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FSMOne SG - Research Highlights

Logo of telegram channel fsmone_sg — FSMOne SG - Research Highlights F
Logo of telegram channel fsmone_sg — FSMOne SG - Research Highlights
Channel address: @fsmone_sg
Categories: Economics
Language: English
Subscribers: 3.16K
Description from channel

www.fsmone.com | Your bite-sized guide to investing globally and profitably

Ratings & Reviews

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The latest Messages

2022-08-27 15:01:06 Macro Research


Does clean energy still deserve a place in investor portfolios?


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• Despite teething problems, the growth potential of the clean energy sector remains undeniable - underpinned by the focus on energy security.

• However, the sector does face tricky issues with no easy solutions. Sourcing of critical metals remain a challenge, and we also remain cognisant of the high valuation of the sector and the exposure to yet-to-be-profitable companies.

• The sector is very much a high-risk, high-reward play, and we recommend a diversified approach through the iShares Global Clean Energy ETF (NASDAQ: ICLN) for passive exposure or the BlackRock Global Funds - Sustainable Energy Fund for an active approach.

• Alternatively, investors investors can also consider the VanEck Rare Earth/Strategic Metals ETF (NYSE:REMX) or the Blackrock Natural Resources Growth & Income Fund, which provides exposure to commodity-linked equities - a key cog in the clean energy supply chain.


: Read the full article here
: iShares Global Clean Energy ETF (NASDAQ: ICLN), BlackRock Global Funds - Sustainable Energy Fund, VanEck Rare Earth/Strategic Metals ETF (NYSE:REMX), Blackrock Natural Resources Growth & Income Fund
230 views12:01
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2022-08-26 03:51:38 Macro Research


Not time yet – maintain 2.5 Stars “Neutral” rating for the Digital Economy


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• Tech stocks have plummeted by as much as 50%, over the year as inflation, rate hikes, the Russia-Ukraine war, and China lockdowns weighed on the sector.

• In the near-term, we see near-term downside risks which include a recession, and high inflation. The digital economy looks challenged and earnings growth is likely to be subdued in the next 6-12 months.

• Overall, we recommend investors wait out the near-term volatility and for downside risks to be priced in, before going back into Tech stocks.

• Nevertheless, not all is doom and gloom, as Big Tech having a strong business model could prove more resilient in weathering the storm, and among the segments, the cloud business stands out.

• We maintain a 2.5 Stars “Neutral” rating, given the near-term downside risks and lack of positive catalysts. Our target price is USD 157 for the Invesco NASDAQ Internet ETF (NASDAQ: PNQI), which gives investors an upside potential of 18.6% as of 23 August 2022.


: Read the full article here
: Invesco NASDAQ Internet ETF (NASDAQ: PNQI), ALPS O'Shares Global Internet Giants ETF (BATS: OGIG)
496 views00:51
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2022-08-23 13:01:42 Fund Idea

Recession fears have struck markets. Can the commodities sector overcome them?

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• The increasing talks about a looming recession have dampened the near-term outlook for the commodities sector. Nevertheless, the case for commodities remains as the macro environment is still dominated by record inflation and supply tightness.

• In a high inflationary environment that we are currently in, commodities serve as a useful inflation hedge as their returns have historically been positively correlated with inflation levels.

• China’s potential recovery would be a positive catalyst to the commodities sector, given that it is one of the largest commodity importers. President Xi Jinping has called for an “all out” effort to increase infrastructure spending this year in the hope of fuelling economic growth.

• With diversified exposure to the energy, mining, and agriculture sectors, investors can consider the Blackrock Natural Resources Growth & Income Fund to get exposure to the commodities sector.

: Read the full article here
: Blackrock Natural Resources Growth & Income Fund
674 views10:01
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2022-08-22 13:01:52 Macro Research

Semiconductors: Maintain 2.5 Stars “Neutral” as we await a better entry point

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• After an incredible rally over 2020 and 2021, semiconductor stocks have fallen by close to -22% year-to-date, underperforming the broader S&P 500 Index.

• While most chipmakers have reported strong earnings, many have guided for a slowdown in earnings growth and are planning to reduce their capex spending after observing a reduction in demand.

• With sales growth falling and lead times levelling off, the chip industry is likely to be in the early stages of a down cycle.

• Future down cycles are likely to be milder than those in the past as there are now numerous semiconductor applications than before.

• While we have decided to maintain a 2.5 Stars “Neutral” rating for the semiconductor industry for the time being, our long-term view on the industry remains overwhelmingly positive.

: Read the full article here
: VanEck Vectors Semiconductor ETF (NASDAQ:SMH)
747 views10:01
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2022-08-20 15:00:53 ETF Idea

After the rise in US rates, are Chinese government bonds still attractive?

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• While the US is fighting elevated inflation with rate hikes, China has remained in a monetary easing mode – cutting key interest rates again on 15 August.

• Following the sharp rise in US rates, Chinese government bonds (CGBs) have lost their yield advantages. The 10-year Treasury yield has reached 2.8%, while the yield of similar-tenured CGBs has fallen slightly to 2.6%.

• For investors on the hunt for higher potential returns, we reckon that the opportunity now lies within USD-denominated Asian IG debt and short duration bonds.

• With the increasingly divergent monetary policy, we think that RMB weakness is likely to persist in the near-term which could erode value from a total return basis for foreign investors.

• That being said, we continue to acknowledge the long-term story of CGBs. Apart from providing portfolio diversification benefits, CGBs stand to benefit from the ongoing shift away from the dollar.

: Read the full article here
: ICBC CSOP FTSE Chinese Govt Bond Index ETF (SGX:CYC), Premia China Treasury & Policy Bank Bond Long Duration ETF (HKEX:9177)
815 views12:00
Open / Comment
2022-08-16 13:01:41 Stock Idea

Lenovo: Undervalued Chinese PC giant with strong upside potential

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• Lenovo’s transformation towards a more solutions-based business can drive long-term growth.

• Strong market share in China supports earnings resiliency, especially as China's GDP growth continues to outperform peers on a relative basis.

• Lenovo may see headwinds from the PC downcycle, but we see support from government and commercial demand for PCs, as well as its other non-PC segments.

• Valuations for Lenovo remain depressed amidst pessimism about the PC industry and the macro situation in China. Using a fair P/E of 9X, we arrive at a target price of HKD 11.8 by FY24, or an upside of +71% in under two years. Lenovo’s consistent dividends can also help to bolster gains for any investor in Lenovo.

: Read the full article here
: Lenovo Group Limited (HKEX:0992)
1.1K views10:01
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2022-08-15 09:22:18
How sensitive are Contingent Convertible (CoCo) bonds? Here’s our analysis on how its prices react to non-call events and changes in credit ratings: https://bit.ly/3zOufRB
988 views06:22
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2022-08-13 15:01:28 Macro Research

Inflation may have peaked, is it time to buy US equities?

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US equities rallied across the board after the recent July CPI data showed signs that inflation may have potentially peaked. Read on to find out if this rally is justified and sustainable.

: Read the full article here
1.0K views12:01
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2022-08-13 07:30:26 Macro Research

Japan: Attractive upside with a potential turnaround in 2H22

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• Japanese equities have had a challenging year but the outlook moving forward has improved. We see a combination of catalysts in 2H22 and an attractive 25% upside potential by Mar-2024.

• The re-opening of borders and a positive turn in the China situation will be significant macro catalysts, setting up for a possible sequential growth rebound for Japan in 2H22.

• Corporate earnings remain supportive given tailwinds from i) strong pricing power, ii) robust sales growth, iii) weak yen boosting foreign income, and iv) earnings strength from the Consumer, Communication Services, and Health Care sectors.

• Valuation multiples have de-rated significantly over the past year and are currently undemanding. We see room for a re-rating given the catalysts and gradually improving investor sentiment.

: Read the full article here
: iShares MSCI Japan ETF (NYSE:EWJ), JPMorgan Funds - Japan Equity A (dist) SGD
1.1K views04:30
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2022-08-11 09:01:16 Stock Idea

2Q22 earnings: Why did Big Tech stocks pop?

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Post this quarter’s earnings results, Big Tech saw a pop in the share prices – Amazon up +10%, Microsoft, Google, and Netflix up +7%. Read on to find out what drove this rally and whether or not it is sustainable.

: Read the full article here
978 views06:01
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