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)

<ul><li>Singapore’s Energy Sector was the strongest of Singapore’s stock Sectors in October, with a 10.4% market capitalisation weighted total return on oil and coal price swings. This followed on from Energy also being the strongest of the Sectors back in September.</li><li>The 10 largest capitalised stocks of Singapore’s Energy Sector averaged a 12.5% total return in October, consisting of seven advancing stocks and three declining stocks. CAO, the largest capitalised stock of Singapore’s Energy Sector is scheduled to report 3Q16 results Wednesday.</li><li>Two of the 10 largest capitalised Energy stocks, Geo Energy Resources and KrisEnergy also ranked amongst the 10 actively traded stocks that saw the biggest increase in their October traded volume, compared to respective three month average volumes. Geo Energy Resources was the fifth biggest volume leader while KrisEnergy was the sixth biggest volume leader.</li></ul>

Singapore’s Energy Sector was the strongest of Singapore’s stock Sectors in October, with a 10.4% market capitalisation weighted total return on oil and coal price swings. This followed on from Energy also being the strongest of the Sectors back in September.The 10 largest capitalised stocks of Singapore’s Energy Sector averaged a 12.5% total return in October, consisting of seven advancing stocks and three declining stocks. CAO, the largest capitalised stock of Singapore’s Energy Sector is scheduled to report 3Q16 results Wednesday.Two of the 10 largest capitalised Energy stocks, Geo Energy Resources and KrisEnergy also ranked amongst the 10 actively traded stocks that saw the biggest increase in their October traded volume, compared to respective three month average volumes. Geo Energy Resources was the fifth biggest volume leader while KrisEnergy was the sixth biggest volume leader.

Energy the Strongest Sector in October on Oil & Coal Price Swings

Asean-focused. Ex-Head of Thai Research

Athaporn Arayasantiparb, CFA

Equity Bottom-Up

The Vongkusolkij family of Mitr Phol Group boasts market leadership in not one but two very distinct industries: sugar and coal (Banpu), and have diversified into power. But they are also big shareholders in Erawan, Thailand's largest low-cost hotel play. To understand why anyone would want to get into three very different sectors, we outline the structure of Thailand's sugar industry and the family structure and personality of Chanin, the patriarch's younger brother, to understand their diversification. You will be equally surprised that the family has dabbled in insurance (Royal Sun &amp; Alliance) and even has links to the founders of Kiatnakin Phatra, an investment bank that has gained a great deal of spotlight lately...and of course, the timing for this review couldn't be better. October 28 was Banpu Power's first trading day.

The Vongkusolkij family of Mitr Phol Group boasts market leadership in not one but two very distinct industries: sugar and coal (Banpu), and have diversified into power. But they are also big shareholders in Erawan, Thailand's largest low-cost hotel play. To understand why anyone would want to get into three very different sectors, we outline the structure of Thailand's sugar industry and the family structure and personality of Chanin, the patriarch's younger brother, to understand their diversification. You will be equally surprised that the family has dabbled in insurance (Royal Sun &amp; Alliance) and even has links to the founders of Kiatnakin Phatra, an investment bank that has gained a great deal of spotlight lately...and of course, the timing for this review couldn't be better. October 28 was Banpu Power's first trading day.

Rabble Rousers (Episode 2): The Hardest Dots To Connect

SGX lists four Upstream Coal Plays: Geo Energy Resources, Resources Prima Group, BlackGold Natural Resources and Golden Energy &amp; Resources.Geo Energy Resources has been the strongest performer among the four upstream plays in the 2016 year to date with a 37.9% gain. On 12 August,  Geo Energy Group reported that for the six months ending 30 June 2016, company revenue was US$33 million compared to US$10 million for the same period a year ago.

SGX lists four Upstream Coal Plays: Geo Energy Resources, Resources Prima Group, BlackGold Natural Resources and Golden Energy &amp; Resources.Geo Energy Resources has been the strongest performer among the four upstream plays in the 2016 year to date with a 37.9% gain. On 12 August,  Geo Energy Group reported that for the six months ending 30 June 2016, company revenue was US$33 million compared to US$10 million for the same period a year ago.

Geo Energy Resources Led Upstream Coal Plays in 2016 YTD

We estimate that Banpu's shares are worth Bt20/sh implying a 20% upside to current share price of Bt16.6/sh (assuming conglomerate discount of 30%). Its current share price implied a discount of 60%, which seems rather excessive. We value the coal assets using EV/reserve based on recent deals and power assets using EV/MW based on either acquisition or replacement costs. We think this and the recent recovery in coal price explains Banpu's recent resurgence despite continued weak financials.

We estimate that Banpu's shares are worth Bt20/sh implying a 20% upside to current share price of Bt16.6/sh (assuming conglomerate discount of 30%). Its current share price implied a discount of 60%, which seems rather excessive. We value the coal assets using EV/reserve based on recent deals and power assets using EV/MW based on either acquisition or replacement costs. We think this and the recent recovery in coal price explains Banpu's recent resurgence despite continued weak financials.

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.
​
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 Indo Tambangraya Megah Tbk operates as a coal exploration and mining company that provides energy and electricity support. The Company operates in Indonesia and supplies coal to the world energy market.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Indo Tambangraya Megah (ITMG IJ)

Energy the Strongest Sector in October on Oil & Coal Price Swings

Singapore’s Energy Sector was the strongest of Singapore’s stock Sectors in October, with a 10.4% market capitalisation weighted total return on...

Singapore Exchange Ltd (SGX)

Rabble Rousers (Episode 2): The Hardest Dots To Connect

The Vongkusolkij family of Mitr Phol Group boasts market leadership in not one but two very distinct industries: sugar and coal (Banpu), and have...

Athaporn Arayasantiparb, CFA

Geo Energy Resources Led Upstream Coal Plays in 2016 YTD

SGX lists four Upstream Coal Plays: Geo Energy Resources, Resources Prima Group, BlackGold Natural Resources and Golden Energy & Resources.Geo...

Singapore Exchange Ltd (SGX)

Banpu: Valuing the Coal-Power Phoenix

We estimate that Banpu's shares are worth Bt20/sh implying a 20% upside to current share price of Bt16.6/sh (assuming conglomerate discount of...

Athaporn Arayasantiparb, CFA

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

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)