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My Technical Analysis of the Possible Movements of the STI, and All 30 Blue Chip Companies in the Week Ahead (15-19 June 2020) (Guest Post)

My Technical Analysis of the Possible Movements of the STI, and All 30 Blue Chip Companies in the Week Ahead (15-19 June 2020) (Guest Post)

After the Singapore’s benchmark index, the Straits Times Index (STI), finally commencing a new bull run the week before (where it recovered by more than 20% from its trough of 2,209 points in mid-March), the week that just ended last Friday (12 June) saw the STI returning some of the gains (largely due to the Fed casting a gloomy outlook of the economy in the next 2 years ahead.)

This post was originally posted here. The writer, Lim Jun Yuan is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 1195  followers.

After the Singapore’s benchmark index, the Straits Times Index (STI), finally commencing a new bull run the week before (where it recovered by more than 20% from its trough of 2,209 points in mid-March), the week that just ended last Friday (12 June) saw the STI returning some of the gains (largely due to the Fed casting a gloomy outlook of the economy in the next 2 years ahead.)

Particularly, the STI shed 67 points, or 2.4%, to close at 2,684 points (bull run still in-tact as it stayed above 2,650 points). The following is the weekly movement of the STI:
Straits Times Index’s Movements on a Weekly Timeframe

The candlestick pattern resembles a doji – implying an indecision on the direction. However, MACD still remains in an uptrend position. As such, in the week ahead, I feel that the STI may move in either direction – should it be able to break above the resistance line at 2,750 points, then it could advance further from there. Otherwise, it could once again retreat to somewhere around 2,650 points.

Moving on, here’s my technical analysis of each of the 30 blue chip companies listed on the Straits Times Index based on their weekly share price movements to share with you.

Let’s begin…

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A New Bull Run has Just Started on the STI. What’s Next? (Guest Post)

A New Bull Run has Just Started on the STI. What’s Next? (Guest Post)

Before I begin, a disclaimer – I am not a certified financial advisor, and the views that you’re about to read below are my personal views based on my analysis of the STI which I am sharing for educational purposes only. Also, whatever companies which I may mention in this post below are by no means a recommendation to buy/sell shares in them.

This post was originally posted here. The writer, Lim Jun Yuan is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 1134  followers.

If you have been following my weekly technical analysis of the STI, you will know that I have been waiting for the STI to go above 2,650 points – which implies a recovery of 20% from the trough of 2,208 points around mid-March 2020, and a birth of a new bull market.

Yesterday, the STI went up by 88.86 points, or +3.4% compared to the previous day to close at 2,700.39 points – implying the start of a new bull market (the following screenshot is a daily movement of the STI):
Daily Movement of Singapore’s Benchmark Straits Times Index, Where it Crossed Above 2,650 Points at Close Yesterday (03 June 2020)

There are a couple of reasons for the optimism, and one of them is due to the relaxation of the two-month circuit breaker measures with effect from 02 June 2020, as Singapore moves into Phase One of post-circuit breaker. Also, there is optimism that Phase Two (which includes the re-opening of retail shops, and dining in at F&B outlets) may be implemented sooner rather than later (we await for further news to be announced in the middle of June.)

Additionally, there are also discussions to resume essential business travels between Singapore and other countries (and this bodes well for businesses in the aviation industry and hotels.) Personally, I feel that any confirmation as to when Phase Two will start, and also the further lifting of travel restrictions will lead to the STI leaping higher.

Despite all the positivity, however, there may be events which may peg back the climb of the STI – chief of which is the second wave of Covid-19 in the country, leading to the re-implementation of the circuit breaker measures (to prevent that from happening, all of us have a part to play here to adhere to the safe distancing measures, and putting on a mask at all times whenever we are outside of our residence to stem the community spread of the virus), and another being the further deterioration of relationship between the United States and China – which may negative impact trade further straining the growth of the global economy. …

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My Technical Analysis of STI’s (along with All 30 Blue Chip Companies’) Share Price Movements in the Week Ahead (01 – 05 June 2020)

My Technical Analysis of STI’s (along with All 30 Blue Chip Companies’) Share Price Movements in the Week Ahead (01 – 05 June 2020)

Today is the first day of another new month, and also the last day of the two-month circuit breaker period (which the Singapore government put in place since 07 April 2020 in a bid to contain the community spread of Covid-19 in the country.) I certainly hope that all of you who are reading this post are doing great so far.

 

This post was originally posted here. The writer, Lim Jun Yuan is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 1100  followers.

After a two week break, I’m here once again to share with you my personal technical analysis on the movement of Singapore’s benchmark Straits Times Index (STI), as well as the movements of all 30 blue chip companies in the coming week ahead.

Before I begin, a disclaimer – whatever you are about to read from this point onward is based on my personal technical analysis, which I am sharing with you for educational purposes only. They do not represent any buy or sell calls for any other companies listed below. Please do your own due diligence before you make any trading/investing decisions.

With that out of the way, let us first take a look at the weekly movements of the STI below:

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Possible Movements of 30 Blue Chip Companies in the Week Ahead(between 13 – 17 April 2020) (Guest Post)

Possible Movements of 30 Blue Chip Companies in the Week Ahead(between 13 – 17 April 2020) (Guest Post)

If you have been following my weekly posts, you probably would be aware that I’ve mentioned before that, should the STI for the week closed above 2,560 points, we could see a possible change in trend.  That said, is an uptrend in sight? In my post today, I’d be sharing with you my personal thoughts on how the STI, as well as all the 30 blue chip companies’ share price may move in the week ahead based on a weekly timeframe…

This post was originally posted here. The writer, Jun Yuan Lim is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 858 followers.

If you have been following my weekly posts on the possible movement of STI and all 30 blue chip companies’ share price movements, you probably would be aware that I’ve mentioned before that, should the STI for the week closed above 2,560 points, we could see a possible change in trend (from a downward moving one to an upward moving one.)

When trading for the week ended last Thursday (09 April 2020), STI was at 2,571 points (above the 2,560 points.) That said, is an uptrend in sight? In my post today, I’d be sharing with you my personal thoughts on how the STI, as well as all the 30 blue chip companies’ share price may move in the week ahead (between 13 – 17 April 2020) based on a weekly timeframe…

 

1. Straits Times Index
Straits Times Index’s Movements on a Weekly Timeframe

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Why Did I Add UOB (SGX:U11) to My Long-Term Investment Portfolio (Guest Post)

Why Did I Add UOB (SGX:U11) to My Long-Term Investment Portfolio (Guest Post)

Some insights about UOB ’s historical financial performance, along with its dividend payouts to shareholders over the years and many more.

This post was originally posted here. The writer, Jun Yuan Lim is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 797 followers.

 UOB launches high street branch model at Faber House targeting ...

Why Did I Add UOB (SGX:U11) to My Long-Term Investment Portfolio

With my investment in UOB (SGX:U11) on 06 March 2020 at my intended entry price of S$23.26 (based on this entry price, and a dividend payout of S$1.30/share in FY2019, my dividend yield is 5.6%), I now have all 3 Singapore banks, plus another financial institution in Hong Leong Finance (SGX:S41) in my long-term investment portfolio.

In my post today, I would like to share with you reasons why I’ve invested in the bank…

 

Brief Introduction to United Overseas Bank

Before I talk about the bank’s historical financial performance, along with its dividend payouts to shareholders over the years, let me first a quick introduction about the bank.

Besides Singapore, UOB has more than 500 branches and offices in 19 countries (Australia, Brunei, Canada, China, France, Hong Kong, India, Indonesia, Japan, Malaysia, Myanmar, Philippines, Singapore, South Korea, Taiwan, Thailand, United Kingdom, United States of America, and Vietnam.)

 

Historical Financial Performance of UOB over the Past 10 Years

Before I put my hard-earned money into any company, I will need to make sure the company fulfils some criteria – one of which is an improving set of financial results reported by the company over the years.

In this section, I will be sharing some of the key financial statistics reported by UOB over a period of 10 years (between FY2010 and FY2019):

Net Interest Income, Net Fee & Commission Income, and Other Non-Interest Income:

UOB’s “Total Income” comprises of 3 business components – (i) Net Interest Income, (ii) Net Fee & Commission Income, and (iii) Other Non-Interest Income.

Let us now take a look at the performances of these 3 business components between FY2010 and FY2019:

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SIA Rights Issue: Debunking The Complication Behind The Math (Guest Post)

SIA Rights Issue: Debunking The Complication Behind The Math (Guest Post)

Most of you would probably have been aware of Singapore Airlines’ (SIA) plight and the need to do a massive fund-raising exercise, fully-backed by Temasek. This means that if Singaporeans are not willing to support our national carrier by subscribing to those new shares, Temasek will come in to backstop 100% of the issue. SIA looks to raise a total amount of S$15bn (SIA Rights), through a combination of S$5.3bn in Rights Shares issuance and S$9.7bn via Rights mandatory convertible bonds or MCB for short.

This post was originally posted here. The writer, Royston Tan is a veteran community member and blogger on InvestingNote, with username known as Royston_Tan and has 17 followers.

SIA reassures cabin crew on medical leave system, Singapore News ...

SIA RIGHTS ISSUE: DEBUNKING THE COMPLICATION BEHIND THE MATHS

By now, most of you would probably have been aware of Singapore Airlines’ (SIA) plight and the need to do a massive fund-raising exercise, fully-backed by Temasek. This means that if Singaporeans are not willing to support our national carrier by subscribing to those new shares, Temasek will come in to backstop 100% of the issue.

SIA looks to raise a total amount of S$15bn (SIA Rights), through a combination of S$5.3bn in Rights Shares issuance and S$9.7bn via Rights mandatory convertible bonds or MCB for short.

S$15bn looks like a HUGE amount of equity to be raised, particularly when one compares with SIA’s key competitor Qantas which, a few days prior to SIA’s announcement, highlighted that it has managed to secure ONLY A$1.05bn in collateralized (against its fleet of 7 Boeing 787 aircraft) debt funding at an interest rate of 2.75%. Qantas share price appreciated by 26%.

Unlike SIA which has been levering up on its balance sheet to make new aircraft purchases, Qantas, on the other hand, has maintained a steady net debt balance of A$3bn over the past 3 years. Comparatively, SIA’s net debt balance has ballooned to S$8bn (including lease liabilities) as at end-2019 as a result of their aggressive fleet renewal plan.

So, Qantas (with a market cap of A$5bn) requires an additional A$1bn to tide over this major aviation crisis (for now perhaps) while SIA (now with a market cap of S$7bn) requires a potential total of S$15bn (plus S$4bn in bridging loan) and one can see the huge disparity in terms of capital management.

With that notion in place, let’s evaluate the two Rights issuance, first the SIA Rights Share followed by the SIA Rights Mandatory Convertible Bonds.

I will then follow up with 4 scenario analysis for a potential SIA shareholder and calculate what might the market value of the SIA Rights Shares and SIA Rights MCBs be worth when they start trading.

They are; …

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The Hammer Candlestick Trading Strategy Guide (Guest post)

The Hammer Candlestick Trading Strategy Guide (Guest post)

The Hammer candlestick pattern is a powerful entry trigger. If you were to trade it, your stop loss is at least the range of the Hammer (or more). But won’t it be great if you can reduce the size of your stop loss and improve your risk to reward?

This post was originally posted here. The writer, Rayner Teo is a veteran community member and blogger on InvestingNote, with username known as Rayner and has 310 followers.

According to most textbooks:

Whenever you spot a Hammer candlestick pattern, you should go long because the market is about to reverse higher.

And that’s what you do.

But the next thing you know…

The price immediately reverses and you get stopped out for a loss.

And you wonder to yourself:

“Wait a minute, isn’t a Hammer candlestick a bullish signal?

“Why did the market reverse against me?”

“What’s going on?”

Well, let me tell you a secret…

A Hammer candlestick pattern doesn’t mean jackshit (and I’ll explain why later).

But first, let’s understand what a Hammer candlestick pattern is about…

What is a Hammer candlestick pattern?

A Hammer is a (1- candle) bullish reversal pattern that forms after a decline in price.

Here’s how to recognize it:

  • Little to no upper shadow
  • The price closes at the top ¼ of the range
  • The lower shadow is about 2 or 3 times the length of the body

And this is what a Hammer means…

  1. When the market opens, the sellers took control and pushed price lower
  2. At the selling climax, huge buying pressure stepped in and pushed price higher
  3. The buying pressure is so strong that it closed above the opening price

In short, a hammer is a bullish candlestick reversal candlestick pattern that shows rejection of lower prices.

Now, this is important.

Just because you see a Hammer candlestick doesn’t mean you go long immediately.

Here’s why…

The truth about Hammer candlestick (that most gurus don’t even know)

Are you ready?

Here you go…

  1. A Hammer is usually a retracement against the trend
  2. The Hammer doesn’t tell you the direction of the trend
  3. The context of the market is more important than the Hammer

Let me explain…

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A Look into the Possible Share Price Movements of Singapore’s Blue Chip Companies in the Week Ahead (30 Mar – 03 Apr 2020) [Guest Post]

A Look into the Possible Share Price Movements of Singapore’s Blue Chip Companies in the Week Ahead (30 Mar – 03 Apr 2020) [Guest Post]

During the course of last week, the STI fell to a low of 2,208 points, before rebounding up strongly to finish the week at 2,528 points. In my opinion, in order for the trend to be considered as reversed (i.e. from a downtrend to an uptrend), it must close above 2,560 points when trading for the week closes this Friday (i.e. 03 April.) Otherwise, in my opinion, the overall trend is still a downward one.

This post was originally posted here. The writer, Jun Yuan Lim is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 772 followers.

The share prices of quite a number of blue chip companies rebounded last week – but in my opinion, the trend is still a bearish one.

Before I proceed to analyse the share price movements of each of the 30 blue chip companies last week, and possible movements in the week ahead (for the trading week between 30 March and 03 April 2020) based on a weekly timeframe, here’s the share price movement of the STI on a weekly timeframe:
STI’s Movements on a Weekly Timeframe

During the course of last week, the STI fell to a low of 2,208 points, before rebounding up strongly to finish the week at 2,528 points. In my opinion, in order for the trend to be considered as reversed (i.e. from a downtrend to an uptrend), it must close above 2,560 points when trading for the week closes this Friday (i.e. 03 April.) Otherwise, in my opinion, the overall trend is still a downward one.

Now, let us take a look at how each of the 30 blue chip companies performed last week, and how they are likely to perform in the week ahead:

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Updates from Manulife US REIT & Prime US REIT (Guest Post)

Updates from Manulife US REIT & Prime US REIT (Guest Post)

Most of the REIT investors endure some extreme volatility in this March Madness. Their holdings have quite a good run in 2019.Coming into 2020, investors believe that the low rate environment is here to stay. Even when the threat of Covid-19 reaching the United States and Europe, investors rationalize that when the interest rate plunge, this must be a more conducive environment for the REITs. What comes next is that in a span of 2 weeks, many REITs saw their stock prices plunge 50%.

This post was originally posted here. The writer, Kyith Ng is a veteran community member and blogger on InvestingNote, with username known as Kyith and has 954  followers.

Most of the REIT investors endure some extreme volatility in this March Madness. Their holdings have quite a good run in 2019.

Coming into 2020, investors believe that the low rate environment is here to stay. Even when the threat of Covid-19 reaching the United States and Europe, investors rationalize that when the interest rate plunge, this must be a more conducive environment for the REITs.

What comes next is that in a span of 2 weeks, many REITs saw their stock prices plunge 50%.

Manulife US REIT and Prime US REIT both endure the same fate as their peers.

In the past 2 days, both REITs provided some updates to analysts, so as to address the potential uncertainties of investors.

Since then both REITs saw their share price go up 20-25%. Manulife’s share price held up better, probably because they are in the Index and are much more liquid.

Their transparency may have worked wonders for their share price. However, overall, a lot of the REITs managed to bounce off their lows.

Here are some updates that I have gathered.

 

Possible Reasons for the Sharp Price Falls

Management updated that possible reasons why the draw down was so swift was due to

  1. Manulife’s entry into the index. When index funds, exchange-traded funds systematically sell down, there isn’t many fundamentals per se
  2. There was a lot of margin calls from the Private Banks (my friend KK from RisknReturns mentioned a few days ago that the three US Office REITs may have been removed from the list of marginable stocks on private banks)
  3. Funds redeeming and switching around. They are switching from smaller stocks to more liquid stocks
  4. Ultra-rich Chinese are facing heavy margin calls (we can guess who they are). Manulife US REIT does not have them on their register

 

Are Manulife US REIT’s Properties Affected?

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Singapore Airlines Ltd (SGX: C6L) Is In Deep Trouble And Rights Issue Call Is Imminent (Guest Post)

Singapore Airlines Ltd (SGX: C6L) Is In Deep Trouble And Rights Issue Call Is Imminent (Guest Post)

The Covid-19 situation has hit the aviation industry really hard and in particular the airlines, SIA, since they are highly capitalized business which needs constant cashflow to fund their operating costs, capex and fixed costs. In the scenario where they have to cut capacity like where we are in this situation now, the company may be able to “save” on their operating costs since they do not have to incur charges like handling and ground charges that are related to the operating business.

This post was originally posted here. The writer, Brian Halim is a veteran community member and blogger on InvestingNote, with username known as 3Fs and 2068+ followers.

Image result for sg airline

Singapore Airlines Ltd (SGX: C6L) Is In Deep Shit And Rights Issue Call Is Imminent

The Covid-19 situation has hit the aviation industry really hard and in particular the airlines since they are highly capitalized business which needs constant cashflow to fund their operating costs, capex and fixed costs.

In the scenario where they have to cut capacity like where we are in this situation now, the company may be able to “save” on their operating costs since they do not have to incur charges like handling and ground charges that are related to the operating business.

But, they do have to continue paying for parking charges to the airport, levies as well as fixed costs such as salaries and rental that will continue to bleed the business.

Cashflow Simulation Run
I’ve run a simulation run where the left hand side shows their latest Q3 results for the year ending 31 Dec 2019, while the middle portion reflects what the situation is today. On the right side, I’ve accounted for movement that is related to cashflow, so things like depreciation is taken out of context because they are non-cashflow related items.

The middle portion reflects the current scenario we have today.

For example, the topline sees a 95% capacity cut which was announced just a few days ago since Singapore is on semi-lockdown situation. Consequently, I’ve adjusted the same for operating costs related such as fuel, inflight meals and handling charges.

For staff costs, I’ve used a 20% haircut across the payroll while for other fixed costs I’ve taken a 50% haircut.

The resulting loss coming in from this simulation is a negative $(1,998m) for the quarter. If we divide this by months, it means incurring a net loss of $(666m) / month.

What this means from a cashflow point of view is that should the situation prevails, the company is burning approximately $1,461m in cash every quarter, or $487m every month.

Now, this might look okay if you are in a good standing order in terms of your balance sheet but let’s see what they have today. …

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