Investment: InvestFair 2007

Hi guys, i know that i am away for the past 2 weeks. Well today (or rather yesterday), i went for the invest fair at suntec level 4. I went for the investment merits seminar for a few companies, such as Midsouth, C&O and KSH. I also learnt about the Zero Certs by ABN Amro too. I will do my research on them soon, and they seems to be quite sound.

But something that i want to highlight is the seminar by Melvin Yong (CNA guy) on: What's Hot and What's Not for the year 2007. In this seminar the panelist is:
1) Kevin Norbert Scully from NRA Capital Pte Ltd
2) Ooi Ltd Seng from Societe Generale
3) Song Seng Wun from CIMB-GK Research
4) Terence Wong from SIAS Research Pte Ltd

Not in any order, i will just report here whatever i can remember from the 45 mins panel:

The recent rally maybe a 'dead cat bounce', and recommended to sell into rally while still can. The recent cut in the fed rate is a sign of diminished confidence. As Kevin stated, if the US govt never reduce the fed rate, it may be a show of 'the sub-prime loan problem is a small one and we can control it in due time'. However a cut in the fed rate shows that the sub prime loan problem is not that small afterall.

From Ooi side, he kept mentioning that the fact that as a issurer of Warrants, he and his company have to keep a neutral stand, thus the only obvious sign he stated is that, 'the number of people buying put warrants have increased...'

From both Song and Terence, they shed a few stock picks and their view on the economy.

Terence was cautiously bullish about this selldown, saying that there were many opportunities presented this time round. He mentioned about 3 things, 1) Take note of companies that do with domestic demand (Singapore), 2) He also state that Oil and Gas Sector is still his play and 3) He loves dividend plays. Thus to sum up the sectors that he will look into, will be oil and gas, properties, construction and Marine and offshore sector. He feel that out of the 3 banks in singapore, UOB is the safest, saying that 'for a bank who dun know its exposure to CDO, its dangerous...' He also stated that many of the REITs are quite defensive.
Stock pick by Terence: One of his picks is Babcock and Brown. For oil and gas, Blue-chip, Sembcorp Marine and Keppel, there is also Cosco Corp. Properties, he mentioned about there is actually small cap properties that has good fundementals albeit smaller margin, one of it is BBR. Marine and offshore is but of course Rotary.
One thing that Terence emphasied (repeating 3 times throughout the seminar) is that to avoid Penny stock, or junk caps as he mentioned it. they will shed about 80% to 90% in this selldown.

Whereas for Song, he is quite bearish about the economy, stating that the European market has pumped in about 600 Billions into the market to stablise it, and for a mature market to pump in that much, the situation is really quite dire. 5 to 6 months is the time he give to this selldown. He also mentioned that Japanese Banks is not able to sustain the low interest rate, and if they were to increase their interest rate, it maybe a repeat of the 1997 economic crisis. He also mentioned that the Oil and gas sector has book orders all the way til 2010, however, he said, having book orders is good, but the quality of the book orders must be there. Construction sector in Singapore is also set to go, placing Tat Hong and Tiong Woon as his picks for the construction sector. He also mentioned about the spillover effect to other companies related, like a wiring company, (which i cant catch the name, anyone readers know please tell me, it was noisy there).

When ask about how they see STI will be heading for the remaining of the year, they all agree that 2800 to 3000 is something not impossible to happen as any more 'bad news' will drive the market downwards. Song mentioned about next friday's Ben Bernanke's views on the Housing and Credit Market will show the direction of the market. He also said that the domestic market in US is weakening and that is a sign that we (investors) should take note of.