http://neuropolitics.org/defaultapr09.asp
http://www.schoolofthinking.org/what-is-your-dangerous-idea/tit-is-coming-the-shadow-of-the-future/
Monday, 2 August 2010
The Zero-Sum Games of Capitalism
http://neuropolitics.org/defaultapr09.asp
http://www.schoolofthinking.org/what-is-your-dangerous-idea/tit-is-coming-the-shadow-of-the-future/
Strong Performance at DBS, Singapore Bank stocks in focus
July 30: Bank stocks in focus next week
WRITTEN BY GOOLA WARDEN
SATURDAY, 31 JULY 2010 11:21
DBS GROUP HOLDINGSS has been hit by another impairment charge related to its controversial purchase of Hong Kong’s Dao Heng Bank nine years ago. Singapore’s largest bank said today that it made a goodwill impairment charge of $1.02 billion in 2Q10, resulting in a net loss of $300 million for the quarter.
DBS bought Dao Heng in 2001 for more than $10 billion, or three times book value. Under accounting rules at the time, the goodwill of $6.8 billion was to have been amortised over 20 years. The rules changed in 2005, however, and DBS is now required to carry Dao Heng in its books at “fair value”. DBS made an impairment charge of $1.13 billion related to Dao Heng in 4Q05. Dao Heng, which has since been renamed DBS Hong Kong, was carried in the group’s books at $8.43 billion as at June 30. That values Dao Heng at 2.2 times book value. By comparison, shares in Bank of China are trading at about 2.1 times book value, while Hang Seng Bank is trading at about 3.5 times book value.
On the operational front, however, DBS turned in a solid performance in 2Q10. Its loan book expanded 8.9% q-o-q, and 18.1% y-o-y. That drove DBS’ market share of Singapore dollar loans up by almost one percentage point, from 21.5% to 22.4%. Excluding the goodwill impairment charge, DBS chalked up earnings of $718 million. That was a record for the banking group, and some 20% higher than the most bullish analyst estimates. “It was above our expectations and consensus, led by another strong trading quarter,” notes Kenneth Ng, an analyst at CIMB Securities.
Piyush Gupta, CEO of DBS, warns that the group’s operational performance in 2H10 might not be as strong. “We don’t expect double digit [loan growth] for the second half,” he says. Also, net interest margins have been under pressure, declining by nine basis points in 2Q10 to 1.84%. Gupta says that “NIMs could see two to three basis points compression” in the second half.
Looking ahead, Gupta says DBS is trying to rebalance its footprint across the region, aiming for 40% of its earnings to come from Singapore; 30% from Hong Kong and China; and the remaining 30% from South and Southeast Asia. Currently, Singapore contributes 62%, Hong Kong 22%, India 8%-9%, China 2%-3% and the balance spread across other markets.
WATCHING THE BANKS
In the wake of the strong performance at DBS, bank stocks could be in focus in the coming week. “We wonder if UOB and OCBC could surprise with stronger-than-expected trading figures,” Ng says. “Our 2Q10 forecasts for UOB and OCBC stand at $582 million and $607 million respectively.” Oversea-Chinese Banking Corp will be reporting 2Q10 results on Monday, while United Overseas Bank is scheduled to report the week after on Aug 10. CIMB currently has “outperform” ratings for both OCBC and UOB with target prices of $10.79 and $23.32 respectively.
As for DBS, some analysts are turning more positive now. For one thing, it has a decent dividend yield. For 2Q10, the bank declared a dividend of 14 cents per share, bringing its total dividend for 1H10 to 28 cents. That translates to an annualised yield of 3.9% at the last done price of $14.40. Investors who opt for scrip dividend will receive their shares at a 5% discount. Shares in DBS are trading at 1.3 times its book value of $10.88 per share.
Jonathan Koh, an analyst at UOB Kay Hian, says that loan growth at DBS has been strong and broad based. He currently has a “buy” recommendation on the stock. Ng of CIMB, however, still has an “underweight” rating on the counter. Meanwhile, DMG & Partners says that DBS’ 2Q10 results were way above expectations, and that it is reviewing its “neutral” rating.
CHART VIEW
The STI (2,987) fell nine points on Friday, after testing an intra-day high of 3,018. As a result a dark cloud cover formed on the candlestick chart suggesting that the index is likely to continue lower in the coming week. While major support is at 2,900, the near term retreat should find support at 2,957. The trend remains upwards but resistance at 3,000 is formidable.
http://www.theedgesingapore.com/blog-heads/goola-warden/18534-weekends-comment-july-30-bank-stocks-in-focus-next-week.html
WRITTEN BY GOOLA WARDEN
SATURDAY, 31 JULY 2010 11:21
DBS GROUP HOLDINGSS has been hit by another impairment charge related to its controversial purchase of Hong Kong’s Dao Heng Bank nine years ago. Singapore’s largest bank said today that it made a goodwill impairment charge of $1.02 billion in 2Q10, resulting in a net loss of $300 million for the quarter.
DBS bought Dao Heng in 2001 for more than $10 billion, or three times book value. Under accounting rules at the time, the goodwill of $6.8 billion was to have been amortised over 20 years. The rules changed in 2005, however, and DBS is now required to carry Dao Heng in its books at “fair value”. DBS made an impairment charge of $1.13 billion related to Dao Heng in 4Q05. Dao Heng, which has since been renamed DBS Hong Kong, was carried in the group’s books at $8.43 billion as at June 30. That values Dao Heng at 2.2 times book value. By comparison, shares in Bank of China are trading at about 2.1 times book value, while Hang Seng Bank is trading at about 3.5 times book value.
On the operational front, however, DBS turned in a solid performance in 2Q10. Its loan book expanded 8.9% q-o-q, and 18.1% y-o-y. That drove DBS’ market share of Singapore dollar loans up by almost one percentage point, from 21.5% to 22.4%. Excluding the goodwill impairment charge, DBS chalked up earnings of $718 million. That was a record for the banking group, and some 20% higher than the most bullish analyst estimates. “It was above our expectations and consensus, led by another strong trading quarter,” notes Kenneth Ng, an analyst at CIMB Securities.
Piyush Gupta, CEO of DBS, warns that the group’s operational performance in 2H10 might not be as strong. “We don’t expect double digit [loan growth] for the second half,” he says. Also, net interest margins have been under pressure, declining by nine basis points in 2Q10 to 1.84%. Gupta says that “NIMs could see two to three basis points compression” in the second half.
Looking ahead, Gupta says DBS is trying to rebalance its footprint across the region, aiming for 40% of its earnings to come from Singapore; 30% from Hong Kong and China; and the remaining 30% from South and Southeast Asia. Currently, Singapore contributes 62%, Hong Kong 22%, India 8%-9%, China 2%-3% and the balance spread across other markets.
WATCHING THE BANKS
In the wake of the strong performance at DBS, bank stocks could be in focus in the coming week. “We wonder if UOB and OCBC could surprise with stronger-than-expected trading figures,” Ng says. “Our 2Q10 forecasts for UOB and OCBC stand at $582 million and $607 million respectively.” Oversea-Chinese Banking Corp will be reporting 2Q10 results on Monday, while United Overseas Bank is scheduled to report the week after on Aug 10. CIMB currently has “outperform” ratings for both OCBC and UOB with target prices of $10.79 and $23.32 respectively.
As for DBS, some analysts are turning more positive now. For one thing, it has a decent dividend yield. For 2Q10, the bank declared a dividend of 14 cents per share, bringing its total dividend for 1H10 to 28 cents. That translates to an annualised yield of 3.9% at the last done price of $14.40. Investors who opt for scrip dividend will receive their shares at a 5% discount. Shares in DBS are trading at 1.3 times its book value of $10.88 per share.
Jonathan Koh, an analyst at UOB Kay Hian, says that loan growth at DBS has been strong and broad based. He currently has a “buy” recommendation on the stock. Ng of CIMB, however, still has an “underweight” rating on the counter. Meanwhile, DMG & Partners says that DBS’ 2Q10 results were way above expectations, and that it is reviewing its “neutral” rating.
CHART VIEW
The STI (2,987) fell nine points on Friday, after testing an intra-day high of 3,018. As a result a dark cloud cover formed on the candlestick chart suggesting that the index is likely to continue lower in the coming week. While major support is at 2,900, the near term retreat should find support at 2,957. The trend remains upwards but resistance at 3,000 is formidable.
http://www.theedgesingapore.com/blog-heads/goola-warden/18534-weekends-comment-july-30-bank-stocks-in-focus-next-week.html
Sunday, 1 August 2010
Sun Tzu & The Art of War - Applied to Portfolio & Risk Management
It would be helpful for you to have these two texts, especially Clavell's, to reference as you read through these comments.
Once you get past the first section of these comments, Application of Selected Sun Tzu Phrases To Portfolio Management and Risk Management, the following sections are organized to follow the chapter titles in Clavell's book; with Griffith's chapter titles in parentheses, and quotes treated as supplemental information.
Within each chapter section, before each Clavell quote or series of quotes, I have inserted a brief heading label that characterizes the substance of the quote(s) and the companion portfolio management and risk management corollaries.
 | • Selected Phrases - Application of Selected Sun Tzu Phrases To Portfolio Management and Risk Management |
 | • Chapter I - Laying Plans (Estimates) |
| • Chapter II - On Waging War (Waging War) |
| • Chapter III - The Sheathed Sword (Offensive Strategy) |
| • Chapter IV - Tactics (Dispositions) |
| • Chapter V - Energy (Energy) |
| • Chapter VI - Weak Points & Strong (Weaknesses and Strengths) |
| • Chapter VII - Maneuvering (Maneuvre) |
| • Chapter VIII - Variation Of Tactics (The Nine Variables) |
| • Chapter IX - The Army On The March (Marches) |
| • Chapter X - Terrain (Terrain) |
| • Chapter XI - The Nine Situations (The Nine Varieties of Ground) |
| • Chapter XII - Attack By Fire (Attack by Fire) |
| • Chapter XIII - The Use Of Spies (Employment of Secret Agents) |
| • Summary - Summary of The Art Of War as applied to Portfolio and Risk Management. |
http://www.strategies-tactics.com/suntzu.htm
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