon as the index nears 8,000 on the downside, chartists and traders will start calling a 'buy' on the market.
The divisor: For every dollar an index stock falls, the DJIA falls 7.964782 points, regardless of the stock's capitalisation
Closer examination, however, reveals that the bounces around the 8,000 mark are simply a function of the way the index is constructed. Because the Dow is price-weighted, it is also inherently flawed.
In Thoughts from the Frontline weekly newsletter dated Jan 23, writer John Mauldin correctly points out that the divisor for the DJIA is 7.964782, which means that for every dollar an index stock falls, the DJIA falls 7.964782 points, regardless of the stock's capitalisation.
As a result, if the stock of Microsoft, with a price of US$17 and a market cap of US$156 billion, was to crash to zero, the DJIA would only lose 135 points (17x7.964782). But if the same was to happen to IBM, with a smaller market cap of US$124 billion but a higher share price of US$92, it would cost the index to lose a whopping 700 points.
Now consider the four financial stocks currently in the DJIA - Citigroup (US$3.90), Bank of America (US$6.78) Amex (US$16.70) and JPMorgan (US$25.43) - using last Thursday's prices.
If all four stocks were to crash to zero, the DJIA would only lose 300 plus points, not that huge a loss in the context of the market, yet imagine the repercussions on the US and global economies if these four institutions collapsed totally.
If all four stocks were to crash to zero, the DJIA would only lose 300 plus points, not that huge a loss in the context of the market, yet imagine the repercussions on the US and global economies if these four institutions collapsed totally.
Most of the news on Wall Street these days centres on the crippled financial and auto sectors. But because the share prices of these companies are now so low, these stocks do not affect the DJIA by much (General Motors' shares, for example, are now just above US$3).
In other words, because the index stocks most affected by bad news are already battered to rock-bottom levels, the DJIA doesn't seem to fall much when bad news is released, thus giving the mistaken impression of resilience to adverse news and of strong support around 8,000 points.
By right, these financial and auto stocks should have been removed from the index, given that it has been past practice to replace stocks whose prices drop below US$10.
For some reason, the DJIA's guardians have been reluctant to do the same now, possibly because of the political fallout that might ensue - imagine the repercussions of removing pillars like Citigroup or General Motors.
This then leads to the inevitable conclusions: the DJIA is not comparable over time; the only reason the DJIA appears well-supported around 8,000 is because the collapsed financial and auto components have not been replaced as they should have been; and that movements in large-price stocks are magnified because the index is heavily skewed in favour of these counters.
If the index was to be correctly re-balanced by removing the battered financials and autos and replacing them with stocks with prices above US$10, you'd have to wonder whether the 8,000 mark would hold as well as it has.
If the index was to be correctly re-balanced by removing the battered financials and autos and replacing them with stocks with prices above US$10, you'd have to wonder whether the 8,000 mark would hold as well as it has.
You'd also have to dismiss arguments that it is safe to buy since the index is at its lowest level in many years because historical comparisons are invalid - unless, of course, the same re-balancings that were done in the past are performed now.
How to overcome such a large distortion? The most commonly accepted solution is to use market-cap weights, but this too has its drawbacks.
Last Thursday, the market-cap weighted Straits Times Index (STI) rose 0.64 of a point to 1,766.72, a move that a casual observer might interpret to indicate a mixed or quiet session. Far from it - if you stripped out warrants, the rest of the market only recorded 95 rises against 188 falls, a gain/loss ratio that indicated market weakness rather than a mixed session.
Peer beyond the numbers and it would have been readily evident that an 11-cent rise by big-cap SingTel to $2.76 pushed the STI up 11 points, thus creating the mistaken impression of a slightly firm or mixed market. Assuming SingTel had not risen and everything else remained the same, the STI would have recorded an 11-point fall, leading a casual observer to correctly surmise that the market had been weak that day.
Similarly, on Dec 29 last year, a sudden 87 per cent surge by CapitaMall Trust in the final minute of trading helped push the STI up 54 points, once again creating the mistaken impression of a session that was much stronger than it really was.
Still, using market-cap weights is probably a much better way to capture what's going in a stock market, at least for most of the time and over longer time periods. The alternative is to use price weights, which has been shown to lead to even more inaccurate conclusions.
On this last point, local investors - chartists and fundamentalists alike - would do well to take into account just how distorted a picture the price-weighted DJIA paints of the US economy and market, while also pondering whether 8,000 is really where its 'support' lies. If Dow at 8,000 is artificial, where does this leave the STI?
Thursday, 5 February 2009
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