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The following is extracted from an appendix probably from one of the recent quarterly report. Is it accurate to say that IPCO cost of purchase of Blumont and Innopac was only $0.015 and $0.01 per share respectively ?

Blumont
On 7 October 2010, Asia Plan Ltd, in which the Group holds a 70% equity interest and which is engaged in real estate development near Seattle in the state of Washington, USA via its wholly- owned subsidiary Capri Investment L.L.C. (?Capri?), entered into a Conditional Sale and Purchase Agreement (?S&P?) with Blumont Group Ltd, a company whose shares are listed and quoted on the Main Board of the SGX-ST, and Blumont?s subsidiary company, Phelago Holdings Pte Ltd, to sell 37 finished lots held by Capri for an aggregate purchase consideration of S$2.96 million. Upon completion of the transaction on 28 September 2011, the group received 137,956,868 shares of Blumont (70% of the total of 197,081,240 shares issued to Capri) at a price of S$0.015 per share. At the time this represented 10.93% of Blumont?s issued share capital, in addition to the 26 million shares previously held by the Group.
The closing price per share for Blumont was S$0.80 and S$1.385 as at 30 April 2013 and 31 July 2013, respectively.
Innopac
On 16 February 2011, the Group?s wholly-owned subsidiary, Dimensi Cita Sdn Bhd entered into a Conditional Sale and Purchase Agreement (?S&P Agreement?) with Innopac Holdings Ltd, a company whose shares are listed and quoted on the Main Board of the SGX-ST, whereby Innopac acquired from Dimensi 100% of the issued and paid-up ordinary shares capital of Enigma Venture (M) Sdn. Bhd. for a total consideration of S$2,000,000.
Upon completion of the transaction on 10 April 2012, the Company received 200,000,000 new ordinary shares of Innopac at S$0.01 per share as full settlement of the consideration based on the S&P Agreement. At the time this represented 9.89% of Innopac?s issued share capital.
The closing price per share for Innopac was S$0.20 and S$0.135 as at 30 April 2013 and 31 July 2013, respectively.

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Not sure if NOL is into breadbulk an heavylift ocean cargo but overall improvement will ultimately aids freight rates recovery.

Breakbulk, Heavy-Lift Market Poised for Resurgence

Peter T. Leach, Senior Editor | Jan 22, 2014 10:48AM EST

The market for breakbulk and heavy-lift ocean cargo is emerging from the doldrums it experienced last year. Although a backlog of global industrial projects carried the heavy-lift sector through 2012 and construction of new pipelines and wind farms in the U.S. filled inbound multipurpose breakbulk vessels that year, demand largely dried up in 2013. But the picture is brightening, and the market is positioned for a significant recovery in 2014 and 2015.

?2013 was a lackluster year,? said Bob Sappio, president and CEO of Rickmers Group in the Americas. ?While it?s probably not boom time yet, what has gotten everybody so excited is the outlook for 2014 and beyond.?

The excitement in the project cargo business is the sheer number of chemical, petrochemical, refining and other projects being planned for construction along the Gulf Coast from New Orleans to the Mexican border. ?The number of projects, whether ammonia plants or refineries or power plants, is monumental,? Sappio said. That?s on the coast alone, and doesn?t include all the breakbulk and heavy-lift cargo that will move through Gulf ports destined for energy-related projects being built in Montana and the Dakotas to handle the boom in natural gas fields being developed by hydraulic fracturing.

Houston is at the center of all the new developments. ?It?s truly boom time here in Texas,? said Len Waterworth, executive director of the Port of Houston Authority. Energy and petrochemical companies have announced plans to invest $35 billion in plants lining the banks of the 52-mile Houston Ship Channel and may invest almost twice that as the gas boom develops further. Many of the investments are geared to retrofit those plants, which once processed petroleum imports for the domestic U.S. market, to refine domestic natural gas into products for export. ?The industry is excited about the import of components, the machinery and the modules needed to build these refineries,? Sappio said. ?If you talk to anyone, like GE or the forwarders, they are all bullish about 2014 and beyond.?

Heavy-lift carriers also are benefiting from investments by foreign steelmakers in the U.S., including Luxembourg-based Arcelor Mittal, which in November agreed to acquire the ThyssenKrupp plant in Alabama, and India?s Tata Steel, which is building a plant in the U.S. to take advantage of cheap natural gas. Tianjin Pipeline, the biggest Chinese investment in the U.S., has started construction on the first phase of a $1.3 billion plant in Corpus Christi, Texas, to build steel pipes for oil and gas pipelines.

Beyond the U.S., the outlook for the global project cargo market also appears to be picking up. Offshore oil fields are being developed in Mozambique. New projects are under way in Southeast Asia and South America. Although the market for breakbulk cargo has dwindled in countries such as Brazil, which imposes high protectionist taxes on imported steel and forest products, this has spurred investment by global steelmakers to build plants in the markets they serve.

The timing for construction of all these projects comes as the breakbulk and heavy-lift carriers come to the end of the multipurpose vessel orders they placed in happier times, when it looked like global projects would keep these new vessels filled.

?When you put that bullish demand projection against what it looks like in the supply of MPVs, all of a sudden from a ship operator?s perspective things are looking pretty good,? Sappio said.

The multipurpose vessel orderbook begins to decline precipitously in 2014 and 2015, so as demand increases, fewer new vessels are being delivered. Supply and demand will come into equilibrium in the latter half of 2014, and after 2014 vessel space may not be enough to meet demand for all these new projects. That will lift freight rates, which have been flat to down over the last year and plunged many ship operators into the red.

?Everybody is getting creamed right now from an earnings standpoint on the breakbulk side,? Sappio said. ?The cost of fuel is still relatively high, and up until now demand has been anemic and there have been plenty of ships.?

Rates may continue to be under pressure at the beginning of the year, but in the second half when volume accelerates and delivery of new multipurpose vessels tails off, the sector will recover more rapidly than others.

?Breakbulk people want to make money again, so they are going to wait a while before they start ordering,? Sappio said. ?Hopefully, before the industry begins to order again, everybody will allow rates to stabilize and get healthy again. They will allow demand to be firmly in place.?

Contact Peter T. Leach at pleach@joc.com and follow him at www.twitter.com/petertleach.

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JOC ? Maritime News ? International Freight Shipping
JOC Economist: Growth in US Containerized Imports to Rise in 2014

Bill Mongelluzzo, Senior Editor | Jan 17, 2014 3:37PM EST

U.S. containerized imports are projected to increase 6 percent in 2014, up from 3.5 percent growth in 2013, according to Journal of Commerce economist Mario Moreno.

Moreno told a JOC webcast on the maritime industry Thursday that the strong growth in imports will be led by auto parts, footwear and apparel ? all of which are high-volume cargoes that move by sea.

Containerized exports, however, are projected to grow only modestly as Europe contends with fiscal austerity measures and the economies of developing nations experience less robust growth. Exports are projected to increase 2 percent this year, up marginally from the estimated export growth of 1.9 percent in 2013.

Nevertheless, U.S. containerized imports and exports are expected to set new records in 2014, indicating that the worst effects of the 2008-09 global economic recession are finally over.

Year-over-year percent change in U.S. containerized imports, 2009-2014

Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation, also sees strong import growth this year, although the retailers group is not quite as bullish as Moreno. Gold projects import growth of 3.7 percent in 2014.

Holiday sales helped retailers end 2013 on a happy note. Gold said holiday sales increased an estimated 3.9 percent over the holiday period of 2012, with online sales increasing 13 to 15 percent.

Retailers, though positive about growth prospects in 2014, will nevertheless face a number of economic and operational challenges. Consumer confidence and jobs creation remain a drag on growth, while legislative and regulatory uncertainties hang over the transportation industry.

The evolving chassis management regime could result in equipment dislocations and shortages, and regulatory changes including federal hours of service limitations for drivers and localized clean-truck requirements could result in truck capacity shortages.

Retailers are still waiting to see what impact the formation of the P3 Network involving Maersk Line, Mediterranean Shipping Co. and CMA CGM ? the three largest container lines in the world ? will have on rates and service, Gold said. The alliance will begin operations later this year if it receives regulatory approval in the U.S., Europe and China.

The U.S. housing industry was a driver of growth in 2013 as existing home sales reached 420,000 units, Moreno said. Increased home sales have a direct correlation to increased imports of furniture, which is the highest-volume containerized import.

After eight strong months of existing home sales in 2013, sales dropped in September, October and November. That led to a decline in furniture imports of 5 percent in November and 1 percent in December. Moreno expects home sales to grow more modestly in 2014, due to low inventory and rising mortgage rates.

On the other hand, the nation?s ?resilient manufacturing sector? will add jobs and increase production in 2014, especially in the auto sector, Moreno said. The industry is forecasting total sales of 16.6 million autos and light trucks, which will result in increased imports of auto parts. Auto parts are the second largest import category, accounting for 4.5 percent total containerized imports.

Contact Bill Mongelluzzo at bmongelluzzo@joc.com and follow him at twitter.com/billmongelluzzo.

Maritime News?International Freight Shipping
Economy Watch?US Economy News
International Trade News?Trade Data?United States Trade Data
North America?United States
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While freight rate from Shanghai to US increases 3 weeks in a row that has not happened since 2012 for more than 2 weeks in a row, the Asia-Europe is trying to hold on to their gain from last GRI. Nonetheless, the rates re generally 137%-150% higher than 3 mths ago. There should be good sign that rates may be holding up and likely trend even higher. The key lies in demand and Europe's sustainable recovery and improved global trade for the impetus.

SCFI: Asia-to-Europe Spot Container Rates Erode

JOC Staff | Jan 21, 2014 11:40AM EST

Shanghai Containerized Freight Index, North Europe, week ending Jan. 17, 2014

Spot container rates from Asia to northern European and Mediterranean ports measured by the Shanghai Containerized Freight Index fell for a second straight week in the week of Jan. 17, following jumps of more than $200 in the trade lane because of a general rate increase. Lanes have already seen increases erode by more than half of what they gained in the week of Jan. 3.

"Carriers could be starting to get very nervous that rates are falling at this pace already, amidst the rush of sailings ahead of Chinese New Year alongside a flurry of blank sailings," said Michael Rainsford, freight trader for Morgan Stanley Commodities, in an interview with the JOC. "While no announcements have yet been made about the next GRI on the Asia-Europe trade, a decline of this magnitude does increase the probability that carriers will have to announce something for March if not before. Failing this, rates will succumb to fundamentals, and assuming the return of weekly schedules to their normal state, this will not be pretty for carriers."

The spot rate from Shanghai to northern European ports for the week ending Jan. 17 slipped 4.2 percent from the week before, down to $1,641 per TEU. Rates have lost $124 of the $254 increase achieved in the week of Jan. 3. However, rates are still up nearly 150 percent or $980 from the week of October 18, three months ago. The current SCFI rate to northern Europe is 21.6 percent above where it was at the same point in 2012.

Shanghai Containerized Freight Index, Mediterranean, week ending Jan. 17, 2014

The spot rate from Shanghai to Mediterranean ports declined 4.3 percent from the week before to $1,670 per TEU, according to the latest SCFI data issued by the Shanghai Shipping Exchange. Rates have lost $121 of the $221 increase achieved in the week of Jan. 3. However, rates are still up 137 percent or $965 from the week of October 18, three months ago. The SCFI to the Mediterranean index is up 27.4 percent year-over-year.

"In conversation with our customers that are actively trading container derivatives today, a large number have been let down by their carriers in recent weeks on pre-agreed contract rates. Shippers and NVOCCs, in the belief that they had secured space at an attractive rate for the 2014 period, were being told that carriers simply cannot move their freight at the contract price, as spot prices are buoyant and ships are full. Without sounding like broken record, this behaviour is inevitable. Carriers hold all of the cards in a market that can absorb rate increases and where the contracting mechanism does not have to be honored and rarely legally binding in nature. Those customers that are paying index rates today having fixed their net price in via a hedge are laughing. Regardless of how high spot rates go, the shipper's boxes will load as they have the power to pay index/spot on the physical, which will be compensated by their hedge," Rainsford said.

"The February and March 2014 forward prices for Asia-Europe are actively trading around the levels $1,400 per TEU and $1,325 per TEU, respectively," he added. "While discounted to spot rates, these levels are proving very appealing to carriers that could be realizing that rates rarely stay around these levels for long. If the market turns sour, the decline is rapid and unstoppable. Being able to give customers the chance to pay index in a falling market while protecting revenues at these prices is attractive going into the months ahead."

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SCFI: Shanghai-to-US Spot Rates See Third Straight Increase

JOC Staff | Jan 21, 2014 11:19AM EST

Shanghai Containerized Freight Index, U.S. West Coast, week ending Jan. 17, 2014

Spot container rates from Asia to the U.S. East and West Coasts, as measured by the Shanghai Containerized Freight Index, increased for a third straight week in the week ending Jan. 17. Consecutive increases have not extended past two weeks since 2012.

The second round of the two-stage rate general rate increase proposed by the Transpacific Stabilization Agreement took effect on Jan. 15 in Asia-U.S. lanes. Carriers including MOL, Evergreen, Cosco Container Lines and U.S. Lines adopted the proposed increase of $300 per FEU in the Asia-to-U.S. trade lanes.

Shanghai Containerized Freight Index, U.S. East Coast, week ending Jan. 17, 2014

The spot rate from Shanghai to the U.S. West Coast jumped 13.1 percent, or $245 from last week to $2,111 per FEU, according to SCFI data issued by the Shanghai Shipping Exchange. This is the highest rate in this lane since early July 2013. During the past three weeks, the rate has increased $308 per FEU. Despite being two weeks ahead of an early Chinese New Year, the spot rate in the week ending Jan. 17 is still 16.2 percent below the level in the same week last year, when the rate stood at $2,520.

The spot rate to the U.S. East Coast climbed 6.6 percent, or $213 per FEU, to $3,430 in the week ending Jan. 17. This is the highest rate level since the week of Aug. 16, 2013. The rate is up $323 over the past three weeks. Despite the increase, the current rate remains down 6.5 percent year-over-year, from $3,670 one year ago.

Drewry?s benchmark rate for shipping from Hong Kong to Los Angeles climbed $200 in the week of Jan. 15, after remaining unchanged for three weeks. It rose to $2,086.

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2 white candle bars in a row. Will it repeat another round of 8 white candle bars consecutively and break out of 1.135 towards 1.25 this round ?

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RM2583 ▲ 6 ▲ 0.23% US $775
January 22 2014 11:00:00 AM

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PUBLISHED JANUARY 22, 2014
Top CEOs more confident on economy in 2014: survey

Major worries emerging in survey responses were a feared tightening of business regulation and an enduring inability by governments to slash deficits and wind down debt - PHOTO: BLOOMBERG
[DAVOS, Switzerland] Top business leaders are increasingly confident about the state of the world economy though they are only slightly more bullish on the prospects for their own companies, according to a major survey released at the Davos forum Tuesday.
According to the survey of 1,344 chief executives conducted by financial services firm PricewaterhouseCoopers, those forecasting a recovery in the world economy jumped to 44 per cent, up sharply from 18 per cent last year.
Only seven per cent of corporate bosses thought a recession was looming in 2014, a significant plunge from the 28 per cent expecting a contraction last year.
By region, CEOs in Western Europe were the most confident, with half of the respondents brushing off years of debt crisis for a far rosier outlook.

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PUBLISHED JANUARY 22, 2014
Top CEOs more confident on economy in 2014: survey

Major worries emerging in survey responses were a feared tightening of business regulation and an enduring inability by governments to slash deficits and wind down debt - PHOTO: BLOOMBERG
[DAVOS, Switzerland] Top business leaders are increasingly confident about the state of the world economy though they are only slightly more bullish on the prospects for their own companies, according to a major survey released at the Davos forum Tuesday.
According to the survey of 1,344 chief executives conducted by financial services firm PricewaterhouseCoopers, those forecasting a recovery in the world economy jumped to 44 per cent, up sharply from 18 per cent last year.
Only seven per cent of corporate bosses thought a recession was looming in 2014, a significant plunge from the 28 per cent expecting a contraction last year.
By region, CEOs in Western Europe were the most confident, with half of the respondents brushing off years of debt crisis for a far rosier outlook.

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Good and fair analysis. Don't really need too much guts. Limited downside so more of needing much patience and holding power. I believe it will break up above the 200D MA not too long from now.

marubozu1688 ( Date: 21-Jan-2014 22:43) Posted:

Yup.. Need a lot of guts but base on the chart, NOL looks like finding a bottom now. However, Fundamental is still pretty weak.

http://mystocksinvesting.com/singapore-stocks/cosco-corp/will-shipping-stocks-in-2014-recover/

ascend88 ( Date: 20-Jan-2014 15:14) Posted:

it take lots of guts to buy during low time....

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From Bloomberg, IMF Raises its 2014 Global Growth Forecast to 3.7% vs Prior Estimate of 3.6%

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RM2578 ▲ 10 ▲ 0.39% US $773
January 21 2014 6:31:00 PM

Lucky03 ( Date: 21-Jan-2014 18:59) Posted:

RM2578 ▲ 10 ▲ 0.39% US $773

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RM2578 ▲ 10 ▲ 0.39% US $773

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RM2570 ▲ 2 ▲ 0.08% US $774
January 21 2014 11:15:00 AM

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http://myfcoach.com/ein55-004/

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Stock and Property Investment Coaching Program
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Interview with Dr Tee: 2014 Singapore Stock Market Outlook
COACHES' ARTICLES, SPECIFIC STOCKS, STOCK INVESTING, UPDATES CURRENT MARKET ANALYSIS, DR TEE, EIN55 STYLES, QE, SINGAPORE, STI, STOCKS LEAVE A COMMENT
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By: Dr Tee (Ein55), Investing Mentor of www.MasterYourFinance.com & myfcoach.com

Date: 18th Dec 2013 Email: ein55.tee@gmail.com

Below are my questions for my 2014 outlook story for local stock market:

Q1) What are the major events, such as Fed?s tapering of QE and debt ceiling issue, that will affect the performance of the local stock market?

Singapore is a ?penny stock market? from a global perspective, weightage is less than 1%, therefore any major event, especially from the world No 1 economy (US) and No 2 economy (China), will have significant impact on the local stock market performance. Due to globalization of businesses, as well as easy flow of liquidity from one investment market to another one without international border, local stock market generally will follow the trend of major regional stock markets.

For Fed QE3, here are the potential impacts to local markets:

1) Significant reduction in liquidity of global market (from US$85B to $0 per month, tapering over a period) which will also implicate Singapore, as there will be less foreign investment funds (eg. from US and other regions) flowing in to local stock market. However, this likely will be just a correction (<20% downside), not a major trend reversal from bull to bear market (>40% downside) as in a global financial crisis.

2) If the Fed could make the QE3 tapering more gradual, eg. $10B/month or lesser reduction, the effect will be less intense, stock market could take the impact easily because the shortage of liquidity may be filled in by new funds from everyone?s pocket when more jobs are created, resulting in higher spending and investing activities. However, if US$85B/month is terminated abruptly to $0 within 1 month, this will be a shock to the stock market, reducing short-term confidence of investors, leading to significant correction to global and local stock markets.

3) US government bond yield will increase when the asset purchase by the Fed is reduced due to lower bond prices, resulting in higher borrowing cost. Singapore government bond yield will also increase gradually, following similar footsteps of US government bond. When bond price is reduced, the fund from bond market will partially flow to stock market, aiming at quicker and higher return of investment. For short term, both global and local stock market will suffer due to lack of confidence, but once the strength of global and local economy is demonstrated, it will support stock market in longer term, attracting more funds to exit from bond market, injecting into stock market. For Singapore, since the property market is at much higher state of % Optimism, the downside is more than the upside, therefore short-term and mid-term investors may be in favour of stock market over property market.

4) US dollar index will increase but the exchange rate of USD/SGD will increase more gradually, partially due to appreciation of SGD to fight the inflation. For local stock market with counters traded in US$, they could benefit from rises of both stock market and also USD/SGD exchange rate in longer term.

US debt limit crisis is just a political show, unlikely to cause major impact to both global and local stock market, but it could result in some correction due to fear of investors. From practical point of view, it is nearly impossible for US government to ?commit suicide? to default in payment of sovereign debt (eg. US government Treasury bonds) because this is the main source of cheap loans (was 2% for 10 year bond) from global investors (who balance their investing portfolio with some safer components) which help the accelerate the growth of US economy at lower cost. If US government loses its credibility, other countries (China, Japan, Singapore, etc) who invest over trillion of US$, unlikely to increase its stake, then the US government bond price may collapse, resulting in higher bond yield (higher cost of loan). Based on the latest ?show?, the US Congress has compromised to agree on a budget, to ensure the operation of US government over the next 2 years. This US debt crisis has become less concern now to global and local investors.

Q2) The local penny stocks had a good run-up this year until they were hit by the saga brought about by Blumont, Liongold and Asiason which are not exactly penny stocks themselves during the year before the price crash. Do you think investors sentiments will recover and year 2014 will see the price of penny stocks picking up again? Why?

These 3 penny stocks have a common trait, i.e. the stock prices went up from penny range to dollar range, over 10+ times within the last 1-3 years. This is clearly due to speculation (buy high sell higher) by some invisible hands, stock prices usually are not sustainable at high % Optimism level, any correction in the stock market, could trigger the investors of these ?dollar stocks? to quickly take the profit (following by some who may cut loss and some who short-sell to profit), resulting in a snowball effect rolling from the peak (dollars) to the valley (cents), back to status of penny stocks again. Due to the 10+ times of potential, the falling of price is very severe, over 90%, correction (reasonable price before speculation) to form its mega support, then another speculation will start, hope to buy low sell high. Therefore, the status of ?dollar stocks itself does not mean their traits of penny stocks are removed. An investor should analyze the history and growth rate of a particular dollar stock, when it went up in a parabolic way, likely it will come down in a similar inversed parabolic way if the rise could be justified by its fundamental (eg. business performance).

The overall penny stock market can be reflected by FTSE Fledgling Index and Small Cap Index, both are showing relatively stable trends in 2013 with correction of 10%-15%, aligned well with the trend of STI (blue chips). This implies the 3 problematic penny stocks do not significantly implicate the entire penny stock market. An investor should consider some penny stocks, especially those with strong fundamental, in their overall stock portfolio. From TA (Technical Analysis), we could not be very sure that penny stock market will recover significantly in 2014, but the blue chips have to recover first, following by the lagging penny stocks (exact duration required will depend on market sentiment), as long as the mega market remains bullish. However, an investor should buy undervalued penny stocks (price is much cheaper than its value), using holding power to wait for its appreciation in future. This investing strategy is much safer compared to trading approach of buy high (when penny stocks have risen >20% in prices), hoping to sell higher (same tragedy may repeat due to the greedy emotion). At second phase of bull market, most of the blue chips have limited upside (around 20%) but penny stocks are usually lagging, they could potentially have >50% to 100% upside. In the last market cycle, the speculation factor or max/min price of blue chips is 2.5X, while the Small Cap Index is 4X, implying penny stocks have much higher upside.

Q3) Are there any sectors that investors should take note of in the year to come? Are there any sectors or stocks that ride on the US economic recovery?

1) US economy recovery:

- Banking & finance sector will benefit, especially US interest rate is likely to increase in 2015, Singapore banks will follow gradually, the earning is expected to increase. Look for stocks with lower price / NAV (Net Asset Value): an undervalued US stock, Citigroup has >50% upside based on this criteria, one could try to accumulate this stock closer to US$45/share if it could not break the US$55 mega resistance (once broken, next limit will be US$70). Singapore banks generally will benefit but upside will not be as high.

2) China economy recovery

- S-chips (China related stocks) is at low % optimism, the share price likely will recover, following the China SSEC trend, those S-chips with strong fundamentals but undervalued may be considered. Alternatively, buy UETF A50 ETF to indirectly invest in China SSEC Index (2000 points is a strong mega support zone, good entry point if close to it). When China market releases more positive economic news in 2014, likely China stock market will recover significantly, leading S-chips in Singapore stock market to rebound together.

3) Global economy recovery (including US, Europe, China, Japan, etc):

- Commodity related stocks will increase in price due to higher demand for commodity with stronger economy. Price of Wilmar is over-corrected due to declining oil palm price in the past few years which affected its earning. Price/share near to $3 was considered a good buy 1 year ago, new investor could try to accumulate when the price is approaching $3 again.

- Maritime/shipping related stocks will have higher potential (use Baltic Dry Index to reflect rising shipping cost) because it is currently at around 25% Optimism, downside is very limited, growing global economy will bring more businesses to this sector. NOL has poor business performance but its share price has over-compensated, price/share near to $1 is a good buy if an investor has holding power of a few years, min 50% upside can be expected. YangZiJiang is in this sector (shipbuilding), as well as a fundamentally strong S-chip, golden entry price of $0.80/share may not be possible in mid-term, next possible buying target is around $1/share.

Q4) STI has remained flat throughout the year, what does this imply for the investors? For investors who are thinking of capturing the opportunities that may arise due to a possible rally in year 2014, what should they take note of when it comes to stock picking for: a) STI component stocks b) reits and business trust & c) the other stocks

Among the major regional stock markets (US, Germany, UK, Japan, Hong Kong, China, Singapore), STI has the worst performance (nearly zero) in the past 1 year. This is partly due to appreciation of SGD, discouraging foreign investing fund, as well as penny stock market nature (lagging market) of STI, which usually rises the most during the initial recovery phase from the valley of bear market (eg in year 2009) and also the euphoric stage, about 6 months before end of bull market.

In my opinion, having a long-term sideway or lagging stock market (but not long-term declining trends like China market in the past 4 years or Japan market over the past 2 decades) is a blessing in disguise for STI. Usually for an index which is traded within a tight range (eg. 3000 ? 3200 points), it is storing the ?spring energy? through the accumulation phase (by some big players), when the time is right (eg. aligned with a major positive global financial news ? eg QE3 or US debt limit is no longer a threat), it will have a much higher growth potential >20%. Investing in STI requires great patience as it has been sleeping around 3000 points +/- 10% in the past 4 years, while other major leading stock markets have gone up consistently. Usually the worst performance market can be the best performance market in the following year due to lower baseline for comparison. Japan Nikkei Index is a good example: bad performance in 2012 but after the Japan QE, it becomes the best performance stock market in the world in 2013.

STI is projected to have ultimate upside of 4800 points (before reaching the peak of market cycle), about 50% from the current level, when the global economy reaches its peak a few years later (estimated to be year 2017 or later). For year 2014, due to disturbance of QE3, the upside is estimated to be about 10+% for STI (target is 3500 points), but individual local stocks (especially the lagging penny stocks with strong fundamental) could have as high as 50% upside, especially after major correction (QE3 tapering can be a good crisis and opportunity).

For STI components, choose stocks which have similar trend as STI, i.e. lagging or undervalued in nature, as the growth potential will be higher. If there is limited capital, one may consider to buy STI ETF (acceptable by CPF investment fund), indirectly diversify the investment portfolio with 30 STI components. Buy STI while it is bearish, closer to 3000 points for mid-term (if global market is stable) and below 3000 points, around 2800 points if QE3 tapering becomes a major issue. After more than 50% appreciation for REITS sector in 2013, the last correction of 15% has brought another good buying opportunity, especially for those stocks with price much lower than its Net Asset Value (NAV). However, REITS will have limited upside for capital gain, it is more suitable as defensive stock for value investors, therefore buying low after correction is a must to ensure higher % dividend. The interest rate hike (estimated in 2015) will continue to give earning pressure to property market and REITS sector, but the recovery of global economy may balance it out eventually.

The main investing strategy recommended is to buy undervalued stocks with strong fundamental, accumulating after each major correction (>10+%), then hold until the ultimate upside (>75% Optimism) is reached, this could potentially give >50% return. Following the trend to buy high and sell higher is more suitable for trading in mid-term (3-12 months) but the average gain of a portfolio likely will be less than 20% due to unpredictable mid-term crises.

Dr Tee (Ein55)

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http://myfcoach.com/ein55-004/

MYF Coach
Stock and Property Investment Coaching Program
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Interview with Dr Tee: 2014 Singapore Stock Market Outlook
COACHES' ARTICLES, SPECIFIC STOCKS, STOCK INVESTING, UPDATES CURRENT MARKET ANALYSIS, DR TEE, EIN55 STYLES, QE, SINGAPORE, STI, STOCKS LEAVE A COMMENT
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By: Dr Tee (Ein55), Investing Mentor of www.MasterYourFinance.com & myfcoach.com

Date: 18th Dec 2013 Email: ein55.tee@gmail.com

Below are my questions for my 2014 outlook story for local stock market:

Q1) What are the major events, such as Fed?s tapering of QE and debt ceiling issue, that will affect the performance of the local stock market?

Singapore is a ?penny stock market? from a global perspective, weightage is less than 1%, therefore any major event, especially from the world No 1 economy (US) and No 2 economy (China), will have significant impact on the local stock market performance. Due to globalization of businesses, as well as easy flow of liquidity from one investment market to another one without international border, local stock market generally will follow the trend of major regional stock markets.

For Fed QE3, here are the potential impacts to local markets:

1) Significant reduction in liquidity of global market (from US$85B to $0 per month, tapering over a period) which will also implicate Singapore, as there will be less foreign investment funds (eg. from US and other regions) flowing in to local stock market. However, this likely will be just a correction (<20% downside), not a major trend reversal from bull to bear market (>40% downside) as in a global financial crisis.

2) If the Fed could make the QE3 tapering more gradual, eg. $10B/month or lesser reduction, the effect will be less intense, stock market could take the impact easily because the shortage of liquidity may be filled in by new funds from everyone?s pocket when more jobs are created, resulting in higher spending and investing activities. However, if US$85B/month is terminated abruptly to $0 within 1 month, this will be a shock to the stock market, reducing short-term confidence of investors, leading to significant correction to global and local stock markets.

3) US government bond yield will increase when the asset purchase by the Fed is reduced due to lower bond prices, resulting in higher borrowing cost. Singapore government bond yield will also increase gradually, following similar footsteps of US government bond. When bond price is reduced, the fund from bond market will partially flow to stock market, aiming at quicker and higher return of investment. For short term, both global and local stock market will suffer due to lack of confidence, but once the strength of global and local economy is demonstrated, it will support stock market in longer term, attracting more funds to exit from bond market, injecting into stock market. For Singapore, since the property market is at much higher state of % Optimism, the downside is more than the upside, therefore short-term and mid-term investors may be in favour of stock market over property market.

4) US dollar index will increase but the exchange rate of USD/SGD will increase more gradually, partially due to appreciation of SGD to fight the inflation. For local stock market with counters traded in US$, they could benefit from rises of both stock market and also USD/SGD exchange rate in longer term.

US debt limit crisis is just a political show, unlikely to cause major impact to both global and local stock market, but it could result in some correction due to fear of investors. From practical point of view, it is nearly impossible for US government to ?commit suicide? to default in payment of sovereign debt (eg. US government Treasury bonds) because this is the main source of cheap loans (was 2% for 10 year bond) from global investors (who balance their investing portfolio with some safer components) which help the accelerate the growth of US economy at lower cost. If US government loses its credibility, other countries (China, Japan, Singapore, etc) who invest over trillion of US$, unlikely to increase its stake, then the US government bond price may collapse, resulting in higher bond yield (higher cost of loan). Based on the latest ?show?, the US Congress has compromised to agree on a budget, to ensure the operation of US government over the next 2 years. This US debt crisis has become less concern now to global and local investors.

Q2) The local penny stocks had a good run-up this year until they were hit by the saga brought about by Blumont, Liongold and Asiason which are not exactly penny stocks themselves during the year before the price crash. Do you think investors sentiments will recover and year 2014 will see the price of penny stocks picking up again? Why?

These 3 penny stocks have a common trait, i.e. the stock prices went up from penny range to dollar range, over 10+ times within the last 1-3 years. This is clearly due to speculation (buy high sell higher) by some invisible hands, stock prices usually are not sustainable at high % Optimism level, any correction in the stock market, could trigger the investors of these ?dollar stocks? to quickly take the profit (following by some who may cut loss and some who short-sell to profit), resulting in a snowball effect rolling from the peak (dollars) to the valley (cents), back to status of penny stocks again. Due to the 10+ times of potential, the falling of price is very severe, over 90%, correction (reasonable price before speculation) to form its mega support, then another speculation will start, hope to buy low sell high. Therefore, the status of ?dollar stocks itself does not mean their traits of penny stocks are removed. An investor should analyze the history and growth rate of a particular dollar stock, when it went up in a parabolic way, likely it will come down in a similar inversed parabolic way if the rise could be justified by its fundamental (eg. business performance).

The overall penny stock market can be reflected by FTSE Fledgling Index and Small Cap Index, both are showing relatively stable trends in 2013 with correction of 10%-15%, aligned well with the trend of STI (blue chips). This implies the 3 problematic penny stocks do not significantly implicate the entire penny stock market. An investor should consider some penny stocks, especially those with strong fundamental, in their overall stock portfolio. From TA (Technical Analysis), we could not be very sure that penny stock market will recover significantly in 2014, but the blue chips have to recover first, following by the lagging penny stocks (exact duration required will depend on market sentiment), as long as the mega market remains bullish. However, an investor should buy undervalued penny stocks (price is much cheaper than its value), using holding power to wait for its appreciation in future. This investing strategy is much safer compared to trading approach of buy high (when penny stocks have risen >20% in prices), hoping to sell higher (same tragedy may repeat due to the greedy emotion). At second phase of bull market, most of the blue chips have limited upside (around 20%) but penny stocks are usually lagging, they could potentially have >50% to 100% upside. In the last market cycle, the speculation factor or max/min price of blue chips is 2.5X, while the Small Cap Index is 4X, implying penny stocks have much higher upside.

Q3) Are there any sectors that investors should take note of in the year to come? Are there any sectors or stocks that ride on the US economic recovery?

1) US economy recovery:

- Banking & finance sector will benefit, especially US interest rate is likely to increase in 2015, Singapore banks will follow gradually, the earning is expected to increase. Look for stocks with lower price / NAV (Net Asset Value): an undervalued US stock, Citigroup has >50% upside based on this criteria, one could try to accumulate this stock closer to US$45/share if it could not break the US$55 mega resistance (once broken, next limit will be US$70). Singapore banks generally will benefit but upside will not be as high.

2) China economy recovery

- S-chips (China related stocks) is at low % optimism, the share price likely will recover, following the China SSEC trend, those S-chips with strong fundamentals but undervalued may be considered. Alternatively, buy UETF A50 ETF to indirectly invest in China SSEC Index (2000 points is a strong mega support zone, good entry point if close to it). When China market releases more positive economic news in 2014, likely China stock market will recover significantly, leading S-chips in Singapore stock market to rebound together.

3) Global economy recovery (including US, Europe, China, Japan, etc):

- Commodity related stocks will increase in price due to higher demand for commodity with stronger economy. Price of Wilmar is over-corrected due to declining oil palm price in the past few years which affected its earning. Price/share near to $3 was considered a good buy 1 year ago, new investor could try to accumulate when the price is approaching $3 again.

- Maritime/shipping related stocks will have higher potential (use Baltic Dry Index to reflect rising shipping cost) because it is currently at around 25% Optimism, downside is very limited, growing global economy will bring more businesses to this sector. NOL has poor business performance but its share price has over-compensated, price/share near to $1 is a good buy if an investor has holding power of a few years, min 50% upside can be expected. YangZiJiang is in this sector (shipbuilding), as well as a fundamentally strong S-chip, golden entry price of $0.80/share may not be possible in mid-term, next possible buying target is around $1/share.

Q4) STI has remained flat throughout the year, what does this imply for the investors? For investors who are thinking of capturing the opportunities that may arise due to a possible rally in year 2014, what should they take note of when it comes to stock picking for: a) STI component stocks b) reits and business trust & c) the other stocks

Among the major regional stock markets (US, Germany, UK, Japan, Hong Kong, China, Singapore), STI has the worst performance (nearly zero) in the past 1 year. This is partly due to appreciation of SGD, discouraging foreign investing fund, as well as penny stock market nature (lagging market) of STI, which usually rises the most during the initial recovery phase from the valley of bear market (eg in year 2009) and also the euphoric stage, about 6 months before end of bull market.

In my opinion, having a long-term sideway or lagging stock market (but not long-term declining trends like China market in the past 4 years or Japan market over the past 2 decades) is a blessing in disguise for STI. Usually for an index which is traded within a tight range (eg. 3000 ? 3200 points), it is storing the ?spring energy? through the accumulation phase (by some big players), when the time is right (eg. aligned with a major positive global financial news ? eg QE3 or US debt limit is no longer a threat), it will have a much higher growth potential >20%. Investing in STI requires great patience as it has been sleeping around 3000 points +/- 10% in the past 4 years, while other major leading stock markets have gone up consistently. Usually the worst performance market can be the best performance market in the following year due to lower baseline for comparison. Japan Nikkei Index is a good example: bad performance in 2012 but after the Japan QE, it becomes the best performance stock market in the world in 2013.

STI is projected to have ultimate upside of 4800 points (before reaching the peak of market cycle), about 50% from the current level, when the global economy reaches its peak a few years later (estimated to be year 2017 or later). For year 2014, due to disturbance of QE3, the upside is estimated to be about 10+% for STI (target is 3500 points), but individual local stocks (especially the lagging penny stocks with strong fundamental) could have as high as 50% upside, especially after major correction (QE3 tapering can be a good crisis and opportunity).

For STI components, choose stocks which have similar trend as STI, i.e. lagging or undervalued in nature, as the growth potential will be higher. If there is limited capital, one may consider to buy STI ETF (acceptable by CPF investment fund), indirectly diversify the investment portfolio with 30 STI components. Buy STI while it is bearish, closer to 3000 points for mid-term (if global market is stable) and below 3000 points, around 2800 points if QE3 tapering becomes a major issue. After more than 50% appreciation for REITS sector in 2013, the last correction of 15% has brought another good buying opportunity, especially for those stocks with price much lower than its Net Asset Value (NAV). However, REITS will have limited upside for capital gain, it is more suitable as defensive stock for value investors, therefore buying low after correction is a must to ensure higher % dividend. The interest rate hike (estimated in 2015) will continue to give earning pressure to property market and REITS sector, but the recovery of global economy may balance it out eventually.

The main investing strategy recommended is to buy undervalued stocks with strong fundamental, accumulating after each major correction (>10+%), then hold until the ultimate upside (>75% Optimism) is reached, this could potentially give >50% return. Following the trend to buy high and sell higher is more suitable for trading in mid-term (3-12 months) but the average gain of a portfolio likely will be less than 20% due to unpredictable mid-term crises.

Dr Tee (Ein55)

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Singapore Hubs Poised to Benefit From Growth in Asian Exports

Mike King, Special Correspondent | Jan 20, 2014 12:31AM EST

Handling cargo at Changi Airport.
Singapore is set to benefit this year from its status as one of Asia?s leading transport hubs, as demand from key markets in the West boosts trade.

HSBC forecasts Singapore?s exports will expand by 5.6 percent in 2014, up from an estimated 2.9 percent growth last year.

The city-state?s economy will also be boosted by rising volumes being transshipped via its marine terminals and through Changi International Airport.

Singapore container throughput, 2008-2013
Full-size image
?In 2014 we forecast growth in both port and airport total tonnage volumes,? said a report by Business Monitor International. ?Both facilities are investing considerably, and we are confident of growth over the medium and long term.?

Container throughput at the world?s second biggest box port increased 2.9 percent last year to 32.6 million TEUs, while total cargo tonnage handled rose 3.6 percent to 557.5 million tons.

?The port of Singapore's gross tonnage will grow by 3.2 percent in 2014,? BMI said.

Changi Airport handled 1.7 million tons of freight in the first 11 months of 2013, a year-on-year increase of 0.9 percent. BMI forecasts cargo growth at the airport of 1.1 percent this year and 1.2 percent per annum over 2014-18.

Standard Chartered forecasts that Singapore?s GDP will grow by 4.4 percent this year, aided by increased trade.

The major risk to the country?s economic fortunes this year will come from international markets. ?This dynamic economy depends on the export markets of the U.S., eurozone, and mainland China, and each of those three faces varying degrees of downside economic risks,? BMI said.

?Further, the port of Singapore and Changi Airport both handle huge transshipment volumes, which could be affected should the global economy slump once more.?

Contact Mike King at mikeking121@gmail.com.

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RM2568 ▲ 43 ▲ 1.70%

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I'm picking more.

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Extreme Weather Wreaking Havoc on Food as Farmers Suffer
By Brian K. Sullivan, Elizabeth Campbell and Rudy Ruitenberg
January 17, 2014 7:49 AM EST

Extreme Weather Wreaks Havoc on Food
Volatile weather around the world is taking farmers on a wild ride.
Too much rain in northern China damaged crops in May, three years after too little rain turned the world?s second-biggest corn producer into a net importer of the grain. Dry weather in the U.S. will cut beef output from the world?s biggest producer to the lowest level since 1994, following 2013?s bumper corn crop, which pushed America?s inventory up 30 percent. U.K. farmers couldn?t plant in muddy fields after the second-wettest year on record in 2012 dented the nation?s wheat production.
Graphic: Living With Extreme Weather
?Extreme weather events are a massive risk to agriculture,? said Peter Kendall, president of the U.K. National Farmers Union, who raises 1,600 hectares (3,953 acres) of grain crops in Bedfordshire, England. ?Farmers can adapt to gradual temperature increases, but extreme weather events have the potential to completely undermine production. It could be drought, it could be too much rain, it could be extreme heat at the wrong time. It?s the extreme that does the damage.?
Farm ministers from around the world are gathering in Berlin tomorrow to discuss climate change and food production at an annual agricultural forum, with a joint statement planned after the meeting.
Arctic Invasion
Fast-changing weather patterns, such as the invasion of Arctic air that pushed the mercury in New York from an unseasonably warm 55 degrees Fahrenheit (13 Celsius) on Jan. 6 to a record low of 4 (minus 16) the next day, will only become more commonplace, according to the New York-based Insurance Information Institute. While the world produces enough to provide its 7 billion people with roughly 2,700 calories daily, and hunger across the globe is declining, one in eight people still don?t get enough to eat, some of which can be blamed on drought, the United Nations said.
Related:Why Is It So Cold? The Polar Vortex, Explained
?There?s no question, while there?s variability and volatility from year to year, the number and the cost of catastrophic weather events is on the rise, not just in the U.S., but on a global scale,? said Robert Hartwig, an economist and president of the insurance institute. ?It?s all but certain that the size and the magnitude and the frequency of disaster losses in the future is going to be larger than what we see today.?
The number of weather events and earthquakes resulting in insured losses climbed last year to 880, 40 percent higher than the average of the last 30 years, according to Munich Re, the world?s largest reinsurer.
More Precipitation
Research points to a culprit: an increase in greenhouse gases, generated by human activity, that are forcing global temperatures upward, said Thomas Peterson, principal scientist at the U.S. National Climatic Data Center in Asheville, North Carolina. The warmer the air the more water it can hold, he said.
?What we?re finding worldwide is that heavy precipitation is increasing,? Peterson said.
Flood waters in Passau, Germany, in May and June reached the highest level since 1501, Munich Re said. That was the year Michelangelo first put a chisel to the block of marble that would become his sculpture of David. High water did $15.2 billion in damage in parts of Central and Eastern Europe, according to Munich Re.
A July hailstorm in Reutlingen, Germany, led to $3.7 billion in insured losses, according to Munich Re. Hailstones the size of babies? fists cracked the windshield of Marco Kaschuba?s Peugeot.
?Two minutes before the storm started you could already hear a very loud noise,? said Kaschuba, a 33-year-old photographer. ?That was from hailstones hitting the ground in the distance and coming closer.?
In 2012, the U.K. had its second-highest rainfall going back to 1910, according to the U.K. Met Office. England and Wales had its third-wettest year since 1766.
Israeli Blizzard
December marked the worst blizzard since 1953 in Jerusalem, dumping 15 inches (38 centimeters) of snow on Israel?s capital, where more than 4,000 people were rescued from their vehicles, according to police.
?It was like a neutron bomb hit,? said Eilon Schwartz, 56, an environmental activist living in Tel Aviv who had taken his 11-year-old daughter to play in the snow with friends. ?All these cars marooned in the snow and no people.?
December was also Norway?s wettest month in history, according to weather service YR.
Rainfall last year in the contiguous U.S. was 7 percent higher than the 20th century average, according to the National Oceanic and Atmospheric Administration. Yet it was difficult to draw broad conclusions because of regional variations. Michigan and North Dakota set records for wetness, while California set its own for lack of rain, NOAA said.
China Cold
Other weather phenomena were similarly topsy-turvy. China shivered through its coldest winter in at least half a century in 2010. Three years later, Shanghai was suffocated by its hottest summer in 140 years, according to the city?s weather bureau.
Record flooding hit the Mississippi River in 2011. The next year, record-low water levels stranded barges, choking the flow of coal, chemicals and wheat.
Such fluctuations were reflected in food prices. In the past three years, orange juice, corn, wheat, soybean meal and sugar were five of the top eight most volatile commodities, according to data on 34 compiled by Bloomberg. Natural gas was No. 1.
While the percentage of the world?s people who go hungry has fallen to 12 percent last year from 19 percent in 1992, and food inflation is ebbing, farming is vulnerable to the extreme weather that comes with climate change, according to the UN.
Price Fluctuations
Record harvests from India to Brazil to the U.S. expanded supply and sent corn, soybeans, wheat, sugar and coffee into markets where prices were falling. The Standard & Poor?s GSCI Agriculture Index of eight crops tumbled 22 percent last year, the biggest annual drop since 1981. The gauge is down 0.8 percent in 2014.
Yet higher food costs pushed 44 million people into poverty from June 2010 to February 2011, the World Bank estimated. The three years in the past two decades when global food costs were highest all occurred after 2007, according to the UN. Historic drought on four continents over the last five years is partly to blame.
?A drought is really all-consuming,? said northeast Texas rancher Phil Sadler. ?It doesn?t necessarily have to be on your place to feel the impact.?
Texan Drought
The record Texas dry spell in 2011 was followed the next year by the most severe drought in the U.S. Midwest since the Dust Bowl of the 1930s. Texas cattle herds dwindled, driving the price of beef to a record in the U.S., the world?s biggest producer. As of the beginning of last year, ranchers in Texas had reduced their herds to the smallest since 1967, according to the Agriculture Department. The U.S. herd has shrunk for six straight years and last year was at its smallest since 1952, government data show.
?We had to liquidate our herd in order to be able to take care of what we had left,? Sadler said.
Even as rain returned to Texas in 2012, the problems weren?t over for ranchers such as Sadler. The Midwest drought boosted prices of corn and soybeans, used for feed, to all-time highs. The 2011 drought caused a record $7.62 billion in farm losses in Texas, including $3.23 billion for livestock producers, according to Texas A&M University?s AgriLife Extension Service in College Station.
Russia suffered its worst dry period in at least 50 years in 2010 and two years later lost about 25 percent of its grain harvest in another dry spell, according to the country?s Grain Producers Union.
Powdered Milk
Authorities declared a drought in 2013 across the entire North Island of New Zealand, the world?s biggest dairy exporter, as some areas were the driest in as many as 70 years, according to the government. That pushed the price of whole-milk powder to a record in April last year at Fonterra Cooperative Group Ltd?s GlobalDairyTrade auction.
In 2012, Spain had its driest winter and second-driest summer since at least 1947, cutting olive oil and wine volumes to the lowest in at least a decade.
A temperature of 110 degrees in Melbourne halted tennis matches yesterday at the Australian Open.
The violent ups and downs of the weather in the last few years have vexed agricultural producers, said Ross Burnett, who farms cotton in the northeastern Australian state of Queensland. A drought there, in the country?s biggest sugar- and beef-producing region, follows flooding in 2010 and 2011 so bad it stopped the steady rise of sea levels around the world, according to the U.S. National Center for Atmospheric Research.
?The variability is the most difficult part of it,? Burnett said. ?It?s difficult given it can change overnight.?