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DBS Vickers Reports Sept 2013
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PostPosted: Mon Sep 02, 2013 9:08 am    Post subject: DBS Vickers Reports Sept 2013 Reply with quote

Today’s Focus
 STI – Technical rebound off 3000 cap at 3100;
subsequent downside towards 2880 offers good
value
Asia bourses of Australia and Japan have started the week
moderately higher after China’s official Purchasing
Managers Index (PMI) rose to 51.0 in August, led by new
orders.
Pressures on the emerging markets sell-down could ease
in the short-term. For example, technically, the Indonesia
10-year yield looks to be consolidating its recent rally. It
has pulled back from 8.87% to 8.415% and might
consolidate further in coming week(s) to 8% (23.6%
downward retracement) or even 7.5% (38.2% downward
retracement).
For the STI, we continue to see the prospect of the
technical rebound that started at c.3000 last week
heading closer towards 3100. Still, with June’s low of
3065 take out on the downside last week, STI should
head down closer to 2880 (based on Fibonacci projection)
subsequently before arriving at a significant low. Based on
the latest STI PE forecast, the 2880 level coincides with
the 12.3x (-1SD) 12-mth forward PE line by end
September. It becomes an attractive level for investors
looking for value. Thus, while we see the risk of a
moderate c.4% decline below the 3000 line, investors
should view such a drop as an opportunity to value hunt.
China Minzhong has today received a letter from PT
Indofood Sukses Makmur Tbk in relation to a possible
offer. The offer, if made, is expected to be announced
later today.
Super Group is proposing a JV of its subsidiaries with
Shanghai Shang Heng to jointly establish a JV company to
undertake the manufacturing of liquid glucose syrup solid,
which is a key ingredient to Super’s non-dairy creamer.
EMS Energy is placing 80m new shares at an issue price of
S$0.042 each. The net proceeds of about S$3.2m will be
used for the funding of the Group’s order book and for
other general working capital purposes.
US Indices Last Close Pts Chg % Chg
Dow Jones  14,810.3 (30.6) (0.2)
S&P  1,633.0 (5.2) (0.3)
NASDAQ  3,589.9 (30.4) (0.Cool
Regional Indices
ST Index  3,028.9 (9.1) (0.3)
ST Small Cap  524.5 0.1 0.0
Hang Seng  21,731.4 26.6 0.1
HSCEI  9,825.2 (25.5) (0.3)
HSCCI  4,247.3 33.6 0.8
KLCI  1,727.6 23.8 1.4
SET  1,294.3 1.8 0.1
JCI  4,195.1 91.5 2.2
PCOMP  6,075.2 131.0 2.2
KOSPI  1,923.8 (2.5) (0.1)
TWSE  8,021.9 104.2 1.3
Nikkei  13,388.9 (70.Cool (0.5)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 558
Total Daily Vol (m shrs) 3,008
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
30 Aug
Target Price
($)
ST Engineering Buy 3.960 4.80
ComfortDelgro Buy 1.845 2.19
UOL Buy 6.400 8.34
Stock Picks – Small /Mid Cap
Rec’n Price ($)
30 Aug
Target Price
($)
Ezion Holdings Buy 2.270 3.20
Goodpack Buy 1.640 2.00
Nam Cheong Buy 0.265 0.36
Jaya Holdings Buy 0.625 0.90
Venture Corporation Buy 7.600 8.40
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
JES International has secured up to US$40m financing.
The loan facility will be available for a maximum of
US$20m for 3 years, with an option for an additional
US$20m. The Group will utilise the loan proceeds for
working capital and potential mergers and acquisitions.
Chasen Holdings has secured a total of four projects
worth approximately S$9.1m by its subsidiaries from the
Technical & Engineering business since 1st July 2013. The
group is upbeat on outlook and expects to secure more
major projects from both its Relocation Division and
Technical & Engineering business segments.
Bank lending in July continued to slow from a year ago
for a third consecutive month, dragged down by slower
growth in consumer loans. Domestic banking unit (DBU)
loans rose 17.6% y-o-y to $539bn in July, down slightly
from June's 17.7% growth. Loans-to-deposits ratio
breached the 100% threshold - marking the first time
since September 1995 that this has occurred. Over the
month, total bank loans rose 1.2% at the end of July,
faster than June's 0.7% growth. Business loans grew
1.6% over the month to $321.1bn, rising from the 0.7%
growth in June. Compared to a year ago, growth in loans
to consumers slowed to 13.2% and reached $217.9 bn,
moderating from June's 13.8%. On a month-on-month
basis, consumer loans grew at 0.7% in July, as they did in
June.
The government has raised development charge (DC)
rates for industrial use by around 15% on average, while
leaving the rates for commercial use completely
untouched. It has also upped DC rates for landed
residential use by an average of 7% and those for nonlanded
residential use by 5% on average. DC rates for
hotel use were left unchanged. The new rates apply for
the period Sept 1, 2013 to Feb 28, 2014.
Industrial DC rates have been raised in all geographical
sectors by 7-29%. The biggest hike is in sectors 115
(Woodlands, Senoko, Sembawang, Yishun area), 107
(including Upper Thomson Road and Sin Ming Industrial
Estate), 73-75 (including Kim Tian Road, Tiong Bahru
Road, Delta Road and Jalan Bukit Merah) and 77-88
(which includes Telok Blangah Road and Alexandra Road).
For non-landed residential use, the increases in DC rates
range from 5% to 28% in 53 out of 118 sectors. Sector
74, which includes the Kim Tian/Tiong Bahru location,
saw the biggest rate jump of 28%. Landed residential DC
rates have been raised by 5-13% in 76 sectors. The
biggest jump of 13% applies to 13 geographical sectors,
including those covering the Tanjong Katong Road,
Changi Road, Joo Chiat and Telok Kurau areas, Siglap and
Bedok South.
China’s official Purchasing Managers Index (PMI) rose to
51.0 in August, up for the second month in a row, led by
new orders. The sub-index measuring new orders rose to
52.4 in August from 50.6 in July, indicating stronger
demand for Chinese goods. Export orders rose to 50.2
from 49.0 in July, suggesting that external demand is also
up.
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PostPosted: Tue Sep 03, 2013 9:20 am    Post subject: Reply with quote

Today’s Focus
 Vard – Secured PSV contract from newly established
player in the offshore support vessel market
The anticipated near-term technical rebound that started
off c.3000 level on the STI should follow through in early
trade on the back of the overnight rally in European
markets that reacted to a better-than-expected PMI for
the Eurozone and China. US futures continue to point to a
higher opening tonight. For the STI, follow through levels
seen at 3070 first, before scoping towards 3100.
We see the possibility of the STI dipping towards 2880
once the current rebound ends before reaching a
significant low. Foreign funds outflow from the region
due to QE unwinding remains the main stumbling block.
This in addition to the lack lustre earnings outlook,
troubles in Syria and the need to raise the USD16.7tril US
debt ceiling by mid-Oct.
In a further sign that policymakers may have averted a
sharp slowdown, China's factory activity expanded for the
first time in 4 months in August as domestic demand
rebounded. The final HSBC/Markit Purchasing Managers'
Index (PMI) climbed to 50.1 in August, up sharply from
July's 47.7 and in line with last week's flash reading.
In the Eurozone, strong orders for manufactured goods
helped factory activity rise at the fastest pace in over 2
years in August and led to backlogs of work for the first
time since mid-2011. Markit's Manufacturing Purchasing
Managers' Index (PMI) rose to 51.4 from 50.3 in July. The
figure was also better than an earlier flash reading of
51.3.
Vard has secured a new contract for the design and
construction of one Platform Supply Vessel (PSV) for
Carlotta Offshore, a newly established player in the
offshore support vessel market. Delivery is scheduled from
Vard Vung Tau in Vietnam in 4Q 2014. The contract value
was not disclosed. Based on the similar PSV secured in
2011, the contract could worth about NOK300m. This will
bring YTD-FY13 order wins to NOK11.6bn, making up
93% of our order win assumption this year. We expect
Vard to book NOK12.5bn new wins in FY13 and
NOK11.0bn in FY14. Maintain HOLD call and TP of S$0.92
on Vard.
US Indices Last Close Pts Chg % Chg
Dow Jones  14,810.3 (30.6) (0.2)
S&P  1,633.0 (5.2) (0.3)
NASDAQ  3,589.9 (30.4) (0.Cool
Regional Indices
ST Index  3,055.7 26.8 0.9
ST Small Cap  535.5 11.0 2.1
Hang Seng  22,175.3 444.0 2.0
HSCEI  10,055.1 229.8 2.3
HSCCI  4,292.3 45.1 1.1
KLCI  1,717.6 (10.0) (0.6)
SET  1,323.7 29.4 2.3
JCI  4,101.2 (93.9) (2.2)
PCOMP  6,061.8 (13.4) (0.2)
KOSPI  1,924.8 (1.5) (0.1)
TWSE  8,038.9 17.0 0.2
Nikkei  13,572.9 184.1 1.4
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 558
Total Daily Vol (m shrs) 4,107
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
2 Sep
Target Price
($)
ST Engineering Buy 3.990 4.80
ComfortDelgro Buy 1.830 2.19
OCBC Bank Buy 10.010 12.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
2 Sep
Target Price
($)
Ezion Holdings Buy 2.350 3.20
Goodpack Buy 1.675 2.00
Nam Cheong Buy 0.265 0.36
CSE Global Buy 0.870 0.97
Venture Corporation Buy 7.620 8.40
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
PT Indofood Sukses Makmur has made an offer to acquire
the remaining shares of China Minzhong that it does not
already owned at S$1.12 in cash per share, valuing the
company at around S$734m. It currently owns 219.5m
shares or approximately 33.49% stake in China
Minzhong.
Fitch Ratings has affirmed Mapletree Industrial Trust’s
Long-Term Issuer Default Rating at “BBB+” with a Stable
Outlook. In addition, Fitch has affirmed “BBB+” ratings to
senior unsecured notes issued under the S$1 billion Multi-
Currency Medium Term Note programme.
Singapore Post has entered into an agreement for the
acquisition of the entire issued and paid-up share capital
of EK Media for S$1.2m. EK Media owns and operates a
leading online sampling platform in Singapore called The
Sample Store (www.thesamplestore.sg), which focuses on
distributing product samples to end-consumers. In
addition, EK Media also runs branding and social media
marketing campaigns for advertisers.
Notwithstanding the ongoing legal action, AusGroup will
receive a further $18.3m from Karara Mining, expected to
be paid under the terms of the contract over the course
of this week. This is in addition to the progress payment
of $13.0m paid in July 2013.
CNA Group has signed a Letter of Award via its
Vietnamese subsidiary, CNA-HTE Vietnam to renovate,
upgrade and expand Ho Chi Minh City’s Tan Son Nhat
International Airport’s domestic terminals for
approximately S$10.6m. The project is CNA’s second
airport-related project in South East Asia clinched this year
and will increase order book to approximately S$74.2m.
China Environment has secured three contracts with an
aggregate value of RMB86.6m to supply Electrostatic
Precipitators (ESPs) to Indonesia, thus increasing its
orderbook to RMB241.2m.
A-Sonic Aerospace has established an aircraft leasing
business which is steadily growing and will contribute
significantly to its bottomline in the years to come. To
date, it has leased out two aircraft to clients in South Asia
and Euro-Asia. Another two are expected to be leased out
before the end of this year. A-Sonic also owns six aircraft
engines, of which three have been leased out. The
company has entered into letters of intent to acquire
additional seven airframes, one aircraft and three aircraft
engines.
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PostPosted: Wed Sep 04, 2013 9:07 am    Post subject: Reply with quote

Today’s Focus
 SPH REIT - Initiating coverage with a HOLD call and
target price of S$ 0.97. The REIT offers exposure to
the retail and healthcare services industry, backed by
a strong Sponsor, SPH.

We are initiating coverage on SPH REIT with a HOLD call
and target price of S$ 0.97. SPH REIT offers investors a
unique exposure to the retail and healthcare services
industry in Singapore, backed by a portfolio of landmark
high quality commercial assets, and a reputable and
strong sponsor, SPH. We believe that the REIT will provide
a stable yield platform with growth potential from organic
and inorganic means. FY13-14F yields of 5.4%-5.6%
while attractive given its stability is noted to be currently
at a premium to other retail-focused S-REITs, which
currently offer yields in the range of 6.1%-6.5%.
In a move that would increase its reserves by 80%, Interra
is acquiring an Indonesian company for US$78.5m. The
company, PT Benakat Barat Petroleum (BBP), holds all the
rights to explore and develop the Benakat Barat field in
South Sumatra. It holds proven and probable (2P) reserves
of 19.9 million barrels of oil, according to a May 2010
reserve report. Interra now has 25 million barrels in
reserves. The transaction will be 80% paid for with cash,
financed through bank borrowings; the remaining 20%
will be funded by new shares issued at 45.91 cents - the
weighted average price for trades done yesterday. The
Benakat Barat field is adjacent to the Tanjung Miring
Timur (TMT) field, in which Interra holds full participating
interest. The contract to develop the Benakat Barat field
was assigned in 2009 for 15 years.
Tat Hong Holdings is embarking on a programme to
consolidate and optimise its Singapore operations and has
secured a 22-year lease from Jurong Town Corporation
for a 16,100 sq m plot of industrial land at Tuas South
Street 10. The consolidation of operations will free up one
of its lease-hold properties, at 11 Gul Crescent, which the
Group intends to divest through a public tender.
Depending on the final sale price and the completion
date, the Group is expected to recognise a gain on the
divestment of 11 Gul Crescent in the financial year ending
31 March 2014. The Group currently also operates out of
five other sites in the western part of Singapore.
US Indices Last Close Pts Chg % Chg
Dow Jones  14,834.0 23.6 0.2
S&P  1,639.8 6.8 0.4
NASDAQ  3,612.6 22.7 0.6
Regional Indices
ST Index  3,054.8 (0.9) (0.0)
ST Small Cap  537.1 1.6 0.3
Hang Seng  22,394.6 219.2 1.0
HSCEI  10,251.0 195.9 1.9
HSCCI  4,320.7 28.4 0.7
KLCI  1,724.2 6.7 0.4
SET  1,315.4 (8.3) (0.6)
JCI  4,164.0 62.8 1.5
PCOMP  6,083.9 22.1 0.4
KOSPI  1,933.7 8.9 0.5
TWSE  8,088.4 49.5 0.6
Nikkei  13,978.4 405.5 3.0
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 563
Total Daily Vol (m shrs) 4,455
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
3 Sep
Target Price
($)
ST Engineering Buy 4.000 4.80
ComfortDelgro Buy 1.815 2.19
OCBC Bank Buy 9.980 12.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
3 Sep
Target Price
($)
Ezion Holdings Buy 2.320 3.20
Goodpack Buy 1.650 2.00
Nam Cheong Buy 0.265 0.36
CSE Global Buy 0.855 0.97
Venture Corporation Buy 7.560 8.40
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
Cordlife Group is acquiring a 19.92% interest in StemLife
Berhad, a company listed on Bursa Malaysia, for
RM29.58m to expand its overseas operations. The
transaction will enlarge the Group’s geographical
footprint in Asia and extend the Group’s reach of
complementary services such as umbilical cord tissue
banking. The aggregate consideration for the acquisition
will, unless elected by Cordlife to pay fully in cash, be
satisfied via the issuance of 8m new shares in Cordlife at
an issue price of S$1.30 per share and cash payment of
RM2.85m.
Global Logistic Properties will sell two wholly-owned
properties in Japan to GLP J-REIT. The properties comprise
a total gross floor area of 126,000 sqm and the sale price
of JPY28.5 bn (US$2871m) represents a 1% premium to
the properties’ newly appraised value as of 30 June 2013.
Completion of transaction is targeted to take place in
March 2014. Net cash proceeds from the sale are
estimated to be approximately JPY13.6 bn (US$137m).
GLP plans to hedge the proceeds and intends to reinvest
the capital to maintain its 15% interest in the J-REIT as
well as developments in China, Japan and Brazil.
Separately, GLP Japan Income Partners I will sell seven
properties to GLP J-REIT for approximately JPY27.5 bn
(US$2771m), which is in line with the properties’ newly
appraised value as of 30 June 2013. GLP owns a 33.3%
stake in GLP Japan Income Partners I. The properties have
generated a cumulative net levered IRR in excess of 46%
for investors in GLP Japan Income Partners I, before
management fees and promotes, since they were
acquired in February 2012. Completion of transaction is
targeted to take place in October 2013. Net cash
proceeds from the sale are estimated to be approximately
JPY9 bn (US$91m), with GLP’s share at JPY3 bn
(US$30m). GLP plans to hedge the proceeds and intends
to reinvest the capital to maintain its 15% interest in the
J-REIT as well as developments in China, Japan and Brazil.
Acma is buying into a Russian private engineering
company with strong political connections, in a deal
which could enable it to regain a strategic foothold in a
market where it used to have a strong presence. It would
issue shares to buy a 30% stake in Russia's Avanguard
500 (AVG). The deal involves a guarantee of at least
US$10m in total pre-tax profit to Acma for the next three
years. The purchase consideration of US$3m will be paid
via the issuance of 123.1m new Acma shares at 3.11
Singapore cents each, representing 2.93% of Acma's
issued and paid-up capital. AVG, incorporated in Russia
on Dec 8, 2009, is mainly engaged in engineering and
engineering-related construction. Its chairman Igor
Alexandrovich Putin, a Russian businessman and
politician, is a first cousin of the country's president
Vladimir Putin.
A proposed $590m collective sale of Thomson View
Condominium is scuppered after the High Court found
that its marketing agent's offer of more than $548,000 in
incentive payments to four owners to get a requisite 80%
majority amounted to bad faith. Wee Hur has entered
into a conditional contract for the collective purchase of
all strata units and the common property of Thomson
View back in September 2012.
LionGold has signed an MOU with CBMI Construction, a
subsidiary of China’s State-owned engineering contractor
giant, SINOMA Group. The arrangement would also allow
LionGold to leverage on CBMI’s technical capabilities in its
efforts to bring its gold mining projects to production as
well as to acquire new gold mining projects. Also, as part
of the arrangement, CBMI would assist, where possible,
project financing for LionGold’s gold mining projects on
terms to be agreed.
CH Offshore has entered into two bareboat charters with
a third party for a period of three years each, with an
option for the Charterer to purchase the vessels.
After several months of outperforming its Asian peers,
Singapore's PMI headed in the opposite direction last
month, falling to 50.5 from 51.8 in July, below market
expectation of a slight rise, and followed news on
Monday that China, Taiwan and South Korea all posted
higher manufacturing PMIs. PMI fell because of a
slowdown in production, as manufacturers drew down
inventories that have been building up over the last few
months. The overall new export orders sub-index,
however, rose to 53.4, its highest reading since April
2011. Demand for electronic exports was especially
strong. The electronics new export orders sub-index rose
to 54, its highest reading since May 2011, pushing the
electronics sector PMI to a three-month high of 51.3.
A hotel site on Havelock Road has been triggered from
the Government Land Sales' Reserve List, after the URA
received a commitment from a developer to bid at least
$18.0m for the plot. The 60-year leasehold plot, which
measures about 16,535.5 sq ft, has maximum permissible
gross floor area of about 23,088.6 sq ft. Based on the
trigger price of $18.0m, this translates to about $780 psf
ppr.
US stocks rose modestly but eased off early session high
even as the August ISM manufacturing index increased to
55.7 (consensus 54) from 55.4 the previous month. The
reading is also the strongest since June 2011. Stocks back
tracked after US President won endorsement from the top
2 Republicans in the House for action against Syria. Asian
bourses are starting the mid-week session lower, reacting
to higher oil price on concerns about a strike on Syria.
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PostPosted: Thu Sep 05, 2013 9:40 am    Post subject: Reply with quote

Today’s Focus
 Goodpack - Resuming growth path; maintain BUY
and TP of S$2.00
Goodpack’s prudent business model and market share
gain bolster its earnings during downturn. Earnings
growth has been rather muted in the past two years. We
believe the tide is changing for Goodpack and project a 2-
year CAGR of 17% in FY13-15F, driven by market share
gain in synthetic rubber (SR) segment and cost-saving
initiatives. This is augmented by the recovery in US/Europe
(45% of Goodpack’s revenue) and bottoming out of the
rubber industry, which is expected to grow at 2-6% in the
same period. The crytalisation of an autopart contract
from a major OEM in Europe will prompt us to further rerate.
Dividend yield of 3-4% is decent while valuation is
undemanding. Maintain BUY and TP of S$2.00.
Yangzijiang announced that there was a further four
options with an aggregate value of US$ 110.4m
converted into effective orders last month, comprising
two units of 1,100 TEU containerships and two unit of
82,000 DWT bulk carries. The vessels will be delivered in
2015. YTD wins of US$1.2bn made up 60% of our full
year assumption of US$2bn. We believe Yangzijiang is on
track to meet our target. It has remaining 51 options
worth US$2.87bn, of which 22 options are for
containerships worth US$1.79bn and 29 options are for
multi-purpose bulk carriers worth US$1.08bn. Maintain
HOLD, TP: S$1.02.
Global Logistic Properties will commence development of
GLP Zama, a new multi-tenant logistics facility in Greater
Tokyo. GLP Zama is to be redeveloped into a 130,000 sqm
(1.4 million sq ft) multi-tenant logistics facility. This is the
sixth project under GLP Japan Development Venture,
which has now committed a total of JPY79.6 bn
(US$802m). The project will be completed in July 2015.
Indofood Sukses Makmur (INDF) has raised its stake in
China Minzhong Food Corp (MINZ) to 51.6%. The press
release said INDF's rationale included securing the supply
of instant noodle seasoning packs from China Minzhong
(presumably at lower than current cost), the introduction
US Indices Last Close Pts Chg % Chg
Dow Jones  14,930.9 96.9 0.7
S&P  1,653.1 13.3 0.8
NASDAQ  3,649.0 36.4 1.0
Regional Indices
ST Index  3,015.4 (39.4) (1.3)
ST Small Cap  536.7 (0.4) (0.1)
Hang Seng  22,326.2 (68.4) (0.3)
HSCEI  10,233.0 (17.9) (0.2)
HSCCI  4,302.0 (18.7) (0.4)
KLCI  1,716.8 (7.5) (0.4)
SET  1,303.2 (12.2) (0.9)
JCI  4,073.5 (90.6) (2.2)
PCOMP  5,968.3 (115.6) (1.9)
KOSPI  1,943.0 10.0 0.5
TWSE  8,083.4 (4.9) (0.1)
Nikkei  14,053.9 75.4 0.5
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 562
Total Daily Vol (m shrs) 3,623
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
4 Sep
Target Price
($)
ST Engineering Buy 3.900 4.80
ComfortDelgro Buy 1.835 2.19
OCBC Bank Buy 9.840 12.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
4 Sep
Target Price
($)
Ezion Holdings Buy 2.270 3.20
Goodpack Buy 1.640 2.00
Nam Cheong Buy 0.270 0.36
CSE Global Buy 0.865 0.97
Venture Corporation Buy 7.590 8.40
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
of industrialised farming and replicating MINZ’s business
model in Indonesia. The press release also reiterated
INDF’s confidence in MINZ, and that INDF had taken
necessary steps to ensure that its investment in MINZ is
prudent.
Hiap Hoe has made its second strategic overseas
acquisition in two months. This time round, is a
commercial building on a 3,165 sqm site located in the
heart of Melbourne’s Central Business District, near the
corner of Lonsdale Street and Elizabeth Street. The
acquisition comes with a newly issued permit for an iconic
46 level mixed-use development comprising 627
apartments, 445 bay commercial car park and ground
level retail. The Group intends to fund this acquisition
with a combination of internal resources and debt.
Singapore retained its place as the world's second-most
competitive economy, after Switzerland which held the
top spot for a fifth year. This is according to the World
Economic Forum's latest Global Competitiveness Report.
Singapore is the only economy to feature in the top 3 in
seven out of the 12 pillars of the Global Competitiveness
Index, which looks at goods market efficiency, labour
market efficiency and financial market development,
among other pillars. Singapore's competitiveness is
further enhanced by its strong focus on education, which
has translated into a steady improvement of its ranking in
the higher education and training pillar, where it comes in
2nd, behind Finland.
In property news, twp residential sites - a freehold
redevelopment plot in Katong and a two-storey bungalow
in Bukit Timah are up for sale. The Katong site at 12
Amber Road is occupied by several old, vacant houses.
Measuring 22,800 square feet, it is zoned for residential
development, and has an allowable gross plot ratio of
2.8. The asking price, in excess of $63m, works out to a
land rate of some $1,300 psf ppr. Meanwhile, the Bukit
Timah site, with an indicative price of $32m, is in a goodclass
bungalow area. It is a corner plot at 19A Yarwood
Avenue, off Dunearn Road.
US stocks rose after the FED’s Beige Book survey reported
the economy continued to grow in July to August even as
borrowing costs increased. Automakers and technology
companies led gains. Meanwhile, the Senate panel has
authorized the US President to conduct a limited military
operation against Syria because of its use of chemical
weapons. The August ADP employment change
(consensus 182k, previous 200k) released tonight comes
ahead of Friday’s official job numbers.
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PostPosted: Fri Sep 06, 2013 9:16 am    Post subject: Reply with quote

Today’s Focus
 Overseas Education – Initiating coverage with BUY
recommendation and target price of S$1.03.
We are initiating coverage on Overseas Education with
Buy recommendation and target price of S$1.03, which
implies 36% potential upside. OEL, a top international
school in Singapore, presents a highly cash generative
business with operating cashflow growing at 48% CAGR
over 2010-2013. The stock also pays 4% dividend yield,
backed by strong cashflow generation. We expect fee
hikes of about 6% to 10% to support near term earnings
while the new campus, ready in 2016, to accelerate
growth.
Global Logistic Properties has leased 17,000 sqm to
Sankyu Logistics, an international third party logistics
provider. Sankyu Logistics is expanding its distribution
centers in Foshan (Southern China), Tianjin (Northern
China) and Suzhou (Eastern China) to meet growing
demand. The customer now leases 77,000 sqm (829,000
sq ft) across three locations with GLP in China.
Otto Marine has signed a Memorandum of Understanding
(MOU) for the newbuilding of 5 cement carriers ranging
from 7,500dwt to 15,000 dwt. Apart from the firm
orders, there is also potential for the Group to secure
contracts for the conversion of 2 additional bulk carriers
into cement carriers, and a further order for a 3,500bhp
Ocean Towing Tug from the same Indonesian customer.
Moody’s Investors Service has downgraded the
subordinated debt (sub-debt) ratings of the three
Singapore banks in a regionwide exercise to reflect the
increasing global trend of bail-in risks that all banks face.
The banks now have a sub-debt rating of Aa3, down a
notch from Aa2. The banks' senior obligation ratings and
standalone baseline credit assessments were unaffected.
Across the Asia-Pacific, other banks which faced similar
downgrades were in Australia, Hong Kong, the
Philippines, India, South Korea and Thailand.
US Indices Last Close Pts Chg % Chg
Dow Jones  14,937.5 6.6 0.0
S&P  1,655.1 2.0 0.1
NASDAQ  3,658.8 9.7 0.3
Regional Indices
ST Index  3,039.5 24.0 0.8
ST Small Cap  537.8 1.1 0.2
Hang Seng  22,598.0 271.8 1.2
HSCEI  10,338.9 105.9 1.0
HSCCI  4,329.2 27.2 0.6
KLCI  1,721.0 4.2 0.2
SET  1,313.5 10.3 0.8
JCI  4,050.9 (22.6) (0.6)
PCOMP  5,959.2 (9.1) (0.2)
KOSPI  1,951.7 18.6 1.0
TWSE  8,169.1 85.7 1.1
Nikkei  14,064.8 10.9 0.1
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 557
Total Daily Vol (m shrs) 3,876
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
5 Sep
Target Price
($)
ST Engineering Buy 3.950 4.80
ComfortDelgro Buy 1.865 2.19
OCBC Bank Buy 9.870 12.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
5 Sep
Target Price
($)
Ezion Holdings Buy 2.290 3.20
Goodpack Buy 1.635 2.00
Nam Cheong Buy 0.275 0.36
CSE Global Buy 0.860 0.97
Venture Corporation Buy 7.620 8.40
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
In property news, developers have been trimming launch
prices for new private residential projects to adjust to the
new market reality in the aftermath of the Total Debt
Servicing Ratio (TDSR) framework's rollout in late June. A
case in point is the 445-unit Thomson Three condo in
Bright Hill Drive, being developed by UOL Group and
Singapore Land. Without TDSR, the price range is about
$1,500 psf on average, or even higher, but now, the
developers are pricing it at a more realistic level, at
$1,350-1,400 psf. Downward adjustment of developers'
earlier pricing expectations is also set to surface for two
condo projects where sales begin today - The Skywoods
in the Dairy Farm area and The Glades in Tanah Merah.
All three projects are 99-year leasehold.
A mixed-use commercial and residential plot at Yishun
Central 1 drew a top bid from units linked to Frasers
Centrepoint Ltd (FCL) that far surpassed that of the
second-highest bidder and consultants' expectations,
though the number of bidders were at the tail end of
predictions. North Gem Development and FC North Gem
Trustee put in a top bid of $1.4 bn, or $1,077 psf ppr, for
the 99-year leasehold site. This is 47% higher than the
second-highest bid, and way above the top bid of $750
and $850 psf ppr that consultants had expected. In total,
five bids were placed, with consultants earlier expecting
between five and 15 bids.
SGX is stepping up its efforts to pursue mineral, oil and
gas (MOG) listings as it announced new mainboard
admission rules for such firms. With effect from Sept 27,
even if MOG firms are not yet in production and hence
unable to meet current listing rules for profit, operating
revenue and positive cashflows, they can list if they have
market capitalisation of not less than $300m, and disclose
its plans, milestones and capital expenditure for
progressing to production stage. However, they have to
satisfy all other listing requirements. Additionally, all MOG
firms, whether they are still in exploration stage or already
in production, will need to have achieved "indicated
resources" for minerals or "contingent resources" for oil
and gas. They should have sufficient working capital for
18 months from listing, and have at least one
independent director with appropriate industry experience
and expertise. They also have to include in their offer
documents a valuation report on its reserves, and provide
an independent qualified person's report on significant
resources or reserves.
US stocks continued to surge higher for a third
consecutive day. In a prelude to the August jobs report
tonight, the jobs numbers released by payroll processing
firm ADP showed hiring continuing at a modest pace. The
Labor Department's initial jobless claims figures also
pointed to a steady recovery in the job market, with fewer
people filing for unemployment. The 10-year Treasury
yields, however, continued to move up. The yield is
nearing 3%, a level it hasn't hit since July 2011.
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PostPosted: Mon Sep 09, 2013 9:40 am    Post subject: Reply with quote

Today’s Focus
�� OUE Hospitality Trust - Resilient earnings with
multiple growth drivers; fair value S$0.93
Markets have been weighed down by the anticipation of
FED QE tapering; emerging markets sell-off and the risk of
a military strike on Syria. We look for bargain/value
hunting opportunities should the STI dips moderately
lower towards 2900 that coincides with 12.3x (-1SD) 12-
mth forward PE. Guided by a 10.4% EPS growth forecast
for FY14, the Singapore market currently trades at 12.6x
FY14F PE, which is reasonably attractive. Singapore
market should recover past the September-October period
of uncertainty. Expect the STI to recover pass 3200 (13.1x
(-0.5SD) FY14F PE) but cap below 3400 [(13.9x (average)
FY14F PE) by year-end.
We continue to prefer stocks with exposure to developed
markets, and avoid emerging markets. Stocks with
earnings visibility supported by yield are likely to remain in
favour. Our picks are SingPost, Comfort Delgro, ST Eng,
HPH Trust and Overseas Education.
DBSV Research issues an Equity Explorer report on OUE
Hospitality Trust with a fair value of S$0.93, offers 8%
upside. OUE HT is a Singapore-based REIT with an initial
portfolio of two properties in prime locations - the 1051-
room Mandarin Orchard Hotel, and the accompanying
Mandarin Gallery retail mall. The properties are collectively
worth S$1.7bn as of 31 Mar13. The Trust has resilient
earnings structure with strong visibility. Multiple growth
drivers are also in place. While earnings are sensitive to
RevPAR changes, we expect earnings volatility to RevPAR
changes to be limited given a high % of income pegged
to fixed rates. In addition, yields of 7.6%-8.0% are higher
than S-REIT peers.
Ramba Energy has received an offer from a Jakarta-listed
company for a 51% stake in the firm. Sugih Energy, an
Indonesian energy producer, will make a voluntary
conditional cash offer at 65 cents a share. This represents
a 3.2% premium over Ramba's last traded price. Sugih,
which has a market capitalisation of 10.73 trillion rupiah
(S$1.22 billion), holds equity interests in two exploration
blocks in Sumatra in Indonesia, namely a 49% stake in
Lemang block, and a full stake in Kalyani block as an
operator.
US Indices Last Close Pts Chg % Chg
Dow Jones �� 14,922.5 (8.4) (0.1)
S&P �� 1,655.2 2.1 0.1
NASDAQ �� 3,660.0 11.0 0.3
Regional Indices
ST Index �� 3,048.4 32.9 1.1
ST Small Cap �� 537.4 0.7 0.1
Hang Seng �� 22,621.2 295.0 1.3
HSCEI �� 10,334.1 101.0 1.0
HSCCI �� 4,324.4 22.4 0.5
KLCI �� 1,723.8 7.0 0.4
SET �� 1,336.3 33.0 2.5
JCI �� 4,072.4 (1.1) (0.0)
PCOMP �� 5,974.6 6.3 0.1
KOSPI �� 1,955.3 22.3 1.2
TWSE �� 8,164.2 80.8 1.0
Nikkei �� 13,860.8 (193.1) (1.4)
STI Index Performance
Singapore
Total Market cap (US$bn) 562
Total Daily Vol (m shrs) 3,011
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
6 Sep
Target Price
($)
ST Engineering Buy 3.980 4.80
ComfortDelgro Buy 1.855 2.19
OCBC Bank Buy 9.890 12.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
6 Sep
Target Price
($)
Ezion Holdings Buy 2.270 3.20
Goodpack Buy 1.640 2.00
Nam Cheong Buy 0.270 0.36
CSE Global Buy 0.865 0.97
Venture Corporation Buy 7.620 8.40
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
XMH Holdings has entered into an agreement to acquire
Mech-Power Generator for approximately S$17.4m.
Boasting a history of about 30 years, the target company
is engaged in the manufacturing, assembly, sale and
servicing of diesel powered generator sets and has
operations based in Singapore and Malaysia. The
acquisition will be synergistic to XMH’s existing operations
and would also help to grow more in the non-marine
sector applications. This is the first major M&A for XMH
since building a war chest of cash at its IPO and after
investment by Credence Capital.
Hotel Grand Central is purchasing Lot S3 of 300 Finders
Street Building, Melbourne, Australia for A$48.5m. The
proposed acquisition will enable the group to diversify its
investments in Australia to the commercial market in
Melbourne, Australia.
Sunpower Group has clinched a contract of RMB85.1m
with Shenhua Group, one of the largest coal companies
in China, to supply ZLD technique & key equipments and
Flare System EPC service for Shaanxi Methanol
downstream processing project of Shenhua Group. The
securing of contract underscores the long-standing
relationship between the Group and conglomerate
Shenhua Group.
China's exports rose more than expected in August,
boosted by improving demand for the country's goods in
major markets. Exports rose 7.2% y-o-y in August and
imports rose 7%, leaving the country with a trade surplus
of US$28.6 bn for the month. The figures are better than
market expectations of a rise of 6% in exports, an 11.3%
rise in imports and a trade surplus of US$20 bn. Exports
to ASEAN nations jumped 30.8% in August, outpacing
July's gains, while exports to the US rose 6.1%, faster
than July's 5.3% gains. Exports to the European Union
rose 2.5%, little changed from July's gain, while exports
to Japan contracted for the seventh straight month.
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PostPosted: Tue Sep 10, 2013 9:31 am    Post subject: Reply with quote

Today’s Focus
�� CSE Global – Likely to return most of the proceeds
from upcoming IPO of about 26-28 Scts to
shareholders
CSE Global is likely to return most of the proceeds, which
our analyst estimates to be 26-28 Scts DPS, from the
divestment of its UK business. The UK business (~33% of
group profit) can fetch higher PE than CSE itself, thus
unlocking value for its shareholders. We estimate that CSE
will take three years to recover the earnings gap due to
divestment of UK business. Our TP of S$1.07 ((Prev.
S$0.97) implies potential returns of 28%. Maintain BUY.
A successful IPO could lead to a re-rating of the stock.
Tiger Airways has upped its shareholding in the capital of
Indonesia's PT Mandala Airlines from 33% to 35.8%.
Tiger became a shareholder of Mandala early last year
when it acquired a one-third stake for a nominal amount
of US$1, but committed itself to re-fleeting the
Indonesian carrier with its own A320 planes and providing
technical and management expertise to the once-troubled
carrier. Tiger's partner at Mandala is Indonesian
conglomerate Saratoga Investment Corp, which took over
51% of the airline.
Sound Global is proposing to delist from SGX. The exit
offer will be made at S$0.70 in cash for each Offer Share.
The offeror does not intend to increase the exit offer
price. The company will continue to maintain its primary
listing of the shares on the SEHK. Sound Global will also
be making an offer for the outstanding RMB600m
principal amount of bonds.
Amara Holdings may sell hospitality assets as a real estate
investment trust (Reit). Amara is considering putting its
27-year-old Amara Singapore Hotel, along with the
adjacent 100 AM shopping mall and Amara Sanctuary
Resort Sentosa into a Reit and selling the assets in an
initial public offering (IPO), according to a person with
knowledge of the matter. The IPO could take place next
year.
US Indices Last Close Pts Chg % Chg
Dow Jones �� 15,063.1 125.6 0.8
S&P �� 1,671.7 16.6 1.0
NASDAQ �� 3,706.2 47.4 1.3
Regional Indices
ST Index �� 3,088.2 39.8 1.3
ST Small Cap �� 543.4 6.0 1.1
Hang Seng �� 22,750.7 129.4 0.6
HSCEI �� 10,528.7 194.6 1.9
HSCCI �� 4,354.3 29.8 0.7
KLCI �� 1,747.0 23.2 1.3
SET �� 1,384.3 48.1 3.6
JCI �� 4,191.3 118.9 2.9
PCOMP �� 5,997.0 22.4 0.4
KOSPI �� 1,974.7 19.4 1.0
TWSE �� 8,192.1 27.9 0.3
Nikkei �� 14,205.2 344.4 2.5
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 562
Total Daily Vol (m shrs) 2,868
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
9 Sep
Target Price
($)
ST Engineering Buy 4.01 4.80
ComfortDelgro Buy 1.865 2.19
OCBC Bank Buy 10.01 12.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
9 Sep
Target Price
($)
Ezion Holdings Buy 2.28 3.20
Goodpack Buy 1.64 2.00
Nam Cheong Buy 0.27 0.36
CSE Global Buy 0.87 1.07
Venture Corporation Buy 7.61 8.40
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
GRP is proposing a renounceable non-underwritten rights
cum warrants issue of up to 418.2m new shares at an
issue price of S$0.08 for each Rights Share, with up to
418.2m free detachable warrants. Each Warrant carries
the right to subscribe for one (1) new share at an exercise
price of S$0.08 per share, on the basis of three (3) Rights
Shares for every one (1) existing share held.
See Hup Seng announced that it is in discussions in
relation to possible transactions involving the issue of
shares in the company and acquisition of business.
In property news, the response to last week's launches of
The Glades in Tanah Merah and The Skywoods in the
Dairy Farm area shows that the new loan curbs have
affected private home sales. Not only were sales relatively
weak but they also seemed to have stalled after the first
day of booking. Keppel Land said that it had sold around
80 units at 99-year-leasehold The Glades, next to Tanah
Merah MRT Station, at average price of $1,450-1,500 psf.
The bulk of the sales are understood to have been done
on the first day, Friday. Meanwhile, the consortium
developing The Skywoods, also a 99-year project, sold 35
units last Friday, followed by 10 units on Saturday and
Sunday combined. Its average price for the first 150 units
released in the 420-unit project is $1,250 psf.
China’s inflation slowed to 2.6% y-o-y in August, slightly
lower than July's 2.7%. In the first eight months of the
year, the CPI rose 2.5% y-o-y, below both the
government's 3.5% target for 2013 and a touch below
the 2.6% seen in 2012. China's producer price index
(PPI), which measures prices of goods at the factory gate,
rose 0.1% in August from July. It was the first increase in
six months and came after five months of deflation. The
PPI fell 1.6% y-o-y in August, up from a 2.3% decrease in
July and the highest reading in six months.
US stocks rose reacting to positive China August export
numbers (actual 7.2%, consensus 5.5%). Corporate
acquisitions also underpinned optimism while Apple
shares gained ahead of the unveiling of new iPhone
models. In Asia, eyes will be on the release of China’s
August industrial production, fixed asset investments and
retail sales.
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PostPosted: Wed Sep 11, 2013 9:28 am    Post subject: Reply with quote

Today’s Focus
�� United Envirotech – Secured RMB286m contract;
Upgrade to BUY, TP: S$0.98
Follow through gains in early trade is seen riding on the
overnight strength on Wall Street. With recent data
suggesting that the slowdown in the Chinese economy
may be stabilizing, the possibility of a resolution to Syria’s
use of chemical weapons without having to commit a
military strike and short-term stability returning to
emerging markets, STI looks to have found an important
low late last month at 2990. Investors also have had more
than ample time (about 4 months since May 22) to react
to the possibility of the start of QE tapering come next
week’s FOMC meeting.
STI current trades at slightly above 13.1x (-0.5SD) 12-mth
forward PE. In the immediate term, slight pullback off
3132 is possibly but this should find support at/above
3055-3060. The index has the capacity to head towards
3220 in coming weeks should recent uncertainties
continue to ease.
United Envirotech has secured a RMB286m (S$59m)
Transfer-Operate-Transfer (TOT) cum Build-Operate-
Transfer (BOT) agreement with the municipal government
of Hong Wei District in Liaoyang City, China.
Upon completion, the plant will treat 30,000 m3/day of
municipal wastewater and 30,000 m3/day of industrial
wastewater. This contract win is positive and material.
Firstly, the construction of the BOT would add RMB261m
to UENV’s EPC orderbook, lifting YTD new win to
RMB451m, slightly ahead of our RMB400m assumption.
Secondly and more importantly, the additional
60,000m3/day capacity will add 6% to existing phase 1
capacity, lifting UENV’s total treatment capacity to 1.45m
m3/day. Based on minimum offtake for TOT and
staggered guaranteed offtake from 70% of the design
capacity for Year 1, this contract will boost our target
price of UENV to S$0.98 from S$0.90 previously. In view
of the improved upside, we upgrade United Envirotech to
BUY with revised TP of S$0.98.
Malaysia’s Aug13 palm oil output of 1.735m MT was in
line with forecast. Strong export of 1.524m MT (+7% mo-
m) was offset by 25% m-o-m drop in domestic intake;
keeping stockpile flat at 1.666m MT. We expect
Malaysia’s palm oil stockpile to re-accumulate to 1.824m
US Indices Last Close Pts Chg % Chg
Dow Jones �� 15,191.1 127.9 0.8
S&P �� 1,684.0 12.3 0.7
NASDAQ �� 3,729.0 22.8 0.6
Regional Indices
ST Index �� 3,123.9 35.7 1.2
ST Small Cap �� 547.0 3.6 0.7
Hang Seng �� 22,976.7 226.0 1.0
HSCEI �� 10,697.4 168.8 1.6
HSCCI �� 4,418.3 64.1 1.5
KLCI �� 1,765.0 17.9 1.0
SET �� 1,393.2 8.9 0.6
JCI �� 4,358.1 166.9 4.0
PCOMP �� 6,089.7 92.7 1.5
KOSPI �� 1,994.1 19.4 1.0
TWSE �� 8,208.8 16.7 0.2
Nikkei �� 14,423.4 218.1 1.5
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 571
Total Daily Vol (m shrs) 5,251
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
10 Sep
Target Price
($)
ST Engineering Buy 4.10 4.80
ComfortDelgro Buy 1.87 2.19
OCBC Bank Buy 10.04 12.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
10 Sep
Target Price
($)
Ezion Holdings Buy 2.28 3.20
Goodpack Buy 1.64 2.00
Nam Cheong Buy 0.27 0.36
CSE Global Buy 0.885 1.07
Venture Corporation Buy 7.65 8.40
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
MT by end Sep13. We do not expect the Indian
government to raise import duties on refined oils. The
Indonesian government’s new policy to raise biodiesel
blend, if realised, could have positive impact on CPO
prices. Our picks for SGX-listed CPO stocks are First
Resources and Bumitama Agri.
Overseas Education has awarded the construction
contract for the building of the new school campus. The
contract sum is S$233.5m and the contracted
construction period is 19 months from September 2013
to April 2015. Situated at the junction of Pasir Ris Drive 3
and Elias Road, the new school campus will consist of two
12-storey teaching blocks, a 7-storey administration
block, a performing arts centre and auditorium, elevated
sports field and 50-metre swimming pool, covered car
park and bus park lots and other facilities and amenities.
Asiatravel.com Holdings has appointed Green Olive Travel
& Tours as its General Sales Agency for TAcentre.com; its
online wholesale system. This appointment empowers
Green Olive to manage Myanmar’s growing travel trade
segment and develop new business through its sales and
customer service teams in their Yangon and Mandalay
offices.
Asia is not on the verge of financial crisis, despite the
recent turmoil in regional equity and currency markets,
Prime Minister Lee Hsien Loong said. He highlighted that
the Asian economies are in a stronger position than they
were in '97 when the crisis came, and we have got more
safeguards instituted now over the last decade and a half
since the Asian crisis, to deal with the likely consequences
of big capital flows.
In property news, a consortium comprising Hoi Hup
Realty, Sunway Developments and SC Wong Holdings has
narrowly emerged as the top bidder of a plum, 99-year
leasehold residential site at Mount Sophia. It drew as
many as nine bidders, on the higher end of consultants'
expectations. The trio's bid of $442.3m - or $1,156.53 psf
ppr - was just 0.06% higher than the second highest bid.
China’s industrial production grew 10.4% in August, its
fastest in 17 months, accelerating from 9.7% in July.
Retail sales, a key indicator of consumer spending, rose
13.4% y-o-y last month, and fixed asset investment, a
measure of government spending on infrastructure,
increased 20.3% in the first eight months of the year. The
better-than-expected data comes on the back of strong
trade figures and PMIs published earlier in September.
US markets extended gains as China’s August industrial
output and retail sales rose slightly better-than-expected
and as tensions surrounding Syria eased. US President had
asked senators to delay a vote authorizing military strikes
to allow time for talks on eliminating Syria’s chemical
weapons.
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PostPosted: Thu Sep 12, 2013 9:08 am    Post subject: Reply with quote

Today’s Focus
�� OEL TP tweaked lower to $1.01 (prev. $1.03),
maintain Buy post increase in campus construction
cost
�� CRCT – Higher rental revision trend to continue and
value is emerging , Maintain Buy
Overseas Education has awarded construction of its Pasir
Ris campus to Woh Hup P/L. The contract sum of
S$233.5m together with a land premium of S$28m
means the cost of the new campus YTD is S$261.5m. This
is higher than management’s S$200m forecast at the time
of IPO. Apart from S$130m of cash and IPO proceeds, we
estimated OEL would need another S$150m for the new
campus. Assuming all debt funded, net gearing would
increase to 0.42 and 0.22 in FY15 and FY16 respectively.
While interest costs would be higher, the impact is mostly
offset as we lower staff cost assumptions post
management update. Consequently, our DCF fair value
would be lowered to S$1.01 from S$1.03 previously. We
expect share price to soften on news of over-budget but
considering that the expansion is on course, we maintain
Buy.
The coming two years could be transformational for
CapitaRetail China Trust. After fine-tuning its portfolio
tenant mix and the completion of various asset
enhancements, CRCT’s portfolio of malls have been
consistently seeing strong shopper traffic and tenant sales,
resulting in higher rental reversions (averaging 17% over
2Q12-2Q13) compared to the average of 12% over
1Q11-1Q12. With a renewed tenant mix and a stronger
operational footing, we believe this trend is likely to
continue going forward. We see value emerging after the
recent price decline. The stock offers an attractive FY13-
15F DPU yield of 7.0%-8.3%, which is higher than the SREIT
peer average of 6.3-6.7%. Maintain Buy TP $1.60
US Indices Last Close Pts Chg % Chg
Dow Jones �� 15,326.6 135.5 0.9
S&P �� 1,689.1 5.1 0.3
NASDAQ �� 3,725.0 (4.0) (0.1)
Regional Indices
ST Index �� 3,108.2 (15.7) (0.5)
ST Small Cap �� 549.7 2.6 0.5
Hang Seng �� 22,937.1 (39.5) (0.2)
HSCEI �� 10,636.7 (60.7) (0.6)
HSCCI �� 4,430.5 12.2 0.3
KLCI �� 1,768.5 3.5 0.2
SET �� 1,411.2 18.0 1.3
JCI �� 4,349.4 (8.7) (0.2)
PCOMP �� 6,214.9 125.2 2.1
KOSPI �� 2,003.9 9.8 0.5
TWSE �� 8,209.0 0.2 0.0
Nikkei �� 14,425.1 1.7 0.0
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn)
Total Daily Vol (m shrs)
12m ST Index High
12m ST Index Low
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
11 Sep
Target Price
($)
ST Engineering Buy 4.100 4.80
ComfortDelgro Buy 1.870 2.19
OCBC Bank Buy 10.01 12.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
11 Sep
Target Price
($)
Ezion Holdings Buy 2.290 3.20
Goodpack Buy 1.640 2.00
Nam Cheong Buy 0.270 0.36
CSE Global Buy 0.905 1.07
Venture Corporation Buy 7.590 8.40
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
Sembcorp Marine’s Jurong Shipyard announced this
morning that it has secured a contract to build a second
Semi-submersible Well Intervention Rig at US$346m for
Helix Energy Solutions. This is SMM's second specialised
platform with well intervention and subsea capacilities.
Price is 10% lower than the first one secured in Mar-
2012, which was priced at US$385.5m. While the
functions are pretty similar, there could be some
differences in terms of specs and equipment furnished.
The latest contract lifts SMM's YTD wins to S$3.65bn,
representing 73% of our full year assumption of US$5bn.
Maintain Hold (TP: $4.70)
Ezion subsidiary, Teras Australia Pty Ltd has entered into a
share swap arrangement with Aboriginal Maritime Pty Ltd
(AML). AML is a 25% Aboriginal-owned marine services
company that provides maritime training and employment
to Indigenous workers in Australia. We believe the
rationale for this share swap is to enhance Ezion
competitive strength in bidding for projects in the
Aboriginal dominated region and solve their crew / staff
recruitment issue when projects are secure. Hence, while
this transaction is immaterial, it may be a harbinger for
new offshore logistic projects. Maintain Buy (TP: $3.2)
Popular Holdings net profit for the fiscal 1Q fell 18.8% yo-
y to $5.32mil. Revenue rose 12.1% to $133.52mil
largely due to higher revenue in the property, retail and
distribution divisions.
The Monetary Authority of Singapore (MAS) announced
new rules to cap the amount of credit card and other
unsecured loans that banks can extend to individuals in a
bid to rein in borrowing. The changes, to be implemented
in stages from Dec 1, include a limit on the total amount
of unsecured loans an individual can take to 12 times that
person's monthly income. The changes are "aimed at
improving lending practices by financial institutions and
enabling individuals to make better borrowing decisions",
this according to the MAS.
US indices rose with the 30-stock DJIA gained more than
the broader market S&P500 as concerns about a military
strike against Syria eased. Meanwhile, shares of Apple Inc
tumbled as investors reacted in dissapointment to the
launch of the latest iPhone models.
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PostPosted: Fri Sep 13, 2013 9:09 am    Post subject: Reply with quote

Today’s Focus
�� SIA upgrade to Buy (TP: $11.4) on attractive valuation
and the potential of excess net cash return
SIA’s share price has recently broken below -1SD (0.92x
P/BV) in August to its current level of 0.87x P/BV, or -
1.3SD. This is a level seen previously only in crises such as
9/11, SARS, and the GFC. At this current price, the rest of
SIA I valued at less than S$3 per share if we were to strip
to out its net cash and stake in SIA Engineering. There is
potential to return excess net cash to shareholders that
has reach c.S$4.20 per share. We upgrade SIA to BUY, TP
S$11.40 (prev. $11.5) based on 1x FY14 P/BV, which
translates to -0.5SD, reflecting the still muted outlook for
Singapore’s premier carrier. Nonetheless, we see the
stock’s current valuation at 0.88x P/BV as an attractive
level for entry.
Cosco Corp has secured a series of contracts totalling
USD566m, comprising 4 platform supply vessels (PSVs), 2
salvage lifting vessels, 2 module carriers (21k dwt), 4 bulk
carriers (64k dwt) and 1 semi-submersible accommodation
rig (exercise of option). In additions, options for 8 PSVs, 2
module carriers and 2 bulk carriers were also signed.
These new contracts bring Cosco's YTD wins to
US$1.78bn, forming 89% of our expectation of US$2bn.
With Cosco's non-offshore orderbook running low with
only c.1x revenue coverage, it is under pressure to fill its
shipbuilding capacity through merchant ships and some of
the offshore support vessels. While strong order flow is
encouraging, we would prefer to monitor its execution
and earnings performance further.
US stocks dipped modestly amid lingering concerns over Syria
and ahead of an anticipated reduction in QE at next week’s
FOMC meeting. US Secretary of State John Kerry told top
Syrian opposition members that the option for a US military
strike remains on the table. This even as he heads for talks on
a proposal for Syria to surrender chemical weapons.
Meanwhile, investors continue to weigh on the possibility of a
USD10bil/mth reduction in QE at next week’s FOMC meeting.
US Indices Last Close Pts Chg % Chg
Dow Jones �� 15,300.6 (26.0) (0.2)
S&P �� 1,683.4 (5.7) (0.3)
NASDAQ �� 3,716.0 (9.0) (0.2)
Regional Indices
ST Index �� 3,121.1 12.9 0.4
ST Small Cap �� 552.7 3.1 0.6
Hang Seng �� 22,953.7 16.6 0.1
HSCEI �� 10,637.5 0.8 0.0
HSCCI �� 4,418.3 (12.2) (0.3)
KLCI �� 1,772.4 3.9 0.2
SET �� 1,397.9 (13.3) (0.9)
JCI �� 4,356.6 7.2 0.2
PCOMP �� 6,195.6 (19.3) (0.3)
KOSPI �� 2,004.1 0.2 0.0
TWSE �� 8,225.4 16.4 0.2
Nikkei �� 14,387.3 (37.Cool (0.3)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 578
Total Daily Vol (m shrs) 9,797
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
12 Sep
Target Price
($)
ST Engineering Buy 4.030 4.80
ComfortDelgro Buy 1.885 2.19
OCBC Bank Buy 10.120 12.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
12 Sep
Target Price
($)
Ezion Holdings Buy 2.320 3.20
Goodpack Buy 1.650 2.00
Nam Cheong Buy 0.275 0.36
CSE Global Buy 0.920 1.07
Venture Corporation Buy 7.670 8.40
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
US 10-yr bond yields rebound slightly to 2.92%, still below
the 3% mark. FED chairmen Ben Bernanke has given financial
markets a more than ample 4 months time to prepare for QE
tapering. From a technical perspective, we believe it will be
cap at around the 3% level in the short-term with the
likelihood of a pullback to 2.7% or even 2.5% in coming
weeks/month. S-REITs should rebound if bond yields take a
dip. Our picks are AREIT, CDL HT, MCT & Suntec Reit.
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PostPosted: Mon Sep 16, 2013 9:11 am    Post subject: Reply with quote

Today’s Focus
�� Lawrence Summers withdrew from FED chairman
consideration – Positive for SREITs & emerging
markets exposure as US 10-yr yield and Dollar dips
BREAKING NEWS – Former Treasury Secretary Lawrence
Summers withdrew his name from consideration to be
chairman of the FED. Summers is considered the ‘most
hawkish’ compared to the other 2, Janet Yellen and
Donald Kohn. Financial markets are currently reacting. The
USD is pullback with the Dollar Index dipped 0.315 of a
point to 81.13. US 10-year yield is also pulling back to
2.8846% (-0.025).
News of Summers’ withdrawal eases some of the current
concerns for equities with regards to how quickly QE will
be tapered and short rates will rise down the road. Asia
markets are currently firmly higher as are US futures. Yield
plays such as S-REITs should rebound (refer to Traders
Spectrum titled “Bond Yield going ↓ → SREITs going ↑
” for our picks. Likewise emerging market stocks (e.g.
Indo names) should also rebound as their currencies
rebound against the USD.
Overseas Education announced that the SLA has on 13
September 2013 levied an additional land premium of
S$9.1m on the new campus due to intensified land use.
This is on top of a S$28m land premium payable for the
site announced in June 2013. This additional levy would
bring total development costs of the new campus to
c.S$270m, which is within our estimated budget of
S$280m. Hence, no change to forecast and S$1.01 TP for
OEL.
Datapulse Technology is proposing a capital reduction
exercise. The CD and DVD services firm also announced
that its non-executive chairman and director, Ng Khim
Guan, had stepped down from both posts with effect
from last Thursday. The proposed capital reduction will
see the firm's shareholders receiving a cash distribution of
3.5 cents per share. According to Datapulse, there will be
no share cancellation or change in the number of shares
held by shareholders. Each shareholder will have the same
number of shares before and immediately after the capital
reduction. The board is of the view that the capital of the
US Indices Last Close Pts Chg % Chg
Dow Jones �� 15,376.1 75.4 0.5
S&P �� 1,688.0 4.6 0.3
NASDAQ �� 3,722.2 6.2 0.2
Regional Indices
ST Index �� 3,120.3 (0.Cool (0.0)
ST Small Cap �� 550.7 (2.0) (0.4)
Hang Seng �� 22,915.3 (38.4) (0.2)
HSCEI �� 10,538.9 (98.6) (0.9)
HSCCI �� 4,418.3 (0.0) (0.0)
KLCI �� 1,770.8 (1.6) (0.1)
SET �� 1,401.1 3.2 0.2
JCI �� 4,375.5 18.9 0.4
PCOMP �� 6,133.2 (62.4) (1.0)
KOSPI �� 1,994.3 (9.7) (0.5)
TWSE �� 8,142.5 (25.7) (0.3)
Nikkei �� 14,404.7 17.4 0.1
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 577
Total Daily Vol (m shrs) 6,225
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
13 Sep
Target Price
($)
ST Engineering Buy 4.110 4.80
ComfortDelgro Buy 1.885 2.19
OCBC Bank Buy 10.090 12.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
13 Sep
Target Price
($)
Ezion Holdings Buy 2.310 3.20
Goodpack Buy 1.650 2.00
Nam Cheong Buy 0.275 0.36
CSE Global Buy 0.900 1.07
Venture Corporation Buy 7.480 8.40
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
company is in excess of its immediate requirements and
the proposed capital reduction will allow the group to
achieve a more efficient capital structure.
CSC Holdings has grown the total value of its foundation
contracts in Singapore and the region to $200m since its
latest financial year began in April, after clinching two
more deals. It has been awarded two foundation
contracts: one for the future Terminal 4 at Changi
Airport, and the other for the redevelopment of two
buildings along Robinson Road.
Mermaid Maritime has been awarded an initial of two
years contract, with a one year option, to provide
offshore Inspection, Repair and Maintenance (IRM)
services to a major Indonesian based upstream oil and gas
operator. The estimated contract value for the initial term
is USD 55m.
Federal International is acquiring a land drilling rig for
US$10.4m, to be satisfied by cash of US$7.7m and the
balance of US$2.7m through the issue of new shares at
an issue price of S$0.10 per share.
Singaporean Ho Kwok Wai, a consultant, has entered into
a deal to acquire 90.4m shares, or a stake of 73.86%, in
mainboard-listed Singapore Windsor Holdings at 18 cents
a share, triggering a general offer for the remaining
interest at the same price. The consideration values
Singapore Windsor at $22m.
Retail sales in July fell a sharper-than-expected 7.8%
compared with a year earlier, as sales of motor vehicles
were hit by the implementation of the total debt servicing
ratio (TDSR) framework at the end of June. The data was
below market expectation of a decline of 1.5% and
June’s 4% drop. Stripping out vehicle sales - which
plunged 42.7% y-o-y and 19.7% m-o-m - retail sales for
July rose 2.5%. On a month-on-month basis, retail sales
fell 5.3% in July, and were down 2.6% after excluding
vehicle sales. Aside from motor vehicles, retail categories
which posted lower year-on-year sales in July included
telecommunications apparatus and computers (-7%),
recreational goods (-3%) and wearing apparel and
footwear (-2.4%). But petrol service station sales jumped
8.4% from a year ago, while receipts for food and
beverages increased 5.7% and those of optical goods and
books rose 4.9%.
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PostPosted: Tue Sep 17, 2013 9:12 am    Post subject: Reply with quote

Today’s Focus
�� SIA – Firm August operating statistics; maintain BUY,
TP: S$11.40
SIA reported August operating statistics that were firm,
with passenger carriage up 8.6% yoy to 8,560m p-km on
3.1% growth in capacity, with load factor up by 4.1
percentage points to 82.4%. This was attributed to strong
leisure travel demand during the Lebaran/Hari Raya
holidays coupled with returning summer traffic. YTD, the
Group's passenger business is tracking our assumptions,
with carriage up by 3.5% on 3.6% increase in capacity,
and load factor at 79.5%. However, SIA also warned that
yields remain under pressure due to ongoing efforts to
stimulate demand.
The cargo business remained weak, with carriage
declining 5.7% yoy to 541 tonne-km on 5% decrease in
capacity, and load factor dropping slightly to 60.1%.
Silkair posted 10.7% increase in carriage to 482m p-km,
but with a 13.4% increase in capacity, load factor was
slightly lower at 71.7% for the month.
Ezra Holdings has issued S$25m in aggregate principal
amount of 5.00% Fixed Rate Notes due 2015. The net
proceeds from the issue will principally be used by the
company for financing general working capital, corporate
purposes and to refinance existing borrowings of the
company and its subsidiaries.
United Engineers (UE) has entered into a deal to buy
Hewlett-Packard's freehold premises on Alexandra Road -
an industrial building and a commercial office tower - for
$402m. HP will lease back the 12-storey office tower
fronting Alexandra Road for three years, with two options
to extend for periods of six months each. HP will also
lease back the eight-storey industrial building behind the
tower for five years, with three options to renew for five
years each. These leases provide UE with an immediate
and steady rental income stream while it evaluates the
longer term redevelopment plan for the sites.
DMX has been awarded a four-year contract to supply IT
Professional Services to the Hong Kong Government.
Under this new four-year award, DMX will provide an
array of professional information security and
independent testing services for the various departments
and bureaus of Hong Kong Government.
US Indices Last Close Pts Chg % Chg
Dow Jones �� 15,494.8 118.7 0.8
S&P �� 1,697.6 9.6 0.6
NASDAQ �� 3,717.8 (4.3) (0.1)
Regional Indices
ST Index �� 3,179.5 59.2 1.9
ST Small Cap �� 559.1 8.4 1.5
Hang Seng �� 23,252.4 337.1 1.5
HSCEI �� 10,706.6 167.7 1.6
HSCCI �� 4,461.3 43.0 1.0
KLCI �� 1,770.8 (1.6) (0.1)
SET �� 1,445.1 44.0 3.1
JCI �� 4,522.2 146.7 3.4
PCOMP �� 6,302.7 169.5 2.8
KOSPI �� 2,013.4 19.1 1.0
TWSE �� 8,255.3 112.9 1.4
Nikkei �� 14,404.7 17.4 0.1
STI Index Performance
Singapore
Total Market cap (US$bn) 580
Total Daily Vol (m shrs) 3,772
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
16 Sep
Target Price
($)
ST Engineering Buy 4.210 4.80
ComfortDelgro Buy 1.915 2.19
OCBC Bank Buy 10.280 12.40
Spore Airlines Buy 10.390 11.40
Suntec REIT Buy 1.600 1.78
Stock Picks – Small /Mid Cap
Rec’n Price ($)
16 Sep
Target Price
($)
Ezion Holdings Buy 2.330 3.20
Goodpack Buy 1.680 2.00
CSE Global Buy 0.900 1.07
Mapletree Commercial Trust Buy 1.160 1.35
CDL Hospitality Trust Buy 1.590 1.80
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
Blumont is planning significant investment in coal miner
Resource Generation. Blumont will subscribe for new
shares to be issued by RES at a placement price of A$0.22
per share for a total investment consideration of between
A$20.97m and A$22.1m. This will represent
approximately 15% of the potential enlarged share
capital of RES. The proceeds will be used for the further
advancement of RES’s Boikarabelo coal mine located in
South Africa, which has probable reserves of 744.8m
tonnes and existing gross resources of 6.4 bn tonnes.
Blumont will fund the investment from internal resources.
SGX-listed Noble Group has a 12.85% stake in RES and a
strategic partnership which includes substantial off-take
contracts and a secured loan facility.
Chip Eng Seng has been awarded a S$103.8m contract
by HDB for the construction works at Jurong West
Neighbourhood 6 Contract 31. The contract comprises
the construction of 6 blocks of residential buildings with
700 dwelling units and other community facilities. The
construction period is approximately 31 months.
Logistics Holdings intends to invest about $5m in a joint
venture to build a pre-cast products manufacturing plant
in Iskandar. Its partner, Coninco, a licensed supplier of
pre-cast building materials approved by the HDB, will hold
a 20% stake.
Asiasons Capital has placed out 212.6m new shares to
raised S$254m. The proceeds will equip the Company
with readily available cash resources to capitalise on
potential opportunities as and when they arise, in
particular, in the mineral and oil & gas industries due to
the recent volatilities giving rise to many good
opportunities.
Singapore's non-oil exports unexpectedly fell in August
due to a decline in both electronics and non-electronics
shipments. Exports of goods made in Singapore fell 6.2%
y-o-y in August, the seventh consecutive month of
contraction. The data is lower than market expectation
for exports to expand 2.4% and also lower than July’s
1.9% drop. Compared with the previous month, exports
fell 6%, after contracting 1.8% in July. Electronics exports
declined 9.2% on year, after falling 11.1% in July, while
non-electronics shipments fell 4.7%, compared with a
2.9% rise in July. In the non-electronics sector,
pharmaceutical exports fell 31.1%, after contracting
32.0% in the previous month. Shipments to the European
Union, its second biggest export destination, fell 20.8% in
August from a year earlier, compared with a 38.5% onyear
fall in the previous month. Exports to the U.S. fell
6.7% on year after rising 17.4% in July. Exports to China,
however, accelerated to 15.3% after the previous
month's 4.8% increase. China is now Singapore’s biggest
export destination.
New private home sales recovered last month but
remained subdued by the double whammy of the Total
Debt Servicing Ratio (TDSR) framework and the Hungry
Ghost month. Only 742 private homes transacted in
August, excluding transactions for the hybrid executive
condominiums (ECs). This was 54% higher than July's
482 units, but was just over half the 1,427 sales recorded
in the corresponding month last year. Developers
launched 927 units for sale last month, an improvement
over July's 557 homes. Mass-market residences continued
to dominate activity in August, with Outside Central
Region (OCR) homes making up 73% of sales and 76%
of launches. Units from the Rest of Central Region (RCR)
made up 15% of sales and 13% of launches, while Core
Central Region homes accounted for 12% of sales and
10% of launches. Including ECs, 1,468 homes were
moved in August, compared with 1,819 homes launched.
Demand for ECs remained sturdy, with 726 units sold last
month, compared with July's 112 units. Property
consultants believe sales will improve this month, with
developers having launched the Glades and The
Skywoods, and with Thomson Three to be launched soon.
Prime office rents crept up in Q3 amid higher leasing
enquiries, a report released by Knight Frank showed.
Reversing seven consecutive quarters of negative or flat
growth, prime Grade A+ rents in Marina Bay and Raffles
Place posted an increase of 1.4% quarter-on-quarter,
hitting between $9.90 and $12.00 psf. Outside of the
Central Business District (CBD), Orchard Road's average
office rents for Grade A space rose 3.1% year-on-year,
bolstered by rising asking rents for smaller office spaces.
Compared with the last quarter, Orchard's average office
rents inched up 0.6%, reaching between $7.00 and
$10.90 psf. In the Suntec/Marina Centre/City Hall area,
average rents held firm, rising 0.5% quarter-on-quarter.
Knight Frank expects overall rents to creep up by around
0.3% quarter-on-quarter in Q4, buoyed by improving
business sentiment, rising rent expectations from
landlords, and the addition of new office developments.
Average rents in the CBD are likely to stay firm or notch
up modest increases of 0.2 to 0.3% in Q4.
China's cabinet has detailed plans to speed construction
of urban infrastructure projects in the latest move to
boost domestic consumption by urbanization. The
government will focus on projects ranging from
underground sewage and household waste treatment to
gas pipes and heating systems as well as public transport
and power grid upgrades. The National Development and
Reform Commission is expected to unveil an urbanisation
plan in the second half of this year.
US markets rallied, bond yields dipped and the USD fell
after Lawrence Summers withdrew his bid to be the next
FED chairman and both America & Russia agreed on a
Singapore
Wired Daily
Page 3
plan to remove Syria’s chemical weapons. Brent crude fell
2.4% to USD110pbl. US 10-yr bond yield slipped to
2.855%. Having reacted to news of Summers’ withdrawal
yesterday, the rally in Asian bourses are likely to pause in
the next 2 sessions as investors await the outcome of the
FOMC meeting and QE tapering possibility this
Wednesday.
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PostPosted: Wed Sep 18, 2013 9:13 am    Post subject: Reply with quote

Today’s Focus
�� Singapore Property - No asset bubble but expect a
5% contraction in private home prices annually over
the next 2-3 years
We think that there will be no asset bubble leading to a
boom and bust situation in the Singapore private
residential market owing to forward thinking brakes put
in place. However, price and sales volume in residential
sector are expected to fall from the latter half of this year
until the supply peak in 2016-17. We expect a 5%
contraction in private home prices annually over the next
2-3 years as vacancies rise to a projected 8-9%. In terms
of primary transaction volumes, we estimate that primary
demand could contract by 20-30% this year to 17,000-
19,000. Meanwhile, prospects of rising positive real
mortgage rates amid downward pressure on rental yields
and caps on financing capabilities are also likely to keep
investment demand in check. We prefer retail, office and
residential sector in this order on the bases of rental and
price resilience. In terms of stock pick, we prefer
diversified developers with strong cashflow generating
capabilities such as UOL, Global Logistic Properties,
CapitaMalls Asia and Keppel Land.
Rex International is acquiring stakes in two more licences
in Norway. Total licences to increase to 15 in four regions
from initial 10 as at listing on 31 July. Rex anticipates
announcing more deal flows in the coming months as it
intends to grow its portfolio of licences to 20 by next July.
Global Logistic Properties has leased 26,000 sqm at GLP
Park Beijing Capital Airport to DHL Supply Chain China.
The company will lease the facilities to meet growing
demand for its warehousing and distribution solutions
from customers in the consumer sector expanding their
reach across Northern China.
Asiasons Capital breaks into oil & gas sector by acquiring a
27.5% stake of US-based Black Elk for S$218m. The
acquisition will be funded by the issuance of 194.6m new
shares at S$1.1948 per share. Producing about 14,000
barrels of oil per day from assets located in the Gulf of
Mexico, Black Elk represents Asiasons Capital’s second
acquisition of resource-based companies following the
acquisition 10% in LionGold Corp.
US Indices Last Close Pts Chg % Chg
Dow Jones �� 15,529.7 34.9 0.2
S&P �� 1,704.8 7.2 0.4
NASDAQ �� 3,745.7 27.9 0.7
Regional Indices
ST Index �� 3,180.9 1.4 0.0
ST Small Cap �� 563.8 4.6 0.8
Hang Seng �� 23,180.5 (71.9) (0.3)
HSCEI �� 10,650.6 (56.0) (0.5)
HSCCI �� 4,483.1 21.8 0.5
KLCI �� 1,774.9 4.1 0.2
SET �� 1,443.8 (1.3) (0.1)
JCI �� 4,517.6 (4.6) (0.1)
PCOMP �� 6,344.1 41.4 0.7
KOSPI �� 2,005.6 (7.Cool (0.4)
TWSE �� 8,249.8 (5.6) (0.1)
Nikkei �� 14,311.7 (93.0) (0.6)
STI Index Performance
Singapore
Total Market cap (US$bn) 591
Total Daily Vol (m shrs) 3,738
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
17 Sep
Target Price
($)
ST Engineering Buy 4.230 4.80
ComfortDelgro Buy 1.930 2.19
OCBC Bank Buy 10.190 12.40
Spore Airlines Buy 10.440 11.40
Suntec REIT Buy 1.605 1.78
Stock Picks – Small /Mid Cap
Rec’n Price ($)
17 Sep
Target Price
($)
Ezion Holdings Buy 2.280 3.20
Goodpack Buy 1.690 2.00
CSE Global Buy 0.895 1.07
Mapletree Commercial Trust Buy 1.155 1.35
CDL Hospitality Trust Buy 1.595 1.80
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
Jet fuel trader China Aviation Oil (CAO) will have global
expansion on its mind for the next three years, with plans for
all the major regions in the world. Over the next three years,
CAO plans to consolidate its position in the Chinese market
and increase its jet fuel trading market share in the region.
Where gas oil, fuel oil and petrochemicals are concerned,
CAO plans to secure supply contracts and increase its trading
activities.
US markets rose ahead of the conclusion of the FOMC
meeting that will decide on interest rates and the possibility
of the start of QE tapering. Consensus expects the FED to
reduce QE by some USD10-15bil/mth from the current
USD85bil/mth. US 10-year treasury yield eased to 2.8366%.
Singapore’s STI could start the session firmer but gains will
likely be modest while awaiting tonight’s FOMC outcome. To
the upside, we peg resistance at 3210-3225 that is just
slightly below the 13.9x (Ave) 12-mth forward PE.
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PostPosted: Wed Sep 18, 2013 10:39 am    Post subject: Reply with quote

Hi Guys and Gals,

With effect from 1 Oct 13, I will cease posting Stock market news and reports in this forum. All postings will be in www.redbeanforumsg.blogspot.sg.

Cheers.

Redbean
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Posts: 1350

PostPosted: Thu Sep 19, 2013 9:13 am    Post subject: Reply with quote

Today’s Focus
�� Expect STI to rise in reaction to the FED decision.
SREITs and emerging markets exposure names should
outperform.
�� Centurion - Initiate coverage with a BUY call and
target price of S$ 0.77
The FED refrained from reducing the USD85bil/mth QE
program, saying it needs more evidence of lasting
improvement in the economy and warning an increase in
interest rates threatens to expansion. Interest rates will
remain near zero ‘at least as long as’ unemployment is
higher than 6.5% and outlook for inflation is no higher
than 2.5%. FED officials also reduced their forecasts for
economic growth this year and next. 2013 US GDP is now
lowered to 2-2.3% from 2.3-2.6% this year.
Our economist notes that the ‘taper postponement’ this
month does not mean that one is automatically scheduled
for October. Employment growth has been very weak.
We estimate that less than half the people who lost their
jobs back in 2008/09 have them back again, 5 years after
the fact. Inflation – the biggest risk to the QE program – is
nowhere to be seen. Core PCE prices are running at
1.2% YoY, half the Fed’s target. Private sector GDP
growth is slowing, not accelerating. And long-term
interest rates have risen by 100 basis points and appear to
be having a negative impact on housing. That’s a pretty
solid package of information that told the Fed to sit tight.
As yesterday’s Statement says, “asset purchases are not
on a preset course” – they will remain contingent on the
data. The data are key. And they’re not looking like
October at the moment.
Expect the STI to rise in a positive reaction to the FED
decision. SREITs and emerging markets exposure names
should outperform in the near term. Our SREITs picks are
Suntec REIT, MCT, AREIT and CDL HT. Recovery names
with US recovery exposure should lag. While a positive
reaction for the STI is seen, we note that the recent rise
has lifted it closer to 13.9x (ave) 12-mth forward PE at
3250, which is seen as a near-term cap. This line rises to
3330 by year-end based on current forecast. Post FOMC
outcome, attention will switch to more data watch, the
October debt ceiling debate and the upcoming 3Q results
season. Thus, further gains for the STI in the near-term
should be capped at/slightly below 3250.
US Indices Last Close Pts Chg % Chg
Dow Jones �� 15,676.9 147.2 0.9
S&P �� 1,725.5 20.8 1.2
NASDAQ �� 3,783.6 37.9 1.0
Regional Indices
ST Index �� 3,193.9 12.9 0.4
ST Small Cap �� 573.5 9.8 1.7
Hang Seng �� 23,117.5 (63.1) (0.3)
HSCEI �� 10,588.0 (62.6) (0.6)
HSCCI �� 4,453.3 (29.Cool (0.7)
KLCI �� 1,771.4 (3.5) (0.2)
SET �� 1,439.1 (4.6) (0.3)
JCI �� 4,463.3 (54.4) (1.2)
PCOMP �� 6,334.0 (10.2) (0.2)
KOSPI �� 2,005.6 (7.Cool (0.4)
TWSE �� 8,209.2 (40.6) (0.5)
Nikkei �� 14,505.4 193.7 1.4
STI Index Performance
Singapore
Total Market cap (US$bn) 592
Total Daily Vol (m shrs) 5,688
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
18 Sep
Target Price
($)
ST Engineering Buy 4.230 4.80
ComfortDelgro Buy 1.925 2.19
OCBC Bank Buy 10.340 12.40
Spore Airlines Buy 10.420 11.40
Suntec REIT Buy 1.635 1.78
Stock Picks – Small /Mid Cap
Rec’n Price ($)
18 Sep
Target Price
($)
Ezion Holdings Buy 2.310 3.20
Goodpack Buy 1.690 2.00
CSE Global Buy 0.905 1.07
Mapletree Commercial Trust Buy 1.160 1.35
CDL Hospitality Trust Buy 1.580 1.80
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
We initiate coverage on Centurion with a BUY call and target
price of S$ 0.77. Centurion is a premier player in the foreign
worker dormitory business, garnering c.11% market share
with 18,000 beds in three dormitories in Singapore. The
Group has also expanded into Malaysia since 2011,
operating 11,000 beds as the first and only purpose-built
dormitory operator in the country. It is a key beneficiary of
demand/supply imbalance, and the enforcement to raise
living standards of workers. Key growth drivers are
continued rent increases (we assumed 5% p.a.), higher
occupancy and 50% expansion in beds in Singapore from
2013 to 2015 and 120% in Malaysia by 2015.
Keppel Corp has secured two Floating Production Storage
and Offloading (FPSO) conversion contracts from repeat
customers worth a combined value of S$190m. These
contracts are from SBM Offshore and M3nergy Offshore.
The latest win brings Keppel's YTD new orders to S$4.5bn,
forming 75% of our full year assumption of S$6bn. Maintain
BUY and TP of S$12.90 on Keppel.
Nam Cheong has entered into an agreement to acquire 49%
equity stake in PT Bahtera Niaga Indonesia for US$1.5m. The
purpose and objectives of the acquisition is the owning,
operating and chartering of marine vessels for
transportation, exploration and production activities in the oil
and gas industry and to manage the maintenance of marine
vessel and provision of offshore marine service and all other
related businesses and activities.
BBR secures S$105.8m worth of new contracts in Singapore
and Malaysia. These include a contract for the construction
and maintenance of Phases 14 and 15 of the mixed-use
development at The Springside at Jalan Ulu
Seletar/Sembawang Road, Singapore and a number of
specialised engineering contracts in Singapore and Malaysia.
OUE Hospitality Trust has been granted right of first refusal
to acquire the entire stake in Meritus Mandarin Haikou, a
hotel situated in Haikou, China for S$58.7m and 80% stake
in Meritus Shantou China for S$49.3m but it has declined
the offer. The managers are of the view that such acquisition
would not be accretive to the distribution per unit at the
proposed purchase consideration levels.
China Environmental Resources is expected to record a
decrease in losses for FY Jun 2013 as compared to last year,
mainly attributed to the decrease in loss on changes in fair
value of biological assets.
Flight bookings into Singapore for the 2013 Formula One
(F1) Grand Prix, already up 12.6% from last year, according
to a forecast from travel technology firm Amadeus and
market research company Forward Data, point to a bumper
year. There could be a last-minute surge in bookings based
on last year’s data, since the report took into account
bookings only until Sept 1, 2013. Some 30% of the final
tally for 2012 started to flood in only in the three weeks
leading up to the race.
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