Straits Times Index   

STI to cross 3000 boosted by long-term investors

Infrastructure was a theme I mentioned many times before.

 

From what I have underlined you should know what stock to look at in our local market. 

Strategy

�� Global investment environment to remain tough in 2H08 - no thanks to strong oil prices, uncertain US credit and housing market outlook, fears of more price caps on key inputs and stubborn inflation in China. These negatives have speeded up correction of China stocks.

�� Both H- and A-shares are bottoming out, supported by undemanding valuations, still-solid economic performance and expected moderation in CPI.

�� Expect supportive measures from Beijing in run-up to 2008 Olympics, possibly triggering mini rally that could lift the HSCEI to 15,500 in 3Q08.

�� Macro headwinds and possibility of more earnings downgrades for 2008 will keep market volatile in 4Q08. Worst-case downside for the HSCEI is 11,500 (11x 2009 projected

earnings).

�� China stocks should stage comeback in 2009 with Beijing’s ability to control inflation and maintain economic growth, along with recovery in corporate earnings. We have

identified two investment themes – massive rail investment and continued urbanisation, which should work well in both 2H08 and the next bull market.

�� OVERWEIGHT banks, insurance companies, consumer, coal, metals and agriculture, MARKET WEIGHT property, shipping and oil & gas sectors and UNDERWEIGHT telecoms, power and power equipment sectors.

�� Top stock picks are China Dongxiang, China Merchants Bank, China Mobile, China Railway Group, China Shenhua Energy, Sinopec, Golden Eagle, Hidili, Ping An Insurance and NWS. SELL Harbin Power and Lianhua Supermarket.

 

In the medium term, we have identified two investment themes which are

likely to work well in the next bull cycle. The first theme is urbanisation. This

theme worked well in the last cycle and many related sectors – such as retailers,

food & beverage, housing and financial stocks – experienced a major re-rating.

The sharp pullback in 2008 provides a great opportunity to accumulate this

group as urbanisation is likely to continue in the years ahead. However, investors

have to focus on companies that have strong pricing power and are able to pass

on cost increases to customers. The second theme is massive rail investment.

As a result of the bottlenecks in the railway transportation system, the central

government will speed up investment in the railway network in 2008 – 2010,

which provides enormous opportunities for construction companies, equipment

makers and railroad operators. Our 2009 year-end target for the H-share index

is pegged at 19,000, which represents 18x our estimate for 2009

 

think LKH SP has been changed to LKH. go check it out

simonking      ( Date: 02-Jul-2008 18:15) Posted: Hai to any Master or Sifu, got 1 q to ask. Like a share : LKH sp.  had been delisted , all the share holding by invester will be gone forever or got any share payment back to invester? Thanks .

 

She is one of the BB....LOL

 

Hi elfie,

You're certainly very well informed about BB movements. Where do you get your info from? 

 

Hai to any Master or Sifu, got 1 q to ask. Like a share : LKH sp.  had been delisted , all the share holding by invester will be gone forever or got any share payment back to invester? Thanks .

 

foreign BBs are leaving/have left the market: MS, merril, GS, citi have consistently churned and now sold out of STI already.

local BBs are mostly out of action: some of them got burnt on some of the speculatives.

ie, don't expect recovery in the S-shares anytime soon.

those in chinaenergy be careful pls. a boutique fund has been selling it. Was surprised to see its name up actually; had to dig up info on it. never saw it before.

 

i love the way the markets plays those who were bullish this morning when market was up..

ozone2002      ( Date: 02-Jul-2008 09:38) Posted: STI up ah...put warrant play again...muhahaha

 

can see some light now as HSI now is -397 as compared to 501 an hr earlier. STI responded to clock at -2..07 now. STI will stay above 2900 till close if no further sell down.

2morow is T+3 since Mon, more sell down may happen if DJ tonite don't show well and CO burst to new price height.

 

struggling to stay afloat 2900 level...

 

folks , whats the implication of sti falling 2900 ??

 

may see more sell down during show time later. now easten hemisphere markets are all red. HSI down half k now. big wok loh.

 

Oh no...break thru 2900 level...

 

Look like a bull trap this morning...STI is threading negative path now....

either sell to strength or siam....

 

Agreed.

Note also 2922 resistance still holds. Tested 2923, but not broken.

Unless some magical chiong in USD or drop in oil price below $130 materialises, or earnings reports come out far better than expectations in the upcoming season, don't expect any strong bull.

 

singaporegal      ( Date: 02-Jul-2008 10:44) Posted: Be cautious.... it may be a dead cat bounce in progress today.  I don't hear any news that's worth cheering about.

 

HSI drops below 250 and SHI up 40. STI still very quiet, vol traded poorly .58b.

Will off the table and go for lunch leow. Cheers.

 

yoh! HSI not syncronises with SHI leh. SHI on red since 26 Jun. Today, as now, rebounded 14.5pts.

STI vol now is .52b after 2 hrs of trading. look like it will not hit 0.8b by end of the day.

yes cautious is the word.

 

See how STI has been stuck below 2917 for eons?

HSI's indecision is proving to be a real pain to the mkts.

 

Be cautious.... it may be a dead cat bounce in progress today. 


I don't hear any news that's worth cheering about.

 

minor tech rebound early the morning owing DJ minor rebound last nite. heng CO only up 97cts if not below 2900 is not impossible leow. AK guess today's gain will not sustain above 10, will be in the opposite.

will stay sideline in the morning and may be acc SPC in the pm.

KepCorp jinx ah, so many problems.