Chip Eng Seng

just an opnion.. the notes are oversubscribed means investors have confidence and are optimistic in the future outlook of CES.
On the other side, more cash flow seems to be flowing into the debt markets, is it not too good for the stocks markets?

(13-10-2014, 10:52 AM)jjlim84 Wrote: just an opnion.. the notes are oversubscribed means investors have confidence and are optimistic in the future outlook of CES.
On the other side, more cash flow seems to be flowing into the debt markets, is it not too good for the stocks markets?

Try not to fall too much for the hype, almost every capital markets issue is oversubscribed. Three times oversubscribed is a decent amount but I don't think it has any real read through for the equity. I wouldn't worry about the debt vs equity markets issue as these are really different pools of investment funds, realistically not many firms are switching between one or the other.

Damien: hard to say without having a more detailed knowledge of their maturity profile but I guess the funding was available at a decent price and they took it. Even once the cash flow comes in for TOPping projects they will continue to maintain a decent level of debt - this is the nature of a property developer...

Will rising rate hit CES stock price gg forward into next year? Can please say something, thanks.

Better sell off if u are not confident. Selling off might give u a better night sleep

(13-10-2014, 09:33 PM)yewkim Wrote: Will rising rate hit CES stock price gg forward into next year? Can please say something, thanks.

(13-10-2014, 09:39 PM)Curiousparty Wrote: Better sell off if u are not confident. Selling off might give u a better night sleep

(13-10-2014, 09:33 PM)yewkim Wrote: Will rising rate hit CES stock price gg forward into next year? Can please say something, thanks.

Thanks, for your reply.

(13-10-2014, 09:40 PM)yewkim Wrote:

(13-10-2014, 09:39 PM)Curiousparty Wrote: Better sell off if u are not confident. Selling off might give u a better night sleep

(13-10-2014, 09:33 PM)yewkim Wrote: Will rising rate hit CES stock price gg forward into next year? Can please say something, thanks.

Thanks, for your reply.

The rising rate has been a story long repeated for umpteenth times by the Fed. Its a "definite" direction, but timing is very unclear. I attended the recent DBS Asia insights and the guys there are also unsure as to the question of when exactly. There is also the other view that the central banks can't afford to raise rates at an abrupt rate, especially at this time with "unrest" occurring in middle east and other global issues. Its interesting to read those views and it offers more clarity on the why the timing is unclear.

Next thing is, how would rate hit CES? Borrowings would have been obtained earlier on when rates are cheap. The cost of existing or new construction is (correct me if I'm wrong) not likely to escalate higher due future rates increases. Especially for those projects that are currently taking place, including the Alexandra development. Not likely to see higher rates affecting these developments going to TOP this FY or near future. Unless the borrowings are happening in the new higher interest rates environment, then it may hit the bottomline bad. It may be speculative to say this, but proper risk management would have prompted the developer to purchase some form of forward rate for its borrowings.

Even if there is a crazy interest hike today, the interest cost is unlikely to crystalise and hit the income statement immediately until the development is sold. If percentage of completion is used, the impact will not likely have full impact on the income statement. From what I understand, interest cost of a development can be capitalised and held in balance sheet, until when revenue is recognised and cost has to be correspondingly recognised and matched.

To answer your question, price has to be a function of the business fundamentals and other economic factors. Rates are one thing. What is also of concern is the moving forward strategy and how CES would overcome existing issues, such as the Melbourne Towers.

Just my 2 cents. Still learning more about the markets.

CES has dropped from the recent high of 97 cents to a low of 84.5 cents yesterday.

If the pace of decline continues, it might hit 70 cents by end of this month...

General market sentiment aside, are there any blind spots which investors might have overlooked in the first place?

(14-10-2014, 10:22 AM)vesfreq Wrote:

(13-10-2014, 09:40 PM)yewkim Wrote:

(13-10-2014, 09:39 PM)Curiousparty Wrote: Better sell off if u are not confident. Selling off might give u a better night sleep

(13-10-2014, 09:33 PM)yewkim Wrote: Will rising rate hit CES stock price gg forward into next year? Can please say something, thanks.

Thanks, for your reply.

The rising rate has been a story long repeated for umpteenth times by the Fed. Its a "definite" direction, but timing is very unclear. I attended the recent DBS Asia insights and the guys there are also unsure as to the question of when exactly. There is also the other view that the central banks can't afford to raise rates at an abrupt rate, especially at this time with "unrest" occurring in middle east and other global issues. Its interesting to read those views and it offers more clarity on the why the timing is unclear.

Next thing is, how would rate hit CES? Borrowings would have been obtained earlier on when rates are cheap. The cost of existing or new construction is (correct me if I'm wrong) not likely to escalate higher due future rates increases. Especially for those projects that are currently taking place, including the Alexandra development. Not likely to see higher rates affecting these developments going to TOP this FY or near future. Unless the borrowings are happening in the new higher interest rates environment, then it may hit the bottomline bad. It may be speculative to say this, but proper risk management would have prompted the developer to purchase some form of forward rate for its borrowings.

Even if there is a crazy interest hike today, the interest cost is unlikely to crystalise and hit the income statement immediately until the development is sold. If percentage of completion is used, the impact will not likely have full impact on the income statement. From what I understand, interest cost of a development can be capitalised and held in balance sheet, until when revenue is recognised and cost has to be correspondingly recognised and matched.

To answer your question, price has to be a function of the business fundamentals and other economic factors. Rates are one thing. What is also of concern is the moving forward strategy and how CES would overcome existing issues, such as the Melbourne Towers.

Just my 2 cents. Still learning more about the markets.

Thank you for your reply. U are humble. I sincerely appreciate your reply as well as that of curiuosparty whose posts on this counter I read and benefited. Thanks to all once again.

http://blogs.marketwatch.com/capitolrepo...it-starts/


this site provide a rough guide to fed rate increase.


The dot plot suggests that the Fed may raise rates four times in 2015, from 0.25% to 1.25%. It may raise rates five times in 2016, from 1.25% to 2.75%, and it may raise rates four times in 2017, from 2.75% to 3.75%.

The Fed meets eight times a year, so the dot plot suggests a rate hike at nearly every meeting from the middle of 2015 to the middle of 2017.

Of course, the dot plot isn’t supposed to be taken as gospel or a literal road map; it’s just what the members of the committee think is the mostly likely future as of now.

As Fed Chair Janet Yellen said over and over again in her press conference, there is a lot of uncertainty about the Fed’s forecasts, even over the next few quarters, never mind its forecasts for where interest rates will be at the end of 2017.

When the Fed began to raise rates in 2004, the Fed raised rates by a quarter point at 17 straight meetings, taking the fed funds from 1% in June 2004 to 5.25% in June 2006. In hindsight, some Fed officials believe the central bank was too predictable, regular and slow in raising rates, leading to a sense of complacency that may have helped fuel the credit bubble.

The Fed had the opposite problem in 1994, when it surprised the markets with a rate hike in February and kept raising rates all year, leading to what’s now known as the Bond Massacre of 1994. The fed funds rose from 3% at the start of the year to 5.5% at the end.

The share price of CES is behaving as if upcoming results are going to be very bad.... Can this happen?