OEL SP

0.42 x 22,000 OEL SP K SRS

Director fees

median pay for SP500 board member is $255k
Highest paid is Regeneron at $1.7m Chairman paid $20m
Japan 8m yen as independent director

Trade Feb 16

OCBC 1500 @ $7.84

SGDJPY 20000 @ 80.4

OCBC

Entry at 7

Sales S$10bn
NP 3.5bn
NIM 1.7%
Net interest income 5.2bn, non interest 2.5bn
Insurance: 30% of total non-interest income
Cost to income 40%
CET1 11.8%

Subsidiaries: Great Eastern, OCBC Malaysia, OCBC NISP (Indon), OCBC Wing Hang and Bank of Singapore (AUM S$77bn)


Stocks holdings account for 50% of market cap
Great Eastern SGD 8bn
Sinar Mars SGD 1.4bn
United Engineers SGD 260m

Loans by geography
88b Singapore
29b Malaysia
17b Indonesia
56b Greater China
11b Other Asia Pac
10b ROW
211b Total

Loans by sector
7b Agri
12b Transport
34b Building and construction
13b Manufacturing
27b Financial Institution
26b Commerce
23b Pros and Indv
56b Housing
10b Others
211b Total

Total deposits S$246b CASA ratio 46%

6% of loan book to O&G

DBS

Total Gross Loans SGD 312bn
Liquid Assets and Investment SGD 58bn
Equity SGD 40bn
Sales SGD 10bn
NP SGD 4bn

Loan growth 4%
NIM 2%

PBT by business
60% Wholesale
22% Retail
12% Others
6% Treasury

PBT by geography
65% Singapore
30% HK
3% Greater China
2% ROW
0% ASEAN

Loan mix
72% Wholesale
28% Retail

46% Singapore
18% HK
17% Greater China
10% ASEAN
9% ROW

20% Housing
18% General Commerce
11% Manufacturing
8% Pros and Indv
9% Transport and TMT
19% Building and Construction
5% Fixed Income
10% Others

NPLs
2.4% ASEAN
0.7% Greater China
0.3% Singapore
0.9% Total

Transactional banking-15% of total revenue
Trade finance-18%of total loans

China and commodity risk: NPL could jump to 3% from 1% now, ROE down to 9%
15% of loans are to China of which 60% relates to trade finance
Oil and Gas loan SGD 21bn c.6% of total loans but another est is 12%

IBM transcript

our global cloud data center footprint to 46. We already have an ecosystem of millions of developers globally, and our Bluemix platform as a service has already expended to over a million users adding 15,000 developers a week. With nearly $18 billion of analytics revenue, we are also the largest analytics provider and will extend that lead by moving into new areas including Watson Health and Watson Internet of Things.

And currency was also a headwind to our profit performance. We estimate it impacted our profit growth by about $300 million in the fourth quarter and over $1 billion for the year. At current spot rates, we would expect a significant impact to revenue and profit again in 2016 not just from the translation but from the year-to-year cash flow hedging dynamics.

urning to the balance sheet, we ended the quarter with a cash balance of $8.2 billion. Total debt was nearly $40 billion of which $27 billion was in support of our Financing business. The leverage in our financing business remains just over 7 to 1. The credit quality of our financing receivables remains strong at 55% investment grade. You can see this in our supplemental charts. The year-to-year reduction in investment grade was driven by rating changes to our existing portfolio not by changing our approach to the market. Our non financing debt of $12.7 billion was almost $1 billion lower than September and up just over $1 billion year-to-year.

The ELA construct quite powerful. It is the right way, I think, for our clients to consume our software and the right way to give them flexibility to deploy it. 

Pearson 1

60% of sales of higher education from 2 yr community college and 4 yr for profit college in US.
Pearson share of testing dropped from 40% to 30% after Common Core
Wage accounts for 70-80% of education cost (more teachers)
The other 10% from supplies and services each

SRS

J 21344
K 10800

Farm exports

145bn USD US
80bn USD Brazil
79bn USD Germany
70bn USD France
54bn USD China

#55 3.3bn USD Japan

Daily Routine

Morning

1. READ - newspaper, magazines
2. THINK - Meditate, Plank, Mantra

Office

1. UPLOAD - 2 new things
2. COMPLETE - 2 tasks

TO DO 2W Feb 16

1. Blog VN or -ve int rate
2. 360
3. Note Giant Sup

Weekly Theme

Mon
Interest: music, blog, biz, others

Tue
Exercise, vegetarian

Wed
Emails, work related, fwd stuff

Thu
PA

Fri
Family/Self

To This 2

1. Focus on minutes - 1440 minutes every day, can do a lot of things.

2. Beat procrastination with time travel - Your future self cannot be trusted, do things now.

3. Set daily priorities - Identify the Most Important Tasks (MIT), use 2 hours to complete them.

4. Schedule things into the calendar – less about to do lists.

5. Make it home for dinner

6. Use a notebook, capture everything there, use calendar on phone for To Dos

7. Only check email 3 times a day, don’t disturb the flow.

8. Avoid meetings, don’t hold them if possible.

9. Say “no” to almost everything. Focus on things that really have impact.

10. 80/20 – 80% of outcomes will come only from 20% of your time

11. Delegate and outsource - identify your unique ability, outsource everything else

12. Focus on energy, not time – maximize energy to maximize productivity, sleep well, watch diet, exercise and short break throughout the day

13. Touch things once – if something takes 10 min to complete, do it now

14. Morning routine – Wake up early, devote 60 minutes for mental, physical and spiritual health

15. Work theme – create days of week for different areas, batch tasks together

Do This

Japanese songs

1. 　三日月
2.　あかいスイートピー
3.　花がさく
4.　今井美樹
5.　ありがとう　いきものがかり
6.　Ambitious Japan

IBM

EPS $12, FCF 11-12bn
IBM Cognitive Business Solutions supported by over 2000 specialists and 50000 analytics engagements, partherships with FB and Twitter.
Currency drag 8% of revenue due to strong USD, or $1 in EPS
Strategic businesses: 34bn USD, 40% of 80bn overall revenue

Pretax profit and margins 2016
700m systems hardware OPM 10%
8300m software OPM 39%
4600m global technology services OPM 15%
2400m global business services OPM 15%
2400m global financing OPM 130%
-3700m eliminations

Bread and butter business (sw) losing to cloud and new competitors like ServiceNow
Losing 2% share annually in core categories

Application Infrastructure and Middleware 31% in 2012 dropped to 29% (Websphere and MQ-Series)
Database Mgmt 21% to 18% (DB2)
IT Operations 18% to 15%
Storage Mgmt 16% to 15%
Application development 22% to 20%
Enterprise Content Mgmt 20% to 18%

Not strong in SCM and CRM (Mkt share CRM 18% Salesforce 12% SAP 9% Oracle 6% MSFT 4% IBM)

Not content in Project and Portfolio Mgmt, Virtualization Infrastructure (VMWare 90% mkt share), Office Suites and Digital Content Creation

CCC -ve, Big Blue!

FT: Why lower rates mean higher liabilities

Why lower rates mean higher liabilities

When Daimler used €2.5bn of the cash on its balance sheet to top up its pension fund last December, it rather took the market by surprise. But the move by the German carmaker, while unusual, reflected another unintended consequence of the flood of cheap money from the European Central Bank. Many companies’ pension deficits have widened significantly because the discount rate used to value pension liabilities has fallen in tandem with interest rates.

Lufthansa is also suffering from this unwelcome side-effect of the low interest rate environment. Earlier this month, the airline said the deficit in its defined benefit pension scheme had risen by more than 40 per cent since December, and is now more than €10bn. Lufthansa wants to scrap DB pension arrangements for employees but has yet to negotiate a less onerous scheme with unions. Its pilots have gone on strike repeatedly to protect early retirement benefits.

Similarly, the deficit in Siemens’ pension plan rose to €11bn at the end of March, from €9.6bn at the end of December. At BASF, the chemicals manufacturer, pension provisions more than doubled to €9.6bn in the first quarter, compared with a year earlier. Standard & Poor’s, the credit rating agency, estimates that a 50-basis point change in discount rates adds a whacking €1.85bn to BASF’s liabilities.

It is not just pension fund trustees in Germany that are feeling the pain. Standard & Poor’s estimates that, in 2014, the sharp fall in long-term bond yields increased the post-retirement benefit obligations of the top 50 companies it rates in Europe by 11 to 18 per cent. It is predicting a further widening of scheme deficits this year. Even at the end of 2013, pension schemes at these 50 companies were underfunded by 30 per cent, or nearly €200bn.

Pension deficits are not debt in the conventional sense, and many companies face no statutory requirement to set aside financing for them. Nor have S&P or Moody’s downgraded any company’s credit rating because of a widening of its deficit. S&P believes, however, that if interest rates remain low, pension deficits will become a more material negative factor over the next two years. More companies, in that case, may have to follow Daimler’s lead.

Wishlist

200 CT200h
200 Stocks 2016
300 condo downpayment
200 Viet 2

Stocks to note

BATS
Shenhua
Genting
SMM
BLT

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