Tuan Sing- A good defensive stock to buy in these times of uncertainty

Tuan Sing
BUY
Sept 25 2007 close : $0.375

Tuan Sing share price surge 17.2% from $0.32 to $0.375 on report in a business times article that it has a lot of upside potential. What so interesting about this share is that investors failed to notice that Tuan Sing has 3 commercial properties right at the heart of the commercial district. Valuation of these 3 properties done last year is worth 154 millions. However, property prices has increased significantly this year and Tuan Sing 3 commercial properties could be well worth over 154 millions. Stock price for Tuan Sing will definitely move to a higher region when it shed more light on the revaluation of its 3 properties.

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I will reccomend a buy as I feel that it is still undervalued based on its current stock price.

Looming threats

Earlier in the year, Greenspan warn the world that there is one out of three chance that the US economy will set into a recession. But now he has raises the probability to somewhat less than 50 percent.

The biggest risk of the US economy still lies at subprime problems. If the whole problem worsen or intensify, it would have a spillover effect on the global economy and Singapore too will not be spared.

Singapore on Monday 17 september reported its key exports rose an annual 11 percent in August, boosted by increased shipments of pharmaceuticals. Despite all the problems in the US, macro-economic fundamentals remain fairly good in Singapore and Asia. However, Singapore economy is still really dependent on the US.

Come 18 september, the fed will decide on benchmark federal funds interest rates. The Fed is widely expected to lower benchmark interest rates, now at 5.25 percent, by at least a quarter-percentage point to help the economy weather a housing downturn and a credit crunch. But bear in mind, lowering of interest rate will cause inflation. We just do not know which is of the lesser evil. Hopefully, the fed will make the right decision. We shall wait and see.

High volaitility ahead

The Straits Times index had rebounded past recent high of 3442 to close at 3466 on 5th Sep. However, I caution Investors to take a conservative approach in the coming week as Dow Jones dive 231.76 points. I expect higher volatility in the coming week and patiently wait for any buying opportunity. Investors can look into high yield stocks and move some of thier money to safer investment option ahead of the 18 sept FOMC meeting.