market view

Market views form Money Morning:

- shale gas to enable US to become energy self sufficient, perhaps also for UK

- Andy Xie doesn't believe in the China rebound

- Italy is a better buy than britain

- Iskandar Johor is like Shenzhen in 1979

- Japan is reaching a tipping point

ICAP dual-listed global fund

So ICAP is planning one, a world's first for closed-end fund.

The other country to be listed is yet to be known.
My wild guess: ermmm... ok, how about Singapore?
This is truly a wild guess. My only rationale is it's much more difficult to do it anywhere else than our good old nearby neighbour.

BTW, TTB sees light at the end of the European tunnel in maybe half-year's time. Ferrari, anyone?

I hope TTB flies in more of his lovely overseas staff in next AGM. At least to make up for just giving us a mug!!!

ICAP AGM 2012

Latest news is that the controversial trio  did not get voted in by a large majority (87%). I did not stay back for the results because we had to wait like 2 hours for it. The registrars could have done better.

While my support is with Tan Teng Boo, here is one thing I would like to point out: He is always saying he keeps cash to wait for that moment he can get a bargain. But, in 2009, during the depths of the global financial crisis, what did he do with the pile of cash? Based on the annual reports, not much. Wasn't there cheap enough bargains then?

I have bought into ICAP around $2.60 back when it was trading at a premium, and another batch around $1.95 a couple of years ago. So I sold one batch at $2.50 to hedge myself. If price drop I can buy back cheap, if price increase to NAV I will realise the profit for the other batch.

I had remind myself
1. Do not fall in love with your stocks (I believe this is from Warren Buffett too? Or Ben Graham?)
2.  Bulls and Bears make money, Pigs get slayed.

investment idea

investment ideas from Moneymorninig:
-short AUD (China slowdown)
-Mexico  (China slowdown)

rubber outlook

Rubber is poised to drop as sustained supplies from Southeast Asia and falling demand from China’s tiremakers push stockpiles to match their record at Qingdao port, the main shipment hub, an industry executive said.
Global natural-rubber supply will exceed demand for a third year in 2013, according to RCMA Commodities Asia Group in Singapore. Production will top usage by 299,000 tons, from a surplus of 321,000 tons this year and 4,000 tons in 2011, according to Chief Executive Officer Chris Pardey, a former commodities trader at Cargill Inc. and Noble Group Ltd.

[Source:Bloomberg news]

investment ideas

from MoneyWeek:
-Greater Mekong

KLCI to grind its way up

Fund manager Mr. Chen Fan Fai (of Kenanga Investment) sees KLCI grinding its way up for the rest of the year. Speaking at the Fundsupermart investment seminar in KL today, he prices the market as more or less fairly valued at 15x PE, 2.2 PBV, with dividend yield around 4 %. He is cautious of the debt crisis in Europe and slowing down of US and emerging economies. If and when the endgame comes in Europe (e.g. some countries leaving the union), perhaps in the next year or two, this would result in a financial contagion causing the market to fall off the cliff.  His funds are positioned with risk management by seeking shelter in defensive stocks and presently holds 20% in cash. The sector he favors include consumer, healthcare and reits. He also foresees some weakness when the general elections are announced due to the uncertainty, which will be compounded if the opposition were to win. Award-winning Chief Investment Officer at AmInvestment Ms. Goh Wee Peng also sees a challenging time ahead. OSK's Mr. Ho Seng Yee recommends investor include global emerging markets bond fund in their portfolio to achieve a long term equity-like returns with bond-like volatility.

*most benchmarks used by unit trust funds are price indices which do not include dividend returns. Thus the returns are actually less. For example, a KLCI index should be added around 3% per annum to reflect the true returns. This means if a fund underperforms the KLCI index, the underperformance is actually worse as the dividend yield has not been included in the index.

coal, India

Coal is the goal
Of the BRICs, India

market views

-we favour pharmas (strong FCF, low correlation to global GDP),  telecomms (high yield, EM growth), IT (dividend hikes)
- financials in Europe (well capitalised and low PE)
Gary Motyl (Templeton Global Equity Group)

- equities will fall 50%, stay short between early 2012-late 2013
- safety in bonds
- favours healthcare stocks and EM (accumulate after 2013 or 2014)
- deflationary decade ahead

- China is the last great bubble, of which bursting will cause global deflation and EM downturn
Harry Dent (The Great Crash Ahead)

-oil could fall basedon fundamentals (but watch Iran)
- industrial metals set for fall
-expect more panic in Europe as Spanish house prices tumble
John Stepek (MoneyWeek)

market view

Indian stocks are cheap right now, especially smaller-cap stocks
- DailyWealth

Singapore Stock Market is the World's Biggest Bargain
- Martin Hutchinson, Money Morning

political risk in the Middle East has increased significantly with war between Iran and Israel “almost inevitable”, and precious metals and equities investments offer some safety.
-Marc Faber

our copper/oil indicator is sending out a warning signal that world equity indices could soon be heading south
- David Stevenson, The Fleet Street Letter

Japanese stocks are set to soar
-James Ferguson, Moneyweek

Spain is the next big problem for the eurozone
- John Stepek, Moneyweek

market view

SP500: 55dma crosses down through the 21dma - sell
for now the trend is up

For now the bond market is telling me that the inflation trade - or that risk - is back on. That means that cash is not the place to be, but assets - be it gold, equities or commodities - are.

-Dominic Frisby, Money Morning

investment ideas

Emerging Markets dividend stocks - WisdomTree Emerging Markets High Yielding Equity ETF (NYSE: DEM).
-Martin Hutchinson, Money Morning


"war in the region might persuade Iran to shut down the Strait of Hormuz, something it’s threatened several times before. As 40% of the oil barrels shipped around the world has to travel through the Strait, crude prices could be sent skyward."
-Matthew Partridge, Money Morning

when looking for safe haven, Yen becomes strong
When Yen is weak, Japanese stocks become strong
Japanese stocks are cheap
-John Stepek, Editor, MoneyWeek


Canada’s house price bubble is set to burst
Short the Canadian dollar
A huge drop in demand for commodities seems well underway
Short the Austalia dollar
-David Stevenson, Money Morning

India is the place to be in 2012
-Cris Sholto Heaton

market view

- China slowing down

- weaker British pound

David Stevenson, Associate editor, MoneyWeek 

- India
- junior gold stocks
- silver
John Stepek, Editor,MoneyWeek

market view

- move from emerging market currencies to dollars
- keep in Indian currencies if you must
- buy gold
Merryn Somerset Webb, Editor-in-chief, MoneyWeek


- oil prices to fall
- Europe and Japan is looking cheap
- short AUD
John Stepek, Editor, MoneyWeek

- gold price $1900 end of 2012, or 2013
Dominic Frisby



2012  themes:
attractive - treasury bonds, quality dividend stocks, small luxuries, consumer staples and foods, dollar against euro/aud/canadian, healthcare providers, rental apartments, productivity enhancers,  north american energy
unattractive - developed country stocks, home builders, house prices, consumer discretionary, consumer lenders, banks, junks bonds, emerging country bonds, emerging market stocks, commodities price, old tech capital equipments producers
Gary Schilling