• Some glimmers of hope… Rays of hope are permeating the semiconductor
industry, which probably saw most of the bad news in 1QCY09. Global chip sales
improved slightly in Mar 09 with a 30.0% yoy decline compared with a 30.1% yoy
fall in Feb 09. The book-to-bill ratio has ticked up with preliminary Mar 09 numbers
hitting 0.61x, up from Feb 09’s abysmal 0.47x. Finally, utilisation rates have scraped
bottom as some production facilities have been shuttered and inventory control is
being exercised. The end-user markets appear to have troughed, with PC and
handset sales probably hitting the bottom. Furthermore, trade credit is now
normalising. That said, stabilisation does not equate to a recovery and we believe
that restocking activity as inventory runs low is the primary factor in the improving
outlook. We still expect 2009 to be a difficult year where the typical seasonal pick up
in 3Q may not materialise given the current re-stocking activities.
• …but no full-blown recovery until 2010. We argue that a true recovery will only
take root when the global economy begins to move upwards. A meaningful and
sustained recovery will only take place when consumer sentiment and spending
spring back to life and cause ASPs to start rising. We believe that a more
convincing uptrend will take hold only from 2H10 onwards.
• Global economies to start stabilising towards year-end. Our economists believe
that the world economy will feel the full impact of the global financial crisis this year.
Although the process of sorting out the financial system will take time and
resources, the cumulative effects of sizeable fiscal stimuli and aggressive monetary
easing globally will work to provide some stability. Recent global indicators are less
negative. Considering the extremely low base this year, global growth should pick
up in 2010 but will probably fall short of its long-run average growth rate of 3.7%.
• Upgrade sector to TRADING BUY. While the fundamentals for the sector remain
uncertain, we think that downside to share prices is limited as valuations are still
below trough levels. We upgrade the sector from Underperform to TRADING BUY.
Furthermore, in line with our market strategy, we think that investors’ risk appetite is
increasing and higher beta plays such as semicon should be in vogue. Investors
should start picking up semicon stocks ahead of the recovery of the sector as
historically, the share prices for both MPI and Unisem cratered 13-18 months before
the upturn of the sector. Sector catalysts include a) a sooner-than-expected revival
of end-user demand and b) a faster-than-expected economic recovery.
• Upgrade Unisem and MPI to Trading Buy. In tandem with the sector upgrade, we
upgrade MPI and Unisem from Underperform to Trading Buy. We raise our target
prices for both after cutting our discounts to their 5-year historical average by 30-
60% pts to 20-40% for Unisem and MPI respectively. We assign a lower discount to
Unisem, our top pick, as its higher liquidity and beta make it a better play on a
market rebound. Re-rating catalysts include a) qoq improvement in earnings, b)
revival of end demand and c) the higher betas on offer.
The document provides a quarterly review and outlook for Jefferies TMT Equity Capital Markets group. Some key points:
- The markets stabilized in Q1 2010 with the S&P 500 and NASDAQ up around 5%, and TMT indices outperforming.
- Investor appetite increased as valuations improved, leading to growth in the IPO pipeline and M&A activity.
- Several successful TMT IPOs priced in Q1, with offerings across sectors receiving strong demand. The IPO pipeline continues growing.
Infosys Technologies reported modest revenue growth of 2.3% sequentially in Q3 2011, below expectations, due to seasonal weakness in volume growth of 3%. However, margins remained flat despite currency headwinds due to improved pricing. While guidance was raised marginally, the company expects Q4 revenues in the range of Rs 7157-7230 crore and full year revenues of Rs 27,408-27,481 crore.
The document provides a summary and analysis of Malaysian companies' 1Q09 earnings results. Some key points:
- The results season was not as bad as feared, with fewer companies missing expectations than in previous quarters. EPS forecasts for 2009 and 2010 were surprisingly raised rather than cut.
- Six sectors disappointed expectations while two performed above. The revision ratio improved to 0.6x, indicating less negative earnings momentum.
- The worst could be over as future quarters may see more balanced results and fewer EPS cuts. However, EPS growth may not turn positive again until 3Q09.
- During the results period, the analyst raised forecasts for eight companies and lowered forecasts for 23 companies.
1. The document proposes an absolute return strategy called Directional Long-Short Strategy (DLSS) that aims to generate positive returns by going long and short on emerging market equities.
2. Backtesting shows the strategy achieved average annual returns of 510% when applied to the Russian stock market between 2005-2010, significantly outperforming a simple buy-and-hold approach.
3. The strategy aims to expand into other emerging markets like China, diversifying country risk and increasing liquidity, while maintaining high returns. This would involve researching other markets' structures and trading suitable instruments like ETFs.
- YES Bank reported net interest income of INR 3.48 billion for Q4FY11, up 43% year-over-year and 8% quarter-over-quarter, ahead of estimates. Margins remained stable at 2.8% against expectations of a 10 basis point decline.
- Business growth rebounded with deposit growth at 16.4% quarter-over-quarter and loan book growth at 10.4% quarter-over-quarter. Earning assets grew by around 15% quarter-over-quarter.
- Net profit for Q4FY11 came in at INR 2.03 billion, up 45.2% year-over-year and 6.4% quarter-over-quarter,
Current Conditions Index - Dec16 2009 LplMattGorham
The LPL Financial Research Current Conditions Index (CCI) is a weekly index that tracks the current economic environment. It is composed of 10 economic indicators, including initial jobless claims, business lending, retail sales, and stock market volatility. The CCI is tracking toward LPL's base case forecast for 2009, which anticipates a recession in the first half of the year followed by economic recovery in the second half. The CCI provides a fact-based measure of current conditions to help assess the likelihood of different economic scenarios.
• 1Q09 adex data point south. Although total gross adex for Jan-Mar 09 shrank
3.9%, it was better than the 20% contraction seen after the 1997-8 Asian financial
crisis. The worst performer was the newspaper segment which saw a 9% decline
compared with a 3.7% growth for TV adex. But ad volume visibility extends only 2-3
months out, leaving question marks over advertising commitments for 2H09.
• Downbeat expectations. The lacklustre adex showing in Jan-Mar 09 ties in with
the 1Q09 results reported by Media Prima and NSTP. It also confirmed the
generally bearish expectations of the media companies since the beginning of the
year, with a few being taken by surprise by the magnitude of the deceleration. Our
previous 2009 projection of an adex range of 1.1% contraction to 6% growth does
not hold and we now revise it to 6-10% adex contraction.
• Newspapers at risk. Fundamental risks could be more severe for newspaper
companies as newspaper adspend continues to take a hit from depressed GDP
data. Although there are signs of resilience in the Malay newspaper segment, this
does not mean total immunity against the potential worsening of adex volume in the
coming months. The top Malay newspaper NST’s Harian Metro is the main winner
but this is not expected to help the group much given that Harian Metro is a small
contributor.
• Indicators leading at inflection point? We concur with our economic research
team’s view that the CLI could hit the trough in Jun-Aug 09 and that the economic
recovery from the trough is likely to take at least 12 months given the severity of the
current global crisis. Advertisers should reposition their spending for a gradual
recovery from 2010. Historical trends suggest that adex in Malaysia should recover
in 1Q2010 based on a 3-6 months’ lag period.
• End-2009 a good potential entry point. We believe end-09 will be a good re-entry
point for exposure to selected media stocks as positives such as earnings visibility,
improved sentiment of advertisers, cheaper newsprint and gradual economic
recovery are likely to kick in as catalysts then. We will monitor closely the situation
on the ground and official stats but so far, adex for the months ahead appears to be
southbound. The share prices of media companies have recovered somewhat since
the start of the year and we fail to see any additional near-term re-rating catalysts.
• Staying NEUTRAL on media sector for now. In view of this, we maintain our
NEUTRAL stance on the media sector but recommend investors to switch to Astro
(Trading Buy) which has very little exposure to adex and minimal downside risks to
its Malaysian operations where the subscriber trend could turn out to be resilient.
We remain NEUTRAL on Media Prima (MPR MK), Star Publications (STAR MK)
and Media Chinese International (MCIL MK). NSTP is kept as an
UNDERPERFORM
The document provides an advisory newsletter with updates and outlook on the Indian economy, equity markets, debt markets, inflation, currency and commodity markets, real estate, and sector outlook. Key points from the document include:
- Indian equity markets declined sharply in January 2011 driven by FII selling and domestic investor uncertainty over inflation and policy reforms.
- Inflation remains high in India and other emerging economies, which may lead to further monetary tightening in India.
- The economic growth outlook for India and other regions like the US, Europe, Japan, and China remains positive.
- Debt markets moved as expected with interest rate hikes, but inflation may not be over yet and further hikes are expected in
The document provides a quarterly review and outlook for Jefferies TMT Equity Capital Markets group. Some key points:
- The markets stabilized in Q1 2010 with the S&P 500 and NASDAQ up around 5%, and TMT indices outperforming.
- Investor appetite increased as valuations improved, leading to growth in the IPO pipeline and M&A activity.
- Several successful TMT IPOs priced in Q1, with offerings across sectors receiving strong demand. The IPO pipeline continues growing.
Infosys Technologies reported modest revenue growth of 2.3% sequentially in Q3 2011, below expectations, due to seasonal weakness in volume growth of 3%. However, margins remained flat despite currency headwinds due to improved pricing. While guidance was raised marginally, the company expects Q4 revenues in the range of Rs 7157-7230 crore and full year revenues of Rs 27,408-27,481 crore.
The document provides a summary and analysis of Malaysian companies' 1Q09 earnings results. Some key points:
- The results season was not as bad as feared, with fewer companies missing expectations than in previous quarters. EPS forecasts for 2009 and 2010 were surprisingly raised rather than cut.
- Six sectors disappointed expectations while two performed above. The revision ratio improved to 0.6x, indicating less negative earnings momentum.
- The worst could be over as future quarters may see more balanced results and fewer EPS cuts. However, EPS growth may not turn positive again until 3Q09.
- During the results period, the analyst raised forecasts for eight companies and lowered forecasts for 23 companies.
1. The document proposes an absolute return strategy called Directional Long-Short Strategy (DLSS) that aims to generate positive returns by going long and short on emerging market equities.
2. Backtesting shows the strategy achieved average annual returns of 510% when applied to the Russian stock market between 2005-2010, significantly outperforming a simple buy-and-hold approach.
3. The strategy aims to expand into other emerging markets like China, diversifying country risk and increasing liquidity, while maintaining high returns. This would involve researching other markets' structures and trading suitable instruments like ETFs.
- YES Bank reported net interest income of INR 3.48 billion for Q4FY11, up 43% year-over-year and 8% quarter-over-quarter, ahead of estimates. Margins remained stable at 2.8% against expectations of a 10 basis point decline.
- Business growth rebounded with deposit growth at 16.4% quarter-over-quarter and loan book growth at 10.4% quarter-over-quarter. Earning assets grew by around 15% quarter-over-quarter.
- Net profit for Q4FY11 came in at INR 2.03 billion, up 45.2% year-over-year and 6.4% quarter-over-quarter,
Current Conditions Index - Dec16 2009 LplMattGorham
The LPL Financial Research Current Conditions Index (CCI) is a weekly index that tracks the current economic environment. It is composed of 10 economic indicators, including initial jobless claims, business lending, retail sales, and stock market volatility. The CCI is tracking toward LPL's base case forecast for 2009, which anticipates a recession in the first half of the year followed by economic recovery in the second half. The CCI provides a fact-based measure of current conditions to help assess the likelihood of different economic scenarios.
• 1Q09 adex data point south. Although total gross adex for Jan-Mar 09 shrank
3.9%, it was better than the 20% contraction seen after the 1997-8 Asian financial
crisis. The worst performer was the newspaper segment which saw a 9% decline
compared with a 3.7% growth for TV adex. But ad volume visibility extends only 2-3
months out, leaving question marks over advertising commitments for 2H09.
• Downbeat expectations. The lacklustre adex showing in Jan-Mar 09 ties in with
the 1Q09 results reported by Media Prima and NSTP. It also confirmed the
generally bearish expectations of the media companies since the beginning of the
year, with a few being taken by surprise by the magnitude of the deceleration. Our
previous 2009 projection of an adex range of 1.1% contraction to 6% growth does
not hold and we now revise it to 6-10% adex contraction.
• Newspapers at risk. Fundamental risks could be more severe for newspaper
companies as newspaper adspend continues to take a hit from depressed GDP
data. Although there are signs of resilience in the Malay newspaper segment, this
does not mean total immunity against the potential worsening of adex volume in the
coming months. The top Malay newspaper NST’s Harian Metro is the main winner
but this is not expected to help the group much given that Harian Metro is a small
contributor.
• Indicators leading at inflection point? We concur with our economic research
team’s view that the CLI could hit the trough in Jun-Aug 09 and that the economic
recovery from the trough is likely to take at least 12 months given the severity of the
current global crisis. Advertisers should reposition their spending for a gradual
recovery from 2010. Historical trends suggest that adex in Malaysia should recover
in 1Q2010 based on a 3-6 months’ lag period.
• End-2009 a good potential entry point. We believe end-09 will be a good re-entry
point for exposure to selected media stocks as positives such as earnings visibility,
improved sentiment of advertisers, cheaper newsprint and gradual economic
recovery are likely to kick in as catalysts then. We will monitor closely the situation
on the ground and official stats but so far, adex for the months ahead appears to be
southbound. The share prices of media companies have recovered somewhat since
the start of the year and we fail to see any additional near-term re-rating catalysts.
• Staying NEUTRAL on media sector for now. In view of this, we maintain our
NEUTRAL stance on the media sector but recommend investors to switch to Astro
(Trading Buy) which has very little exposure to adex and minimal downside risks to
its Malaysian operations where the subscriber trend could turn out to be resilient.
We remain NEUTRAL on Media Prima (MPR MK), Star Publications (STAR MK)
and Media Chinese International (MCIL MK). NSTP is kept as an
UNDERPERFORM
The document provides an advisory newsletter with updates and outlook on the Indian economy, equity markets, debt markets, inflation, currency and commodity markets, real estate, and sector outlook. Key points from the document include:
- Indian equity markets declined sharply in January 2011 driven by FII selling and domestic investor uncertainty over inflation and policy reforms.
- Inflation remains high in India and other emerging economies, which may lead to further monetary tightening in India.
- The economic growth outlook for India and other regions like the US, Europe, Japan, and China remains positive.
- Debt markets moved as expected with interest rate hikes, but inflation may not be over yet and further hikes are expected in
The document discusses the costs of financial procrastination and the benefits of starting to save for retirement early. It provides an example showing that an investor who invests $3,000 annually for 30 years, earning a 5% average annual return, will end up with $199,317. In contrast, an investor who invests the same amount for only 20 years will have an ending balance of only $99,198, despite investing the same total amount of $60,000. Starting retirement savings earlier allows investments more time to benefit from compound growth and earn higher returns over the long run.
The document is a summary of WEG's Q3 2009 conference call discussing financial results. It notes that while the downturn was swift, recovery is gradual. Gross revenues were down 14% year-over-year due to impacts across markets, though margins are recovering faster through improved efficiency. Quarterly highlights show decreases in gross operating revenue but increases in gross margin and net income. Cost reductions and mix improvements helped profitability. Cash generation was strong and debt levels decreased. Capacity expansion investments continued with strict controls to maximize returns. Contact information is provided for further questions.
Yes Bank has experienced strong growth since its inception. It aims to continue growing loans and deposits at above industry rates through aggressive branch expansion and increasing penetration in corporate and retail segments. The bank's loan book has grown at a CAGR of 52.9% over the last 5 years, higher than industry average. The analyst expects loans to grow at a CAGR of 28% from FY11-13. However, maintaining high growth rates may require changes to prioritize improving key metrics like cost of funds. Overall, the report is bullish on the bank's business momentum continuing to drive strong performance.
The document summarizes that most airlines are unprepared for the next economic recession, as traditional strategies for surviving downturns like taking on debt and lowering wages will not be available. It recommends that airlines broaden their strategies to include consolidation, strategic spinoffs, productivity increases, and simplifying their value propositions. Acting early to implement new recession-savvy strategies could help airlines improve their competitive position and performance during the economic downturn.
Be realistic, be selective. We believe this market rally has pushed
valuations to the point where growth expectations have reached
implausible levels. In fact, profits have just begun to turn down. We are
not overly bearish – our Buy list is longer than our Sell list – but we
caution that optimism over growth can disappear as quickly as it
appeared. Domestic factors, particularly political developments, may
be a positive catalyst.
Profit recession has just begun. Industrial production peaked in
January 2008, but profits only began a broad-based decline in 1Q09.
Within our coverage, 63% of the companies that have released 1Q
earnings reported lower sequential quarterly net profits. In seven
sectors, our entire coverage list suffered profit contractions. This
suggests the recession in profits has just begun.
Market valuation implies an optimistic view of growth. The market
currently trades at 15.2x 2009 earnings, up from 12x earlier this year.
This is only 10% below the previous cycle’s mid-cycle value, but today,
we face growth of -7.7% (2009) and +9.7% (2010), taking market
earnings only 1% higher by the end of 2010 from its end-2008 level.
Market growth expectations seem to be running ahead of reality.
History tells us the bear market isn’t over. Two previous bear
markets over 1981-86 and 1993-98 lasted 57 and 58 months
respectively. It has now been 17 months from the January 2008
collapse. Those bear markets had 22-38 trend reversals of 5% or more;
we have now seen 12 since January 2008. These comparisons suggest
we are, at best, half way through this bear market.
Bet on Prime Minister Najib, but Sell hope. Our top stock picks are
in the construction sector. We expect PM Najib will deliver on the fiscal
spending promises, reinvigorating the construction and building
materials sectors. Our top Sells are stocks where high hopes and
expectations have been built in; where current prices have run well
ahead of both our and consensus target prices.
Politics a positive wildcard. Beyond rapidly executed fiscal packages,
the country’s new leadership could make further changes to longstanding
policies to attract foreign investment and win back broader
support from all Malaysians. These initiatives should be positive for
equity market at least in the short-term.
The document discusses trends in the hospitality industry in 2011. It notes that after years of turmoil, fundamentals have stabilized and the industry is recovering, though unevenly by region and segment. Emerging markets remain a key source of growth. While performance is improving, operators are proceeding with caution and focusing on capital strategies. Financing is slowly returning primarily to top assets in major markets, and transaction activity is expected to increase as the recovery strengthens.
The document provides an overview of CMC's business model and current market conditions for the 4th quarter of 2008. It summarizes CMC's key business segments, current projects, liquidity position, financial statistics, and discusses challenges in the global steel market including falling prices, reduced demand, and excess inventory. It analyzes performance and outlook for CMC's Americas and international operations.
The document provides an economic and market outlook update for May 2012. It notes that while short term triggers were confusing, the medium term outlook has predictably improved in India and globally. It expects the recent interest rate cut by the RBI to eventually reduce lending rates and boost growth. The document recommends a combination of strategic long term investing and tactical shifts between broad market and stock specific investments. It provides sector views, noting positives for banking, autos, and metals while remaining neutral on telecom, IT and cement.
Dear All,
Please find attached a note by Mr.Prashant Jain (Fund Manager – HDFC Mutual Fund) titled "ITS TOMORROW THAT MATTERS ".
Attached is a brief outlook of the market by the HDFC FUND MANAGER.
- Indian markets fell for a second consecutive session as RBI's measures to attract foreign investment fell short of expectations. Weakness in world stocks also hit sentiment.
- Tata Steel fell on a credit downgrade while Reliance Industries rose after a ratings affirmation. Market breadth was marginally strong with small and mid caps outperforming.
- Asian markets are trading lower led by declines in Japan and weakness is expected to pull down Indian markets at open as well due to volatile global conditions ahead of key European meetings.
WEG's revenue grew 15.6% in 1Q09 compared to 1Q08, though margins declined as cost increases were not fully passed to prices and demand decreased with tougher market conditions. While the economic outlook remains uncertain, WEG maintained its diversified market presence and competitive position. Capital expenditures continued to expand production capacity according to observed demand trends.
Be cautious into 3Q. 1Q09 results of the six banking stocks we cover
were generally in line, with combined net profit down 2.1% QoQ and
13.1% YoY. However, the weak 1Q09 GDP suggests growing stress in
system loans over the coming months. We remain cautious on banks’
profits, especially from 3Q09. Underweight the sector.
1Q down a sharp 13.1% YoY. Other than AMMB’s positive surprise,
results were generally in-line. The combined net profit of our banking
universe was flattish QoQ but fell a sharp 13.1% YoY on lower treasury
and FX income and higher loan loss provisions. Net interest income
expanded, but the weak equity market continued to affect brokerage
income, which contracted for the 5th to 6th consecutive quarter.
Some signs of stress. Domestic loans continued growing at most
banks. QoQ loan growth at the major banks (Maybank, CIMB Bank and
Public Bank) outpaced system growth. Some loan segments, however,
have begun showing stress. Domestic NPL saw upticks in the
consumer (mortgage, autos) and working capital segments. Net NPL
ratios continued to trend down due to the expanded loans base.
Earnings to contract. There were no major revisions in our individual
earnings forecasts except for AMMB (FY09: +16%, FY10: +7%). Our
combined net profit forecast was upgraded by a marginal 0.1% for 2009
and 0.7% for 2010. We expect sector earnings to contract 9.9% in
2009, before recovering to 6.8% growth in 2010 (previously -10.1%,
+6.1% respectively). This excludes further impairment in the value of
long-term investments, merger costs and other one-offs.
Asset quality concerns. 1Q09 GDP (-6.2% YoY, -7.7% QoQ) should
be the weakest, suggesting that the worst may be over. However, we
expect economic recovery to be slow, with real GDP to return to the
3Q08 high only in 4Q10. There is a 3-6 month interval from GDP trough
to NPL peak. Hence, banks are set to report weaker profits on rising
NPLs and higher credit charges from 3Q09.
Mainly Sells. Against regional peers, the larger Malaysian banks are
pricey. The current liquidity driven market has pushed valuations up but
prospects for a strong economic recovery stay hazy. Sell into strength.
This document provides information on prioritizing product backlogs for profit. It discusses identifying market needs through research and expressing needs to stakeholders. It emphasizes the importance of prioritizing based on three core groups: stakeholder alignment, strategic alignment, and driving profit. Stakeholder alignment involves prioritizing based on input from customer personas, partners, and internal teams. Strategic alignment means showing how the backlog aligns with the company's strategy and roadmap. Driving profit refers to prioritizing features that increase revenue or reduce costs based on the business model. Techniques for prioritizing with stakeholders like innovation games and shared spreadsheets are presented.
A milestone for the sector. We take a positive view of this news as it is a significant
milestone for the water sector. The timing of the award was a slight surprise as we
had expected the recent cabinet reshuffle to result in a slight delay for the project
award following the award of the letter of intent (LOI) to the Shimizu consortium a few
months back. The water transfer project is the first mega job to be rolled out under the
9MP after the announcement of the second stimulus package in Mar 09. Our channel
checks indicate that the tunnelling job will move fairly quickly from here on and the
notification to start work should be received in a matter of days. Once site possession
is obtained, major resource mobilisation will be underway, including Shimizu’s
positioning of the tunnel boring machine (TBM) near the Titiwangsa range. We think
that actual work could start within a month, suggesting a mid-2014 timeframe for
completion of the project.
No details on scope of works. Details of the scope of works are not available. IJM’s
share of works based on its 20% stake works out to RM260m or just RM26m profit
enhancement assuming a 10% pretax margin. We are not revising our earnings
forecasts as the RM260m share of works is already part of our assumption for new
contracts for IJM. That said, the award of the project raises IJM’s profile as it is one of
the main contractors of the country’s largest water infrastructure project.
Focus will now shift to the remaining major components of the water transfer project,
i.e. the Kelau dam and the Langat 2 water treatment plant. We expect the feasibility
studies for both to be concluded sometime in early 2H09, making way for the
tendering process. We gather that the Shimizu consortium is eyeing the Kelau dam
job which has an estimated value of roughly double the tunnelling job. This suggests
that IJM’s potential share of works could be more than RM500m.
Blip, Spurt, Dash: How to ‘A-Ha!’ Yourself and Your Biz With the Social Web (...Epiphanies, Inc.
The "Blip," the "Spurt," and two "Dashes" that define what social media really looks like in our brave new world. From the emotional currency of the Blip, to the productive energy of the Spurt, and the defining Dashes of our days and inspirations, Lani Voivod, co-owner and Ally in Possibility at Epiphanies Inc., brings together our real-world lives and our social media lives in a powerful new way.
The document discusses ethics and respecting others with different views. It references acronyms used in digital communication and asks if a decision could still have a mother's support after explaining the reasoning. The number of days in 78 years is also listed.
Connect With Passion - New Hampshire Young Professionals Network (YPN) SummitEpiphanies, Inc.
You can use social media to talk yourself into doing just about anything, but why would you? The oldest social media network of our day that's still an active Top-10 platform is LinkedIn, and it won't turn 10 years old until December 2012.
The gold rush era of social media seems to be ending - now, it's become about the larger picture of "social business." That means many of the very basics of marketing and branding need to be rediscovered and put back to work in the social space.
Businesses and organizations need to refresh their ability to tell compelling brand stories, across multiple communication channels. To connect with passion and emotion. And to do that, today's young professionals need to own and connect with their own passions - personal and professional - in order to be successful in the evolving Digital Age.
This presentation, developed at the request of Stay Work Play for the 1st Annual NH Young Professionals Network Summit, was delivered for representatives of the steering committees of the 11 young professionals networks in the state of New Hampshire. The presentation covers the Hero's Journey storytelling form, the concept of archetypes as a powerful shortcut to emotional brand connection and conversation, and tips for improved brand storytelling.
This document discusses a USPS site concept involving a station. The concept is labeled "USPS Site Concept 2" and focuses on a station model. No other details about the concept or station model are provided in the short 3 line document.
One Type of Loan Causes Small Banks to FailBrian McDaniel
Commercial real estate and acquisition, development, and construction loans contributed significantly to bank failures during the financial crisis. While fair value accounting did not cause failures, traditional accounting practices may have delayed reporting credit losses and charge-offs that did contribute to failures. The FDIC was able to resolve failed banks at the least cost to the deposit insurance fund despite some healthy banks not bidding due to market concentration in only a few areas.
• B-Toto is worth a bet now as i) its core gaming operations remained resilient even
during the post-CNY off-peak period and appear likely to surpass our 6-7% gaming
revenue growth target for FY4/09, ii) 2009’s special draw allocations for all three
NFOs could take place over the next few weeks and iii) there is upside potential to its
6-8% gross dividend yield based on its policy of a minimum payout of 75% if B-Toto
dishes out higher dividends to lend its parent a helping hand.
• Adjusting earnings but implied yields still decent. We raise our FY09-11’s
revenue per draw growth assumptions by 2-4% pts following the stronger-thanexpected
YTD showing. But FY10-11’s bottomline is lowered by 4-5% as we also
raise our blended prize payout assumption from 62-64% to 63-64% to better reflect
the payout trends seen so far. FY09’s numbers are largely intact despite these
adjustments. Even after a 3-5% cut in our FY10-11 DPS projections (unchanged
80% payout ratio), our forecasts still imply a decent yield.
• Reiterate OUTPERFORM. Our DPS downgrades trim our end-CY09 target price
from RM5.95 to RM5.65, based on an unchanged 5% discount to its DDM value. We
continue to like B-Toto for its steady, low-risk topline growth, superior ROEs and
sustainable dividend yields. Being a low-beta stock, B-Toto may fall out of favour in a
rising market. However, we flag the likelihood of bumper dividends over the short
term. This is a potential share price catalyst that underpins our OUTPERFORM
recommendation, along with the normalisation of luck factor and market share gains.
We raise our CPO price assumption to RM2,000/t (from RM1,600/t)
on the current high price of RM2,800/t and YTD RM2,178/t average.
We do not foresee CPO prices staying at current levels beyond 2Q due
to rising 2H production and slowing exports. The present CPO price is
81-123% above its long term historical price in USD and Ringgit
equivalents. EPS forecasts are upgraded by up to more than 100% but
company valuations remain stretched. Maintain Underweight.
Recent CPO price spike unsustainable. We view the recent 40%
spike to the RM2,800/t level from an average of RM1,950/t in 1Q09 as
too fast, too furious. Traders and speculators justified the high price on
tight inventory. We think a significant price correction in 2H is imminent
as inventory is expected to build up on slowing exports and stronger 2H
production. Also, the present CPO price is 81% and 123% above its 30-
year long term historical price in USD and Ringgit equivalents of
USD430/t and RM1,257/t respectively.
Bearish 2H price outlook. CPO production, which has disappointed in
1H09 due to poor weather and tree stress, is likely to rebound strongly
in 2H. Besides production recovery, narrowing palm oil discounts
against competing oils should slow exports. A return of normal weather
in the next planting season for South America, and increased trade
protectionism by the West on palm biodiesel are some of the other
bearish fundamental factors for CPO.
Earnings forecasts upgraded. With CPO price having averaged
RM2,178/t YTD and likely to remain high in 2Q on tight supply, we raise
our CPO price assumption from RM1,600/t to RM2,000/t for 2009-11.
This results in EPS upgrades for plantation companies under our
coverage ranging from 17% to over 100% for 2009-11.
Valuations remain expensive. We rate the sector Underweight.
Valuations remain stretched, especially for IOI and KLK which trade at
20.1x and 16.9x 2010 PER. We downgrade Asiatic to Sell (from Hold)
as the stock has soared 54% YTD and is highly leveraged on CPO
price swings. Sime has been raised to Hold (from Sell). Risks to our
price view are a weaker USD, higher energy prices, and further supply
shocks due to weather anomalies.
Foreign boys not spared a 20% 1Q earnings decline. The combined net profit
of the five major foreign banks in Malaysia fell 19.7% yoy to RM824.6m in 1Q09,
worse than the 14% slide recorded by the local banks. Clearly, the foreign boys
are not spared the impact of the economic downturn, with earnings dents coming
primarily from (1) a 1.3% yoy drop in net interest income, (2) 25% slump in non-
interest income, and (3) 23% jump in loan loss provisioning (LLP).
• Foreign banks’ loan growth trailing local banks’. As expected, foreign banks
recorded slower net loan growth of 3.1% yoy in Mar 09 compared to 12% for
local banks’ domestic lending. The performance of foreign banks was pulled
down by a 6.8% contraction in Citibank’s loan base, due primarily to a drop in
property and business loans. Other major foreign banks registered single-digit
loan growth ranging from 3.3% (for UOB) to 8.7% (for OCBC).
• Higher NPL ratios and credit costs. Against the backdrop of a grim economic
climate in 1Q09, all major foreign banks saw a rise in their net NPL ratios. The
blended net NPL ratio of these five banks increased from 1.68% in Dec 08 to
1.81% in Mar 09, lower than the industry’s 2.2%. The hike in NPL ratios led to a
23% yoy surge in 1Q09 LLP.
• Better performance by local banks. In 1Q09, local banks outperformed their
foreign peers in the areas of (1) net profit – 14.2% yoy drop vs. 19.7% for foreign
banks, (2) non-interest income – down 7.1% yoy vs. 25.3% for foreign banks
despite their higher exposure to poor investment banking income, and (3) NPL
ratios – a few local banks, i.e. Maybank, Public Bank, AMMB and Alliance
managed to contain their NPL ratios while qoq rises were evident for all the
major foreign banks.
• Maintain NEUTRAL. Foreign banks’ poor 1Q09 financial results reflect the
adverse operating environment. We take heart in the outperformance of the local
banks during these difficult times as it suggests that the improvements in local
banks’ operations, especially in the area of risk management, have helped them
to weather the economic downturn. On this note, we are maintaining our
NEUTRAL stance on Malaysian banks as local banks may trump our and market
expectations in countering the slowdown in loan growth and the uptick in NPLs.
Our top pick for the sector remains Public Bank.
The document discusses the costs of financial procrastination and the benefits of starting to save for retirement early. It provides an example showing that an investor who invests $3,000 annually for 30 years, earning a 5% average annual return, will end up with $199,317. In contrast, an investor who invests the same amount for only 20 years will have an ending balance of only $99,198, despite investing the same total amount of $60,000. Starting retirement savings earlier allows investments more time to benefit from compound growth and earn higher returns over the long run.
The document is a summary of WEG's Q3 2009 conference call discussing financial results. It notes that while the downturn was swift, recovery is gradual. Gross revenues were down 14% year-over-year due to impacts across markets, though margins are recovering faster through improved efficiency. Quarterly highlights show decreases in gross operating revenue but increases in gross margin and net income. Cost reductions and mix improvements helped profitability. Cash generation was strong and debt levels decreased. Capacity expansion investments continued with strict controls to maximize returns. Contact information is provided for further questions.
Yes Bank has experienced strong growth since its inception. It aims to continue growing loans and deposits at above industry rates through aggressive branch expansion and increasing penetration in corporate and retail segments. The bank's loan book has grown at a CAGR of 52.9% over the last 5 years, higher than industry average. The analyst expects loans to grow at a CAGR of 28% from FY11-13. However, maintaining high growth rates may require changes to prioritize improving key metrics like cost of funds. Overall, the report is bullish on the bank's business momentum continuing to drive strong performance.
The document summarizes that most airlines are unprepared for the next economic recession, as traditional strategies for surviving downturns like taking on debt and lowering wages will not be available. It recommends that airlines broaden their strategies to include consolidation, strategic spinoffs, productivity increases, and simplifying their value propositions. Acting early to implement new recession-savvy strategies could help airlines improve their competitive position and performance during the economic downturn.
Be realistic, be selective. We believe this market rally has pushed
valuations to the point where growth expectations have reached
implausible levels. In fact, profits have just begun to turn down. We are
not overly bearish – our Buy list is longer than our Sell list – but we
caution that optimism over growth can disappear as quickly as it
appeared. Domestic factors, particularly political developments, may
be a positive catalyst.
Profit recession has just begun. Industrial production peaked in
January 2008, but profits only began a broad-based decline in 1Q09.
Within our coverage, 63% of the companies that have released 1Q
earnings reported lower sequential quarterly net profits. In seven
sectors, our entire coverage list suffered profit contractions. This
suggests the recession in profits has just begun.
Market valuation implies an optimistic view of growth. The market
currently trades at 15.2x 2009 earnings, up from 12x earlier this year.
This is only 10% below the previous cycle’s mid-cycle value, but today,
we face growth of -7.7% (2009) and +9.7% (2010), taking market
earnings only 1% higher by the end of 2010 from its end-2008 level.
Market growth expectations seem to be running ahead of reality.
History tells us the bear market isn’t over. Two previous bear
markets over 1981-86 and 1993-98 lasted 57 and 58 months
respectively. It has now been 17 months from the January 2008
collapse. Those bear markets had 22-38 trend reversals of 5% or more;
we have now seen 12 since January 2008. These comparisons suggest
we are, at best, half way through this bear market.
Bet on Prime Minister Najib, but Sell hope. Our top stock picks are
in the construction sector. We expect PM Najib will deliver on the fiscal
spending promises, reinvigorating the construction and building
materials sectors. Our top Sells are stocks where high hopes and
expectations have been built in; where current prices have run well
ahead of both our and consensus target prices.
Politics a positive wildcard. Beyond rapidly executed fiscal packages,
the country’s new leadership could make further changes to longstanding
policies to attract foreign investment and win back broader
support from all Malaysians. These initiatives should be positive for
equity market at least in the short-term.
The document discusses trends in the hospitality industry in 2011. It notes that after years of turmoil, fundamentals have stabilized and the industry is recovering, though unevenly by region and segment. Emerging markets remain a key source of growth. While performance is improving, operators are proceeding with caution and focusing on capital strategies. Financing is slowly returning primarily to top assets in major markets, and transaction activity is expected to increase as the recovery strengthens.
The document provides an overview of CMC's business model and current market conditions for the 4th quarter of 2008. It summarizes CMC's key business segments, current projects, liquidity position, financial statistics, and discusses challenges in the global steel market including falling prices, reduced demand, and excess inventory. It analyzes performance and outlook for CMC's Americas and international operations.
The document provides an economic and market outlook update for May 2012. It notes that while short term triggers were confusing, the medium term outlook has predictably improved in India and globally. It expects the recent interest rate cut by the RBI to eventually reduce lending rates and boost growth. The document recommends a combination of strategic long term investing and tactical shifts between broad market and stock specific investments. It provides sector views, noting positives for banking, autos, and metals while remaining neutral on telecom, IT and cement.
Dear All,
Please find attached a note by Mr.Prashant Jain (Fund Manager – HDFC Mutual Fund) titled "ITS TOMORROW THAT MATTERS ".
Attached is a brief outlook of the market by the HDFC FUND MANAGER.
- Indian markets fell for a second consecutive session as RBI's measures to attract foreign investment fell short of expectations. Weakness in world stocks also hit sentiment.
- Tata Steel fell on a credit downgrade while Reliance Industries rose after a ratings affirmation. Market breadth was marginally strong with small and mid caps outperforming.
- Asian markets are trading lower led by declines in Japan and weakness is expected to pull down Indian markets at open as well due to volatile global conditions ahead of key European meetings.
WEG's revenue grew 15.6% in 1Q09 compared to 1Q08, though margins declined as cost increases were not fully passed to prices and demand decreased with tougher market conditions. While the economic outlook remains uncertain, WEG maintained its diversified market presence and competitive position. Capital expenditures continued to expand production capacity according to observed demand trends.
Be cautious into 3Q. 1Q09 results of the six banking stocks we cover
were generally in line, with combined net profit down 2.1% QoQ and
13.1% YoY. However, the weak 1Q09 GDP suggests growing stress in
system loans over the coming months. We remain cautious on banks’
profits, especially from 3Q09. Underweight the sector.
1Q down a sharp 13.1% YoY. Other than AMMB’s positive surprise,
results were generally in-line. The combined net profit of our banking
universe was flattish QoQ but fell a sharp 13.1% YoY on lower treasury
and FX income and higher loan loss provisions. Net interest income
expanded, but the weak equity market continued to affect brokerage
income, which contracted for the 5th to 6th consecutive quarter.
Some signs of stress. Domestic loans continued growing at most
banks. QoQ loan growth at the major banks (Maybank, CIMB Bank and
Public Bank) outpaced system growth. Some loan segments, however,
have begun showing stress. Domestic NPL saw upticks in the
consumer (mortgage, autos) and working capital segments. Net NPL
ratios continued to trend down due to the expanded loans base.
Earnings to contract. There were no major revisions in our individual
earnings forecasts except for AMMB (FY09: +16%, FY10: +7%). Our
combined net profit forecast was upgraded by a marginal 0.1% for 2009
and 0.7% for 2010. We expect sector earnings to contract 9.9% in
2009, before recovering to 6.8% growth in 2010 (previously -10.1%,
+6.1% respectively). This excludes further impairment in the value of
long-term investments, merger costs and other one-offs.
Asset quality concerns. 1Q09 GDP (-6.2% YoY, -7.7% QoQ) should
be the weakest, suggesting that the worst may be over. However, we
expect economic recovery to be slow, with real GDP to return to the
3Q08 high only in 4Q10. There is a 3-6 month interval from GDP trough
to NPL peak. Hence, banks are set to report weaker profits on rising
NPLs and higher credit charges from 3Q09.
Mainly Sells. Against regional peers, the larger Malaysian banks are
pricey. The current liquidity driven market has pushed valuations up but
prospects for a strong economic recovery stay hazy. Sell into strength.
This document provides information on prioritizing product backlogs for profit. It discusses identifying market needs through research and expressing needs to stakeholders. It emphasizes the importance of prioritizing based on three core groups: stakeholder alignment, strategic alignment, and driving profit. Stakeholder alignment involves prioritizing based on input from customer personas, partners, and internal teams. Strategic alignment means showing how the backlog aligns with the company's strategy and roadmap. Driving profit refers to prioritizing features that increase revenue or reduce costs based on the business model. Techniques for prioritizing with stakeholders like innovation games and shared spreadsheets are presented.
A milestone for the sector. We take a positive view of this news as it is a significant
milestone for the water sector. The timing of the award was a slight surprise as we
had expected the recent cabinet reshuffle to result in a slight delay for the project
award following the award of the letter of intent (LOI) to the Shimizu consortium a few
months back. The water transfer project is the first mega job to be rolled out under the
9MP after the announcement of the second stimulus package in Mar 09. Our channel
checks indicate that the tunnelling job will move fairly quickly from here on and the
notification to start work should be received in a matter of days. Once site possession
is obtained, major resource mobilisation will be underway, including Shimizu’s
positioning of the tunnel boring machine (TBM) near the Titiwangsa range. We think
that actual work could start within a month, suggesting a mid-2014 timeframe for
completion of the project.
No details on scope of works. Details of the scope of works are not available. IJM’s
share of works based on its 20% stake works out to RM260m or just RM26m profit
enhancement assuming a 10% pretax margin. We are not revising our earnings
forecasts as the RM260m share of works is already part of our assumption for new
contracts for IJM. That said, the award of the project raises IJM’s profile as it is one of
the main contractors of the country’s largest water infrastructure project.
Focus will now shift to the remaining major components of the water transfer project,
i.e. the Kelau dam and the Langat 2 water treatment plant. We expect the feasibility
studies for both to be concluded sometime in early 2H09, making way for the
tendering process. We gather that the Shimizu consortium is eyeing the Kelau dam
job which has an estimated value of roughly double the tunnelling job. This suggests
that IJM’s potential share of works could be more than RM500m.
Blip, Spurt, Dash: How to ‘A-Ha!’ Yourself and Your Biz With the Social Web (...Epiphanies, Inc.
The "Blip," the "Spurt," and two "Dashes" that define what social media really looks like in our brave new world. From the emotional currency of the Blip, to the productive energy of the Spurt, and the defining Dashes of our days and inspirations, Lani Voivod, co-owner and Ally in Possibility at Epiphanies Inc., brings together our real-world lives and our social media lives in a powerful new way.
The document discusses ethics and respecting others with different views. It references acronyms used in digital communication and asks if a decision could still have a mother's support after explaining the reasoning. The number of days in 78 years is also listed.
Connect With Passion - New Hampshire Young Professionals Network (YPN) SummitEpiphanies, Inc.
You can use social media to talk yourself into doing just about anything, but why would you? The oldest social media network of our day that's still an active Top-10 platform is LinkedIn, and it won't turn 10 years old until December 2012.
The gold rush era of social media seems to be ending - now, it's become about the larger picture of "social business." That means many of the very basics of marketing and branding need to be rediscovered and put back to work in the social space.
Businesses and organizations need to refresh their ability to tell compelling brand stories, across multiple communication channels. To connect with passion and emotion. And to do that, today's young professionals need to own and connect with their own passions - personal and professional - in order to be successful in the evolving Digital Age.
This presentation, developed at the request of Stay Work Play for the 1st Annual NH Young Professionals Network Summit, was delivered for representatives of the steering committees of the 11 young professionals networks in the state of New Hampshire. The presentation covers the Hero's Journey storytelling form, the concept of archetypes as a powerful shortcut to emotional brand connection and conversation, and tips for improved brand storytelling.
This document discusses a USPS site concept involving a station. The concept is labeled "USPS Site Concept 2" and focuses on a station model. No other details about the concept or station model are provided in the short 3 line document.
One Type of Loan Causes Small Banks to FailBrian McDaniel
Commercial real estate and acquisition, development, and construction loans contributed significantly to bank failures during the financial crisis. While fair value accounting did not cause failures, traditional accounting practices may have delayed reporting credit losses and charge-offs that did contribute to failures. The FDIC was able to resolve failed banks at the least cost to the deposit insurance fund despite some healthy banks not bidding due to market concentration in only a few areas.
• B-Toto is worth a bet now as i) its core gaming operations remained resilient even
during the post-CNY off-peak period and appear likely to surpass our 6-7% gaming
revenue growth target for FY4/09, ii) 2009’s special draw allocations for all three
NFOs could take place over the next few weeks and iii) there is upside potential to its
6-8% gross dividend yield based on its policy of a minimum payout of 75% if B-Toto
dishes out higher dividends to lend its parent a helping hand.
• Adjusting earnings but implied yields still decent. We raise our FY09-11’s
revenue per draw growth assumptions by 2-4% pts following the stronger-thanexpected
YTD showing. But FY10-11’s bottomline is lowered by 4-5% as we also
raise our blended prize payout assumption from 62-64% to 63-64% to better reflect
the payout trends seen so far. FY09’s numbers are largely intact despite these
adjustments. Even after a 3-5% cut in our FY10-11 DPS projections (unchanged
80% payout ratio), our forecasts still imply a decent yield.
• Reiterate OUTPERFORM. Our DPS downgrades trim our end-CY09 target price
from RM5.95 to RM5.65, based on an unchanged 5% discount to its DDM value. We
continue to like B-Toto for its steady, low-risk topline growth, superior ROEs and
sustainable dividend yields. Being a low-beta stock, B-Toto may fall out of favour in a
rising market. However, we flag the likelihood of bumper dividends over the short
term. This is a potential share price catalyst that underpins our OUTPERFORM
recommendation, along with the normalisation of luck factor and market share gains.
We raise our CPO price assumption to RM2,000/t (from RM1,600/t)
on the current high price of RM2,800/t and YTD RM2,178/t average.
We do not foresee CPO prices staying at current levels beyond 2Q due
to rising 2H production and slowing exports. The present CPO price is
81-123% above its long term historical price in USD and Ringgit
equivalents. EPS forecasts are upgraded by up to more than 100% but
company valuations remain stretched. Maintain Underweight.
Recent CPO price spike unsustainable. We view the recent 40%
spike to the RM2,800/t level from an average of RM1,950/t in 1Q09 as
too fast, too furious. Traders and speculators justified the high price on
tight inventory. We think a significant price correction in 2H is imminent
as inventory is expected to build up on slowing exports and stronger 2H
production. Also, the present CPO price is 81% and 123% above its 30-
year long term historical price in USD and Ringgit equivalents of
USD430/t and RM1,257/t respectively.
Bearish 2H price outlook. CPO production, which has disappointed in
1H09 due to poor weather and tree stress, is likely to rebound strongly
in 2H. Besides production recovery, narrowing palm oil discounts
against competing oils should slow exports. A return of normal weather
in the next planting season for South America, and increased trade
protectionism by the West on palm biodiesel are some of the other
bearish fundamental factors for CPO.
Earnings forecasts upgraded. With CPO price having averaged
RM2,178/t YTD and likely to remain high in 2Q on tight supply, we raise
our CPO price assumption from RM1,600/t to RM2,000/t for 2009-11.
This results in EPS upgrades for plantation companies under our
coverage ranging from 17% to over 100% for 2009-11.
Valuations remain expensive. We rate the sector Underweight.
Valuations remain stretched, especially for IOI and KLK which trade at
20.1x and 16.9x 2010 PER. We downgrade Asiatic to Sell (from Hold)
as the stock has soared 54% YTD and is highly leveraged on CPO
price swings. Sime has been raised to Hold (from Sell). Risks to our
price view are a weaker USD, higher energy prices, and further supply
shocks due to weather anomalies.
Foreign boys not spared a 20% 1Q earnings decline. The combined net profit
of the five major foreign banks in Malaysia fell 19.7% yoy to RM824.6m in 1Q09,
worse than the 14% slide recorded by the local banks. Clearly, the foreign boys
are not spared the impact of the economic downturn, with earnings dents coming
primarily from (1) a 1.3% yoy drop in net interest income, (2) 25% slump in non-
interest income, and (3) 23% jump in loan loss provisioning (LLP).
• Foreign banks’ loan growth trailing local banks’. As expected, foreign banks
recorded slower net loan growth of 3.1% yoy in Mar 09 compared to 12% for
local banks’ domestic lending. The performance of foreign banks was pulled
down by a 6.8% contraction in Citibank’s loan base, due primarily to a drop in
property and business loans. Other major foreign banks registered single-digit
loan growth ranging from 3.3% (for UOB) to 8.7% (for OCBC).
• Higher NPL ratios and credit costs. Against the backdrop of a grim economic
climate in 1Q09, all major foreign banks saw a rise in their net NPL ratios. The
blended net NPL ratio of these five banks increased from 1.68% in Dec 08 to
1.81% in Mar 09, lower than the industry’s 2.2%. The hike in NPL ratios led to a
23% yoy surge in 1Q09 LLP.
• Better performance by local banks. In 1Q09, local banks outperformed their
foreign peers in the areas of (1) net profit – 14.2% yoy drop vs. 19.7% for foreign
banks, (2) non-interest income – down 7.1% yoy vs. 25.3% for foreign banks
despite their higher exposure to poor investment banking income, and (3) NPL
ratios – a few local banks, i.e. Maybank, Public Bank, AMMB and Alliance
managed to contain their NPL ratios while qoq rises were evident for all the
major foreign banks.
• Maintain NEUTRAL. Foreign banks’ poor 1Q09 financial results reflect the
adverse operating environment. We take heart in the outperformance of the local
banks during these difficult times as it suggests that the improvements in local
banks’ operations, especially in the area of risk management, have helped them
to weather the economic downturn. On this note, we are maintaining our
NEUTRAL stance on Malaysian banks as local banks may trump our and market
expectations in countering the slowdown in loan growth and the uptick in NPLs.
Our top pick for the sector remains Public Bank.
An improved performance. While the results announced by oil & gas (O&G)
companies in Mar-May 09 were a mixed bag, they leaned towards the positive,
unlike the previous quarter. A third of the six companies in our portfolio missed our
forecasts, an improvement on 50% in 4Q08. Half of the companies broadly met our
expectations (4Q08: 17%) and one (17%) surprised on the upside (4Q08: 33%).
Since 1 May 09, the share prices of O&G stocks under our coverage have jumped
by an average 28%, reflecting the overall encouraging reporting season.
• Three trends in 1Q09. 1) Margins picked up as companies climbed the value chain:
Except for Dialog, all the companies in our O&G portfolio showed margin
improvement, with average EBIT margin rising from 14% in 4Q08 to 20% in 1Q09.
2) Late delivery remains a problem for offshore support vessel (OSV) operators: In
total, Petra Perdana and Alam missed six vessel delivery dates due to assembly
line congestion and delayed shipment of parts. 3) Petroleum retailers and refiners
bounced back: The rising crude oil price supports the selling prices of products that
are not subject to automatic pricing mechanism (APM) and refiners benefited from
inventory gains.
• Service providers stand to benefit. YTD, the oil price has jumped 56%, reflecting
factors such as 1) a weakening US dollar, which encourages speculative money to
flow into the market, and 2) an increased risk appetite among investors who
anticipate an economic recovery. As a producing country, Malaysia is poised to
benefit from the upward march of the oil price. Petronas-licensed service providers
offering works and facilities such as yards, tank terminals, offshore structures and
maintenance job stand to win the most.
• Target price increases. There are no changes to our forecasts. However, we are
raising our target prices by 11% for Dialog, Kencana, SapuraCrest and Wah Seong
to reflect our recent index target upgrade. We now apply our revised target market
P/E of 15x to the stocks, instead of 13.5x. Our target prices for Alam, Petra Perdana
and Petronas Dagangan are maintained.
• Kencana replaces Petra Perdana as top pick. YTD, Petra Perdana’s share price
has risen by a whopping 120%, making the stock an outstanding performer in our oil
& gas portfolio. While we still like the stock, we are replacing it with Kencana as our
top pick. We believe Kencana’s newsflow and order book replenishment over the
next few months will be more exciting.
• Maintain OVERWEIGHT. We remain OVERWEIGHT on the oil & gas sector in view
of the potential re-rating catalysts of 1) M&As, and 2) more active newsflow. Also
unchanged are all our stock recommendations and earnings forecasts.
This document discusses a USPS site concept called Cascade that was proposed for a USPS site. The Cascade concept focused on integrating the site's functions and allowing different aspects to flow together efficiently. However, no other details about the Cascade concept or the site are provided in the short document.
• Extended wedge formation. We were expecting the DJIA to break down from its
wedge formation last week but it continued to rise further towards the 8,300 levels
before correcting end of last week. The Index could still be in an extended wedge
formation and the breakdown the wedge support trend line at the 8,100pt would
confirm the end of this pattern.
• If we are wrong… If we are wrong, our alternative wave count shows that DJIA
could have already started its minor wave “c” up leg after completion of the wave
“b” triangle consolidation since early Apr last week (refer to chart below). This wave
count is supported by the breakout of the major resistance trend line since Nov-08.
Confirmation of this alternative wave count if DJIA breaks above 8,300pt.
• US banking stocks remains in consolidation phase. If banking stocks are
leading the market, DJIA is still in an extended wedge formation. The KBW Bank
Index has just broken down below its uptrend channel support trend line since
early-Mar. This indicates further consolidation in the immediate term for the Index.
• Crude oil uptrend is not over. We were looking for crude oil prices to break down
last week but the price has since bounced back above the US$53/barrel levels.
This has negated our preferred wave count and a likely “double zig-zag” is taking
place, targeting the US$60-70/barrel levels in 2H09.
• Channel breakout. MSCI Asia ex-Japan Index (MAxJ) only experienced a mild
correction last week and closed strong for the week at 336. The Index just broke
out of its channel resistance trend line since Nov-08. This is a positive sign if the
Index is able to hold above this trend line over the next few weeks.
• Still expect consolidation. However, we still expect Asian equity markets to
consolidate over the next few weeks to build up a support base before charging up
in June-July. If RSI breaks out of its current consolidation range, this would likely
indicate that Asia has kick started its next up leg towards the June-Jul period.
Tools and Tactics for Audience Building on Facebook and Twitter - Part 1 of 4Epiphanies, Inc.
Originally created for an extended workshop at the Greater Manchester Chamber of Commerce, this presentation has been broken out into four bite-sized chunks for easier use. See the other three parts at http://slideshare.net/AhaYourself!
Part 1 explains how audience building is intricately tied to the rest of your social media action plan. Part two focuses on five audience-building strategies to use on either Facebook or Twitter. Part 3 dives into ten Facebook-specific tools and tactics for audience building, and Part 4 does the same for Twitter.
Please share your feedback and more audience-building ideas here, or at http://facebook.com/AhaYourself. Thank you!
Harking back to the SARS nightmare? The surgical masks, empty stadiums and
deserted streets of Mexico’s cities remind Asians of the devastating outbreak of the
SARS avian flu in east Asia in early 2003.
Yesterday, aviation stocks responded to those fears. Singapore Airlines’ share price
declined 4.5%, Malaysia Airlines fell 3.8%, AirAsia dropped 8.8%, Thai Airways
corrected 6.9%, and Cathay Pacific (Not rated) fell 8%. Airport shares also dropped,
but not by as much. Airports of Thailand fell 2.1%, while Malaysia Airports (Not rated)
fell 0.6% yesterday.
The current swine flu outbreak in Mexico has already killed more than 100 people and
has spread to neighbouring US and Canada. The World Health Organization said that
the outbreak has “pandemic potential” and has rated the seriousness of the outbreak
as a 3 on the scale of 1 to 6, with 6 being the most severe. US President Obama said
that the swine flu outbreak is a "cause for concern and requires a heightened state of
alert…but is not a cause for alarm".
If the outbreak turns into a global pandemic, aviation could be hit by a sudden
collapse of travel demand. During SARS, Singapore Airlines’ passenger numbers fell
50% yoy in Apr 03 and 60% yoy in May (Figure 1) while Cathay Pacific’s passenger
traffic plunged by as much as 75% in May (Figure 2).
Malaysia Airlines saw a 40% yoy fall in international passengers in May 2003 although
domestic traffic was relatively more resilient, pulling back a maximum 25% yoy
(Figures 3 and 4). AirAsia also experienced a sudden demand fall during that period,
although official numbers are unavailable as the company was not listed then.
In Thailand, Airports of Thailand saw international passengers through its 5 airports
plunge 43% yoy in April 2003 and 48% yoy in May while domestic traffic retreated
15% yoy in April and 14% yoy in May (Figures 5 and 6).
Spend a little to make a bundle
We maintain a selective Overweight call on the Consumer sector, mainly on market-leaders who continue to thrive even in the face of a domestic consumption slowdown.
AEON Co, AEON Credit Services
Top Buys are KFC and QL. Investors seeking liquid defensive plays should also be attracted to BAT’s earnings resilience and high dividend yield. , KFC Holdings and QL Resources are on track to continue posting >10% net growth rates in 2009-10, defying conventional logic and market expectations.
Reaping the fruits of disciplined ‘labour.’ AEON Co, AEON Credit Services
Sector Summary Table , KFC Holdings and QL Resources are expected to register double-digit net profit growth in 2009-10. For AEON Co and KFC, their less-than-one-year-old stores will contribute new sources of revenue and profits, even though existing stores, opened for more than one full calendar year, may not cumulatively register meaningful sales growth. AEON Co’s niche of providing comfortable one-stop shopping malls in many suburban areas continues to differentiate itself from other retailers domestically, whilst KFC continues to thrive as the most popular choice of fast food. Reaping the rewards of painstaking integration. In addition to the slew of growth activities at its Integrated Farming business, the integrated nature of QL Resources’ Marine Products business cushions fluctuating product prices. Although surimi (semi-processed fish paste) prices have fallen back to just above 2007-08 levels, this has instead made fishmeal and surimi-based products more affordable and encourages volume sales and margins for these products. Reaping the benefits of significant relationships. In AEON Credit Service’s case, despite the recent decline in motorcycle sales and relative uncertainty in 2009’s GDP growth prospects, its existing loans book, riding on 3-4 year loans profile, provides an earnings buffer against significant slow down in loans growth over the next 6-12months. Further, significant synergies with sister company AEON Co is expected to start showing with the likely combining of the latter’s privilege card (J Card) with the former’s credit cards. Currently, there are at least 10 times as many J Card holders as there are AEON Credit credit card holders. When growth and value come together. While we remain cautious of the broader market over the next few quarters, we continue to like the long-term value offered by our selection of four compelling growth stocks. Arguably, these three stocks offer the relative security of growing steadily within the generally defensive Consumer sector.
• Palm oil stocks at 22-month low but… Malaysia’s palm oil stocks fell for the fifth
straight month to a 22-month low of 1.29m tonnes at end-Apr 09 as exports and
domestic consumption exceeded domestic palm oil production.
• … at high end of expectations. Stocks fell 5.4% mom to 1.29m tonnes, which is at
the high end of market expectations ranging from 1.2m tonnes to 1.3m tonnes. The
decline in inventory is bullish for CPO price as it suggests tight palm oil supplies for
Malaysia, a key palm oil producer.
• Stock level may have hit trough in April. Our rough modelling, which assumes
the mom growth pattern for production and exports in the month of May will be
similar to the historical 3-year average growth pattern, suggests that Malaysia’s
CPO stocks could rise 5% mom to around 1.35m tonnes in May due to higher
production and lower exports.
• CPO price forecast intact. For the first four months of the year, average CPO price
fell 41% yoy to RM2,031 per tonne. This is marginally higher than our 2009 CPO
price forecast of RM1,950 per tonne due to lower-than-expected soybean harvests
from Argentina and weaker palm oil production from Malaysia and Indonesia. We
maintain our view that CPO prices will remain firm in the next few months due to
current tight supplies and potential further downgrade in Argentina soybean
harvests but are likely to trend lower in 3Q when palm oil supply improves and
demand weakens due to the higher selling prices. That said, the recent CPO price
strength has taken us by surprise due to deteriorating soybean crop prospects for
Argentina. In view of lower-than-expected yields, Oil World has cut its current-year
soybean crop estimates for Argentina by a further 1.5m tonnes to 33m tonnes last
week or a decline of 28.5% yoy. Although we are not changing our CPO price
forecasts of RM1,950 per tonne for 2009 and RM2,150 per tonne for 2010, there is
RM100-200 potential upside to our forecast for 2009 in view of the recent
downgrade of soybean supply from Argentina.
• Maintain UNDERWEIGHT. Our earnings forecasts for all the Malaysian planters
remain intact, along with our UNDERWEIGHT stance on the Malaysian planters due
to their expensive valuations relative to their regional peers. Potential de-rating
catalysts for the Malaysian planters are falling CPO price in 3Q, lower crude oil price
and improved weather prospects in major planting areas. Our only pick in the
Malaysian plantation sector is Sime Darby as the stock stands to benefit from the
move towards the new FBM 30 index, has the lowest P/E multiple and foreign
shareholding among the three largest big-cap planters in Malaysia and may engage
in earnings-enhancing M&As. We maintain our preference for the Singapore-listed
planters.
BANKING Mar 09 Statistics Some ResilienceBoyboy cute
Positive signs. Loan disbursements, repayments, applications and
approvals rebounded with strong double-digit MoM growth, flattish-tolow-
teens YoY growth, and in absolute term, were back to pre-Aug/Sep
’08 levels. Absolute NPLs continued to inch lower, mainly from the
working capital segment. Nonetheless, it is early to tell whether these
are sustainable as global fundamentals remain weak.
Strong loan disbursements and repayments. Banking loans (net of
repayments) grew to RM733.9m in Mar ’09 (+0.6% MoM, +10.9% YoY)
on expansion in both household (+0.4% MoM, +8.8% YoY) and
business loans (+0.9% MoM, +9.5% YoY). The pace of disbursements
and repayments was strong (disbursements: +27.4% MoM, +9% YoY;
repayments: +15.7% MoM, +4.8% YoY), mainly for working capital.
YTD loans growth was +1% (household: +1.5%, business: +0.5%).
Forward indicators bounced MoM but still flattish YoY. Loan
applications and approvals also rebounded strongly: +24.3% MoM and
+35.3% MoM respectively. On a YoY comparison, loan applications
were up 4.7%, driven by household loan applications (+21.5%), mainly
for home purchases, which off-set lower applications from businesses
(-11%). Overall loan approvals were rather flattish YoY, with approvals
up for household loans (+12.6%) but down for business loans (-13%).
Absolute NPLs contracted further. Absolute gross NPLs continued
to inch lower, at a slightly higher pace of -3.7% MoM to RM33.6b (Feb
‘09: -0.04% MoM). On a 3-month comparison (see table in page 4),
the lower NPLs came mainly from the working capital segment,
reflecting perhaps resilient business strength. Meanwhile, net NPL ratio
was little changed at 2.24% (Feb ‘09: 2.23%).
Remain Underweight. YTD loans growth, if sustained, should lead to
the upper end of our 2-3% loans growth forecast for 2009. Our other
assumption is for absolute NPLs to expand by 50% YoY by end-2009,
leading to a projected 10% decline in combined net profit for 2009.
While loans quality was resilient in Mar ’09, we remain concerned over
rising NPLs – our analysis shows a 3-6 months interval from GDP
trough to NPL peak. The other main risk is a protracted economic
slowdown leading to rising unemployment and asset deflation.
Luke Hohmann's "Prioritizing For Profit" talk outlines how to create and prioritize a backlog based on customer value, market need, strategic issue, architecture. Targeted at CTOs, VP Eng/Devt, and VP ProductMgmt/Chief Product Officers
HCLT Whitepaper: Insurance~ The market will contract not collapseHCL Technologies
The insurance market will surely contract, but it will not collapse. Consumers and companies will still require risk management - albeit, the number of buyers are fewer. Some of the now marginal mid-tier and small carriers may be acquired, or simply fail. Prices will flatten, and rate increases will be needed to raise capital, but the size will be restrained by the contracting economy. However, most insurance industry leaders think that we will be in that contraction through the first half of 2010. With that return to expansion, the industry will still be confronted with the challenges/ opportunities discussed in my last two missives - expanded demand for more sophisticated products and
the need for time-to-market agility while managing losses and expenses.
2009 Q2: Feature on Financing the Budget Deficiteconsultbw
The document provides an economic review of the 2nd quarter of 2009. It summarizes that while the global economy shows some signs of recovery from recession, growth is expected to remain slow. The mining sector in Botswana experienced a major contraction in the 1st quarter but is now seeing signs of recovery. Botswana's exports fell substantially in the 1st four months of 2009 due to declines in diamond and copper-nickel exports. However, the non-mining economy has proved resilient so far. The government faces fiscal challenges from declining revenues and commitments to large expenditure projects.
PPG Industries reported financial results for Q4 2008 and full year 2008. Q4 was challenging with dramatic volume declines in automotive OEM and industrial end markets due to the global economic slowdown. However, other segments delivered solid results. For the full year, PPG set a new sales record of $16 billion and achieved strong cash flow generation, debt repayment, and exceeded expectations for the SigmaKalon acquisition. However, adjusted EPS was down over 10% due to Q4 results. PPG is well positioned for economic challenges in 2009 with a strong cash position and minimal debt maturities.
The monthly market outlook report reiterates a view of a cyclical growth recovery starting in the third quarter of 2009, followed by a moderate structural recovery. While a strong business investment recovery is unlikely due to low capacity utilization and high costs, earnings results exceeded expectations in the second quarter due to tight cost controls. Reasonable valuations and cyclical improvement should support further equity gains.
The banking sector in Malaysia saw stable loan growth of 10.9% year-over-year in March 2009, driven partly by a 20-30% jump in loans to government agencies and non-bank financial institutions. However, leading loan indicators remained subdued and loan growth is expected to slow significantly to 2-3% in 2009 due to weaker economic conditions. Non-performing loan ratios continued to improve in March. The report maintains a neutral outlook on Malaysian banks, expecting them to perform better than anticipated despite the economic downturn.
The monthly fact sheet provides an overview of the local Malaysian market in February 2010. Equity markets ended higher for the month, though small cap stocks underperformed. Ten of ten sectors were positive, led by telecommunications, consumer staples, and financials. Fixed income markets were flat due to lack of catalysts. The GDP grew strongly in Q4 2009 and inflation rose slightly. The outlook remains positive, expecting further equity market gains supported by strong economic growth, though deteriorating global growth or policy mistakes pose risks.
Strong Performance in Challenging Markets
- Revenue and income for Siemens rose in the first quarter despite weaker demand and a global financial crisis. Total Sectors profit climbed 20% led by the Energy Sector. Income from continuing operations also rose strongly.
- Orders declined 8% from the prior year's record level but the book-to-bill ratio remained well above 1. Revenue increased 7% supported by strong prior year order growth.
- Siemens remains committed to its 2009 targets despite more challenging market conditions.
The document discusses how the stock market can sometimes be wrong in its valuation of companies, both in overvaluing and undervaluing stocks. It provides examples like Bre-X, Nortel, RIM, and the technology bubble of 1999 to show how the market can emotionally overvalue stocks. It also argues the market undervalued Bank of Montreal in 2009 and cites analysis showing companies in a typical Canadian equity portfolio generated much higher dividend growth than share price appreciation from 2007-2011, indicating potential undervaluation. The document advocates measuring investment returns over long periods rather than short term to allow for periods when the market may be wrong.
This document provides an overview and analysis of the Indian storage battery industry. Some key points:
1) The Rs 9,700 crore Indian storage battery industry grew revenues 30% annually and net income 50% annually from FY2005-2010 due to rising vehicle and industrial demand.
2) The industry is expected to grow revenues 19.7% annually from FY2010-2013, with the auto battery segment growing 20% and industrial battery segment 19.4% annually.
3) Exide Industries is expected to outperform Amara Raja Batteries in earnings growth due to Exide's captive lead smelter lowering raw material costs. Exide's earnings are forecast to grow 17%
The document provides an outlook for the UK financial services sector from the ITEM Club. It discusses challenges facing the banking, insurance, and asset management industries.
The key points are:
1) The weakened UK economic outlook presents challenges for banks, which are already struggling with regulatory changes. Bank profits will remain under pressure, forcing more cost cutting and layoffs.
2) Insurance premium growth is expected to be subdued in line with weaker demand, intensifying competition. Asset management growth is also forecast to be modest.
3) Loan demand is expected to be weak given economic uncertainties, and bank loan growth is forecast to turn negative in 2012, with write-offs expected to rise on worsening credit quality
This document provides an overview of Aimco's financial performance and strategy. Some key points:
- Aimco has generated strong returns for shareholders since its IPO, with economic income compounding at 14% annually.
- Operations have performed well, with same store NOI growth exceeding peers. Redevelopment spending has created significant value.
- For 2019, Aimco expects continued strong same store performance and increased redevelopment spending.
- Aimco maintains a disciplined approach to capital allocation, selling lower-quality assets and re-investing in higher-return opportunities.
- The company focuses on innovation to drive operating efficiencies and cost control.
- Aimco aims to enhance value through
The newsletter provides updates on tax, legal, and business issues relevant to accountants and their clients. The main articles discuss the economic recovery underway in 2010 and outlook for investment returns, noting continued risks but momentum in risk assets. It also covers opportunities and challenges of cloud computing for small businesses. Brief sections cover upcoming tax filing dates and amendments, and new rules to benefit small businesses regarding tax filing frequencies and redundancy rebates.
The majority down. 62% of our 72-stock universe suffered lower
sequential quarterly net profits, with 24% surprising on the downside.
The combined 1Q09 net profit of our research universe fell by just 3.5%
QoQ. But stripping out 5 large gainers, net profits fell a larger 13.6%
QoQ. Consumers and glove manufacturers’ defied gravity, but net
profits of virtually all stocks in nine sectors fell quarter-on-quarter.
A surprising combined result, but the devil is in the details. The
combined net profit of our research universe declined just 3.5% QoQ
despite an overwhelming 62% of companies reporting a sequential
quarterly decline. But excluding five companies, combined net profit fell
13.6% QoQ, an acceleration from previous quarters. A broad-based
earnings decline is being masked by a few companies, including some
monopolies.
Declines in nine sectors, but consumer sector unscathed. Every
stock in nine sectors, excluding monopolies Petronas Gas and KLCCP,
experienced a drop in quarterly sequential earnings. The sectors are
gaming, oil & gas, property, REITs, construction, building materials,
semi-conductors, plantations and toll roads. Consumer stocks and
glove manufacturers showed particular resilience.
An ‘energy dividend’ took effect; monopolies fared well. Lower oil
prices benefited heavy fuel users AirAsia and Tenaga. Their gains were
only partially offset by lower earnings at the oil & gas services
companies. Net profits of Telekom, Tenaga and Petronas Gas, all
effectively monopolies, improved on a quarterly basis although only
Petronas Gas raised prices in 1Q09.
The biggest disappointment and downgrade: 1Q GDP. First quarter
2009 GDP fell 6.2% YoY, against consensus expectations of a 3-4%
drop. We have revised our GDP forecasts to -3.8% in 2009 and +4.0%
YoY in 2010 (previously -1.3% and +3.5% respectively). The
government, to be ahead in the expectations game, is projecting 2009
GDP growth of -4% to -5%. The silver lining is the government is now
under greater pressure to implement its fiscal stimulus plans quickly.
A reversal of fortune ahead for construction, building materials.
Despite uniformly lower earnings this 1Q, we believe the construction
and building materials sectors are only 2-3 quarters away from
improved revenues. Share prices of stocks in these sectors will likely
be driven by newsflow from the fiscal stimulus rather than earnings.
Cameron is an oil and gas equipment company that delivered record financial results in 2008 despite challenges. Revenues reached $5.8 billion, earnings per share were $2.60, and orders set new highs. However, volatility in oil prices and the economic downturn introduced uncertainty for 2009. Oil prices fell from nearly $150 per barrel to below $40 by year-end due to reduced demand and available supply outpacing consumption. Customers' cash flows declined and some faced financing difficulties, leading to expectations of less spending on developing new reserves in 2009.
Cameron is an oil and gas equipment company that delivered record financial results in 2008 despite challenges. Revenues reached $5.8 billion, earnings per share were $2.60, and orders set new highs. However, volatility in oil prices and the economic downturn introduced uncertainty for 2009. Oil prices fell from nearly $150 per barrel to below $40 by year-end due to reduced demand and available supply outpacing consumption. Customers' cash flows declined and some faced financing difficulties, leading to expectations of less spending on developing new reserves in 2009.
Invoice financing allows businesses to raise cash against the value of unpaid invoices by having an invoice finance provider pay a portion of the invoice immediately, usually within 24 hours. This gives businesses greater access to working capital and cash flow. Over 46,000 UK and Irish businesses have used invoice financing in the past year, with over £15 billion advanced by the industry. Invoice financing can help businesses fund growth by providing capital to expand operations without heavy reliance on bank loans or overdrafts.
The document provides an overview and analysis of the Indian stock market and recommends "buy" ratings for several stocks. It discusses the recovery of the global and Indian economies from recession, and predicts continued growth in India and other developing economies. It then analyzes the long-term bullish outlook for the Nifty index based on a technical pattern and sets a target of 6,400 levels. The remainder summarizes investment recommendations for several companies across sectors, providing buy ratings and 12-month price targets for each.
PPG Industries reported their third quarter 2008 financial results. Despite challenges like hurricanes, an auto industry slowdown, and higher costs, PPG achieved double-digit sales and earnings growth in most business segments. They completed the sale of their automotive glass business and announced a restructuring to reduce costs. Strong cash generation allowed them to reduce debt by over $650 million for the year so far.
This document is the annual report letter to shareholders from Marshall & Ilsley Corporation regarding their 2008 financial results. It summarizes that 2008 was a disappointing year due to losses from housing market collapse and overexposure to construction loans. It outlines steps taken to reduce risks, such as selling loans, job cuts, and dividend reductions. It expresses hope that government economic stimulus plans will help stabilize the economy and banking industry.
Pwc entertainment and-media-outlook-registrationPraful Baweja
The document provides an executive summary of the Indian entertainment and media (E&M) outlook for 2009-2013. It finds that while India's E&M industry grew at an average of 16.6% from 2004-2008, growth is expected to moderate to around 8% in 2009 and 10.5% annually from 2009-2013 due to the global economic slowdown. However, strong fundamentals such as rising consumption, a positive investment climate, and low media penetration indicate potential for robust long-term growth. The report also notes some recent regulatory and budget changes that could benefit the E&M industry in India.
– February results continued the eight month decline in unit sales (avg -2.6%) across fast moving consumer goods (FMGC) as consumers continue to cut back on shopping trips in the U.S..– Additionally, while the percent change in basket ring increased 2.3% in the U.S., they are off from the January increase of 3.9% possibly due to declining prices as many retail channels did see enhanced shopping frequency in the 1st two months of the year – There was a noticeable up tick in store brands, given the 6.4% increase in unit sales across all store brands in the U.S.. This is the highest lift we have seen since August 2008 as the gap between branded items and store brands widened. – Despite the shift to store brands in the US, National Brands in Canada are still holding their share (81.2) as they capitalize on the consumers need for value through increased feature pricing activity. Over the past year unit sales on feature price increased 8% for National Brands to now account for 38.5% of unit sales. PL remained flat reporting a 1% decline in feature price sales.– Canadians are still shying away from multiple store visits. One stop shopping continues to expand – they are making 4% fewer shopping trips but once in store, they are spending 6% more, driven primarily by rising prices.– Expect March sales to be negatively impacted by the seasonal adjustment of Easter, which in 2008 occurred on March 23rd vs April 12 in 2009.
Upping CPO price forecasts. In this report card on the recent results season, we
are raising our CPO price (cif) forecasts by 18% for 2009 and 8% for 2010 to
US$710 per tonne for both years. The reasons for our upgrades are Argentina’s
lower soybean crops, the slower decline in demand growth from key consumers
and a slower-than-expected recovery in palm oil output. Our new local CPO price
forecasts are RM2,280 for 2009 and RM2,250 for 2010.
• CPO price to pull back in 3Q before recovering in 4Q. We remain positive
about CPO price until end-2Q as the replenishment of stocks will require time,
India’s import duties on edible oils remain at zero and there is concern over the
delay in plantings in US. We expect CPO price to pull back in 3Q before
recovering towards the end of the year.
• Upgrading earnings forecasts and target prices. In view of our higher CPO
price forecasts and recent changes in our rupiah assumptions, we are raising our
FY09-10 earnings forecasts for all the planters in our coverage by up to 30%.
This, along with higher target P/Es following our upgrade of regional
stockmarkets, bumps up our target prices by 3-53%. We are raising Hap Seng
Plantations and Sampoerna Agro to Neutral given their recent underperformance.
• Upgrading Malaysian plantation sector to Neutral. We are raising our rating for
the Malaysian plantation sector from Underweight to Neutral as its valuation
premium over regional peers has narrowed following its recent underperformance,
selected plantations stocks will benefit from an increase in their weightings in the
new FBM30 indices on 6 July 2009, we are more bullish on the Malaysian stock
market and foreign shareholding levels have fallen.
• Staying NEUTRAL on regional plantation sector. Despite our CPO price
upgrade, we remain NEUTRAL on the regional plantation sector as the share
prices of most planters in our universe have done well YTD, reflecting the more
upbeat CPO price outlook and expectations of a correction of CPO price in 3Q
due to seasonally higher production and potential cutbacks in demand from major
consuming countries if crop prospects improve. There is also no change to our
Overweight rating on the Singapore plantation sector and Neutral call on the
Indonesian plantation sector. For exposure to the regional plantation sector, we
continue to recommend large-cap liquid planters. Our top picks in the region are
Wilmar, Sime Darby, Indofood Agri and London Sumatra.
Welcome to the 2009 edition of
The Wealth Report, the third such collaboration
between Knight Frank and Citi Private Bank.
Over the past 12 months the economic outlook has
become even more uncertain. Most of the developed
world is now in recession, and even the emerging
economies have been forced to pause for breath. Every
commentator accepts 2009 will be tough. Our Attitudes
Survey (page 12) indicates clearly that HNWIs will look
to protect their wealth from the ravages of the
downturn with an emphasis firmly on security and
transparency rather than risk.
The tangible nature of property means it is well
placed to benefit from this shift in emphasis, and there
are signs that some mature prime property markets,
such as London and New York, have readjusted to price
levels that offer good value for purchasers. For some
emerging markets, the rollercoaster ride looks set to
continue. A full analysis of prime global markets is
included on page 26, and we recommend 10 locations
and sectors that offer potential for growth on page 23.
As property is just one aspect of wealth, we have
expanded the scope of The Wealth Report by including
an investigation into the performance of alternative
assets, from art and cars to wine (page 36), and an
assessment of the state of the philanthropy sector
(page 16). Influential thinkers, such as Alain de Botton
(page 20), also share their views on how the world will
adjust to life post credit crunch.
We hope you enjoy reading the report.
We expect transactions to fall and prices to ease in 2009, in line with the projected 3%
real GDP contraction. Transactions could fall 20-30% or as much as 35-50% in the
worst-case scenario, matching the performance during the 1997/8 Asian financial
crisis. However, most major developers have pushed out innovative financing
schemes to lure buyers. Response has been mixed, with good response garnered by
the likes of SP Setia (RM500m sales) and Mah Sing (RM170m sales) but lacklustre
sales for many other developers
More excitement ahead. The eventual award of the RM1.3b Pahang-
Selangor raw water transfer tunnel works on 28 Apr confirms that the
new administration sees the urgency for construction in stimulating the
economy. Langat 2 should be next in the limelight, together with the
massive Klang Valley LRT system. We expect more positive news flow
over the near-term. Continue to Overweight Construction.
Langat 2 next. Langat 2, the downstream portion of the water transfer
project, comprises a 2,180 mld treatment plant and the distribution
pipelines. The estimated RM5b construction contract was awarded in
Feb ’08 to Kumpulan Darul Ehsan, which holds 60% of Kumpulan
Perangsang Selangor (KPS). As KPS does not have a major
construction arm, we think that potential beneficiaries are Gamuda, Loh
& Loh and Taliworks, which have had working experience with, and/or
are affiliated to KPS via shareholdings.
Klang Valley LRT to follow. Local companies have been invited to
submit “expressions of interest” for the LRT extension and upgrading
works, with the government keen to see construction works start within
the next 3-4 months, according to today’s Edge. The extension works
could cost RM7b, including RM1b to buy rolling stocks. Our view is that
the project may be parcelled out and experienced contractors like IJM,
Gamuda, UEM Builders and YTL Corp may bid as turnkey contractors.
Overweight Construction. We continue to expect mid-sized projects
to lead the momentum of construction sector recovery under the fiscal
stimulus. Meanwhile, the inter-state water transfer (including Langat 2)
and Klang Valley LRT extension are also two priority projects under the
9th Malaysia Plan with works expected to start before the decade turns.
IJM, WCT and HSL remain on our Buy list. Meanwhile, Gamuda is a
strong contender for the two mega water and LRT projects. Our Hold
call on the stock is under review, with upward revision potential.
This document provides a sector update and analysis of the media industry in Malaysia. Some key points:
1) Advertising expenditure (adex) in March 2009 contracted only 1% year-over-year, a much better showing than previous months, driven by a 13% increase in TV adex.
2) However, the analyst maintains a cautious outlook due to difficult year-over-year comparisons and lack of major events in 2009 that boosted adex in 2008.
3) The analyst downgrades their recommendation on Media Prima and Star to Sell, as their share prices have risen ahead of underlying fundamentals in the weak economy. The media sector outlook is downgraded to Underweight.
This document summarizes the Malaysian government's recent liberalization measures for the country's financial services sector. Key points include:
1) Allowing up to 7 new licenses for foreign commercial and Islamic banks, with 4 in 2009 and 3 in 2011 that can be wholly foreign owned.
2) Increasing the foreign equity limit for domestic insurance, takaful, and investment banks to 70% from 49% previously.
3) Providing greater operational flexibility for foreign commercial banks, such as allowing microfinance branches and new regular branches.
4) The changes follow Malaysia's gradual "managed approach" to financial sector liberalization outlined in its 2001 Financial Sector Master Plan.
Bank Negara announced yesterday measures for further liberalisation of the financial
sector:
Increase in foreign equity limits. The foreign equity limit for investment banks,
Islamic banks, insurance companies and takaful operators has been raised from 49%
to 70%. It is envisaged that these institutions’ business potential and growth prospects
will be enhanced by the international expertise and global networks of foreign
shareholders. However, the cap on foreign shareholdings in domestic commercial
banks remains at 30%.
New banking and Takaful licences up for grabs. New licences will be issued to
strong and world-class players in the following categories:
• In 2009, up to two new Islamic banking licences will be issued to foreign players to
establish new Islamic banks with paid-up capital of at least US$1bn.
• In 2009, up to two new commercial banking licences will be issued to foreign
players that will bring in specialised expertise.
• In 2011, up to three new commercial banking licences will be dished out to worldclass
banks that can offer significant value propositions to Malaysia.
• In 2009, up to two new family takaful licences will be made available.
Greater operational flexibility for foreign banks. Locally-incorporated foreign
commercial banks can establish up to 10 microfinance branches with immediate
effect. Further branches will be considered based on the effectiveness of these
branches in servicing microenterprises. Foreign banks will also be allowed to establish
up to four new branches in 2010 based on the distribution ratio of 1 branch in market
centres, 2 in semi-urban areas and 1 in non-urban areas.
Locally-incorporated foreign insurance companies and takaful operators are now
allowed to set up branches nationwide without restriction. The restriction against these
companies entering into bancassurance/bankatakaful arrangements with banking
institutions has been lifted.
Other liberalisation. Banks, insurance companies and takaful operators now have
greater flexibility to employ specialist expatriates with expertise to continue the
development of Malaysia’s financial system. Offshore financial institutions that meet
the predetermined criteria will be given the flexibility to have a physical presence
onshore – from 2010 for banking institutions and from 2011 for insurance companies.
Comments
Liberalisation well expected. The further liberalisation of the financial sector is within
our and market expectations as it is in line with the objectives laid out in the Financial
Sector Master Plan (FSMP) issued in 2001. Furthermore, the government has alluded
to announcements on this matter this week.
Upping foreign equity limits for Islamic and investment banks... However, it is a
surprise to us that Bank Negara has increased the foreign equity limits for Islamic and
investment banks from 49% to 70% as this means that foreigners will control these
entities. It appears that the authorities view the relaxation as necessary to attract more
foreign players into the Malaysian market to help develop these segments.
…but not for commercial banks. We are also surprised that the government did not
increase the 30% foreign equity limit for domestic commercial banks, which is
something the market had been looking forward to. An increase in the equity limit for
Bank Negara: Tan Seri Dr Zeti Akhtar Aziz, pointed out that OPR had been
“front-loaded”. Zeti indicated that, there will not be any further OPR rate cuts
provided in improvement is seen in the second half of the year and further
improvement going into next year. Zeti expects the global and domestic
economies to improve by the second half of the year. (Source: The Edge Daily)
Axiata: Announcement of Headline KPIs for FY08. Axiata failed to achieve its
FY08 KPIs targets, citing increasing competition in the mobile market of Axiata’s
operating countries, currency volatility, liquidity shortages, and fluctuation of
interest rates. Axiata did not meet its target for revenue growth, EBITDA margin
and ROE for FY08. (Source: Bursa Announcement)
Ramunia: Currently engaging in preliminary discussion with Sime Darby
Engineering Sdn Bhd as a strategic partner. Ramunia and Sime Darby
clarified in an announcement that, they are in engaged in a discussion on a
potential corporate transaction as part of Ramunia’s search for a strategic
partner. (Source: Bursa Announcement)
Air Asia: Eyeing new associates in the Philippines and Vietnam. Datuk Seri
Tony Fernandes is keen on setting up affiliate airlines in the two countries. He
envisioned all AirAsia affiliates in Asean to become a single entity, ultimately.
(Source: Business Times)
G-7: Says strength of recovery depends on clean-up of banks' toxic
assets. In warning that the world economy could still take another turn for the
worse, the finance ministers and central bankers who met over the weekend in
Washington singled out the banks' impaired balance sheets as the biggest threat
to a sustainable recovery. Their remarks indicate it will be critical to follow
through on commitments to deploy taxpayer funds to buy distressed assets,
even as some gauges of financial stress ease. U.S. officials aim to finance the
purchases of as much as USD 1tr of loans and securities, and Germany is
pushing a plan to remove EUR 853b (USD 1.1tr) from balance sheets. (Source:
Bloomberg)
Mexico: Swine flu outbreak may deepen economic decline. The outbreak of
deadly swine flu may curtail tourism and compel shoppers to stay home, further
damaging an economy already reeling because of a U.S. recession that has cut
demand for exports. President Felipe Calderon closed Mexico City schools until
May 6, shut public events and declared emergency powers to order quarantines
to fight the flu, which has killed as many as 103 in Mexico. Finance Minister
Agustin Carstens said there’s “high potential” the outbreak will disrupt the
economy, with hotels and restaurants being the hardest hit. (Source: Bloomberg)
Germany: GfK consumer confidence holds steady for a third month in May
as slower inflation boosted household purchasing power and the recession
showed first signs of easing. GfK AG’s confidence index for, based on a survey
of about 2,000 people, was unchanged from April at 2.5%, the Nurembergbased
market-research company said in a statement. German business and
investor confidence increased this month on hopes that interest-rate cuts and
government stimulus packages will lift the economy out of its worst recession in
over six decades. Germany’s leading economic institutes predict the economy,
Europe’s largest, will shrink by 6% YoY this year. (Source: Bloomberg)
Ireland: Banks may report EUR 22.5b of loan losses. Ireland’s government is
preparing to buy EUR 90b (USD 119b) of property loans in a bid to stave off
nationalizing its biggest lenders. It may still end up with majority control of the
country’s banks. Companies led by Allied Irish Banks Plc may get 25% less than
the face value of their loans under the proposal from the National Asset
Management Agency, according to the median estimate of seven analysts
surveyed by Bloomberg News. That implies losses of EUR 22.5b. Analyst
estimates for the discount ranged from 15% to 30%. (Source: Bloomberg
• Momentum halted US equities indices were in a +/-1% range, after Treasury
Secretary Geithner said the “vast majority” of banks have enough capital and
comments allayed concerns about next month’s “stress test” results, after an earlier
leak indicating otherwise. Big European banks also reported a brighter 1Q09 results or
guidance. Regional markets were mixed, with profit taking in Indonesia, Hong Kong
and Singapore, while Thailand and Malaysia were up.
• 14 painful years to breakeven at 5.4% p.a. Based on the available sample of MSCI
FExJ data, the long term capital returns for the MSCI FExJ markets works out to 5.4%
p.a. Including dividends, the total returns go up to 8.4% to 9.4%. The bad news is that
at this rate, it would take 14 miserable years before breakeven is achieved for
investments made at the October 2007 market.
• But 6.8% is probably more accurate The good news is that the 8.4% to 9.4% p.a.
returns is likely to be an underestimation of the potential returns of Asian equities. A
sanity check based on the historical cost of equity and the underlying ROE of the
countries under our coverage suggests that the long term returns are likely to be in the
10-18% range. Adding a trendline – albeit crude – to the FExJ index throws up an
implied 6.8% p.a. long term capital returns, or close to 12% total returns if dividends
are accounted for. This is also consistent with the long term returns of 10.7% that have
been documented for US equities.
• Juicing the returns beyond long term returns Returns are determined by the timing
of entry into the market. By definition, markets tend to oscillate around the long term
trendline. The FExJ index is currently below the trendline of its long term growth profile,
as expected. If investors are accurately discounting the GDP turning point that is
months away, risk tolerance should improve and equities should continue its march
upward. A reversion to the long term growth profile of the FExJ markets by the end of
this year implies an annualised return of 52%, while a less optimistic view of a
reversion only by the end of next year produces annualised returns of 24%. At 3.5x and
7.6x long term returns on conservative forecasts, the timing factor favours investors.
Disinflation momentum continues…
Consumer Price Index (CPI, 2005=100) moderated further in Mar ’09 to 3.5% YoY (Maybank IB estimate: 3.7% YoY; Consensus estimate: 3.6% YoY) from 3.7% YoY in Feb 09 and the peak of 8.5% YoY in Jul-Aug ‘08. This marked the seventh consecutive month of disinflation. MoM, inflation rate was down by 0.2%, the sixth sequential drop over the past seven months. Led by “disinflation” in Food and Non Alcoholic Beverages (FNAB) prices and “deflation” in Transport costs... The YoY increase in FNAB prices slowed for the sixth straight month while Transport costs declined for the fourth month in a row. Both account for 47.3% of CPI’s basket of goods and services and ¾ of last month inflation rate. There were no significant movements or notable changes in the price trends of other goods and services. Consequently, our measure of CPI ex-FNAB and Transport was little changed at 2.1% YoY last month compared with 2.2% YoY in the preceding month. Technical deflation is on the card as % YoY monthly inflation rate may turn negative between mid-year up to late-3Q09 or early-4Q09 due to the high-base from last year’s sharp hike in fuel and energy prices, as well as taking cue from the producer price index (PPI) which has turned negative since Nov ‘08. Therefore, maintaining our 2009 and 2010 inflation rate forecasts of 1% and 1.5% respectively, which is a marked deceleration from 5.4% in 2008 amid the environment of global/local economic downturn and lower commodity prices. Year-to-date inflation rate is 3.7%.
• Wedge breakdown points to 7,400 target. The DJIA broke below its wedge
formation early this week, confirming the end of the uptrend that started in early
Mar. At the very least, the DJIA should retreat to 7,400, the start of the wedge
formation. For the S&P500, the wedge target is 780pts.
• Deeper correction than 7,400? The DJIA may descend below the 7,400pt target.
Its MACD has just confirmed its bearish “dead cross”, which signals more
downside in the immediate term. Asia’s equity markets also look vulnerable in the
near term with the likely end of both the stockmarket rally in China and crude oil’s
rebound.
• End of China’s rally? China’s stockmarket upswing since Oct 08 may have ended
this week. A critical support for the Shanghai Composite Index gave way this week,
a likely sign that the bull run has ended. Furthermore, the daily RSI has not been
able to overcome its major resistance trend line since 3Q08. The key support is the
50-day SMA at 2,307pts.
• Crude oil heading south? The end of China’s stockmarket rally is also in line with
the likely breakdown of crude oil prices in the coming weeks. Crude oil price
recently broke down from its triangle consolidation. The major daily MACD support
trend line since Dec 08 caved in a fortnight ago while the RSI has not been able to
overcome its major resistance trend line since Dec 08. This could indicate the end
of crude oil’s rebound since Oct 08. The wave 5 down leg could be taking place,
taking crude oil back to the US$30/barrel level in the next few months.
• Consolidation ahead for Asia. The MSCI Asia ex-Japan Index (MAxJ) confirmed
its MACD bearish “dead cross” this week. The last time this happened was in Feb
09. The 200-day SMA at 323 remains a major resistance. The near-term support
trend line collapsed this week, a likely indication of more consolidation ahead. The
key support is at the 50-day SMA at 282 and the 50-61.8% FR at 276-287.
This report from CIMB Research provides technical analysis and forecasts for global and Asian equity markets. It predicts that the recent uptrend in markets will soon be ending, with a correction expected over the next 2-6 weeks. Key support levels are identified at the 50-day simple moving average and 50-61.8% Fibonacci retracement levels. Specific markets like the Dow Jones Industrial Average, MSCI Asia ex-Japan Index, and various Asian country indices are analyzed. Both a preferred and alternative wave count scenario is presented to gauge market direction.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Economic Risk Factor Update: June 2024 [SlideShare]Commonwealth
May’s reports showed signs of continued economic growth, said Sam Millette, director, fixed income, in his latest Economic Risk Factor Update.
For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
South Dakota State University degree offer diploma Transcriptynfqplhm
办理美国SDSU毕业证书制作南达科他州立大学假文凭定制Q微168899991做SDSU留信网教留服认证海牙认证改SDSU成绩单GPA做SDSU假学位证假文凭高仿毕业证GRE代考如何申请南达科他州立大学South Dakota State University degree offer diploma Transcript
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
Fabular Frames and the Four Ratio ProblemMajid Iqbal
Digital, interactive art showing the struggle of a society in providing for its present population while also saving planetary resources for future generations. Spread across several frames, the art is actually the rendering of real and speculative data. The stereographic projections change shape in response to prompts and provocations. Visitors interact with the model through speculative statements about how to increase savings across communities, regions, ecosystems and environments. Their fabulations combined with random noise, i.e. factors beyond control, have a dramatic effect on the societal transition. Things get better. Things get worse. The aim is to give visitors a new grasp and feel of the ongoing struggles in democracies around the world.
Stunning art in the small multiples format brings out the spatiotemporal nature of societal transitions, against backdrop issues such as energy, housing, waste, farmland and forest. In each frame we see hopeful and frightful interplays between spending and saving. Problems emerge when one of the two parts of the existential anaglyph rapidly shrinks like Arctic ice, as factors cross thresholds. Ecological wealth and intergenerational equity areFour at stake. Not enough spending could mean economic stress, social unrest and political conflict. Not enough saving and there will be climate breakdown and ‘bankruptcy’. So where does speculative design start and the gambling and betting end? Behind each fabular frame is a four ratio problem. Each ratio reflects the level of sacrifice and self-restraint a society is willing to accept, against promises of prosperity and freedom. Some values seem to stabilise a frame while others cause collapse. Get the ratios right and we can have it all. Get them wrong and things get more desperate.
2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
In a tight labour market, job-seekers gain bargaining power and leverage it into greater job quality—at least, that’s the conventional wisdom.
Michael, LMIC Economist, presented findings that reveal a weakened relationship between labour market tightness and job quality indicators following the pandemic. Labour market tightness coincided with growth in real wages for only a portion of workers: those in low-wage jobs requiring little education. Several factors—including labour market composition, worker and employer behaviour, and labour market practices—have contributed to the absence of worker benefits. These will be investigated further in future work.
What's a worker’s market? Job quality and labour market tightness
Semiconductor
1. SECTOR UPDATE
7 May 2009
MALAYSIA
CIMB Research Report
Upgraded
TRADING BUY
Semiconductor
Time to reboot?
Terence Wong CFA +60(3) 20849689 - terence.wong@cimb.com
• Some glimmers of hope… Rays of hope are permeating the semiconductor
industry, which probably saw most of the bad news in 1QCY09. Global chip sales
improved slightly in Mar 09 with a 30.0% yoy decline compared with a 30.1% yoy
fall in Feb 09. The book-to-bill ratio has ticked up with preliminary Mar 09 numbers
hitting 0.61x, up from Feb 09’s abysmal 0.47x. Finally, utilisation rates have scraped
bottom as some production facilities have been shuttered and inventory control is
being exercised. The end-user markets appear to have troughed, with PC and
handset sales probably hitting the bottom. Furthermore, trade credit is now
normalising. That said, stabilisation does not equate to a recovery and we believe
that restocking activity as inventory runs low is the primary factor in the improving
outlook. We still expect 2009 to be a difficult year where the typical seasonal pick up
in 3Q may not materialise given the current re-stocking activities.
• …but no full-blown recovery until 2010. We argue that a true recovery will only
take root when the global economy begins to move upwards. A meaningful and
sustained recovery will only take place when consumer sentiment and spending
spring back to life and cause ASPs to start rising. We believe that a more
convincing uptrend will take hold only from 2H10 onwards.
• Global economies to start stabilising towards year-end. Our economists believe
that the world economy will feel the full impact of the global financial crisis this year.
Although the process of sorting out the financial system will take time and
resources, the cumulative effects of sizeable fiscal stimuli and aggressive monetary
easing globally will work to provide some stability. Recent global indicators are less
negative. Considering the extremely low base this year, global growth should pick
up in 2010 but will probably fall short of its long-run average growth rate of 3.7%.
• Upgrade sector to TRADING BUY. While the fundamentals for the sector remain
uncertain, we think that downside to share prices is limited as valuations are still
below trough levels. We upgrade the sector from Underperform to TRADING BUY.
Furthermore, in line with our market strategy, we think that investors’ risk appetite is
increasing and higher beta plays such as semicon should be in vogue. Investors
should start picking up semicon stocks ahead of the recovery of the sector as
historically, the share prices for both MPI and Unisem cratered 13-18 months before
the upturn of the sector. Sector catalysts include a) a sooner-than-expected revival
of end-user demand and b) a faster-than-expected economic recovery.
• Upgrade Unisem and MPI to Trading Buy. In tandem with the sector upgrade, we
upgrade MPI and Unisem from Underperform to Trading Buy. We raise our target
prices for both after cutting our discounts to their 5-year historical average by 30-
60% pts to 20-40% for Unisem and MPI respectively. We assign a lower discount to
Unisem, our top pick, as its higher liquidity and beta make it a better play on a
market rebound. Re-rating catalysts include a) qoq improvement in earnings, b)
revival of end demand and c) the higher betas on offer.
Sector comparisons
Core ROE
Target 3-yr EPS P/BV Div
P/E (x) (x) yield (%)
Bloomberg Price price Mkt cap CAGR (%)
(Local) (Local) (US$ m) (%)
ticker Recom. CY2009 CY2010 CY2009 CY2009 CY2009
Unisem UNI MK TB 1.20 1.70 160 80.1 23.3 (7.5) 0.7 0.8 2.8
7.40
MPI MPI MK TB 5.50 326 147.3 33.1 (31.2) 1.5 1.0 3.1
Chartered Semicon CSM SP U 0.21 0.14 1,311 nm nm 161.7 0.9 (17.4) 0.0
Simple average 111.9 27.7 41.0 1.0 (5.2) 2.0
O = Outperform, N = Neutral, U = Underperform, TB = Trading Buy and TS = Trading Sell
Source: Company, CIMB Research
For further information, kindly contact Simeon Masuda Koh at 603-2084 9807 or simeon.koh@cimb.com
Please read carefully the important disclosures at the end of this publication.
2. Some glimmers of hope…
2009 is shaping up to be an extremely difficult year for chipmakers as they have to
fight their way through a tangled web of diminishing economic growth and weak end-
user demand. Many market researchers are forecasting 2009 to be an exceedingly
poor year:
• In a somewhat dated projection made in Nov 08, Semiconductor Industry
Association (SIA) forecast a 5.6% decline in 2009 global chip sales due to the
current economic global turmoil.
• Databeans, a market research outfit, is pessimistic about the outlook for this year,
predicting that sales will fall by ~20% in 2009 to just over US$200bn (the market
size nine years ago), exacerbated by temporary macroeconomic issues that have
impacted consumer spending on devices that use integrated circuits (IC).
• Gartner, on the other hand, expects semiconductor sales to tumble 24% from the
2008 level due to the impact of the financial crisis.
• IDC, meanwhile, expects a revenue decline of 22% for 2009 due to macroeconomic
uncertainty, double-digit declines in unit shipments, low utilisation rates and price
erosion.
• IC Insights projects a 16% decline in 2009 chip sales.
Glimmers of hope? However, some glimmers of hope are beginning to break
through. The following factors and the normalising of trade credit suggest that
1QCY09 may represent the bottom of the cycle:
• Worldwide chip sales – Global chip sales showed a slight improvement in Mar 09
when sales fell 30.0% yoy vs. a 30.1% drop in Feb 09. 1Q sales dropped by 29.6%
yoy but a lesser 27.3% on a qoq basis. Apart from Japan, sales in all geographic
regions showed mom gains. According to the SIA, the modest sequential rebound in
Mar sales suggests that demand has stabilised somewhat, albeit at substantially
lower levels than last year. While all major product sectors showed mom growth,
there is still limited visibility in end markets.
Figure 1: Monthly sales (US$ bn) vs. yoy growth (%)
US$ bn Monthly Sales %
25 y oy change (%) 60.0%
40.0%
20
20.0%
15
0.0%
10
-20.0%
5 -40.0%
0 -60.0%
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09
Source: SIA, Worldwide Semiconductor Trade Statistics, CIMB Research
Figure 2: Chip sales by geography yoy comparison (%)
Americas Europe Japan Asia Pac Total
60.0%
40.0%
20.0%
0.0%
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
-20.0%
-40.0%
-60.0%
Source: SIA, WSTS, CIMB Research
[2]
3. • Book-to-bill ratio – After hitting near historical lows in Jan/Feb 09, the book-to-bill
ratio ticked upwards with preliminary numbers for Mar 09 touching 0.61x. SEMI
noted that the sharp declines in bookings have abated although the improvement in
Mar is due to the easing of billings. It pointed out that semiconductor equipment
bookings remain at levels below that needed to support a healthy supply chain. In
fact, bookings have compressed at an alarmingly rapid clip, shedding some 76%
since the beginning of 2008.
• Utilisation rates have sat idle – As end-user demand dried up and as greater
inventory control is exercised, utilisation rates began to fall precipitously, hitting
69.3% in 4Q, a level last seen during the dotcom bust. We think that downside to
these rates is limited, especially once the semiconductor industry starts to witness a
pick-up in production activity.
Figure 3: Book-to-bill ratio (x)
1.60
1.40
1.20
1.00
0.80
0.60
Near historic low s
0.40
0.20
0.00
99
00
01
02
03
04
05
06
07
08
09
n-
n-
n-
n-
n-
n-
n-
n-
n-
n-
n-
Ja
Ja
Ja
Ja
Ja
Ja
Ja
Ja
Ja
Ja
Ja
Source: SEMI
Figure 4: Bookings vs. billings (US$ m)
$3,500 Bookings Billings
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09
Source: SEMI
Figure 5: Utilisation rates (%)
100.0
95.0
90.0
85.0
80.0
75.0
70.0
65.0
60.0
1Q97 1Q98 1Q99 1Q00 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08
Source: SICAS
• Foundries are seeing some rush orders – The Taiwan Semiconductor
Manufacturing Company (TSMC) experienced its worst sequential decline ever with
[3]
4. sales dropping 39% in 1Q. However, 2Q is seeing a strong rebound with projections
of a 80-88% qoq surge aided in part by rush orders from the Chinese market which
is seeing strong pickup and some re-stocking. Meanwhile, United Microelectronics
Corp (UMC) is expecting a significant improvement in revenue in 2Q from the heavy
42% qoq decline in 1Q. It is seeing some rush orders from China.
• End-user markets could have bottomed out – According to Gartner, worldwide PC
shipments totalled 67.2m in 1Q09, declining 6.5% on a yoy basis. However, Gartner
has been seeing some evidence of channel inventory restocking, particularly in the
US. This should not be interpreted as a recovery in PC end user demand as it is
unclear if the global PC market has hit the bottom. Intel, however, has issued a
more bullish assessment calling for a bottom for PC sales in 1Q09 and that the
industry is returning to normal seasonal patterns. On the mobile phone front, Nokia
contends that while industry conditions will remain challenging, it appears that the
vast majority of the channel inventory de-stocking appears to be behind it. While this
will lead to lower industry volatility compared to the past two quarters, it is still too
early to call a bottom in the market. That said, although the trajectory of the end-
user market remains unclear, the end market is no longer falling in an uncontrolled
manner. Meanwhile, Apple defied the macroeconomic environment, shipping total
orders that exceeded the market’s expectations.
• ASPs may start to rise – According to IC Insights, industry conditions are starting to
suggest that ASPs will begin to improve dramatically in the coming months. This is
due to low inventory levels. Any uptick in orders would conspire to drive prices
upwards.
2009 will be a difficult year. The improving picture reflects more of an inventory re-
stocking situation rather than a true fundamental return to demand. We think that the
operating environment for 2009 will remain difficult where the typical seasonal pick up
in 3Q may not materialise given the current re-stocking activities. But we caution that
visibility is extremely poor at this stage with limited insights beyond 2Q. Many
operators are still cautious on capex spending.
In a recent interview, the MD of Unisem stated that demand in Mar had outpaced both
Jan and Feb combined and that capacity utilisation rates had ticked up to 50%
currently from 40% in Jan. While he is expecting a better 2Q than 1Q, he is still
cautious. The outlook for 2009 is unclear as it is dependent on what happens in 2H09.
Figure 6: Worldwide PC sales (m)
Company 1Q09 1Q09 1Q08 1Q08 1Q09-1Q08
Shipments Market Share Shipments Market Share Growth
(m) (%) (m) (%) (%)
HP 13.3 19.8 13.0 18.1 2.5
Dell 8.8 13.1 10.6 14.7 -16.9
Acer 8.8 13.0 6.9 9.6 26.7
Lenov o 4.4 6.6 4.8 6.7 -7.7
Toshiba 3.7 5.5 3.1 4.3 18.4
Others 28.2 42.0 33.5 46.6 -15.6
Total 67.2 99.9 71.8 100.0 -6.5
Source: Gartner
Figure 7: Worldwide handset sales (m)
Company 4Q08 4Q08 4Q07 4Q07 2008-2007
Sales Market Share Sales Market Share Growth (%)
(m ) (%) (m) (%)
Nokia 118.8 37.7 133.2 40.4 -10.8
Samsung 57.5 18.3 44.4 13.4 29.7
LG 28.1 8.9 23.5 7.1 19.5
Sony Ericsson 23.6 7.5 29.8 9.0 -21.1
Motorola 21.7 6.9 39.3 11.9 -44.8
Others 65.0 20.7 59.8 18.1 8.7
Total 314.7 100 330.1 100 -4.7
Source: Gartner
[4]
5. …but no great upturn likely until 2010
The key is demand revival and higher ASPs. End-user demand, which is key to the
downcycle this time, remains extremely foggy with limited visibility beyond 2Q. At this
juncture, consumer spending remains at relatively low levels, retail sales in the US are
still weak and the inventory/shipment ratio of electronic and consumer goods is on the
rise, although the worst is probably over. While private consumption in the US
rebounded by 2.2% in 1Q09, our economics team thinks that growth of consumer
spending will remain moderate as households repair their balance sheets and rebuild
their savings.
Therefore, we believe a real revival of the sector will probably unfold in 2H10 as the
economy starts to improve gradually and consumer and corporate spending make a
comeback. This will provide a boost to fairly low ASPs which will, in turn, spur capital
investments, lift utilisation rates and lead to more output and outsourcing to the back-
end test and packaging players. Finally, the various stimulus packages will take some
time to work their way through the system and provide a fillip to consumer/corporate
demand.
A more pronounced recovery in 2010. Most market researchers are expecting a
sharp V-shaped rebound in 2010, partly due to the exceedingly low base in 2009.
• SIA has projected 2010 worldwide sales to push upwards by 7.4%.
• Databeans is the most optimistic market research house, forecasting that 2010
worldwide sales will rebound sharply to exceed 2007’s levels. It expects a
boomerang recovery in 2010, with worldwide sales increasing by 17%. It even went
so far to predict that by 2011, sales will regain momentum and surpass the peak
seen during 2007.
• Gartner, on the other hand expects a fairly decent revitalisation trend in 2010,
predicting growth of 7.5% then.
• IC Insights expects a rather sharp acceleration in chip sales for 2010. Based on
previous trends, chip sales have generally seen very strong growth in the order of
20% in the year after recession, followed by a 30-40% upturn in the subsequent
year. If this holds true, then the industry is poised for strong growth in 2010-2011.
• Finally, IDC does not expect yoy growth in revenues until 2Q10 although it expects
a positive growth rate (quantum not disclosed) in 2010.
Figure 8: Consumption spending declines at slower pace Figure 9: Improving consumer confidence
Consumer Confidence Index
Personal spending Retail sales Index
% mom
100
3
2 80
1
60
0
-1 40
-2
20
-3
0
-4
Jan-07 Jun-07 Nov -07 Apr-08 Sep-08 Feb-09
Jan-07 Jul-07 Jan-08 Jul-08 Jan-09
Source: Bloomberg
[5]
6. Figure 10: US inventory to shipment ratio (x) of electronic products rising sharply – a bearish sign
2.20
2.00
1.80
1.60
1.40
1.20
1.00
Jan-92 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08
Source: CEIC, CIMB Research
Global economy to stabilise by end 09
Stabilisation by end-09. Our economics team believes that the global economy will
stabilise towards year-end although it will feel the full impact of the fallout from the
global financial crisis this year, which will drive global growth into the deepest decline
in decades. Major developed economies have suffered significant contractions despite
attempts to limit the downturn through major fiscal stimulus packages, substantial
interest rate cuts and, in the case of the US, UK and Japan, quantitative easing. In
fact, the IMF recently revised its global economic outlook for the fourth time, noting the
severe recession. It projects world output to decline 1.3% in 2009 in the deepest
recession since the Great Depression. Growth is expected to recover gradually in
2010, increasing by 1.9% as a result of efforts to heal the financial sector as well as
monetary and fiscal easing to support demand.
But some abatement in bad news. Our economics team recently noted that the
sharp decline in economic activity seems to have abated somewhat compared to
previous months. This stems from several indicators including i) reduced risk aversion,
ii) some tentative signs of stabilisation in the US, iii) China’s fiscal stimulus hitting
home, and iv) regional exports bottoming out.
Figure 11: Global GDP growth estimate
2007 1Q08 2Q08 3Q08 4Q08 2008 2009F 2010F
US 2.0 0.9 2.8 -0.5 -6.3 -6.1 -2.0 to -3.0 1.0
EU 2.6 2.1 1.4 0.6 -1.3 0.8 -3.0 0.5
Japan 2.4 1.5 0.7 -0.2 -4.3 -0.6 -3.0 0.8
UK 3.0 2.6 1.8 0.4 -2.0 0.7 -2.8 0.2
Source: Bloomberg, CEIC
What will turn the global situation around? Global policy continues to fire on all
cylinders, with the public sector balance sheet (the federal government and central
banks) being used to cushion the private sector’s deleveraging process. The Fed’s
latest bold actions of adopting quantitative easing and removing toxic assets from
banks’ balance sheets should over time help to restore the health of the banking
sector and ensure the resumption of credit flows to the private sector. The significantly
lower interest rates and fiscal stimulus which will take 6-9 months to work its way
through the system will undoubtedly help to stabilise economic activity later this year.
Global growth should be stronger in 2010 than in 2009, aided by the extremely low
base. Nevertheless, the growth trajectory will probably fall short of its long-run
average of 3.7%. We think major developed economies will not return to above-trend
growth for another 2-3 years.
[6]
7. Figure 12: The global economy will take several years before it grows above trend again
% Global grow th Forecast Long-term trendline
8
6
L-T av g
4
3.7%
2
0
-2
2009E
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2010F
Source: International Monetary Fund (IMF), CIMB/CIMB-GK Research
Figure 13: Major economies roll out large fiscal packages
China 13.3
5.6
US
Japan 2.0
EU-27 1.5
UK 1.4
% of GDP
0 2 4 6 8 10 12 14
Source: National sources, OECD, CIMB/CIMB-GK Research
Figure 14: Major central banks have slashed interest rates to historical lows
As at 9 Apr 09 As at end-Sep 08
% p.a.
6
-450bp since Sep 08
5
-300bp since Sep 08
4
3
-175bp since Sep 08
2
-40bp since Sep 08
1
0.25 0.10 1.25 0.50
0
US Fed fund rate Japan target rate ECB benchmark rate BoE bank rate
Source: National sources, CIMB/CIMB-GK Research
Valuation and recommendation
Upgrade to TRADING BUY. While the fundamental outlook remains rather ugly with
little improvement expected throughout 2009, we believe that the downside risk to
share prices is limited. Valuation-wise, both Unisem and MPI are still trading below
their trough valuations (Figures 18 and 19) during the dotcom bust and the past five
years. In line with our upgrade of the broader market and a shift to higher-beta cyclical
plays in this cycle, we are upgrading the sector to TRADING BUY from Underperform.
Re-rating catalysts for the sector include a) faster-than-expected revival of end-
demand and b) a quicker-than-expected economic recovery. In fact, tech stocks in the
US and Taiwan have rallied in recent weeks as many believe that the worst has
passed and that a recovery could be on the cards.
Near the bottom? Following the weak share price performance, both MPI and
Unisem are now trading below even the trough P/BVs seen during the 2001 dotcom
[7]
8. bust. We think that much of the bad news has already been priced in. In fact, using
the broader KL Technology Index as a gauge, we see that it has been on a downward
momentum, losing 39% since the beginning of 2008 and an even more astounding
77% since the last peak back in Oct 2003.
Share prices react before the recovery. As noted in our previous report in Oct 08,
both Unisem and MPI saw their share prices cratering some 13-18 months prior to the
recovery in the sector. Share prices then rebounded, hitting their peak five months
prior to the end of the dot-com crash, implying an 8-10 month window for profit-taking.
While we earlier advocated a re-entry sometime in June 2009, we have turned slightly
more bullish in line with our market strategy. We now think that an earlier timeframe
would be more appropriate.
Figure 15: KL Technology Index
150
125
100
75
50
25
0
May -00 May -01 May -02 May -03 May -04 May -05 May -06 May -07 May -08
Source: Bloomberg
Figure 16: Unisem’s price performance during dotcom crash
RM
15
Dot-com crash
13 Peak after price
11 cratered
9
Low during crash
7
5
3
1
Jan-00 May -00 Sep-00 Jan-01 May -01 Sep-01 Jan-02 May -02 Sep-02
Source: Bloomberg, CIMB Research
Figure 17: MPI’s price performance during dotcom crash
RM
55
Dot-com crash Peak after
48
price cratered
41 Low during crash
34
27
20
13
6
Jan-00 May -00 Sep-00 Jan-01 May -01 Sep-01 Jan-02 May -02 Sep-02
Source: Bloomberg, CIMB Research
Upgrade both Unisem and MPI. We are upgrading both Unisem and MPI from
Underperform to Trading Buy as we think that the downside to share prices is limited
as both are trading below trough valuations. For Unisem, business conditions appear
to be improving with stronger demand and higher utilisation rates seen. Also, its MD
expects a better 2Q than 1Q. However, we should not read too much into this for the
[8]
9. full year as it is coming from a low base effect and visibility remains poor. We have,
therefore, reduced our discount to its 5-year historical P/BV average from 80% to
20%. This lifts our target price from RM0.53 to RM1.70. The upside catalysts for
Unisem include a) a qoq improvement in earnings, b) revival of end-demand and c) its
higher beta. We attach a lower discount to Unisem vs MPI as its higher liquidity and
beta make it a better play on a market rebound.
Similarly, we think that MPI will report poor 1Q results but expect conditions to
stabilise after. We raise our price objective for MPI from RM3.30 to RM7.40 after
scaling back our discount to its 5-year adjusted historical P/BV from 70% to 40%. The
re-rating catalysts for MPI include a) a qoq improvement in earnings, b) revival of end-
demand and c) increasing risk tolerance. Our preference lies with Unisem over MPI
primarily for its higher beta.
Figure 18: Unisem’s historical P/BV (x)
12
10
8
6
4
2
0
Sep-99 Sep-00 Sep-01 Sep-02 Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08
Source: Bloomberg, CIMB Research
Figure 19: MPI’s unadjusted historical P/BV (x)
15
12
9
6
3
0
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09
Source: Bloomberg, CIMB Research
[9]
11. QUICK TAKES
7 May 2009
MALAYSIA
CIMB Research Report Syariah-compliant stock
TRADING BUY Upgraded
Unisem (M) Berhad RM1.20 Target: RM1.70
Time to reboot? Mkt.Cap: RM566m/US$160m
Semiconductor
UNI MK / UNSM.KL Terence Wong CFA +60(3) 20849689 – terence.wong@cimb.com
Some glimmers of hope
Some glimmers of hope…Rays of hope are permeating the semiconductor industry,
which probably saw most of the bad news in 1QCY09. Global chip sales improved
slightly in Mar 09 with a 29.9% yoy decline compared with a 30.4% yoy fall in Feb 09.
The book-to-bill ratio has ticked up with preliminary Mar 09 numbers hitting 0.61x, up
from Feb 09’s abysmal 0.47x. Finally, utilisation rates have scraped bottom as some
production facilities have been shuttered and inventory control is being exercised. The
end-user markets appear to have troughed, with PC and handset sales probably
hitting the bottom. Furthermore, trade credit is now normalising. That said, stabilisation
does not equate to a recovery and we believe that restocking activity as inventory runs
low is the primary factor in the improving outlook We still expect 2009 to be a difficult
year where the typical seasonal pick up in 3Q may not materialise given the current
re-stocking activities.
…but no full-blown recovery until 2010. We argue that a true recovery will only take
root when the global economy begins to move upwards. A meaningful and sustained
recovery will only take place when consumer sentiment and spending spring back to
life and ASPs start rising. We believe that a more convincing uptrend will take hold
only from 2H10 onwards.
Upgrade sector to TRADING BUY. While the fundamentals for the sector remain
uncertain, we think that downside to share prices is limited as valuations are still below
trough levels. We upgrade the sector from Underperform to TRADING BUY.
Furthermore, in line with our market strategy, we think that investors’ risk appetite is
increasing and higher beta plays such as semicon should be in vogue. Investors
should start picking up semicon stocks ahead of the recovery of the sector as
historically, the share prices for both MPI and Unisem cratered 13-18 months before
the upturn of the sector. Sector catalysts include a) a sooner-than-expected revival of
end-user demand and b) a faster-than-expected economic recovery.
Valuation and recommendation
Upgrade to TRADING BUY with higher target price. We retain our earnings
forecasts but upgrade Unisem to TRADING BUY from Neutral as we believe that the
downside to its share price is limited given that the stock is trading below trough
valuations. Business conditions appear to be improving, with stronger demand and
higher utilisation rates in evidence. Also, Unisem’s MD expects a better 2Q than 1Q.
However, we should not read too much into this for the full year as it is coming from a
low base and visibility remains poor. We have, therefore, reduced our discount to its 5-
year historical P/BV average from 80% to 20%. This lifts our target price from RM0.53
to RM1.70. We assign a lower discount to Unisem vs MPI as its higher liquidity and
beta make it a better play on a market rebound. The re-rating catalysts for Unisem
include a) a qoq improvement in earnings, b) revival of end-demand and c) its high
beta of 1.3x.
For further information, kindly contact Simeon Masuda Koh at 603-2084 9807 or simeon.koh@cimb.com
[ 11 ]
13. QUICK TAKES
7 May 2009
MALAYSIA
CIMB Research Report Syariah-compliant stock
TRADING BUY Upgraded
Malaysian Pacific Industries Bhd RM1.20 Target: RM1.70
Time to reboot? Mkt.Cap: RM566m/US$160m
Semiconductor
UNI MK / UNSM.KL Terence Wong CFA +60(3) 20849689 – terence.wong@cimb.com
Some glimmers of hope
Some glimmers of hope…Rays of hope are permeating the semiconductor industry,
which probably saw most of the bad news in 1QCY09. Global chip sales improved
slightly in Mar 09 with a 29.9% yoy decline compared with a 30.4% yoy fall in Feb 09.
The book-to-bill ratio has ticked up with preliminary Mar 09 numbers hitting 0.61x, up
from Feb 09’s abysmal 0.47x. Finally, utilisation rates have scraped bottom as some
production facilities have been shuttered and inventory control is being exercised. The
end-user markets appear to have troughed, with PC and handset sales probably
hitting the bottom. Furthermore, trade credit is now normalising. That said, stabilisation
does not equate to a recovery and we believe that restocking activity as inventory runs
low is the primary factor in the improving outlook. We still expect 2009 to be a difficult
year where the typical seasonal pick up in 3Q may not materialise given the current
re-stocking activities.
…but no full-blown recovery until 2010. We argue that a true recovery will only take
root when the global economy begins to move upwards. A meaningful and sustained
recovery will only take place when consumer sentiment and spending spring back to
life and ASPs start rising. We believe that a more convincing uptrend will take hold
only from 2H10 onwards.
Upgrade sector to TRADING BUY. While the fundamentals for the sector remain
uncertain, we think that downside to share prices is limited as valuations are still below
trough levels. We upgrade the sector from Underperform to TRADING BUY.
Furthermore, in line with our market strategy, we think that investors’ risk appetite is
increasing and higher beta plays such as semicon should be in vogue. Investors
should start picking up semicon stocks ahead of the recovery of the sector as
historically, the share prices for both MPI and Unisem cratered 13-18 months before
the upturn of the sector. Sector catalysts include a) a sooner-than-expected revival of
end-user demand and b) a faster-than-expected economic recovery.
Valuation and recommendation
Upgrade to TRADING BUY with higher target price. We are upgrading MPI from
Underperform to TRADING BUY as we think that the downside to its share price is
limited given that it is trading below trough valuations. We expect MPI to report poor
1Q results, after which conditions should stabilise. We retain our earnings forecasts
but raise our price objective from RM3.30 to RM7.40 after scaling back our discount to
its 5-year adjusted historical P/BV from 70% to 40%. The re-rating catalysts for MPI
include a) a qoq improvement in earnings, b) revival in end-demand and c) increasing
risk tolerance. However, we prefer Unisem to MPI, primarily for its higher beta.
For further information, kindly contact Simeon Masuda Koh at 603-2084 9807 or simeon.koh@cimb.com
[ 13 ]
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[ 15 ]
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RECOMMENDATION FRAMEWORK #1*
STOCK RECOMMENDATIONS SECTOR RECOMMENDATIONS
OUTPERFORM: The stock's total return is expected to exceed a relevant OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is
benchmark's total return by 5% or more over the next 12 months. expected to outperform the relevant primary market index over the next 12
months.
NEUTRAL: The stock's total return is expected to be within +/-5% of a relevant NEUTRAL: The industry, as defined by the analyst's coverage universe, is
benchmark's total return. expected to perform in line with the relevant primary market index over the next
12 months.
UNDERPERFORM: The stock's total return is expected to be below a relevant UNDERWEIGHT: The industry, as defined by the analyst's coverage universe,
benchmark's total return by 5% or more over the next 12 months. is expected to underperform the relevant primary market index over the next 12
months.
TRADING BUY: The stock's total return is expected to exceed a relevant TRADING BUY: The industry, as defined by the analyst's coverage universe, is
benchmark's total return by 5% or more over the next 3 months. expected to outperform the relevant primary market index over the next 3
months.
TRADING SELL: The stock's total return is expected to be below a relevant TRADING SELL: The industry, as defined by the analyst's coverage universe,
benchmark's total return by 5% or more over the next 3 months. is expected to underperform the relevant primary market index over the next 3
months.
* This framework only applies to stocks listed on the Singapore Stock Exchange, Bursa Malaysia, Stock Exchange of Thailand and Jakarta Stock Exchange. Occasionally, it is permitted for the total expected returns to be
temporarily outside the prescribed ranges due to extreme market volatility or other justifiable company or industry-specific reasons.
CIMB-GK Research Pte Ltd (Co. Reg. No. 198701620M)
[ 16 ]
17. RECOMMENDATION FRAMEWORK #2 **
STOCK RECOMMENDATIONS SECTOR RECOMMENDATIONS
OUTPERFORM: Expected positive total returns of 15% or more over the next OVERWEIGHT: The industry, as defined by the analyst's coverage universe,
12 months. has a high number of stocks that are expected to have total returns of +15% or
better over the next 12 months.
NEUTRAL: Expected total returns of between -15% and +15% over the next NEUTRAL: The industry, as defined by the analyst's coverage universe, has
12 months. either (i) an equal number of stocks that are expected to have total returns of
+15% (or better) or -15% (or worse), or (ii) stocks that are predominantly
expected to have total returns that will range from +15% to -15%; both over the
next 12 months.
UNDERPERFORM: Expected negative total returns of 15% or more over the UNDERWEIGHT: The industry, as defined by the analyst's coverage universe,
next 12 months. has a high number of stocks that are expected to have total returns of -15% or
worse over the next 12 months.
TRADING BUY: Expected positive total returns of 15% or more over the next 3 TRADING BUY: The industry, as defined by the analyst's coverage universe,
months. has a high number of stocks that are expected to have total returns of +15% or
better over the next 3 months.
TRADING SELL: Expected negative total returns of 15% or more over the next TRADING SELL: The industry, as defined by the analyst's coverage universe,
3 months. has a high number of stocks that are expected to have total returns of -15% or
worse over the next 3 months.
** This framework only applies to stocks listed on the Hong Kong Stock Exchange and China listings on the Singapore Stock Exchange. Occasionally, it is permitted for the total expected returns to be temporarily outside the
prescribed ranges due to extreme market volatility or other justifiable company or industry-specific reasons.
For further information, kindly contact Simeon Masuda Koh at 603-2084 9807 or simeon.koh@cimb.com
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