Uncertainty over Trump's policy agenda and US-China trade talks later this week:
It may not be apparent when President Trump and Chinese President Xi Jinping meet beneath the towering palms and crystal chandeliers at Mar-a-Lago this coming week, but the nations they lead are on a collision course for war.
An irresistibly rising China is challenging the United States’ accustomed dominance. Consider that the U.S. share of global economic output fell from 22 percent in 1980 to 16 percent today, while China’s grew from 2 percent to 18 percent over the same period. Historians know that when a rising power threatens to displace a ruling power, alarms should sound: extreme danger ahead. As Thucydides explained about the war that destroyed the two great city states of ancient Greece, “It was the rise of Athens and the fear that this instilled in Sparta that made war inevitable.” Likewise, a century ago, it was the rise of Germany and the fear it created in Britain that allowed an archduke’s assassination to ignite a conflagration so devastating that it required an entirely new category: world war.
This pattern, which I call the “Thucydides Trap,” recurs often. A major nation’s rise has disrupted the position of a dominant state 16 times over the past 500 years. In 12 of those 16 cases, the outcome was war. In the four cases that avoided violent conflict, that was possible only because of huge, painful adjustments in attitudes and actions on the part of challenger and challenged. Think of Britain and the United States under Theodore Roosevelt, or the United States and the Soviet Union during the Cold War.
http://www.msn.com/en-sg/news/world/comment-how-trump-and-china%E2%80%99s-xi-could-stumble-into-war/ar-BBzd4v1
Stocks to watch:
*Property: Flash URA data showed that private housing prices dipped 0.5% in 1Q17, for the 14th consecutive quarter of decline, with landed homes falling 2.8%, while non-landed properties stayed flat. Private home prices have fallen 11.7% since peaking in 3Q13. MKE is Neutral on the property sector, with UOL (Buy, TP $7.68) as its key pick.
*GLP: Divested two portfolio companies with distribution facilities to its GLP US Income Partners III fund for USD34m, as well as three other companies holding a completed asset that is part of the fund's target portfolio. This pared down its stakes in the portfolio companies (held through the fund) from 100% to 49.9%.
*CapitaLand: Serviced residence unit Ascott inks two serviced residences franchise agreements with Vitacon in Sao Paulo, Brazil. The two Citadines serviced residences will add a cumulative 214 rooms, with one scheduled to open in 4Q17, and the other in 2020. Vitacon intends to establish a portfolio of at least 5,000 Citadines-branded units in Sao Paulo.
*Healthway Medical: Private equity firm Gateway Partners, which is subscribing to $70m convertible B notes that can be swapped into 45.7% of HMC enlarged share capital, has declared that it has no intention of buying out the healthcare group. This statement would prohibit Gateway from making any general offer or acquire any shares that will result in it holding >30% of the company in the next six months. Meanwhile, Lippo-linked Gentle Care’s offer for the company at 4.2¢/share has received 23% acceptances.
*Chasen: Secured relocation contracts worth RM2.2m and US$0.2m in Malaysia and Vietnam respectively. The contracts are expected to be completed within the year.
*AnnAik: Acquiring 85% of LinXing Water Supply Co for Rmb9.4m. The target company supplies new water to residents of Lincheng, Zhejiang. The acquisition is complementary to the group’s industrial and municipal wastewater treatment business.
*Sincap: Appointed legal advisors to refute a letter of demand from Fu Hao claiming Rmb6.8m. Separately, it received a qualified opinion from independent auditor Baker Tilly for its FY16 financial statements due to unconfirmed outstanding claims from Shandong Luneng Taishan Mining for a mine refilling project.
*Secura: Wee Ee Chao, through KIP Industrial, is no longer a substantial shareholder following its sale of 1m shares at $0.17093 apiece, paring his stake to 4.76% from 5.01%
*Delong: Selling its pig iron production capacity of 1.1m mt and steel production capacity of 1.21m mt for Rmb400m ($81.1m) to Tsing Tuo. Proceeds from the sale will be used to pay severances as well as other expenses incurred for cessation of operations.
*Asian Micro: Acquiring a plot of land spanning 11,039 sf in Pulau Pinang, Malaysia for RM1.9m (~$0.6m).
*Kingsmen Creative: Its MOU with Regal International, The Destination Lab and ONG&ONG has lapsed and it will not proceed with the project to own, develop and operate two hospitality properties in East Malaysia.
*Auric Pacific: Received 97.02% valid acceptances for the privatisation offer at $1.65/share by Stephen Riady and CEO Andy Adhiwana. The company will be delisted after the close of the offer on 7 Apr.
*Ezra: Holding informal meeting with noteholders on 17 Apr to update on its filing for Chapter 11 bankruptcy in the US.
*Frasers Centrepoint Trust: Issued $90m 2.365% notes due 2020 under $1b multi-currency medium term note programme.
*Azeus Systems: Expects to report a loss for FY3/17 due to its products investments.
It may not be apparent when President Trump and Chinese President Xi Jinping meet beneath the towering palms and crystal chandeliers at Mar-a-Lago this coming week, but the nations they lead are on a collision course for war.
An irresistibly rising China is challenging the United States’ accustomed dominance. Consider that the U.S. share of global economic output fell from 22 percent in 1980 to 16 percent today, while China’s grew from 2 percent to 18 percent over the same period. Historians know that when a rising power threatens to displace a ruling power, alarms should sound: extreme danger ahead. As Thucydides explained about the war that destroyed the two great city states of ancient Greece, “It was the rise of Athens and the fear that this instilled in Sparta that made war inevitable.” Likewise, a century ago, it was the rise of Germany and the fear it created in Britain that allowed an archduke’s assassination to ignite a conflagration so devastating that it required an entirely new category: world war.
This pattern, which I call the “Thucydides Trap,” recurs often. A major nation’s rise has disrupted the position of a dominant state 16 times over the past 500 years. In 12 of those 16 cases, the outcome was war. In the four cases that avoided violent conflict, that was possible only because of huge, painful adjustments in attitudes and actions on the part of challenger and challenged. Think of Britain and the United States under Theodore Roosevelt, or the United States and the Soviet Union during the Cold War.
http://www.msn.com/en-sg/news/world/comment-how-trump-and-china%E2%80%99s-xi-could-stumble-into-war/ar-BBzd4v1
Stocks to watch:
*Property: Flash URA data showed that private housing prices dipped 0.5% in 1Q17, for the 14th consecutive quarter of decline, with landed homes falling 2.8%, while non-landed properties stayed flat. Private home prices have fallen 11.7% since peaking in 3Q13. MKE is Neutral on the property sector, with UOL (Buy, TP $7.68) as its key pick.
*GLP: Divested two portfolio companies with distribution facilities to its GLP US Income Partners III fund for USD34m, as well as three other companies holding a completed asset that is part of the fund's target portfolio. This pared down its stakes in the portfolio companies (held through the fund) from 100% to 49.9%.
*CapitaLand: Serviced residence unit Ascott inks two serviced residences franchise agreements with Vitacon in Sao Paulo, Brazil. The two Citadines serviced residences will add a cumulative 214 rooms, with one scheduled to open in 4Q17, and the other in 2020. Vitacon intends to establish a portfolio of at least 5,000 Citadines-branded units in Sao Paulo.
*Healthway Medical: Private equity firm Gateway Partners, which is subscribing to $70m convertible B notes that can be swapped into 45.7% of HMC enlarged share capital, has declared that it has no intention of buying out the healthcare group. This statement would prohibit Gateway from making any general offer or acquire any shares that will result in it holding >30% of the company in the next six months. Meanwhile, Lippo-linked Gentle Care’s offer for the company at 4.2¢/share has received 23% acceptances.
*Chasen: Secured relocation contracts worth RM2.2m and US$0.2m in Malaysia and Vietnam respectively. The contracts are expected to be completed within the year.
*AnnAik: Acquiring 85% of LinXing Water Supply Co for Rmb9.4m. The target company supplies new water to residents of Lincheng, Zhejiang. The acquisition is complementary to the group’s industrial and municipal wastewater treatment business.
*Sincap: Appointed legal advisors to refute a letter of demand from Fu Hao claiming Rmb6.8m. Separately, it received a qualified opinion from independent auditor Baker Tilly for its FY16 financial statements due to unconfirmed outstanding claims from Shandong Luneng Taishan Mining for a mine refilling project.
*Secura: Wee Ee Chao, through KIP Industrial, is no longer a substantial shareholder following its sale of 1m shares at $0.17093 apiece, paring his stake to 4.76% from 5.01%
*Delong: Selling its pig iron production capacity of 1.1m mt and steel production capacity of 1.21m mt for Rmb400m ($81.1m) to Tsing Tuo. Proceeds from the sale will be used to pay severances as well as other expenses incurred for cessation of operations.
*Asian Micro: Acquiring a plot of land spanning 11,039 sf in Pulau Pinang, Malaysia for RM1.9m (~$0.6m).
*Kingsmen Creative: Its MOU with Regal International, The Destination Lab and ONG&ONG has lapsed and it will not proceed with the project to own, develop and operate two hospitality properties in East Malaysia.
*Auric Pacific: Received 97.02% valid acceptances for the privatisation offer at $1.65/share by Stephen Riady and CEO Andy Adhiwana. The company will be delisted after the close of the offer on 7 Apr.
*Ezra: Holding informal meeting with noteholders on 17 Apr to update on its filing for Chapter 11 bankruptcy in the US.
*Frasers Centrepoint Trust: Issued $90m 2.365% notes due 2020 under $1b multi-currency medium term note programme.
*Azeus Systems: Expects to report a loss for FY3/17 due to its products investments.
