The sun rises again.

20 May 2017

Dear Fellow Investor,

The sun rises again.

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That was the theme of yesterday’s presentation on The Asian Economy held at the Swiss Garden Hotel.



Prominent speakers included Charles Lee, Portfolio Manager from Phillip Securities Singapore, Louis Wong, Director, Phillip Capital Hong Kong, Ms Pikun, Fund Manager from Phillip Securities Thailand and Mr Phua Lee Kerk Market Strategist, Phillip Capital Mgt.



Statistics and charts were presented to support the rising sun theme.



The sun is definitely rising in japan. Exports are picking up. Tourism numbers continue to increase. Deflation is ending. Consumers are spending. The employment market is robust and wages are going up. Abonomics is working. Valuations of 13.9 PE are reasonable and there are quality small and mid caps which offer opportunity.



The sun is also rising in Thailand. The 3 year drought has ended and the farmers are happy. They have more money to spend and that is boosting consumer stocks. As the Army is in control for at least the next 5 years that provides economic and political stability which is attracting foreign investment. Ms Pikun recommended several Thai consumer stocks to ride the trend.



The sun is definitely rising in Singapore after 3 under performing years. Property is beginning to recover with government initiatives to loosen policies imposed to cool off the property market.



The policy of strategic alignment with China is the new focus. This alignment includes goods, services and finance . Over 100 China MBA grads are now in Singapore studying at a local University the Singapore model of growth and business development so they can replicate this model



This will provide support and growth to the Singapore/ China economy.



The compelling valuation of the Singapore market is PE 13 with a price to book of only 1.2. Average dividend yield for the blue chip index is a generous 3.4 % which beats the FD rate by a wide margin.



Charles Lee continues to like selected REITS as a income plays as well as transportation and infrastructure stocks.



The sun in Hong Kong is also bright. With the PMI expanding in China growth is accelerating and spilling over into Hong Kong. Valuations of the Hong Kong share index are at PE 13.2 which are reasonable.



I have bought the EWH as a play on Hong Kong for our PGWA clients. This is a fund listed in New York managed by Blackrock which include a selection of blue chip Hong Kong shares. So far it has been performing and should continue to perform with the China recovery.



Malaysia is also benefitting from the rising sun and I am focusing more on small and mid cap stocks with solid fundamentals. We visited Kossan last week to get a review of the rubber glove sector and also attended the AGM of ECS IT. Kossan is expanding with a new plant which should boost profits. Since inception 30 years ago I was told that Kossan has never had a losing year.



The prospects for ECS are bright as they are expanding into the Internet of Things and establishing a presence in the Penang free trade zone.



Invest well and grow your wealth

Bill

Secretive and largely solitary by nature, the cougar is more closely related to smaller felines, including the domestic cat…rather than the large cats of Africa, India, Siberia…or the jaguar in South America.