Company in STI that will benefit when Japan start rebuilding

[jamestai]

Hi,

I like to hear from all the experts here what are the company in STI you think that would benefit when Japan being to rebuild their country ?

I am thinking maybe stock related to Steel and construction dealing with Japan maybe have the potential to rise. We can share and brainstorm our view here to or at the "Discussing Specify Stock" forum to see if there is any stock that we should look into.

James Tai

[Dennis Ng]

Hi,

I like to hear from all the experts here what are the company in STI you think that would benefit when Japan being to rebuild their country ?

I am thinking maybe stock related to Steel and construction dealing with Japan maybe have the potential to rise. We can share and brainstorm our view here to or at the "Discussing Specify Stock" forum to see if there is any stock that we should look into.

James Tai

in rebuilding, what typically needed would be Construction Materials.

Santeh is involved in cement, but its market is mainly in China, not sure if they have spare capacity and can benefit from any possible increased demand for cement in Japan subsequent rebuilding.

[ein55]

Short term:
-Medical
-Food

Mid term:
-Oil & Gas industry: oil demand will be back when industry is rebuilt
-Construction

Long term:
-Renewable energy industry: eg. solar, not only for Japan, but also for entire world, to reduce dependence on petrol.

[Dennis Ng]

Short term:
-Medical
-Food

Mid term:
-Oil & Gas industry: oil demand will be back when industry is rebuilt
-Construction

Long term:
-Renewable energy industry: eg. solar, not only for Japan, but also for entire world, to reduce dependence on petrol.

Hi ein55,
can share some of the specific stocks for each category?

[ein55]

Hi Dennis,

These are the industries just come to my mind based on logical analysis of the needs of Japan in short, mid and long term. For Singapore company, they may benefit in 2 ways:

1) Selling products or services in needs by Japan. For company who have business in Japan, the stocks shd be affected more than other stocks. Company who can benefit is those who have less/no business in Japan but now expanding into Japan (because of the strong demand there), eg. providing construction equipment, etc. However, the local Japanese company will be given priority if the gov decides to pump in money for rebuilding. So, the services/products shd be something in need by Japan and cheaper to get from overseas (than from local in Japan).

2) Competiting with Japan company affected, taking over their market share lost during the crisis. Eg, automotive, electronics/semiconductor, even seafood (just read an article, sushi restaurant has to mention sources of ingredients are from other countries, not Japan). In fact, the international demand for automotive/semiconductor is increasing in short term due to reduction in supply from Japan. However, if the entire market is changing direction into recession, these industries will suffer in long term.

I don't know specific stocks in Singapore which may meet the criteria above, perhaps those interested can do further analysis. We invest in this opportunity only if we think the current correction is a correction, else the benefit from rebuilding of Japan may not be sufficient to compensate for the risk in downturn of world economy.

[ctsan1]

My opinion
those company involve in construction material supply will be benefit.
those company using the construction material will be suffer cost increase.

sapphire - mainly involve in steel and vaninium supply will gain extra profit because higher demand on steel and highly sell price.
although their market in China, but due to shortage steel supply from Japan, their steel demand in China may increase, furthermore price will be up. For information, few steel mill in Japan is badly affected by earthquake and they declare cease operation for certain period which yet to finalize. My company is oue of the major user of hot rolled/cold rolled steel, our operation is somehow affected. Hence, we are looking for alternative material from China Steel and Pasko (Korea steel), they will be benefited from Japan re-built.

Liang Huat - aluminium alloy extruded profiles supply mainly for manufacturing and construction, they will be benefited as aluminium price is expected to soar when Japan re-built.

Both company are declare $0.01 dividen, it is 3.3% and 7% respectively at current price, I plan to excharge some of many current holding, like Genting Sg, Tiong Woon, KSH to this 2 stock in next wk. Sell low..buy low also.

But, those construction company, eg. CES, KSH, Koh brother and so on will be affected because construction material price expected to be soar especially cement and steel. Furthermore, government is increase foreign level for construction worker by $200. This will further increase their cost but this factor i am sure the constructor will factor in their cost to offload to developer and finally transfer to buyer.

can anyone study both company FA & TA, it is worth to go in at this moment?



Budget 2011: Foreign worker levies to be increased
As the economy has grown at a much faster rate than expected, the local labour market is at full employment levels.

Read more:
» AsiaOne Special: Singapore Budget 2011
Further increases on the Foreign Worker Levy will be introduced to prevent the proportion of foreign workers from rising over time and exceeding the government's long-term target of one-third of the workforce.

The additional measures will be phased in at six-monthly intervals, starting from Jan 1, 2012 and extending till Jul 1, 2013. This is one year beyond the previous schedule and will give companies time to prepare for the changes.


For the manufacturing sector, the levy will be increased by an average of another $60 by July 2013, which is over and above the earlier announced increase of about $100.

For the services, the average levy will go up by a further $180 by July 2013 on top of the earlier announced increase of about $100, while average levy rates for the Construction sector will go up a further $200 over the same period on top of the earlier announced increase of about $130.

Levy rates for S Pass holders will be increased from $50 to $300 - $450 by July 2013 to manage the continued increase in demand for such workers.

The Minister says the levy increases are in line with the direction to provide clear and strong incentive for businessess to upgrade their operations, train workers and reduce their dependence on low-skilled foreign workers. The govt will also review more tightening measures if demand for foreign labour continues to strengthen beyond its expectations in the next two years.

Companies can also expect the government to adopt other measures to help them cope with a downturn in the future, such as enhanced training subsidies, instead of cutting foreign worker levies.

The Minister also urged companies to take advantage of schemes such as the NPF, and the enhanced PIC scheme to restructure, improve their efficiency, grow their businesses, and to offset the impact of higher labour costs over time.

[leslie_foo]

Hi, just to share my opinion.

I foresee, that companies involved in the raw materials will benefit when Japan is rebuilding. Companies which make finished materials such cement will not benefit because the Japanese is one of the major cement producing countries in the world so they will rely on domestic supply. Same for steel plants. Japan is one of the major steel producers in the world, and they need iron ore materials to produce the steel. Next is the energy products such as coal (needed to provide energy for steel plants, cement plants, and also for power plants to generate power.

One of the companies mentioned above although involved in steel products, are actually mainly a China market player, not international enough to benefit from this.

Next, we can expect more people to come to Singapore. Some of the MNC in Japan have already recall their expat staff and families in Tokyo and I believe many are operating in other parts of Asia, and Singapore could be one of the best locations. Many MNC also have their offices in Singapore. So the local economy will continue to go up, so is inflation. Property and food market/stocks should be good.

Regards,

[cellobear]

I have been thinking about this as well.

I think its the raw materials companies that may benefit. Personally, I feel that timber is required for a lot of construction as I believe substantial housing in that part of Japan is made from that material.

But I am happy to see the Japanese companies rally around their country. I hope that Singapore companies will do the same if called upon in future.

ch.

[leslie_foo]

Was "watching" (or rather listening to) the 10pm news on channel 8 just now and they had a report on our Finance Minister Mr Tharman speaking at an event (didn't pay much attention) and heard he mentioned that when Japan later goes into rebuilding the country, the demand for main commodities such as iron ore and coal will increase or something like that.

[Dennis Ng]

Would Tiong Woon benefit? Today's its share price went up from 32.5 cents by 4.5% to 34 cents.

[leslie_foo]

Would Tiong Woon benefit? Today's its share price went up from 32.5 cents by 4.5% to 34 cents.

Hi Dennis, not sure what Tiong Woon is involved in. However, my opinion is like this:
- Japan needs to import raw materials. They have all the while been importing. In fact, they are the ones who can actually impact on the price trends of international iron ore prices due to their buying power and demand for high grade iron ore (from Australia, Brazil).
- Due to this need to rebuild their cities, they will need more.
- Companies involved in such commodities will benefit. Not the finished materials since they have such industries themselves. But rather, companies that are vertically integrated.
- Not only commodities, but in the short-medium term, Japan would also need to import food, since their farms and sea food are contaminated.

[Dennis Ng]

Would Tiong Woon benefit? Today's its share price went up from 32.5 cents by 4.5% to 34 cents.

Hi Dennis, not sure what Tiong Woon is involved in. However, my opinion is like this:
- Japan needs to import raw materials. They have all the while been importing. In fact, they are the ones who can actually impact on the price trends of international iron ore prices due to their buying power and demand for high grade iron ore (from Australia, Brazil).
- Due to this need to rebuild their cities, they will need more.
- Companies involved in such commodities will benefit. Not the finished materials since they have such industries themselves. But rather, companies that are vertically integrated.
- Not only commodities, but in the short-medium term, Japan would also need to import food, since their farms and sea food are contaminated.

yes, construction materials, including steel would be in demand.

In rebuilding, also needs alot of Construction cranes, Tiong Woon is in business of rental of Construction cranes.