Daily Brief Industrials: Sunac Services Holdings, Keppel Corp, S&P 500 and more

In today’s briefing:

Hong Kong Stocks Priced For Liquidation
Straits Times Index Quiddity Leaderboard Mar 23: Sembcorp/Keppel and Other Potential Index Changes
Another Bear Market Rally Begins; Indexes and Sectors With Bullish 2+ Month Inflections

Hong Kong Stocks Priced For Liquidation

With investors chucking in the towel and the HSI touching a thirteen-year low, it’s time for some old school perspective.
This insight looks at Benjamin Graham’s Net Nets, (current assets less current liabilities), then subtract any debt not included in current liabilities. More simply, current assets less total liabilities.
Graham would conclude these stocks are priced for liquidation. Stocks discussed include Sinopec Engineering (2386 HK), PC Partner (1263 HK), Linklogis (9959 HK), Antengene (6996 HK) and property service companies.

In this insight, we take a look at the potential index changes for the FTSE Straits Times Index (STI) (STI INDEX) between now and the March 2023 index review.
Keppel DC REIT (KDCREIT SP) is currently the lowest ranked index constituent and could get kicked out when Sembcorp Marine (SMM SP) gets added.
Olam Group (OLG SP) and SATS (SATS SP) are the next highest ranked potential ADD and DEL respectively and could be involved in index changes if their prices move sharply.

The bear market rally we have been discussing since our Sept. 27 Compass report has begun.
Over half of the Sectors and all the major indexes (S&P 500, Nasdaq 100, DJIA, and S&P 600 Small Caps) display bullish 2+ month inflections.
As referenced last week, we expect the aforementioned indexes to rally to their 200-day MAs; longer-term, this is still a bear market until they can break above their 200-day MAs.

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