Equities revitalized by Janet Yellen’s dovish comments,
STI reverse recent lethargy and looks headed to 3275-
3290 in coming weeks
Dovish comments by FED chairperson Janet Yellen look to
have revived the equity market that otherwise would have
headed to a dull year-end lull period. We see the STI heading
to 3275-3290 in coming weeks. Further gains beyond this
level towards 3380, however, would have to be justified by
an end to the earnings downward revision trend that is still
not in sight. Riding on Singapore’s GDP recovery, we see
banks OCBC & UOB leading the index rise. Yield names
should be underpinned as QE tapering timeline is pushed
back to March 2014 or beyond. Our picks are Venture Corp,
China Merchant, Pan-United and Keppel Corp as they tend to
pay out good dividend when they announce their 4Q/FY
results by end-Feb. Finally, look towards the Industrial sector -
Noble Group, Yoma, Midas, O&M - Ezion, Nam Cheong and
planters –Indofood Agri to drive growth in FY14F.
Ezion’s 3Q13 net profit surged 137% y-o-y and 5% q-o-q to
US$38.2m, bringing 9M13 net profit to US$102.9m, or 73%
and 77% of our and consensus’ FY13 estimates. This is
slightly better than our already above consensus estimates.
We lift FY14/15F EPS estimates marginally by 3.0%/1.6%.
Maintain BUY, TP adjusted to S$2.65, based on 14x revised
FY13/14F EPS. Current valuation is undemanding and we
believe Ezion’s strong earnings growth (2-year CAGR of 42%
in FY13-15) and contract wins will underpin the stock.
Suntec REIT announced that it had entered into an agreement
to acquire a 100% stake in a (a) freehold land, and (b) a tobe-
developed office building in the North CBD area of
Sydney, Australia, for a consideration of A$413.2m. The 31-
floor office building is expected to have a NLA of 423,915
sqft and is Suntec REIT's first outside of Singapore. The
acquisition will be fully funded by a S$500m 5-year
unsecured loan facility.
Pacific Radiance 9M FY13 revenue rose 25% to US$126.2mil
on the back of higher utilisation and charter rates for its
vessels. This increase in revenue, coupled with contributions
from its 2 JV in high-growth and cabotage-protected markets
in Indonesia and Malaysia, lifted 9M FY13 net attributable
profit (PATMI) 36% higher y-o-y to US$40.4mil.
US Indices Last Close Pts Chg % Chg
Dow Jones 15,961.7 85.5 0.5
S&P 1,798.2 7.6 0.4
NASDAQ 3,986.0 13.2 0.3
Regional Indices
ST Index 3,201.3 10.2 0.3
ST Small Cap 535.2 0.9 0.2
Hang Seng 23,032.2 383.0 1.7
HSCEI 10,702.7 311.6 3.0
HSCCI 4,514.1 83.0 1.9
KLCI 1,789.9 5.7 0.3
SET 1,420.7 5.0 0.4
JCI 4,335.4 (31.9) (0.7)
PCOMP 6,346.4 18.5 0.3
KOSPI 2,005.6 38.1 1.9
TWSE 8,177.1 42.2 0.5
Nikkei 15,165.9 289.5 1.9
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 589
Total Daily Vol (m shrs) 1,790
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
15 Nov
Target Price
($)
Hutchison Port Holdings Trust Buy 0.690 0.82
ComfortDelgro Buy 1.890 2.19
OCBC Bank Buy 10.530 12.40
Singapore Airlines Buy 10.330 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
15 Nov
Target Price
($)
Ezion Holdings Buy 2.130 2.60
CSE Global Buy 1.000 1.11
Frasers Centrepoint Trust Buy 1.810 2.14
Yoma Strategic Holdings Buy 0.740 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
Otto Marine’s subsidiary, PT Batamec shipyard, has clinched 2
newbuilding contracts to build two 3000 HP Habour Tugs for
a consideration of approximately USD 9mil. The vessels are
expected to be completed by 4Q 2014 and are not expected
to have a material effect on the consolidated NTA/share or
EPS for the FY ending 31 Dec 2013.
Singapore's NODX rose 2.8% y-o-y (better than consensus
expectation of -1.1%) in October due to a rise in shipment of
non-electronic goods that outweighed a continued
contraction in electronic exports. Shipments to China rose
21.8% y-o-y in October, compared with a 20.2% y-o-y rise
the previous month. Exports to the EU fell 12.3 while that to
the U.S. fell 15.5% y-o-y after a 24.8% rise in September.
Electronic exports declined 1.4% y-o-y while non-electronic
shipments grew 4.9%.
US markets set another record level as speculation continued
that the FED will maintain its monthly stimulus and as China
announced changes to economic policy. The Chinese
government pledged to allow more private investment in the
state sector, loosen its one-child policy and better protect
farmers’ rights to land.
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