Today’s Focus
Hyflux - Interests to remain muted with yet another top
management departure.
U.S. stocks fell after the FED minutes and better-thanestimated
ADP employment data fuelled concern stimulus
cuts may be accelerated. According to the minutes, Fed
officials saw diminishing economic benefits from the central
bank’s bond buying program. The minutes didn’t describe a
set schedule for the pace of asset-purchase reductions,
although some officials mentioned the need for a “more
deterministic path.” The ADP employment change for
December came in at 238k, better than the 200k expected.
Meanwhile, the IMF plans to raise its forecast for global
economic growth this year, three months after lowering its
prediction, underscoring confidence in the global recovery as
the outlook for the U.S. improves. IMF Managing Director
Christine Lagarde said yesterday that the revision will take
place in 3 weeks.
The FED minutes, ADP employment data and the upcoming
global economic growth revision by the IMF underpins our
view that stocks that benefit from US-Europe recovery theme
as well as the O&G will continue to find interest while SREITs
underperform as the yield curve continue to stay steep. Our
picks for global recovery exposure are HPH Trust, Venture
Corp and Goodpack.
Hyflux’s senior executive vice-president and deputy CEO Sam
Ong will join SMRT Corporation as its new executive VP and
chief financial officer from March 1 this year. Mr Ong's
previous roles at Hyflux included stints as its CFO and chief
investment officer. With his departure, two middle level
managers who have worked closely with Sam will continue to
support Hyflux's Business Development team in the Middle
East and North Africa region. We believe interests in Hyflux
would remain muted particularly with yet another top
management departure. Hyflux's ex-CFO Mr Cho Wee Peng
left sometime in July 2013. Maintain HOLD; TP: S$1.18.
OCBC has set up a qualified private equity fund to invest in
onshore China companies, potentially allowing the bank to
raise an onshore renminbi fund. The US$100m fund was
created under the Shanghai Qualified Foreign Limited Partner
(QFLP) programme, which allows the fund to convert up to
US Indices Last Close Pts Chg % Chg
Dow Jones 16,462.7 (68.2) (0.4)
S&P 1,837.5 (0.4) (0.0)
NASDAQ 4,165.6 12.4 0.3
Regional Indices
ST Index 3,150.7 29.8 1.0
ST Small Cap 547.0 0.5 0.1
Hang Seng 22,996.6 283.8 1.2
HSCEI 10,329.8 93.7 0.9
HSCCI 4,423.5 77.1 1.8
KLCI 1,831.3 6.2 0.3
SET 1,257.7 (4.6) (0.4)
JCI 4,200.6 24.8 0.6
PCOMP 5,986.5 39.0 0.7
KOSPI 1,959.0 (0.5) (0.0)
TWSE 8,556.0 43.7 0.5
Nikkei 16,121.5 307.1 1.9
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 567
Total Daily Vol (m shrs) 4,462
12m ST Index High 3,454
12m ST Index Low 3,004
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
8 Jan
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.680 0.80
Keppel Corp Buy 11.220 12.90
OCBC Buy 9.760 12.40
Yangzijiang Buy 1.210 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
8 Jan
Target Price
($)
Ezion Holdings Buy 2.370 3.36
China Merchants Buy 0.925 1.20
Pacific Radiance Ltd Buy 0.970 1.05
Nam Cheong Buy 0.335 0.42
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
US$100m of foreign currency into renminbi and invest that
renminbi onshore in domestic Chinese companies over the
next five years.
Frasers Centrepoint Limited (FCL), the property arm of the
conglomerate Fraser & Neave (F&N), begins trading as a
separate entity from the parent company today. The split of
FCL from F&N had been done by way of a listing by
introduction for FCL and a two-for-one in-specie distribution
of FCL shares to F&N shareholders. With the "de-merger",
F&N will have a clean break from the property business, and
be left with its food and beverage (F&B) and printing and
publishing businesses.
Global Logistics Properties (GLP) will start development of two
multi-tenant logistics facilities in Greater Tokyo. GLP Sayama
Hidaka I and II, expected to be completed in December 2015
and May 2016 respectively, have a total development cost
estimated at 18.7 bn yen (S$227m). The two facilities will be
located in Saitama Prefecture, Greater Tokyo, and have a
combined gross floor area of about 127,000 square metres.
Rex International is divesting its entire 49% interest in Loyz
Rex Drilling Services to Loyz Energy, for a consideration of
US$4.5m, by way of US$1m in cash and US$3.5m in newly
issued shares in the capital of Loyz. The shares will be issued at
S$0.3597 per share, being a 5% premium to the volume
weighted average price.
Armarda Group proposed to issue 577m new shares at an
issue price of S$0.01145 each. The issue price represents a
discount of approximately 4.05% discount to the volume
weighted average price. The net proceeds of about S$6.3m
will be used to finance or fund the Group’s corporate actions
and/or business opportunities or developments and for
working capital purposes.
A consortium of five local construction companies, including
two listed ones, has been formed to bid for $60 bn worth of
MRT projects. United Singapore Builders Pte Ltd (USB) will
tender for projects laid out by the Ministry of Transport (MOT)
as outlined in Land Transport Master Plan 2013, said OKP
Holdings and Swee Hong. The other members of the group
are Ho Lee Construction, Chye Joo Construction and Hwa
Seng Builder.
PSA International handled 2.9% more cargo at its port
projects around the world in 2013. It handled 61.8m Twentyfoot
Equivalent Units (TEUs) of containers, with the PSA
Singapore Terminals contributing 32.2m TEUs and those
outside Singapore handling the remaining 29.6m.
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