US VIEW: Dow likely down to 8,000 before going up to 9,500 by 3Q09 ........
Dow was +100/-50 to-and-froing around 8,500. Asia market recovery from yesterday's intraday breather likely to be muted today given Dow's passive performance. A slew of capital raising from US Banks & Autos may make it fashionable for Asia corporates to do the same. This is the only negative catalyst I see. However, good news are still outweighing bad news. As a guide, most investors expect by 3Q09 the following:
a. Dow down to 8,000 before resuming its upside by another +20% to 9,500.
b. FSSTI down to 1,900 before going to 2,400
c. HSI down to 16,300 before going up to 19,000
DOW : +50 (8469); S&P -1 (908); Nasdaq -15 (1715)
Good : Oil USD59/bbl, US Trade deficit USD27.6bn (growing less-than-expected), Hedge funds Apr return+3.2% (best in 2 years)
Bad : US Banks likely to have slew of dilutive capital raising to pay back TARP, Autos capital raising saw share price fall, Median home price -14% 1Q09/1Q08 to USD169k
S'PORE VIEW: FSSTI side 2,200
We have a HOLD China Sports Int'l Px/Tgt SGD0.14 post within-expected-results. However, I think this stock is fundamentally more superior than the other S-shares and deserves >0.6x PB that our analyst is valuing it. At the very least it should be trading at its cash/share of SGD0.18.
CHINA/HK VIEW: HSI side 17,300
Good : Apr FAI +30.5%
Bad : Apr Exports -22.6% to USD91.9bn & Imports -23% to USD78.8bn
Nna Sheng has a HOLD on CCB Px/Tgt HKD 4.98/5.20 despite sale overhang lifted and valuation gap vs ICBC set to narrow.BoA sold 13.5b CCB shares at HK$4.20 each with buyers rumoured to include Hopu and Temasek. I prefer to buy HKD4.50.
Mark Po has a BUY on Haitian International Px/Tgt HKD 2.00/2.57 because its gaining market share. HI's operating environment has improved given demand picking up from downstream sectors, including automobile and home appliances. We upgrade HI from HOLD to BUY given better operating environment and valuation
THAI VIEW: SET side 545
Veena says that Thai Property sector offers the maximum upside of 72% on a 10-year P/B. QH and LPN are our top picks in the property sector. Telcos, having lagged behind during this rally, has a 56% upside. Top BUYs are ADVANC and DTAC. We also like PTT, PTTEP, BANPU, TISCO, BBL, KTB and KBANK. For stocks which share prices have breached our target prices, we put them under review.
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