FSMOne SG - Research Highlights

2022-08-10 06:42:22 Stock Idea

AMTD: Stay away from this stock

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• AMTD price movements appear to be disconnected from its fundamentals, and could be driven by other factors instead.

• This stock has generally traded at thin volumes, and it demonstrates the importance of liquidity in our stock-selection process.

• We believe that increased attention from communities such as WallStreetBets could result in even greater price volatility, making this stock even more unattractive.

• To summarise, we continue to caution investors against investing in stocks which have seen a massive increase in price without a similar improvement in fundamentals. While these stocks could see massive price increases in a single day, we remind investors that they can similarly experience even sharper sell-offs, especially when the bubble bursts.

: Read the full article here Open / Comment

2022-08-08 07:20:05 Lost your money investing in China property bonds? Here’s why you should continue to hold on.

While China’s property bonds have taken a beating from the mortgage boycotts, we share why investors should keep calm and remain patient for the gradual recovery.

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• In view of mortgage boycotts over the past few weeks, bonds of Chinese developers have extended their losses. Although the number of mortgage boycotts has increased rapidly, we believe that this is currently not a systemic crisis.

• Other homebuyers facing non-delivery of their homes may not have a huge incentive to join the boycott, as they risk suffering a hit to their social credit scores.

• Besides, the mortgage boycotts will threaten China’s financial and social stability. Stability is the top agenda for Chinese officials, whom we expect to act quickly to contain this crisis.

• Our base case is that the mortgage crisis will be brought under control, with government intervention acting as the key near-term catalyst for a recovery in market sentiment.

• Patience is key for investors who are currently holding on to China’s property bonds. Diversification and credit selection within the Chinese property bond market remains crucial as well.

: Read the full article here
: Eastspring Investments - Asian High Yield Bond ASDM SGD-H / Blackrock Asian High Yield Bond A8 SGD-H / Premia China USD Property Bond ETF (HKEX:9001) Open / Comment

2022-08-02 12:59:02 Macro Research

2Q22 Market Report Card – Another win for Asia?

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• Global equities had a rough 2nd quarter as we wrap up the first half of 2022, as seen by the -13.4% decline of the MSCI ACWI Index in 2Q22. On a country level, the top performing markets in 2Q22 (in SGD terms) were China (+6.2%), Hong Kong (+3.3%) and Indonesia (-2.4%).

• China: We continue to remain optimistic on China’s growth projections despite setbacks from Covid restrictions and pessimistic earnings outlook as the Chinese government has shown that they are ready to support the economy via policy measures and easing of Covid lockdowns.

• Hong Kong: Similar to China, Hong Kong has recently started to ease Covid restrictions by suspending Covid flight bans, signalling room for recovery and growth ahead.

• Indonesia: With the relaxation of domestic restrictions and recent travel restrictions, coupled with strong growth and consumption, we expect to see positive impacts for the economy looking ahead.

: Read the full article here Open / Comment

2022-08-01 12:59:06 ETF Idea

ETF Insights: New ETF focuses on Asian equities with high and stable dividends (Jul 2022)

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• Explore a new high-dividend ETF strategy concentrated within Asia.

• A metaverse-related ETF focused on Asia Pacific has recently been launched.

• Building on the theme of innovative technologies, an ETF which focuses on companies that could disrupt our consumer behaviour patterns debuts.

• A new ETF focusing on pre-merger SPACs has been launched – yay or nay?

• Invest in a dynamically changing portfolio of global equities.

: Read the full article here Open / Comment

2022-07-31 06:03:13 After missing a dozen payment deadlines, Evergrande might miss yet another one - its long awaited restructuring plan due in July.

Another developer Ronshine will be extending the maturity of three onshore bonds for a year. More updates on distressed developers here. Open / Comment

2022-07-28 14:00:41 DIY Cash Management Portfolios

Receive higher yields as interest rates continue to climb

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• A cash management portfolio serves as an alternative to traditional bank deposits, with higher yields and a good amount of liquidity. To help investors get started on a DIY cash management portfolio, we have shared some model portfolios earlier this year.

• The Conservative portfolios were the key standouts. Having chalked up a gain of 0.2% and 2.1% respectively in 2Q22, the SGD-denominated and USD-denominated portfolios generated higher returns than benchmarks such as interest rates on bank saving deposits.

• To better navigate through the challenging environment faced by bond markets, we also share some changes made to the model portfolios.

• As rates continue to rise, we expect yields of the portfolios to climb further moving forward. In the meantime, our model portfolios continue to provide yields of up to 2.3% (for SGD) and 2.8% (for USD).

: Read the full article here Open / Comment

2022-07-27 03:01:39 In this week's Bond Market Monitor, Chinese property developer China South City seeks to extend the maturities and adjust coupons on 5 of its USD bonds.

Plus, the 2-year and 10-year UST yields remains inverted as the spread continues to widen: https://bit.ly/3PIyUL8 Open / Comment

2022-07-26 06:50:11 MAPS Portfolios

Stocks and bonds are falling simultaneously. Should you be concerned?

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• Equities and bonds have become more correlated as inflation expectations become unanchored. This can be challenging for investor’s portfolio in a market downtrend.

• We are not overly concerned as we see a lower likelihood of a further simultaneous decline, as both equities and bonds typically rebound quickly.

• Staying active is vital to defend the portfolio’s return during market turmoil. For our MAPS portfolios, we have actively maintained our diversification choices, rebalanced periodically, all while remaining focused on the longer-term horizon and the right asset classes during this period of market volatility.

• Despite the positive equity-bonds correlation, we see the merits in bonds as they enhance our portfolio diversification and dampen equity market drawdowns.

: Read the full article here
: FSM MAPS Portfolios Open / Comment

2022-07-25 11:40:10 Stock and ETF Idea

Value Focus List: Here are some of the best value stocks to buy at this moment

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• Value stocks represent companies that possess good fundamentals but might be under-priced as valuations may be lower than historical average or industry peers.

• To help investors identify these opportunities, we have our Value Focus List, which features stocks and ETFs under our coverage that are trading at huge discounts to their fair values.

• We believe that they will appeal to investors who are willing to wait for them to emerge from their undervalued positions.

: Read the full article here
: For a list of the ideas, refer to the article Open / Comment

2022-07-23 15:07:20 Macro Research

Maintain 2.5 Stars on US equities: Aggressive rate hikes might put the US on a recessionary path

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• US equities have gotten off to a rocky start in 2022. At the midway point of the year, the S&P 500 index is already in bear market territory, while inflation continues to be red hot.

• We fear that the Fed’s aggressive response to tackle inflation might lead to a sudden tightening of financial conditions, which could put the US on a recessionary path.

• Higher prices, negative real wages, and lower savings all point to waning consumer spending, which should negatively affect economic growth.

• Even though GDP estimates for 2022 have been revised down significantly, earnings are still expected to grow 15% year-over-year. Earnings estimates are likely to be overly optimistic and thus we expect more downward revisions to come.

• We maintain a 2.5 Stars “Neutral” rating for US equities. Investors who are still keen to remain in the US equity space may want to consider adopting a value tilt.

: Read the full article here
: JPMorgan Funds - US Value A (acc) USD, Vanguard S&P 500 ETF (NYSE:VOO), Allspring US Large Cap Growth Fund Cl A Acc USD Open / Comment