22nd October 2010 The Business Times

• Equity bubble, asset bubble in Asian Market in 12 to 18 months time (October - December 2011), without good economic growth.
• US creating more debt to deal with debt. Hedge funds are back to their stride, leverage buy-outs and private equity transactions are back. Japan's Quantitative Easing measures to print more money and effective devaluation of the yen. A Mercantilist behaviour before the Asian financial crisis. China holding back and not let its currency appreciate enough and handing on to its export-led and speculation-led model of growth instead of boosting domestic demand. All this contributes to global imbalance. Expect a 30% correction in stock markets.
• Excess speculative capital flushing around and although the markets have been quite strong the last four weeks, its likely only tip of the iceberg.
• Bullish on property, financial, energy commodities e.g oil because it is a lagging indicator. Should focus on rig builders and offshore structure builders because of more orders inflow incoming in.
• China's hike may hit some of S'pore listed firms
• Capitaland with 35% of its Revised Net Asset Value from China, risk a bigger fall out compared to its peers from policy risks in Chinese property market. Its 2 projects in Shanghai - the Pinnacle and Paragon, could be delayed for 6 months from October. However, Capitaland earnings should not be affected given its resilient retail portfolio.
• Kepland has 25% of its RNAV exposure to China, should be offset by its large exposure to the rebounding offices sector in Singapore.
• Yangzijiang shipping contracts are mostly in US dollars and its running cost in yuan terms. More than 90% of its shipping revenue is from overseas customer. It has some currency forwards to hedge currency fluctuations.
• Sino Grandness Food Industry Group will be affected with its avenue derived from overseas market.
• C&O Pharm and China Essence is likely to benefit since their borrowing/purchasing costs is likely to be more than offset by savings from US dollar for the former and US dollar and HK dollar for the latter.
• ComfortDelGro also has operations in China, the United Kingdom, Ireland, Australia, Vietnam and Malaysia. Currently, overseas ventures account for 50% of the company's revenue. China accounts for 13% of its EBIT.