FSMOne SG - Research Highlights

2021-07-05 08:44:41 Quick Take

Quick Take: Will dividend restrictions on Singapore banks be lifted soon?

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• During the peak of the COVID-19 outbreak last year, MAS imposed dividend caps on the three banks to ensure that they have sufficient capital to weather through an economic downturn.

• However, at the beginning of this year, some regulators have announced their plans to relax the restrictions placed on their banks’ capital return programmes.

• In light of these events, we believe there is a good chance that the dividend restrictions may be lifted as soon as this year.

• Looking ahead, we also believe that the trio remains in a good position given the brighter economic outlook ahead.

• We maintain our positive stance on the Singapore banking sector. We favour OCBC and UOB over DBS given their more attractive valuations.

: Read the full article here
: OCBC (SGX:O39) and UOB (SGX:U11) Open / Comment

2021-07-05 03:40:26 Stock Idea

Delfi Limited: An emerging market play in the fast-moving consumer goods (FMCG) business

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• Delfi Limited was founded in the 1950s as a chocolate manufacturer in Indonesia. Today, it has become a key regional player in the fast-moving consumer goods (FMCG) business.

• Delfi has the first-mover advantage in Indonesia, which helped create its strong brand recognition. Edging out
multinational competitors, it is the leading player in the industry.

• Growing disposable income in Indonesia is expected to have a positive impact on the long-term growth in consumption of chocolate confectionery.

• With a net cash position of USD 14.8 million, we believe Delfi has sufficient support to navigate through the uncertainties stemming from the pandemic.

• Our target price for Delfi is SGD 1.0, based on a fair PE multiple of 16X to our projected FY2023 earnings per share. The upside potential is 4.2% and the estimated dividend yield is 3.4%.

: Read the full article here
: Delfi Limited (SGX:P34) Open / Comment

2021-07-01 13:40:16 A fresh addition to the SGD high yield space, Oxley's latest 6.9% bonds maturing in 3 years are attractively priced. Plus, we continue to believe in their ability to pay down their bonds. https://bit.ly/3dukM7p Open / Comment

2021-06-30 12:55:18 Fund Idea

We like Disruptive Innovation too, but which fund should you choose?

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• Despite a stuttering 2021 thus far, we believe that Disruptive Innovation remains a long-term growth theme too important for investors to ignore.

• With the theme also inherently risky by nature, we feel that the Ark Funds have undertaken too much unnecessary risk in the form of highly concentrated positions, perhaps reflecting overconfidence in their stock picking abilities after a successful 2020.

• Identifying tomorrow’s winners is ultimately a numbers game, often boiling down to a probabilistic well-educated bet – and we believe diversification is key.

• Therefore, we prefer the Blackrock Next Generation Technology Fund – which through its diversification, has also provided comparable returns at lower risk compared to the Ark Funds.

• In addition, its more balanced geographical distribution provides exposure to companies in typically hard to access markets, such as Kakao Corp or Samsung SDI (listed in Korea).

• Investors would also do well to not neglect today’s Tech giants, and complementing the O'Shares Global Internet Giants ETF (BATS:OGIG) and/or the Blackrock World Technology Fund with the Blackrock Next Generation Technology Fund should help to “future-proof” investors’ portfolios and capture future growth opportunities.

: Read the full article here
: Blackrock Next Generation Technology Fund Open / Comment

2021-06-29 14:57:30 Stock Idea

Alibaba’s recent sell-off is an opportunity for investors to accumulate more shares

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• In April 2021, Alibaba was handed a fine of USD 2.8 billion, marking the end of the antitrust probe that began in December last year.

• Despite facing numerous challenges, the company’s revenue grew to a record high of CNY 717 billion, 41% higher compared to the previous year.

• Alibaba Cloud delivered its second consecutive profitable quarter as demand for cloud services continues to be robust.

• Taobao Live continues to grow strong. Gross merchandise value generated by the segment in FY 2021 more than doubled compared to FY 2020.

• Based on the sum-of-the-parts methodology, we arrive at a target price of USD 412 for Alibaba which translates to an upside potential of approximately 92%.

: Read the full article here
: Alibaba (NYSE:BABA) Open / Comment

2021-06-29 09:33:50 In this week's Bond Market Monitor, Mexico's central bank has raised overnight rates by 25 bps to 4.25% while the Bank of England has chosen to maintain their current bank rate of 0.1%.

Plus, other updates on Keppel and Sembcorp Marine's possible merger, Hatten Land and Hyflux. https://bit.ly/3Afwv3N Open / Comment

2021-06-25 16:02:38 Fund Idea

Fund Friday: Further capitalizing on Europe's Recovery

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• European stocks had had an excellent 2021 thus far, and while we believe that Europe is already experiencing pricer valuations, ample investment opportunities still exist in this space. A blend of high quality growth and value is likely the best case going forward.

• Allianz Europe Equity Growth Select is growth-centric fund with a distinct focus on quality. However, The Fund also has defensive holdings as well, providing an opportunity for investors to experience the best of both worlds.

• For investors who remain bullish on Europe, the Fund is a good option with a mix of structurally sound growth names and high quality defensive holdings.

• The Fund has stellar performance, significantly outperforming their benchmark index for the past 3 years . With only 37 holdings, the Fund is highly concentrated compared to peers. However, from a risk adjusted standpoint, the Fund is a superior choice, with 3Y annualized returns being twice of peer averages.

• With the European market now trading at near fair level, investors should start focusing more on quality companies with sustainable long term growth - companies that Allianz Europe Equity Growth Select provides healthy exposure to.

: Read the full article here
: Allianz Europe Equity Growth Select Open / Comment