Ernest Lim's investing blog

Unique insights into SGX small caps

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DBS – hits 52-week high, all-time overbought since 1991! (1 Dec 16)

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DBS hit another 52-week high today. It has surged 19% from an intraday low of $14.97 on 9 Nov 2016 to $17.82 on 1 Dec 2016. This has significantly outperformed the STI by a mile, as STI was only higher by 6.0% over the same period.   What has caused the sharp rally in DBS? Some of the possible reasons may be 1. Since Donald Trump’s victory, the market has repriced in faster inflation in the U.S. due to Mr Trump’s infrastructure pledge. This has caused a surge in US Dollar and bond yields, especially on longer-dated debt. This bodes […]

Starhub – all time oversold, price near five year low (22 Nov 16)

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Starhub has plunged 30.3% from an intraday high of $3.96 on 3 Aug 2016 to trade $2.76 today. This is near a five year low.   What has caused the sharp fall in Starhub? Some of the possible reasons may be 1. Market is pricing almost a 100% chance of a rate hike in Dec. Furthermore, there seems to be rising interest rate expectations on faster than expected tightening in 2017; 2. After IDA’s announcement on 16 Nov 2016 that MyRepublic and Australian telco TPG Telecom will get to participate in the 4G mobile airwave auction slated to complete by […]

Chiwayland – potential upside chart breakout (4 Nov 16)

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Chiwayland has dropped from an intraday high of $0.177 on 10 Oct 2016 to trade to an intraday low of $0.151 on 2 Nov 2016. It closed at $0.162 on 4 Nov 2016. Based on Chart 1, Chiwayland seems to have staged an upside breakout above $0.157 on strong volumes, the highest since 11 Oct 2016 (which coincided with the date of UOB Kayhian’s unrated report – see below). All the exponential moving averages (“EMAs”) are rising which indicate an uptrend. Although ADX is declining, it is still at elevated area at around 39 with positive placed directional indicators, indicative […]

Chiwayland – Aiming to be an international property developer; trading at 0.4x P/BV! (14 Sep 16)

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While doing my usual stock screening, Chiwayland pops out as one of the undervalued companies, based on price to book valuation metric. Coupled with its recent multitude of positive announcements, I decide to take a look at this company.   Company description According to Chiwayland’s press release, its properties span across the heart of the Yangtze River Delta Region, including Shanghai, Suzhou and Nanjing. To date, Chiwayland has completed 11 property developments with an aggregate total GFA exceeding 2.0 million square metres, and is ranked as one of the Top 100 Real Estate Development Enterprise. In 2014, the Group embarked […]

Oxley’s base building between $0.380 – 0.460 (13 Sep 16)

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Dear all Based on Chart 1 below, Oxley seems to be an interesting stock. Last Fri (9 Sep 2016) was the T+6th day after its sharp rally. The recent price decline from $0.445 was accompanied with weak volume. (My personal guess is that contra players have been taking profit for the past few days). Broadly speaking, the stock has been stuck in a one-year trading range between $0.380 – 0.460. ADX has declined from an unsustainable 69 on 2 Aug 2016 to around 37 on 13 Sep 2016. All the exponential moving averages (“EMAs”) have stopped their declines with 20D, […]

Caution ahead? Most market strategists think so… (26 Aug 2016)

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Dear readers, Various foreign houses such as Bank of America, Deutsche Bank, Goldman Sachs and UBS etc. are advocating caution in the markets ahead. Some of the commonly cited reasons are valuations; still weak corporate results; U.S. election etc. To be balanced, Morgan Stanley in its 12 Aug 2016 write-up said they continue to be bullish on equities. As you are aware, I operate my portfolio on a short term basis. Based on my views in my previous week market write-up dated 19 Aug 2016 (click HERE), I have reduced my equity allocation from 82% on 19 Aug 2016 to […]

Ernest’s market outlook (19 Aug 16)

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Dear readers, S&P500 has met my technical target of around 2,188. What’s next? Read on for more.   S&P500 Index Just to recap what I have mentioned on 5 Aug 2016 (see HERE), I wrote “Notwithstanding the continued bearish divergences indicated by MACD, RSI and the low ADX, my chart outlook continues to be the same as per two weeks ago. S&P500’s exponential moving averages (“EMAs”) continue to move higher with a constant degree of separation which is a positive development. The break above the trading range of 2,034 – 2,111 points to an eventual measured technical target 2,188. Strong […]

Key takeaways from Sapphire’s 2QFY16 results briefing (12 Aug 16)

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Sapphire Corp just announced a sterling set of 2QFY16 results last Wed. However, its share price barely budged. Is this a case of Mr Market being unaware of this stock, or is Mr Market still bogged down by Sapphire’s chequered past?[1] To know more about the company and its upcoming developments, I attended Sapphire’s 2QFY16 results briefing last Thurs, hosted at Peach Gardens. The meeting was hosted by Mr Teh Wing Kwan, Sapphire’s Managing Director and Group CEO and Mr Ng Hoi-Gee, Kit, Sapphire’s CFO, collectively known as (“Management”). Picture 1: Management meetup with analysts, funds and remisiers Source: Company […]

Sapphire’s order book hits a record high (15 Jul 16)

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Sapphire’s order book hits a record high with RMB873m of worth of infrastructure contracts won on 14 Jul 2016. It seems to be evolving into a serious infrastructure play. However, it is still an under researched, under noticed stock judging from the lack of liquidity and zero analyst coverage.   Noteworthy points on the contracts won On 14 Jul 2016, Sapphire announced that it has clinched RMB873m worth of infrastructure contracts through its engineering, procurement and construction subsidiary, Ranken Infrastructure Limited. There are some noteworthy points in this announcement. a) RMB 300m Jian Cao Ping flyover & RMB 313m to […]

Ernest’s market outlook (24 Jun 16)

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Dear readers, Are you burnt in the aftermath of THE BREXIT? What should you do now? To cut loss, hold or buy more? Before you make the decision, it is good to consider the various markets and how they are likely to fare in the next two weeks.   S&P500 Index Just to recap what I have mentioned on 10 Jun 2016 (see HERE), I wrote “Given the low ADX, S&P500 may trade between 2,034 – 2,106 (barring Brexit on 23 Jun 2016).” –> Although Brexit happens, S&P500 reached an intraday low of 2,033 on last Fri, just 1 point […]