Latest news with #MateinKhalid
Arabian Post
16 hours ago
- Business
- Arabian Post
I now hunt for winner ideas in global real estate!
Matein Khalid While Marjan Island day trips with Amore mio Donna Farah hardly makes me nostalgic for my singleton era visits to Vegas and college boy trips to the odious Trump Plaza/Taj Mahal casinos in Atlantic City, I have no problem taking a flutter on Wynn when it traded at 12X earnings since the free cash flow yield is a more reliable proxy for a money making trade than the capricious whims of Lady Luck. This is why the casino action now moves to Las Vegas Sands (LVS). 2Q results were a blowout last week. Macau and Singapore are both on a roll and LVS capex in both its key Asian properties is now done. The Londoner resort has helped goose Macau market share while Bob Goldstein has hit a sixer (us colonials chaps do cricket metaphors duckies!) in Marina Bay Sands down in the Lion City. No wonder LVS shares are up 8% in the last week and 20% in the last month. This seems almost as good as the insiders who hit multiple home runs when Marjan Island morphed from a busted SRK Bollywood theme park to the first wannabe casino in the Gulf. As for moi, if a hotel/casino is not listed on the NYSE, i will never buy into the story, though do let me know if the La Belle Époque beauty at the Place Casino in Monte Carlo that did not let Manju and I since we were wearing jeans ever floats on the stock exchange, I will gladly turn cartwheels and take a punt on this mother of all trophy assets. My current buy price on LVS is 45-56. Ce n'est pas le moment de jouer LVS. ADVERTISEMENT US homebuilder shares have been mired in a painful bear market, down 17% on the sector tracker ITB in the past year. The Powell Fed's refusal to slash rates means 7% mortgage rates deter new buyers while Trump's tariff threats against Canada and deportation of untold million illegal immigrants suggests the cost of lumber and construction/wages moves higher. Copper tariffs will also raise plumbing costs and the price of imported Carrara marble from Toscana in La Bella Italia is also spiking higher. I do not have any interest in zombie real estate sectors du jour and have zero exposure to US homebuilders for now. Demand smells just as sweet as a garbage dump. Builders will continue to cut prices and miss on margins/guidance, though DR Horton did not. Supply is rising and the job market just faces too many crevices. Mortgage rates will not fall big time unless the US economy slips into recession when builder shares get sandbagged and only the shorts will make money in the debris. In private real estate, I believe the best risk/reward lies in buildings that rent to doctor owned outpatient clinics, where tailwinds are rich but aging Baby Boomer demographics and shifts from nosebleed hospitals will boost rental growth. Supply is at 40% of cycle peak while the occupancy rate is 95%. Yummykins! I hear the Hippocratic Oath has now been repealed in the Gulf as our private equity financiers insist that doctors should optimize revenues via uncessassary extra procedures/tests/surgeries in order to make the hospital's cash register ring, yella-yella-kaching-kaching. I do not know whether to laugh or to cry after I had lunch with a friend who had lived through the horror show of the Abraaj healthcare fraud and Al Masah's Dash It All and Drop Dead medical platform. In the UK, student housing is no longer as grotty as it was in my time, the reason I fled to America. In fact, I was amazed at the uber luxury facilities I visited in the sceptred isle though only for students who happened to be Chinese, the offspring of CCP honchos and drive to uni in their Lambos and Ferraris, vroom vroom… Seriously, there is a chronic shortage of student flats in London and other UK cities, so Jon Gray at Blackstone is on the right track, as he was in the Hilton LBO. Senior Housing and acute care will remain a profitable theme since the supply demand equation is so skewed in the landlord's favour, the reason my fave US REIT apart from the data center guys is now Welltower (WELL). REITs provide me with income when long duration bonds stink as well as an ideal inflation hedge and low correlation to global equities at a time when US valuation metrics are at cycle peaks at 22 times forward earnings and a zero equity risk premium. I was born at night, only not last night. ADVERTISEMENT Also published on Medium. Notice an issue? Arabian Post strives to deliver the most accurate and reliable information to its readers. If you believe you have identified an error or inconsistency in this article, please don't hesitate to contact our editorial team at editor[at]thearabianpost[dot]com. We are committed to promptly addressing any concerns and ensuring the highest level of journalistic integrity.
Arabian Post
16-07-2025
- Business
- Arabian Post
What next for Morgan Stanley and Citigroup shares?
Matein Khalid Morgan Stanley has evolved into one of the world's preeminent wealth management franchises and dramatically reduced its exposure to volatile securities trading in a major strategy shift under its former CEO James Gorman. His acquisitions of E-Trade, Eaton Vance and the Smith Barney brokerage platform from Citigroup have enabled its client assets to grow to a colossal $6.5 trillion and provide the anchor for secular EPS growth in the next decade. Despite the trade war and hyper volatile markets after Trump's Liberation Day on April 2nd, wealth management enabled the bank to generate stellar EPS growth in Q2. Wealth management revenues rose to $7.8 billion, up 14% on an annualized basis. It is ironic that a firm once known as a blueblood investment banking heir of the fabled House of Morgan saw its I-bank revenues fall 5% in Q2 to only $1.6 billion. While trading benefited from the volatile Q2 milieu, fixed income underwriting revenue fell due to a fall in high yield mandate wins and issuance. With a 15% ROE and a 16X forward multiple, I think Morgan Stanley is fairly priced but I would definitely use a profit taking correction in money center banks to accumulate the shares in the 120-125 range for a 150 strategic target using derivatives strategies on the Chicago Board Option Exchange. Morgan Stanley also increased its dividend by 7%, a bullish omen from management though the div yield alone is no reason to buy the stock at 2.65% when the yield on the 10-year Uncle Sam note is not 4.47%. ADVERTISEMENT I have made no secret of my conviction that the restructuring turnaround of Citigroup under CEO Jane Fraser would unlock shareholder value on a massive scale and trigger a valuation rerating to at least tangible book value. I wrote about the money making opportunity in Citi in a half dozen posts since 2023. Citigroup has risen an amazing 32% in the past six months alone as Wall Street has finally regained its lost credere after the New York money center bank's epic disasters and a near failure/FDIC nationalization during the GFC. Chuck Prince's decision to go on dancing proved painfully expensive for Citi's shareholders, who lost more than 90% in its 2009 meltdown. However, I just cannot accept the idea that Citi will command anywhere near the 2.5 times premium book value at which JP Morgan currently trades on the NYSE. So I must conclude that the easy money on this trade has been made and heed the Street's folklore that the 'trend is only your friend until the trend comes to an end'. At 90, I believe Citi is fairly priced and would need it to come down to 76-78 before accumulating the shares again. Also published on Medium. Notice an issue? Arabian Post strives to deliver the most accurate and reliable information to its readers. If you believe you have identified an error or inconsistency in this article, please don't hesitate to contact our editorial team at editor[at]thearabianpost[dot]com. We are committed to promptly addressing any concerns and ensuring the highest level of journalistic integrity.
Arabian Post
07-07-2025
- Business
- Arabian Post
Sri Lankan equities are an Asian frontier market money gusher!
Matein Khalid Sri Lanka is one of the most fascinating and drop-dead gorgeous countries I have ever visited, the island once known as Serendip by ancient Umayyad Arab sailors/ruby merchants and Ceylon by the colonial Dutch and British who once ruled the island, an emerald tear drop in the Indian Ocean. I have a special bond with Sri Lanka because my late mother, an artist, used to spend her summers painting in the exquisite resort of Nuwara Eliya when I was a teenager in the early 80's before the ghastly 26-year civil war devastated this magic land. So I was thrilled when my friend Ruchir Desai, fund manager of Hong Kong's Asian Frontier Capital (AFC) tripled his weight in Sri Lanka from 5% to 14%. When I last met Ruchir for coffee at the Ritz DIFC terrace (oops, it should have been tea), he told me that he expected the Commercial Bank of Ceylon shares to rise 50% in the next 12-months. As an investor in bank stocks (note Citigroup, one of my fave New York money center banks in the past year, is now trading at 88.72, up 37% in the past year). I passed this invaluable financial intel Ruchir gifted me to the three Sri Lankan ladies I have adopted as my sisters. Thank you Sheila, Anola and Naufarah! It is so nice to hear good news from Sri Lanka as I was last there on the eve of its 2022 political crisis, rupee meltdown, petrol lines and IMF bailout. ADVERTISEMENT Sri Lankan equities are priced inexpensively at 8X earnings, down from 14X three years ago. As Ruchi puts it, the combination of cheap valuations, accelerating earnings growth and political stability after the election of Anura Kumara Dissanayake as President is a fantastic combination and a compelling argument to allocate money now to this exciting Asian frontier market. The IMF program is rock solid, the external debt restructuring is over and the central bank governor in Colombo, whom Ruchir regularly visits on his company calls to SL is one of the most respected monetary mandarins in Asia. After five difficult years, the growth cycle has finally begun in Sri Lanka with a stable GDP, rising EPS/margins, the proverbial sweet spot for equities outperformance. Colombo is on the eve of a historic valuation rerating and I do not intend to miss this frontier market Xanadu in 2025, thanks to Ruchir, my Asian frontier market sherpa. I can attest from personal experience that tourism, banking and logistics are quintessential growth industries in Sri Lanka. Strangely enough, I was a student of Raj Rajaratnam when he was a finance TA at Wharton two decades before he became a star technology hedge fund manager at Galleon and Sri Lanka's only billionaire in New York before his fall from grace in a sordid insider trading scandal. While I preferred to stay at the historic Galle Face Hotel, I was stunned by the number of young Indian and Chinese tourists who crowded the casinos in the five star steel and concrete hotel monstrosities on the Colombo seafront. Hopefully, the government's current focus on fiscal consolidation and reform momentum continues to deliver a multi-year bull market in Sri Lankan equities as the Field Marshal, Shaz Speed and Aurie have delivered in Pakistan since the exit of Imran Khan. Ruchir is also my jungle guide for Pakistan, Central Asia, Iraq and Vietnamese equities in addition to SL. I must rename my friend the bionic $6-Million Man LOL. My 2-paisa suggestions to the Colombo stock exchange. One, you need to do everything in your power to boost liquidity before I can seriously help you attract Gulf family office money or institutional capital to SL. Two, the emerging debt market's heavy hitters in New York do not take kindly to investing in the bonds of a country named the Democratic Socialist Republic of Sri Lanka as it sounds eerily similar to Zohranomics LOL. Also published on Medium. Notice an issue? Arabian Post strives to deliver the most accurate and reliable information to its readers. If you believe you have identified an error or inconsistency in this article, please don't hesitate to contact our editorial team at editor[at]thearabianpost[dot]com. We are committed to promptly addressing any concerns and ensuring the highest level of journalistic integrity.
Arabian Post
04-07-2025
- Business
- Arabian Post
Why higher inflation will sink the US economic supertanker?
Matein Khalid Both Israel and the US were careful not to target Iran's oil export terminal at Kharg Island, a major reason why Brent crude trades at 68 and not 100. It is ironic that Iran's oil output is now 5.1-MBD (this figure includes condensates and gas to liquids), its exact amount in 1978, the last year the Shah ruled from his Peacock Throne. There is no danger of an oil price spiral triggering an inflation shock in the US as long as the 'drill baby drill' mantra suffuses the Permian Basin and Saudi Arabia does its best to pressure OPEC+ quota violators Iraq and Kazakhstan with 400,000 barrels a day of monthly output releases. The United States has achieved energy independence and the manufacturing sector's oil intensity has plummeted since the 1970's oil embargo era. The sources of potential inflation lie in Trump's whimsical tariff policies and immigration crackdown, which will dramatically reduce labor supply at the precise moment that the Baby Boom generation reaches 'peak retirement'. This means a wage price spiral risk that is not remotely priced-in to the current valuation metrics of the financial markets and the US dollar is imminent. This wage price spiral risk is also the reason why Fed chairman Jay Powell is so adamant about keeping the policy overnight borrowing rate (Fed funds) at its current midpoint rate 4.375% until credible inflation data emerges from the tariff spasms of Trump's multiple trade war. Net-net, Wall Street obsesses over a softer labor market when the real battle is a structural shortage of workers to pick citrus in the orchards of the San Joaquin Valley in central California or code software in the Bay Area. ADVERTISEMENT Economics 101 argues that even taco Trumponomics will mean higher US wages and higher cost of imports, taking inflation rate closer to 3%. In a world where the bond vigilantes can precipitate a mini gilt/sterling prices at the very sight of Chancellor Reeves in tears at the PMQ in Westminster, a 3% US inflation rate is certain to trigger the mother of all Treasury bond meltdowns. Economic 101 argues that Trump's tariffs, immigration crackdowns and even tax cuts mean debt securities will be gutted by the cancer of inflation even as economic growth slows, consumer credit risk goes ballistic and the $80 trillion housing market collapses under the weight of 8 or even 9% mortgage rates. The post Lehman golden age of low inflation/low interest rates will end not with a whimper but with bang that will resonate all over the world sometime before Santa Claus fills up my Christmas stocking with a new list of shorts delivered by Rudolph the red nosed reindeer (camel?) direct from the North Pole. This is why I believe the current speculative mania is destined to end in tears as the macro stars are aligned for another 2008 scale endgame. Wage push inflation has a seismic impact on inflation expectations and will usher a protracted period of Fed monetary tightening. This shift in inflation expectations will be the final nail in the coffin of easy money and go-go property speculation, as it was in the autumn of 2008. The laws of economics, let alone gravity, have not been repealed in Umm Suqeim. The big beautiful bill's tax cuts and the trillion dollar arms race with China mean a $2 trillion budget deficit and record Uncle Sam borrowing in the debt markets means a higher term premium in interest rates that is simply not priced into current Wall Street valuation models. The global economy is poised to enter the twilight zone of zero/minimal growth and structurally higher inflation. My call, fasten your seatbelts and brace for a painful hard landing. Also published on Medium. Notice an issue? Arabian Post strives to deliver the most accurate and reliable information to its readers. If you believe you have identified an error or inconsistency in this article, please don't hesitate to contact our editorial team at editor[at]thearabianpost[dot]com. We are committed to promptly addressing any concerns and ensuring the highest level of journalistic integrity.
Arabian Post
26-06-2025
- Business
- Arabian Post
Salam Stockholm!
Matein Khalid My generation were teenagers in the late 1970's and thus passionate fans of Sweden since Abba dominated the Top of the Pops (God, how I hated the ghastly Dancing Queen since every girl in high school thought this syrupy pop tune was written specifically for her!) and Björn Borg dominated Centre Court at Wimbledon as the Men's Champion until the trophy was wrested from him in 1981 in a five set marathon by the awful but brilliant American John McEnroe. As I grew older, I learnt to love Sweden's amazing social tolerance and cosmopolitan culture, its democratic values, welfare state, its beautiful lakes, ancient cities and effervescent young women whom I met in my fave Hellenic beach resorts like Ayia Napa in Cyprus and Mykonos in the Greek Aegean. However, in 2025, I have a special reason to love Sweden and it is definitely not the ugly furniture of Ikea my Gen-Z twins adore. The Swedish kroner has been the best anti-dollar FX hedge of 2025 and is up an incredible 17% in the last 6-months. As I expect the Trump Buckeroo to fall 20% before the Big Guy leaves the White house, I hope my Swedish kroner stash rises another 20% and offsets the already exorbitant cost of a Scandi holiday. Since I prefer the Med to the Baltics at any time of the year, why not revert back to the 1980's watering holes in the Cyclades and meet nice Swedish people in the Scandinavian love shack rather than actually flying to Stockholm Gothenburg or Malmö. ADVERTISEMENT Sweden is also one of the world's most successful case studies in innovation and entrepreneurial capitalism, the reason Nasdaq's Old World hub is in Stockholm. This $900 billion economy is one of my favourite countries to invest for the next 5-years as long as Putin does not invade Estonia and try to usurp King Charles XII's role as the supreme war lord of the North with a blockade of the Baltics. After all, Putin is from St. Petersburg, a port founded by Tsar Pyotr Alexievich to fight the Swedish empire, the superpower of the North in the first decade of the 18th century. This IT/green tech/export colossus is a goldmine for investors who love corruption free economies dedicated to innovation and talent, a natural for any refugee from Planet Dollar like moi! Also published on Medium. Notice an issue? Arabian Post strives to deliver the most accurate and reliable information to its readers. If you believe you have identified an error or inconsistency in this article, please don't hesitate to contact our editorial team at editor[at]thearabianpost[dot]com. We are committed to promptly addressing any concerns and ensuring the highest level of journalistic integrity.
