DBS Vickers Report 20 Nov 13

OECD ups China’s 2014 GDP forecast to 8.2%, above
consensus economist estimates
DBSV Research believes that the combination of stabilizing
economies for China, Europe bottoming with upside for
recovery, attractive relative valuation and the possibility of a
further delay to QE tapering form the ingredients for an
uptick in interest for Asian equities going forward, Singapore
included. Our picks are banks as a proxy to GDP recovery,
2014 growth names and companies that tend to payout
good dividend come year end. Full details in our Singapore
Strategy report out later today.
Swissco has placed orders for 3 vessels worth an aggregate of
S$35mil (excluding owner supplied equipment) consisting of
2 anchor handling tug supply vessels (“AHTS”), and one
Multipurpose Utility Tug. The newbuild vessels are expected
to be delivered in FY2015, adding to the Group’s fleet
capabilities.
According to a Reuters news article, Myanmar aims to lure
private companies to upgrade and run nearly half its airports
in a bid to spruce up its poor record on air safety and support
a fast-growing tourism industry. Myanmar has an air accident
rate nine times the world average, aviation authorities say,
and there are fears the figure could rise as the government
aggressively expands the industry and private airlines add
flights in a growing economy. The government plans to invite
local private firms to upgrade and run 32 of the 69 airports
across Myanmar "with intent to improve the service as well as
the image of the airports", said a senior official of the
Directorate of Civil Aviation.
China's foreign direct investment inflows rose 5.8% y-o-y in
the first 10 months of 2013. The Commerce Ministry said
China drew US$97bil in foreign direct investment between
January and October, with October's inflow up 1.2% on year
earlier at US$8.4bil.
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀙 15,967.0 (9.0) (0.1)
S&P 􀀙 1,787.9 (3.7) (0.2)
NASDAQ 􀀙 3,931.6 (17.5) (0.4)
Regional Indices
ST Index 􀀙 3,192.1 (11.0) (0.3)
ST Small Cap 􀀙 535.1 (1.1) (0.2)
Hang Seng 􀀙 23,657.8 (2.3) (0.0)
HSCEI 􀀘 11,365.5 58.1 0.5
HSCCI 􀀙 4,627.8 (25.8) (0.6)
KLCI 􀀘 1,807.2 14.8 0.8
SET 􀀙 1,412.4 (11.5) (0.8)
JCI 􀀘 4,398.3 4.7 0.1
PCOMP 􀀙 6,267.9 (75.4) (1.2)
KOSPI 􀀘 2,031.6 20.8 1.0
TWSE 􀀘 8,260.2 68.7 0.8
Nikkei 􀀙 15,126.6 (37.7) (0.2)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 590
Total Daily Vol (m shrs) 1,926
12m ST Index High 3,454
12m ST Index Low 2,951
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
19 Nov
Target Price
($)
Hutchison Port Holdings Trust Buy 0.700 0.82
ComfortDelgro Buy 1.925 2.19
OCBC Bank Buy 10.440 12.40
Singapore Airlines Buy 10.370 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
19 Nov
Target Price
($)
Ezion Holdings Buy 2.070 2.65
CSE Global Buy 1.005 1.11
Frasers Centrepoint Trust Buy 1.810 2.14
Yoma Strategic Holdings Buy 0.730 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
China's annual economic growth is likely to accelerate to
8.2% in 2014 from an expected 7.7% this year, driven by
stronger domestic demand, this according to the OECD.
Growth is picking up and inflation remains low, domestic
demand has led the turnaround, OECD commented in its
latest report on the global economic outlook. The outlook
was rosier than a recent Reuters poll that showed China's
economic growth could slow to 7.4% in 2014 from an
expected 7.6% this year. The OECD highlighted the need for
Beijing to quicken structural reforms in favour of stronger
domestic consumption, as economic expansion still relies
heavily on investment.
US stocks dipped modestly as investors await a speech by FED
chairman Ben Bernanke. Meanwhile, the OECD cut growth
forecasts for this year and next as emerging market
economies including India and Brazil cools. Bernanke said the
labour market has shown “meaningful improvement” since
the start of the central bank’s bond-buying program and that
the benchmark interest rate will probably stay low long after
the purchases end