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Tuesday, 9 December 2008
Noble
I believe Noble will break 1.13 to test 1.29.
1 comment:
Anonymous
said...
Bleak outlook for commodity stocks
Analysts favour Noble Group to ride through slump
By THEODORA KEE AND ANG AN SHING December 9, 2008
WITH the global economic downturn, the outlook for commodities and commodities-related stocks will be bleak in the short run, analysts told BT.
The advent of the crisis has already caused much turmoil within the sector. Commodities, initially favoured as a hedge against inflation, were quickly thrown into descent.
During the course of the coming year, the pessimistic macroeconomic outlook, softening demand and a prolonged credit drought, could weigh on the sector's outlook.
Chris Sanda, an analyst from Daiwa Institute, said of commodities-related stocks: 'Stocks are significantly below their peaks and arguably factoring a widespread distress.'
On a brighter note, the inelastic demand for basic materials coupled with economic stimulus plans across nations could ameliorate the situation.
Across analysts covering the sector, Noble Group seems to be the preferred stock to ride through the slump.
According to OCBC Research, Noble has proven its ability to manoeuvre the rapidly changing operating environment. Earnings have been growing relentlessly regardless of the booms and busts of the commodity cycle.
While Noble will not be spared the deteriorating global macroeconomic outlook, the group has a well-diversified business model, which will help to mitigate its overall risk, OCBC said in a note.
Daiwa's Mr Sanda shares similar views on Noble. 'Investors have sold off Noble with the idea that the shares would be significantly affected by the drop in commodity prices and demand. That's not how Noble's business model works. Noble is a supply-chain manager that 'plays the spread',' he said.
Another stock recommended by OCBC is Straits Asia Resources Ltd (SAR) which according to the bank, delivered a strong 345 per cent year-on-year surge in its nine-month 2008 earnings to US$84.8 million and it is on track to bring in another year of record profits in FY 2009.
Coupled with declining production costs, OCBC projects that SAR's FY09 earnings could rise another 168 per cent on higher margins.
Goldman Sachs, however, remains neutral on SAR, having lowered its 12-month target price for the stock to S$1.20 based on 1.5 times price-to-book.
Goldman is positive on the growth prospects of the group's Jembayan project, but is less sanguine over the Sebuku project and has assumed zero contribution from the Cagar Alam boundary extension project given the uncertainty over when it would obtain approval from the authorities.
1 comment:
Bleak outlook for commodity stocks
Analysts favour Noble Group to ride through slump
By THEODORA KEE AND ANG AN SHING
December 9, 2008
WITH the global economic downturn, the outlook for commodities and commodities-related stocks will be bleak in the short run, analysts told BT.
The advent of the crisis has already caused much turmoil within the sector. Commodities, initially favoured as a hedge against inflation, were quickly thrown into descent.
During the course of the coming year, the pessimistic macroeconomic outlook, softening demand and a prolonged credit drought, could weigh on the sector's outlook.
Chris Sanda, an analyst from Daiwa Institute, said of commodities-related stocks: 'Stocks are significantly below their peaks and arguably factoring a widespread distress.'
On a brighter note, the inelastic demand for basic materials coupled with economic stimulus plans across nations could ameliorate the situation.
Across analysts covering the sector, Noble Group seems to be the preferred stock to ride through the slump.
According to OCBC Research, Noble has proven its ability to manoeuvre the rapidly changing operating environment. Earnings have been growing relentlessly regardless of the booms and busts of the commodity cycle.
While Noble will not be spared the deteriorating global macroeconomic outlook, the group has a well-diversified business model, which will help to mitigate its overall risk, OCBC said in a note.
Daiwa's Mr Sanda shares similar views on Noble. 'Investors have sold off Noble with the idea that the shares would be significantly affected by the drop in commodity prices and demand. That's not how Noble's business model works. Noble is a supply-chain manager that 'plays the spread',' he said.
Another stock recommended by OCBC is Straits Asia Resources Ltd (SAR) which according to the bank, delivered a strong 345 per cent year-on-year surge in its nine-month 2008 earnings to US$84.8 million and it is on track to bring in another year of record profits in FY 2009.
Coupled with declining production costs, OCBC projects that SAR's FY09 earnings could rise another 168 per cent on higher margins.
Goldman Sachs, however, remains neutral on SAR, having lowered its 12-month target price for the stock to S$1.20 based on 1.5 times price-to-book.
Goldman is positive on the growth prospects of the group's Jembayan project, but is less sanguine over the Sebuku project and has assumed zero contribution from the Cagar Alam boundary extension project given the uncertainty over when it would obtain approval from the authorities.
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