Singapore Stocks Worst in Developed World: Southeast Asia – Bloomberg 09-01-13

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Investors pulled $2.2 billion from Thailand, Indonesia and the Philippines in August, versus inflows of $6.8 billion in 2012.

Wellian Wiranto at Barclays said Singapore is a barometer for Southeast Asia; choppiness elsewhere cause ripples in Singapore.

Khiem Do at Baring Asset Mgmt said Singapore’s stock market benefited from loose monetary policy in the past few years as shares offered investors attractive dividend yields.  Do said Singapore has been affected by redemptions from Asean since it’s the biggest market and is being lumped together with Indonesia, Thailand and the Philippines where capital outflows have accelerated.

Kelvin Tay at UBS said Singapore is likely to outperform, given its strong currency, resilient domestic economy, good earnings-growth potential and exposure to developed markets’ recovery. UBS said Singapore was its preferred market in Southeast Asia, upgrading its rating from neutral.

Singapore’s Straits Times Index is at 14 times estimated earnings  versus 16.1 for the FTSE Bursa Malaysia KLCI Index, 17.4 for the Philippine Stock Exchange Index, and 10.4 for Hong Kong’s Hang Seng Index.

The Straits Times Index offer an average dividend yield of 3.4 percent versus 2.7 percent for 10-year Singapore government bonds.

Daphne Roth at ABN Amro Private Banking sees little catalyst for the Singapore market to recover, and as investors begin to price in rising interest rates, Singapore’s high-yield REITs become less attractive.

Nader Naeimi at AMP Capital Investors said Singapore is getting hit from two sides: being lumped together with other Southeast Asian markets like Indonesia and the Philippines and investors selling high-yield Singapore REITs as bond yields are rising.

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Bubble, Bubble, Money and Trouble – Barron’s 06-01-13

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Marc Faber at the Gloom Boom & Doom Report says:

  • High-end assets from stocks to art to real estate are in a bubble caused by central bank money-printing. This money doesn’t increase economic activity and asset prices in concert, instead creates dangerous excesses in countries and asset classes. Money-printing fueled the stock-market bubble of 1999-2000, the housing bubble in 2008, and the commodities bubble.
  • Owns equities because easing money is flowing into the high-end asset market, including stocks, bonds, art, wine, jewelry, and luxury real estate.
  • The government bailed out S&L depositors in the late 1980s. Treasury and the Fed bailed out Mexico in the mid-1990s. The Fed-supervised bailout of Long-Term Capital Management in 1998 gave a green light to Wall Street to keep leveraging up. Neither Keynes or Friedman would have approved current policies.
  • In the fourth year of an economic expansion, near-zero interest rates will lead to a further misallocation of capital. The S&P 500 is a near a long-term top and could rally to 2000 in the next month or two before collapsing.
  • Money-printing leads to a widening wealth gap. In the Western  democracies, large numbers of people will at some point target the rich through wealth taxes or significantly higher tax rates. The rich have seen huge wealth accumulation in Asia in recent years but the middle class has seen diminishing purchasing power. Growing wealth inequality has always been corrected either peacefully, through taxation and wealth redistribution, or by revolution, as in Russia. European voters will turn against the arrogance of the bureaucracy.
  • China will not tolerate US interference long-term in their region.
  • 25% in equities – no US, some Asian shares and Singapore REITs.
  • Except for some high dividend stocks, Philippines, Indonesia, and Thailand markets are unattractive having quadrupled from post-crisis lows. Dislike Chinese equities unless conditions worsen and China prints money like crazy, when the currency will weaken and stocks will rise.
  • Japanese stocks made a generational low in 2012 and won’t go below that. Like Japanese REITs.
  • Vietnam exports are strong, and the people are hard-working. The beach between Danang and Hoi An will be a huge resort area in the future and is only an hour and 10 minutes by plane from Hong Kong, and two hours from Singapore. Likes stocks with yields of 5% to 7%.
  • Many rich Asian companies have been buying other Asian companies. Asia long-term economic outlook is good. Laos, Cambodia, and Myanmar are opening up, and Vietnam is reopening. Myanmar market is hot but like Vietnam near its peak in 2006-07, looks dangerous for investors.
  • The huge credit bubble in China won’t end well. The economy officially grew 7.7% in Q1 but in truth is growing 4% a year, at best. China reports export figures to Taiwan, South Korea, Hong Kong, and Singapore that are much larger than those countries report as imports.
  • Markets in Europe have made major lows so own European shares – and plan to buy more – and corporate bonds, and real estate. Money in European banks is no longer 100%.
  • Like Singapore REITs whose yields of 5% and 5.5% compare favorably with US REITs. If inflation picks up, REITs can raise their rents.
  • 25% in gold and add to positions every month. When the asset bubble bursts, financial assets will be particularly vulnerable.

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Carson Block Goes Short Unafraid as Chinese Gangsters Chase – Bloomberg 12-10-12

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Carson Block at Muddy Waters said he stopped betting against Chinese companies this year after government agents hindered his analysts and harassed workers at his storage company in Shanghai. Block says China is protecting frauds by making it difficult to research short sale candidates, and has used intelligence and police agencies to deter his company and employees from continuing to do research in China. Block said Singapore is not a thugocracy.

Timothy Ghriskey at Solaris Group said Block has been the most vocal and public about the accounting problems with US-listed Chinese companies. Sahm Adrangi at Kerrisdale Capital Mgmt said the Carson Block model of very detailed reports has set a new standard in terms of writing and sharing research. James Rickards at Tangent Capital Partners said Block is looking at the crime in progress.

The SEC accused affiliates of the four biggest accounting firms of refusing to produce documents for investigations into client financial disclosures.

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