i think I should also do some calculations as to why I think it would go to $4.60. First, the share price should assuming we have a EPS of 0.5538, and PE of  8, factoring dividend, the price of this share should be $4.43 + 0.35= $4.78.  But if the foreign want to come in, with our strong S$ plus bullish regional economy, they should be very happy with PEs of about 13 (by comparision Keppel Corp today is around 20 and Singtel about 14).  This means ex dividend a price of 13x0.5538 or $7.20.  In terms of value for money we are talking for every dollar invested at PE 13, they will get 7.7% per annum which above US savings rate about say 6% without the risk of dollar losing value...


and my assessment is that the eps for 2007 should go up above 0.5538 as we all know that MM Lee has said corporate tax will certainly go down by at least 1% (the 2% GST increase element will be passed to consumers) and like we have posted before, the refinery margins should be very healthy since all the major maintenance have been done.. 


now back to pure defensive dividend play for us locals... where is the max price to take advantage of dividend payments?  I say 4.60 (which if it is ex dividend mean a PE of a healthy 8.3) and because the 35 cents gain after 3 months translate to 30.4% pa. and if we still think the PE should be 8, which means a fair price of 4.43, then the earnings would be 17cents the gain of which for 3 months translate to 3.7% pa, much better than putting your money in the bank.  So that is the max "loss" for this stock or worse chinkiasu position?  so why wait???? 


dear  "Sifus", do pls check my reasoning and calculations.... i am suffering from jetlag.. 
 

 

this may well be the case with this counter.....  we just got no choice but wait.. 


However, the fact is this counter is really value for money.. the "sifus" out there: pls correct me if I am wrong in my reasoning: 


assuming the EPS is a constant 0.5538, and if the PE, that I think is good for this share, is 8, i.e for every dollar invested I get a return of 12.5% pa, the price of this share should be $4.43 ex dividend.  At the current price of $4.46 factoring current dividend, the price of this share should be approx $4.79. 


Right now if I just go for dividend play, for every $4.46 I will get 0.35 in three months i.e 32% pa (i.e assuming XD price is $4.46). If I think the ex dividend price is $4.43, then netting of the "loss of 3" cents my just dividend play will yield me about 28% pa .


How not to chiong?


o