Dairy Farm – Costs a concern; downgrades to HOLD,
target price cut to US$9.46.
The STI has fallen 130 pts in the past eight days, just
recovered slightly last Friday. Market sentiment continued
to weak, weighed down by concerns over QE3 tapering.
The technical support for the STI is at 3015-3040, which
presents a buying opportunity. This support level, which
was briefly tested in the last two trading days, is just
below the -0.5 SD FY14F level of 3043.
We believe the 13.1x (-0.5SD) FY14F PE level is attractive,
as we are expecting 9% earnings growth for FY14F. The
last time the STI hit the -0.5SD level was in June last year,
when the market was affected by concerns over QE3
tapering, which was subsequently postponed. Weak data
coming out of China back then was also another reason
for the selldown.
Many believe the US is on the verge of taking off but our
economist begs to differ as the key component –
consumption is still on a down trend. Overall, he expects
GDP growth of 1.6% in 2013, followed by 2.0% in 2014.
Despite anemic growth, Fed is expected to taper anyway,
possibly in April. Our economist is not expecting more
volatility in emerging markets and we should look beyond
Fed tapering as bond yield is already re-anchored to 2.5%
to 3.0%, above the 2.0%-2.5% target range. Second,
most Asia countries have reported improved trade
performances and more stable balance of payments.
Our analyst downgrades Dairy Farm to HOLD, target price
cut to US$9.46 (Prev US$11.60). Margins are likely to be
lower going forward due to higher costs. Lower margins
could lead to soft FY13F results. He has trimmed
FY14F/FY15F earnings by 15% each.
Thai tycoon Charoen Sirivadhanabhakdi has trimmed his
stake in Fraser and Neave (F&N), to raise the
conglomerate's public float to meet listing requirements.
TCC Assets, Mr Charoen's private vehicle, sold a 2.1%
stake in F&N, or 30.9m shares, for $173m through
married deals. At $5.596 per share, the sale price
represented a 0.6% discount to F&N's Thursday closing
price of $5.63. Following the sale, Mr Charoen's interests
in F&N, held through TCC Assets and listed beer brewer
Thai Beverage Public Co, fell to 87.93% from 90.07%.
This brings the public float to about 12%, meeting the
minimum public float requirement of 10%.
US Indices Last Close Pts Chg % Chg
Dow Jones 15,755.4 15.9 0.1
S&P 1,775.3 (0.2) (0.0)
NASDAQ 4,001.0 2.6 0.1
Regional Indices
ST Index 3,066.0 7.0 0.2
ST Small Cap 525.4 0.4 0.1
Hang Seng 23,246.0 27.8 0.1
HSCEI 11,025.8 63.6 0.6
HSCCI 4,569.7 (3.3) (0.1)
KLCI 1,840.4 6.5 0.4
SET 1,341.1 (15.1) (1.1)
JCI 4,174.8 (37.4) (0.9)
PCOMP 5,767.1 4.6 0.1
KOSPI 1,962.9 (5.0) (0.3)
TWSE 8,376.9 15.6 0.2
Nikkei 15,403.1 61.3 0.4
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 564
Total Daily Vol (m shrs) 1,948
12m ST Index High 3,454
12m ST Index Low 3,004
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
13 Dec
Target Price
($)
Hutchison Port Hldgs Trust (US$) Buy 0.640 0.82
ComfortDelgro Buy 1.935 2.19
OCBC Buy 9.850 12.40
Singapore Airlines Buy 10.050 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
13 Dec
Target Price
($)
Ezion Holdings Buy 2.220 3.30
China Merchants Buy 0.910 1.20
CSE Global Buy 1.005 1.11
Nam Cheong Buy 0.285 0.42
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 3
Centurion has acquired a 7220 sq m plot of land in Jakarta,
Indonesia for S$0.8m, for the development of worker
accommodation. This will be Centurion’s maiden worker
accommodation investment in Indonesia.
Tigerair has entered into strategic alliances with three airlines
to expand its network and commercial cooperation. These
initiatives form part of its strategy to accelerate business
growth in the key Asian markets of North-east Asia, India,
and Singapore without overstretching its resources.
These latest strategic alliance initiatives comprise:
a joint-venture agreement with China Airlines to
establish a Taiwan-based budget carrier,
an interline agreement with SpiceJet to enable
greater connectivity between flights operated by
both carriers, and
an alliance agreement with interline partner, Scoot,
to expand and deepen their collaboration in
commercial activities and network coordination.
Global Tech is expected to record a net profit for the year
ended 30th September, 2013 as compared to a net loss for
the corresponding year ended 30th September, 2012, which
is mainly attributable to the written back of provision for
taxation previously made by the Group during the year.
Transview Holdings is expected to report a loss for FY Dec 13
mainly due to the lower operating income as a result of the
challenging market conditions.
Shares of Wilton Resources Corporation, formerly Hartawan
Holdings will commence trading today, marking a new
chapter as a SGX Catalist-listed corporation involved in gold
exploration and mining in Indonesia. The commencement of
trading follows the completion of a reverse takeover (RTO) of
Catalist-listed Hartawan by Wilton Resources Holdings, an
investment holding company controlled by experienced
entrepreneurs, Mr. Wijaya Lawrence of Indonesia and, Mr.
Patrick Ngiam of Singapore.
Albedo has agreed to buy an additional six parcels of land
from a company majority owned by Malaysian tycoon, Tan
Sri Dato’ Danny Tan in a move that will increase the size of
the reverse takeover (RTO) deal by more than twofold from
S$774m to S$1.86 bn. Albedo, which will be transformed
into a major property developer in Malaysia on completion
of the RTO, first agreed to buy seven parcels of land from
Tan Sri Dato’ Tan’s Infinite Rewards Inc in September 2013.
The additional six land parcels currently belong to Tan Sri
Dato’ Tan and his family and will bring Albedo’s Iskandar
landbank to 13 parcels of about 1,182.58 acres.
Albedo has also announced the issue of up to 260m nonlisted
and non-transferable warrants for an issue price of
S$0.001 per Warrant, each Warrant carrying the right to
subscribe for one (1) new Share in the capital of the
Company at an exercise price of S$0.04338 per share. The
Exercise Price represents a discount of 10.0% to the last
volume weighted average price. The proceeds will be used
for general working capital purposes, including the
repayment of trade payables and borrowings.
Singapore’s retail sales fell unexpectedly in October after
growing in September as buyers avoided buying motor
vehicles. Retail sales fell 3.2% in October compared to
September when it rose 0.6% from August. Stripping out
motor vehicles, retail sales fell marginally by 0.5% in October
compared to the 2.4% drop in September. Retailers of
motor vehicles suffered a seasonally adjusted double-digit
decline of 17.3% in October compared to September, when
they enjoyed 19.1% growth. Year-on-year, retail sales
declined 9.4% in October, also due to lower motor vehicles
sales. Excluding the latter which fell 39.6% y-o-y, retail sales
went down by 0.9%. The total retail sales value in October
was estimated at $2.9 bn, lower than the $3.2 bn a year
ago.
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