CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Quantamental Investing to beat Benchmarks

A. Stotz Investment Research

We pick stocks. We construct portfolios. All our effort is focused on how to better pick stocks and construct portfolios. We serve fund management companies, family offices, and high net worth individuals.

Equity Bottom-Up

<ul><li>Cheap on a gross profit basis, low correlation, and improving asset turnover relative to its sector</li><li>Following a number of successful mergers, BRPT’s subsidiary (TPIA IJ) has become Indonesia’s largest integrated petrochemical company with over a 50% domestic market share</li><li>On top of the 43% jump in capacity in 2016, further capacity additions via a synthetic rubber plant JV to use output from a butadiene plant as feedstock will result in even lower production costs and greater scale merits in the long term</li><li>Looks like a cheaper way to gain exposure to strong subsidiary TPIA IJ</li><li>Risks: If oil prices fall, margins may be squeezed</li></ul>

Cheap on a gross profit basis, low correlation, and improving asset turnover relative to its sectorFollowing a number of successful mergers, BRPT’s subsidiary (TPIA IJ) has become Indonesia’s largest integrated petrochemical company with over a 50% domestic market shareOn top of the 43% jump in capacity in 2016, further capacity additions via a synthetic rubber plant JV to use output from a butadiene plant as feedstock will result in even lower production costs and greater scale merits in the long termLooks like a cheaper way to gain exposure to strong subsidiary TPIA IJRisks: If oil prices fall, margins may be squeezed

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Thematic (Sector/Industry)

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<li>SGX lists four stocks mining industrial minerals including tantalite, phosphate, limestone and marble, four coal mining stocks and three gold mining stocks. These 11 stocks are at different stages in the exploration, development, production cycle and have averaged a 19.0% gain in 2017 YTD.</li>
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Of the three segments, mining industrial minerals has been the strongest performer in the 2017 YTD with an average 30.4% gain, led Alliance Minerals Assets. Coal was the next best performer with the four stocks…</li>
</ul>


SGX lists four stocks mining industrial minerals including tantalite, phosphate, limestone and marble, four coal mining stocks and three gold mining stocks. These 11 stocks are at different stages in the exploration, development, production cycle and have averaged a 19.0% gain in 2017 YTD.

Of the three segments, mining industrial minerals has been the strongest performer in the 2017 YTD with an average 30.4% gain, led Alliance Minerals Assets. Coal was the next best performer with the four stocks…


Average 19% YTD Gain in Key Mining Stocks

Chandra Asri Petrochemical / Equity Bottom-Up

<ul><li>Good price momentum, low correlation to the Indonesian market, and improving asset turnover relative to its sector</li><li>TPIA’s petrochemical production capacity accounts for almost 50% of Indonesia’s total, placing it ahead of competition to distribute future product lines</li><li>Future synthetic rubber plant in JV with Michelin to use output from TPIA’s butadiene plant as feedstock resulting in lower production costs</li><li>TPIA looks attractive as operating profit has grown by almost 5x in 9M16 YoY while revenue grew by 22% during the same period</li><li>Risks: Naphtha corresponds to 57% of feedstock. Price volatility may affect margins significantly</li></ul>* Consensus Estimates

Good price momentum, low correlation to the Indonesian market, and improving asset turnover relative to its sectorTPIA’s petrochemical production capacity accounts for almost 50% of Indonesia’s total, placing it ahead of competition to distribute future product linesFuture synthetic rubber plant in JV with Michelin to use output from TPIA’s butadiene plant as feedstock resulting in lower production costsTPIA looks attractive as operating profit has grown by almost 5x in 9M16 YoY while revenue grew by 22% during the same periodRisks: Naphtha corresponds to 57% of feedstock. Price volatility may affect margins significantly* Consensus Estimates

TPIA: Operating Profit Lifts Indonesian Chemical Boss

Global Head of Research, Smartkarma

Mark Artherton

Global Head of Research

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
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More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

Macroeconomics

<div class="content-highlight">The failure to use or the aggressive implementation of asset write downs in emerging markets and Asia will have far reaching implications for investors.</div> We live in a world where investors are uncertain about asset values both in financial and non-financial companies.  Whilst a lot is written about the nature of bad debts at banks, little has been comprehensively written about the balance sheets of non-financial companies.We see the following evidence in our analysis: <ul><li><div class="content-highlight">The failure of some…</div></li></ul>

The failure to use or the aggressive implementation of asset write downs in emerging markets and Asia will have far reaching implications for investors. We live in a world where investors are uncertain about asset values both in financial and non-financial companies.  Whilst a lot is written about the nature of bad debts at banks, little has been comprehensively written about the balance sheets of non-financial companies.We see the following evidence in our analysis: The failure of some…

Indonesia

PT Chandra Asri Petrochemical Tbk (CAP) is an integrated petrochemical producer. The Company produces ethylene, propylene, mixed C4, pyrolysis gasoline, polyethylene, polypropylene, and styrene monomer.  CAP serves both the domestic downstream industries and regional export markets in Indonesia.

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Chandra Asri Petrochemical (TPIA IJ)

BRPT: Abundant Petrochem Capacity

Cheap on a gross profit basis, low correlation, and improving asset turnover relative to its sector Following a number of successful mergers,...

A. Stotz Investment Research

Average 19% YTD Gain in Key Mining Stocks

SGX lists four stocks mining industrial minerals including tantalite, phosphate, limestone and marble, four coal mining stocks and three gold...

Singapore Exchange Ltd (SGX)

TPIA: Operating Profit Lifts Indonesian Chemical Boss

Good price momentum, low correlation to the Indonesian market, and improving asset turnover relative to its sector TPIA’s petrochemical production...

A. Stotz Investment Research

Beware Impairments in EM and Asia

The failure to use or the aggressive implementation of asset write downs in emerging markets and Asia will have far reaching implications for...

Mark Artherton

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