First look at Food Junction

While I enjoy food, I do not like F&B stocks in general. I feel that the upside surprise would always be capped due to rising cost such as rental cost. At the same time, there is no protection against downside. So this is the first time I look at Food Junction, not vested at the moment.

From 2005 till mid 2008, Food Junction hovered between $0.6 to $0.7. It is now $0.255. Lippo owns about 58% of Food Junction through APG.

Food Junction seems to be in an uptrend, trading above the 20MA and 50MA, however the volume does not seem to suggest a big accumulation. There isn't any announcement of any trading by major shareholders.

Profit margin continues to decline from 19.7% in FY2006 to 8.7% in FY2009. Operation in China, which contributes 10.8% revenue, is still not profitable.

EPS FY2009 is 3.34 cents, translating to a trailing PE of 7.6. NTA is 18.66 cents.

Lacking potential upside, it is just not align to my strategy yet.

DBS - A bank keeps making mistakes?

Just last year, DBS attributed the mis-sale of H5 note to 'clerical mistake'. The customers were expected to spot it.

http://mycroeconomics.blogspot.com/2009/09/dbs-apparent-mistake.html

Today, DBS CEO apologized 7 days after a 7-hour failure in the bank IT system, attributed it to a 'procedural error'. IBM is probably expected to spot it.

http://www.dbs.com/sg/pages/announcement.aspx

Even though the CEO said the bank takes full responsibility of the event, I see no mention of DBS IT. The message keeps mentioning IBM, but where exactly is DBS IT?

The way the bank handles errors may be an error itself.

PUB refinances bond one year ahead?

Based on this announcement, PUB issues $400million bonds in July 2010 to refinance a bond expiring Aug 2011.

It is not stated whether the 2011 bond was called. If it is not, PUB would be paying more than $12million interest ($400million x 3% = $12million) to get the fund available one year ahead of time. Quite expensive? Or PUB foresees the cost of fund to increase significantly over next one year?




http://business.asiaone.com/Business/News/Story/A1Story20100712-226601.html

PUB launches issuance of $400 million fixed rate bonds


Mon, Jul 12, 2010
AsiaOne


PUB, Singapore's national water agency, has launched the new issuance of $400 million 12-year fixed rate bonds.

The issue date for the 12-year bonds, which has a coupon rate of 3.012% per annum payable semi-annually in arrear, is July 12, 2010.

These are issued in denominations of $250,000 and offered to investors pursuant to exemptions under Sections 274 and/or 275 of the Securities and Futures Act, Chapter 289 of Singapore.


DBS Bank Ltd will serve as the lead manager for the bonds, whose approval-in-principle has been granted on July 7 by the Singapore Exchange Securities Trading Limited for the listing and quotation of the 12-year bonds on the SGX-ST.

Proceeds from the issue of the 12-year bonds will be used to refinance the bonds of PUB that are maturing in August 2011.