Dow and Europe were down last night.
Dow -78 closing at 16009. Dow's trend is down. Dow's future is now
-12. Europe opened down.
Asian bourses were mixed. Nikkei +95,
ShanghaiC +15, Hangseng -128. STI closed -1 at 3188. Volume
was 1.6b shares. Gainers were 172 to 234 losers.
STI's trend is starting to turn up.
Another day of gains will see a golden crossing.
Top volumes were Albedo +0.2, Transcu
unchanged, MDR unchanged, Vallianz -0.2, HanKore +0.2, Blumont -1, Noble
-1, SingHaiyi unchanged, CharismaEner unchanged, GoldenAgr -1.
Market opened down but recovered to
close flat. Blue chips were mixed but penny and speculatives were
generally weaker. The bright sparks were Ezra +12 and Yoma +2.5.
Europe and Dow are looking weaker for
tonight. There is a trend divergence between Dow and STI with the former
going down and the latter the other way.
Tuesday, December 3, 2013
Monday, December 2, 2013
OCBC Report 3 Dec 13
| Telecoms Sector: Limited growth, steady dividends Summary: Going into 2014, we believe that there is a possibility of investors switching out of more defensive stocks into the cyclical ones as the developed economies continue to improve. And because of their outperformance in 2013, dividend yields have fallen to around 4.5%, making them merely “decent” when compared to the STI’s 3.5%. In summary, we think that the telcos will likely see just limited growth in the mobile market; stiffer competition in the broadband market; and a relatively unexciting Pay TV market. As such, earnings growth is not likely to be exciting. Hence we maintain our NEUTRAL rating on the sector. (Carey Wong) MORE REPORTS Yoma Strategic Holdings: Signs agreement with Ooredoo Myanmar Summary: Yoma reported that a consortium, Digicel Asian Holdings, comprising Digicel Group, First Myanmar Investment Co., Ltd and Yoma Strategic Holdings Ltd, has signed an agreement with Ooredoo Myanmar to develop, construct and lease telecommunications towers in Myanmar. This will facilitate Ooredoo’s commitment to rapidly achieve coverage across the country after winning a coveted telecommunication license earlier this year. We understand that Digicel Asian Holdings’ company in Myanmar, Myanmar Tower Company, will construct multi-tenancy towers in Myanmar and aim to work with multiple telecommunications operating companies. We will speak further with management regarding this development and, in the meantime, maintain a HOLD rating with our fair value estimate of S$0.84 under review. (Eli Lee) |
| For more information on the above, visit www.ocbcresearch.comfor the detailed report. |
NEWS HEADLINES - US stock indexes ended lower on Mon, with the Dow briefly falling below 16,000 ahead of the closing bell as investors debated whether a record rally has become overextended. - The massive construction of HDB flats will start to taper off from next year as balance is restored between demand and supply in the market, Minister Khaw Boon Wan said. - Better-quality Chinese companies will come to Singapore following last month's agreement between the regulators of the two countries. - Sitra Holdings has obtained JTC approval to sell its Sungei Kadut property to World Furnishing Hub Pte Ltd for S$8.65m. - Sembcorp Industries' new S$154m multi-utilities centre at Banyan sector has started supplying steam, water and on-site logistics services to petrochemical plants there. - A "software bug" gave M1's mobile data service the sniffles yesterday, with some of its users experiencing patchy 3G data access for several hours. - LionGold Corp, together with a subsidiary of associated firm ISR Capital and Chinese firm Suzhou Power, is partnering a new private equity fund that invests in natural resources. |
DBS Vickers Report 3 Dec 13
ASEAN Strategy - Growth downgrades to persist. For
Singapore, stick with OCBC and Oil & Gas - Ezion as top
picks, and adding China recovery plays – Osim, Midas.
Our regional equity strategist expects growth downgrades to
persist in ASEAN, affecting already weak sentiments. Malaysia
upgraded on defensive stance, downgrading Indonesia;
reiterate Philippines overweight. For Singapore, stick with
OCBC and Oil & Gas - Ezion as top picks, and adding China
recovery plays – Osim, Midas. For Malaysia, year-end rally is
expected while the Thai market awaits how politics will pan
out. Indonesia is downgraded on data risks amid weak
sentiments. Philippines is fast to correct on typhoon Haiyan,
reiterate overweight.
Digicel Group and YSH Finance (comprising Yoma Strategic
Holdings) and First Myanmar Investment Co., Ltd (FMI)
announced that their reorganized consortium, Digicel Asian
Holdings, has signed an agreement with Ooredoo Myanmar
to develop, construct and lease telecommunications towers in
the Republic of the Union of Myanmar as part of Ooredoo's
commitment to deploy a world-class telecommunications
network across the country. This development is in line with
Yoma's aspiration to be conglomerate and we believe it will
contribute positively to the company in the long haul
although the accretion may not be significant. We do not
expect immediate profits in its first year of operations
considering start up expenses.
Sembcorp Industries commences commercial operations of its
new S$154m multi-utilities centre located in the island’s
Banyan district. With the addition of this new facility,
Sembcorp now offers companies located in Jurong Island’s
Banyan, Tembusu and Angsana areas a comprehensive range
of energy, water and on-site logistics. These include process
steam, power, industrial wastewater treatment, industrial
waters and service corridor services.
Q& M makes further inroad on the Chinese dental market
and enters Shandong province. It has executed a
Memorandum of Understanding with two owners of dental
hospital and dental polyclinic to acquire 51% for RMB
17.85m. The entire purchase consideration will be paid in
US Indices Last Close Pts Chg % Chg
Dow Jones 16,008.8 (77.6) (0.5)
S&P 1,800.9 (4.9) (0.3)
NASDAQ 4,045.3 (14.6) (0.4)
Regional Indices
ST Index 3,188.8 12.4 0.4
ST Small Cap 535.2 (0.2) (0.0)
Hang Seng 24,038.6 157.3 0.7
HSCEI 11,548.1 106.8 0.9
HSCCI 4,703.3 19.6 0.4
KLCI 1,818.2 5.4 0.3
SET 1,374.3 3.1 0.2
JCI 4,322.0 65.5 1.5
PCOMP 6,223.4 14.6 0.2
KOSPI 2,030.8 (14.1) (0.7)
TWSE 8,414.6 7.8 0.1
Nikkei 15,655.1 (6.8) (0.0)
STI Index Performance
Singapore
Total Market cap (US$bn) 580
Total Daily Vol (m shrs) 1,731
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$)
2 Dec
Target Price
(S$)
Hutchison Port Holdings Trust Buy 0.680 0.82
ComfortDelgro Buy 1.980 2.19
OCBC Buy 10.470 12.40
Singapore Airlines Buy 10.480 11.40
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
2 Dec
Target Price
($)
Ezion Holdings Buy 2.180 3.30
China Merchants Buy 0.915 1.20
CSE Global Buy 0.995 1.11
Nam Cheong Buy 0.290 0.42
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
Q&M shares and the shares will have a 5 year moratorium. The
owners have further given a profit guarantee for a period of
12 years amounting to RMB 36m.
Liongold Corp, together with a subsidiary of associated firm
ISR Capital and Chinese firm Suzhou Power, is partnering a
new private equity (PE) fund that invests in natural resources.
The fund, IPR LP, hopes to achieve medium to long-term
capital appreciation through direct investments in mining
projects, together with related energy and power investments.
Tritech Group has been awarded a S$7.8m instrumentation
contract by the Land Transport Authority
(LTA).
The massive construction of HDB flats will start to taper off
from next year as balance is restored between demand and
supply in the market, according to Minister for National
Development Khaw Boon Wan. It will be done in a measured
way to allow market to gradually adjust.
The government will be launching two 99-year private housing
sites in Geylang this month. Of the two, the one that is
expected to draw more developer interest is a plot next to
Aljunied MRT Station which has been triggered from the
government's reserve list. The successful applicant has agreed
to bid at least $95m, translating to $505.28 psf ppr, at tender
for the site, which is along Geylang East Avenue 1.
China’s manufacturing activity stabilised in November,
outperforming market expectations of a retraction on rising
credit costs and slower restocking of inventories by companies.
The official Purchasing Managers' Index (PMI) remained flat at
51.4. A separate survey by private investment bank HSBC put
the PMI at 50.8, higher than the preliminary 50.4 flash figure
released 10 days ago. China's economy is recovering from two
quarters of slowing growth. Third-quarter data showed retail
sales and investment rebounding strongly; the real estate
industry was also performing well, with another survey
published over the weekend pointing to prices rising by more
than 10% nationally.
US stocks fell, with indices declining in the final hour of
trading amid data that showed manufacturing unexpectedly
climbed in November and reports on holiday retail sales. The
ISM manufacturing Index rose to 57.3 (consensus 55.1) in
November from 56.4 a month earlier. U.S. retailers are coming
off the first spending decline on a Black Friday weekend since
2009. Purchases at stores and websites fell 2.9% to
US$57.4bil in the 4 days beginning with the Nov. 28
Thanksgiving holiday, this according to a survey commissioned
by the National Retail Federation
Singapore, stick with OCBC and Oil & Gas - Ezion as top
picks, and adding China recovery plays – Osim, Midas.
Our regional equity strategist expects growth downgrades to
persist in ASEAN, affecting already weak sentiments. Malaysia
upgraded on defensive stance, downgrading Indonesia;
reiterate Philippines overweight. For Singapore, stick with
OCBC and Oil & Gas - Ezion as top picks, and adding China
recovery plays – Osim, Midas. For Malaysia, year-end rally is
expected while the Thai market awaits how politics will pan
out. Indonesia is downgraded on data risks amid weak
sentiments. Philippines is fast to correct on typhoon Haiyan,
reiterate overweight.
Digicel Group and YSH Finance (comprising Yoma Strategic
Holdings) and First Myanmar Investment Co., Ltd (FMI)
announced that their reorganized consortium, Digicel Asian
Holdings, has signed an agreement with Ooredoo Myanmar
to develop, construct and lease telecommunications towers in
the Republic of the Union of Myanmar as part of Ooredoo's
commitment to deploy a world-class telecommunications
network across the country. This development is in line with
Yoma's aspiration to be conglomerate and we believe it will
contribute positively to the company in the long haul
although the accretion may not be significant. We do not
expect immediate profits in its first year of operations
considering start up expenses.
Sembcorp Industries commences commercial operations of its
new S$154m multi-utilities centre located in the island’s
Banyan district. With the addition of this new facility,
Sembcorp now offers companies located in Jurong Island’s
Banyan, Tembusu and Angsana areas a comprehensive range
of energy, water and on-site logistics. These include process
steam, power, industrial wastewater treatment, industrial
waters and service corridor services.
Q& M makes further inroad on the Chinese dental market
and enters Shandong province. It has executed a
Memorandum of Understanding with two owners of dental
hospital and dental polyclinic to acquire 51% for RMB
17.85m. The entire purchase consideration will be paid in
US Indices Last Close Pts Chg % Chg
Dow Jones 16,008.8 (77.6) (0.5)
S&P 1,800.9 (4.9) (0.3)
NASDAQ 4,045.3 (14.6) (0.4)
Regional Indices
ST Index 3,188.8 12.4 0.4
ST Small Cap 535.2 (0.2) (0.0)
Hang Seng 24,038.6 157.3 0.7
HSCEI 11,548.1 106.8 0.9
HSCCI 4,703.3 19.6 0.4
KLCI 1,818.2 5.4 0.3
SET 1,374.3 3.1 0.2
JCI 4,322.0 65.5 1.5
PCOMP 6,223.4 14.6 0.2
KOSPI 2,030.8 (14.1) (0.7)
TWSE 8,414.6 7.8 0.1
Nikkei 15,655.1 (6.8) (0.0)
STI Index Performance
Singapore
Total Market cap (US$bn) 580
Total Daily Vol (m shrs) 1,731
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$)
2 Dec
Target Price
(S$)
Hutchison Port Holdings Trust Buy 0.680 0.82
ComfortDelgro Buy 1.980 2.19
OCBC Buy 10.470 12.40
Singapore Airlines Buy 10.480 11.40
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
2 Dec
Target Price
($)
Ezion Holdings Buy 2.180 3.30
China Merchants Buy 0.915 1.20
CSE Global Buy 0.995 1.11
Nam Cheong Buy 0.290 0.42
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
Q&M shares and the shares will have a 5 year moratorium. The
owners have further given a profit guarantee for a period of
12 years amounting to RMB 36m.
Liongold Corp, together with a subsidiary of associated firm
ISR Capital and Chinese firm Suzhou Power, is partnering a
new private equity (PE) fund that invests in natural resources.
The fund, IPR LP, hopes to achieve medium to long-term
capital appreciation through direct investments in mining
projects, together with related energy and power investments.
Tritech Group has been awarded a S$7.8m instrumentation
contract by the Land Transport Authority
(LTA).
The massive construction of HDB flats will start to taper off
from next year as balance is restored between demand and
supply in the market, according to Minister for National
Development Khaw Boon Wan. It will be done in a measured
way to allow market to gradually adjust.
The government will be launching two 99-year private housing
sites in Geylang this month. Of the two, the one that is
expected to draw more developer interest is a plot next to
Aljunied MRT Station which has been triggered from the
government's reserve list. The successful applicant has agreed
to bid at least $95m, translating to $505.28 psf ppr, at tender
for the site, which is along Geylang East Avenue 1.
China’s manufacturing activity stabilised in November,
outperforming market expectations of a retraction on rising
credit costs and slower restocking of inventories by companies.
The official Purchasing Managers' Index (PMI) remained flat at
51.4. A separate survey by private investment bank HSBC put
the PMI at 50.8, higher than the preliminary 50.4 flash figure
released 10 days ago. China's economy is recovering from two
quarters of slowing growth. Third-quarter data showed retail
sales and investment rebounding strongly; the real estate
industry was also performing well, with another survey
published over the weekend pointing to prices rising by more
than 10% nationally.
US stocks fell, with indices declining in the final hour of
trading amid data that showed manufacturing unexpectedly
climbed in November and reports on holiday retail sales. The
ISM manufacturing Index rose to 57.3 (consensus 55.1) in
November from 56.4 a month earlier. U.S. retailers are coming
off the first spending decline on a Black Friday weekend since
2009. Purchases at stores and websites fell 2.9% to
US$57.4bil in the 4 days beginning with the Nov. 28
Thanksgiving holiday, this according to a survey commissioned
by the National Retail Federation
Stock broking, a new reality
Trading on SGX dived to a low of $914m daily after the recent penny
stock crash. Superficially it is still a big number to generate a decent
income for the brokerages and the remisiers. But what is real? My
guesstimate is that 90%, could be more, of the daily trades are done by
computer traders and house traders which generates zero commission.
Assuming that this is true, the balance 10% or $90m, to round up the
number for ease, would generate at max $450k at 0.5% or $270m at 0.3%.
Using an average of $350k, the broking houses’ share would be $210k or $10.5k per house (assuming that there are 20 houses). The average monthly intake would be less than $230k for one brokerage.
In the case of remisiers, the share of commission is $140k. Assuming there are 3000 remisiers, the daily income per remisier on the average will be $46. Multiply this by 22 days, the monthly income of an average remisier is about $1000.
The numbers are frightening and a pittance from the heydays. Is this sustainable for an industry of 20,000 people? Is this sustainable for a regionable stock exchange, a financial centre? Is this what we call a vibrant stock exchange?
Or is this the intensive ward for the critically ill? How long can this last before the patient breathes his last breath?
Using an average of $350k, the broking houses’ share would be $210k or $10.5k per house (assuming that there are 20 houses). The average monthly intake would be less than $230k for one brokerage.
In the case of remisiers, the share of commission is $140k. Assuming there are 3000 remisiers, the daily income per remisier on the average will be $46. Multiply this by 22 days, the monthly income of an average remisier is about $1000.
The numbers are frightening and a pittance from the heydays. Is this sustainable for an industry of 20,000 people? Is this sustainable for a regionable stock exchange, a financial centre? Is this what we call a vibrant stock exchange?
Or is this the intensive ward for the critically ill? How long can this last before the patient breathes his last breath?
Daily summary 2 Dec 13
Europe and Dow were marginally weaker
on Friday. Dow closed -11 at 16086. Dow's trend is starting to dip.
Dow's future is now +1. Europe opened slightly down
Asian bourses were mixed. Nikkei -7, ShanghaiC -13, Hangseng +157. .Volume was 1.6b shares. Gainers were 172 to 237 losers.
STI's trend is starting to turn up.
Top volumes were MDR -0.1, Albedo -0.3, Vallianz +0.5, Innopac unchanged, NexGenCom unchanged, Ipco -0.1, MirachEner +0.7, OttoMarine +0.3, KLW unchanged, HPHTrust unchanged.
Market opened up and traded sideways for the most part of the morning. It started to move up slightly in late afternoon to close positive. It was another uneventful day. Blue chips were slightly firmer. Penny and speculatives were mixed.
Europe and Dow are looking mixed at the moment.
Asian bourses were mixed. Nikkei -7, ShanghaiC -13, Hangseng +157. .Volume was 1.6b shares. Gainers were 172 to 237 losers.
STI's trend is starting to turn up.
Top volumes were MDR -0.1, Albedo -0.3, Vallianz +0.5, Innopac unchanged, NexGenCom unchanged, Ipco -0.1, MirachEner +0.7, OttoMarine +0.3, KLW unchanged, HPHTrust unchanged.
Market opened up and traded sideways for the most part of the morning. It started to move up slightly in late afternoon to close positive. It was another uneventful day. Blue chips were slightly firmer. Penny and speculatives were mixed.
Europe and Dow are looking mixed at the moment.
Sunday, December 1, 2013
DBS Vickers Report 2 Dec 13
Ezion - Ample room for appreciation, reiterate
conviction BUY with TP raised to S$3.30
We maintain our view for STI 3150 to hold intact in the
current year-end lull with upside bias towards 3290 (13.9x
or average FY14F PE). Weighed down by the risk of rising
current account deficits and political uncertainties, South
East Asian equities have clearly underperformed their
North East Asian counterparts in recent months. Political
uncertain in Thailand deepens after protesters seeking to
oust Thai Prime Minister Yingluck Shinawatra vowed to
incite more unrest this week after clashes left 3 dead in
Bangkok at the weekend and the Thai central bank
warned the standoff was hurting the economy. The USDBaht
exchange rate is currently at 32.273, higher by 0.7%
compared to Friday.
Capital outflow from this region has weighed on
Singapore equities. But Singapore remains a safe haven as
the country has been enjoying current account surplus
and economic growth is picking up. As a result, Singapore
equities here have outperformed their neighbours.
We reiterate our conviction BUY on Ezion with TP raised
to S$3.30 (Prev S$2.65) as we roll over valuation to FY14,
still pegged to 14x PE. Trading at less than 9x FY14 and 7x
FY15 PE, valuation for Ezion is undemanding against 42%
2-year EPS CAGR, which has strong visibility as 90/72% of
FY14/15F revenue are backed by secured contracts. Ezion
is a safer proxy to ride the growth prospects of its two
associates – Ocean Sky and Charisma - which have yet to
deliver. We estimate that the two associates could add
approx. S$390m or 32 Scents to Ezion’s share price (our
TP reflects only 1.5 Scents). Ocean Sky will take time to
ramp up Port Melville while we await greater clarity on
Charisma’s strategy and financials.
Centurion acquires RMIT Village in Australia, expanding its
business scope and regional presence. This acquisition will
be immediately earnings accretive in FY14, adding S$3.5m
to pre tax profit on a 9M YTD basis or a 9% return on
investment. However, we believe the extent of accretion is
contingent on the interest costs of the funding structure.
Maintain Buy, TP unchanged at S$0.77.
Vard Holdings has secured a new contract with Island
Offshore for the construction of one advanced offshore
support vessel. The value of the contract amounts to
approximately NOK 400m. The vessel is scheduled for
delivery from Vard Brevik in Norway in 1Q 2015.
US Indices Last Close Pts Chg % Chg
Dow Jones 16,086.4 (10.9) (0.1)
S&P 1,805.8 (1.4) (0.1)
NASDAQ 4,059.9 15.1 0.4
Regional Indices
ST Index 3,176.4 (10.0) (0.3)
ST Small Cap 535.3 (0.5) (0.1)
Hang Seng 23,881.3 92.2 0.4
HSCEI 11,441.3 56.0 0.5
HSCCI 4,683.7 42.4 0.9
KLCI 1,812.7 5.1 0.3
SET 1,371.1 11.7 0.9
JCI 4,256.4 22.5 0.5
PCOMP 6,208.8 38.9 0.6
KOSPI 2,044.9 (0.9) (0.0)
TWSE 8,406.8 44.4 0.5
Nikkei 15,661.9 (65.3) (0.4)
STI Index Performance
Singapore
Total Market cap (US$bn) 581
Total Daily Vol (m shrs) 1,747
12m ST Index High 3,454
12m ST Index Low 3,004
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
29 Nov
Target Price
($)
Hutchison Port Holdings Trust Buy 0.680 0.82
ComfortDelgro Buy 1.965 2.19
OCBC Buy 10.440 12.40
Singapore Airlines Buy 10.460 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
29 Nov
Target Price
($)
Ezion Holdings Buy 2.100 3.30
China Merchants Buy 0.910 1.20
CSE Global Buy 1.000 1.11
Frasers Centrepoint Trust Buy 1.770 2.14
Yoma Strategic Holdings Buy 0.740 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 3
Keppel Corp is currently negotiating conversion and
liquefaction contracts with Golar LNG on the conversion of
an existing LNG carrier into a Floating Storage and
Liquefaction Vessel (FLSV). The terms and conditions of the
contracts, including the contract value and expected
completion timeline, have yet to be finalised.
GSH Corporation has signed an agreement to acquire a
prime land parcel for RM132.4m. The leasehold land parcel
of 5,800 sq metres, - which GSH plans to develop into a
residential and commercial development, is located on Jalan
Kia Peng in the prime section of Kuala Lumpur’s city centre,
popularly known as the Golden Triangle.
ST Engineering announced that its electronics arm, ST
Electronics has set up a wholly owned subsidiary, ST
Electronics (Tianjin) in Tianjin Eco-City, China with a paid up
capital of RMB 10m (about S$1.97m). ST Electronics Tianjin
is wholly owned by ST Electronics (Shanghai) Co., Ltd, a
wholly owned subsidiary of ST Electronics.
Separately, ST Engineering announced that it has
streamlined its US entities, by merging Vision Technologies
Systems, Inc., with VT Systems, Inc., through a short-form
merger. VT Systems, Inc. will be liquidated as of 30
November 2013 and all its assets and personnel will be
transferred to Vision Technologies Systems, Inc. Business will
continue seamlessly. Vision Technologies Systems, Inc.,
which has been operating as ST Engineering’s US
headquarters, will continue to leverage the global
capabilities of the Group to expand and grow in the US
market.
Wing Tai Holdings has been awarded the tender for a
leasehold land parcel Plot 17/2, Huai Hai Middle Road
Precinct No. 45 in Shanghai Huangpu District having an
approximate site area of 8,593.9 square metres at the price
of RMB1.104bn.
Innopac Holdings has moved into China's natural gas
market, after a false start in 2011. It will pay $17.1m for
81.82% stake in Shandong CNG firm. Part of the purchase
consideration at $7.2m will be in cash; the balance of $9.9m
will be met through the issuance of 300m new shares in
Innopac at an issue price of 3.3 cents per share.
Business loans continued to power Singapore's bank lending
growth in October, with total loans rising 1.4% over the
month from 1.1% in September. On a year-on-year basis,
however, credit growth slowed slightly, increasing 15.6% to
$554.3 bn last month, compared to 15.7% in September.
Loans to businesses grew 2% in October to $332.1 bn, after
rising 1.4% in September. Year-on-year growth picked up as
well to 19.4% in October, faster than the 18.6% seen in the
month before.
Business lending momentum was largely driven by the
general commerce, and transport, storage and
communication sectors. In year-on-year terms, loans growth
for the former continued to rise at a rapid clip of 28.8% in
October; the latter grew 26%. In contrast, on a year-on-year
basis, consumer loans growth slowed to 10.4%, from
September's 11.7%. Over the month, consumer loans grew
at the same pace of 0.6% in October as they did in
September, to reach $222.2 bn.
Singapore is targeting to welcome 1.5 million cruise
passengers by 2015, up from the 913,000 that sailed into
the island last year, as it sets its sights on winning a sizable
slice of the rapidly growing Asian cruise industry. The
Singapore Tourism Board (STB) believes it is able to hit these
numbers as the sector in Singapore and the region is still in a
nascent stage and has strong growth potential, especially if
it is able to attract more international cruise passengers here.
JTC Corporation has launched four industrial sites zoned for
Business-2 development, in Woodlands Industrial Park E9
and Tuas South, for sale by public tender.
The Land Transport Authority (LTA) has awarded two civil
contracts for the building of the MRT's Woodlands North
and Napier stations and their associated tunnels. The
contracts for these Thomson Line stations are worth $526m.
Woodlands North station goes to Penta-Ocean while Napier
station goes to Sinohydro.
Chinese manufacturing grew more than expected in
November, indicating that the nation's economic recovery is
sustaining momentum amid government efforts to rein in
credit growth. The Purchasing Managers' Index was 51.4.
That's the same reading as October, which was an 18-month
high, and exceeded 24 out of 26 estimates in a Bloomberg
News survey.
conviction BUY with TP raised to S$3.30
We maintain our view for STI 3150 to hold intact in the
current year-end lull with upside bias towards 3290 (13.9x
or average FY14F PE). Weighed down by the risk of rising
current account deficits and political uncertainties, South
East Asian equities have clearly underperformed their
North East Asian counterparts in recent months. Political
uncertain in Thailand deepens after protesters seeking to
oust Thai Prime Minister Yingluck Shinawatra vowed to
incite more unrest this week after clashes left 3 dead in
Bangkok at the weekend and the Thai central bank
warned the standoff was hurting the economy. The USDBaht
exchange rate is currently at 32.273, higher by 0.7%
compared to Friday.
Capital outflow from this region has weighed on
Singapore equities. But Singapore remains a safe haven as
the country has been enjoying current account surplus
and economic growth is picking up. As a result, Singapore
equities here have outperformed their neighbours.
We reiterate our conviction BUY on Ezion with TP raised
to S$3.30 (Prev S$2.65) as we roll over valuation to FY14,
still pegged to 14x PE. Trading at less than 9x FY14 and 7x
FY15 PE, valuation for Ezion is undemanding against 42%
2-year EPS CAGR, which has strong visibility as 90/72% of
FY14/15F revenue are backed by secured contracts. Ezion
is a safer proxy to ride the growth prospects of its two
associates – Ocean Sky and Charisma - which have yet to
deliver. We estimate that the two associates could add
approx. S$390m or 32 Scents to Ezion’s share price (our
TP reflects only 1.5 Scents). Ocean Sky will take time to
ramp up Port Melville while we await greater clarity on
Charisma’s strategy and financials.
Centurion acquires RMIT Village in Australia, expanding its
business scope and regional presence. This acquisition will
be immediately earnings accretive in FY14, adding S$3.5m
to pre tax profit on a 9M YTD basis or a 9% return on
investment. However, we believe the extent of accretion is
contingent on the interest costs of the funding structure.
Maintain Buy, TP unchanged at S$0.77.
Vard Holdings has secured a new contract with Island
Offshore for the construction of one advanced offshore
support vessel. The value of the contract amounts to
approximately NOK 400m. The vessel is scheduled for
delivery from Vard Brevik in Norway in 1Q 2015.
US Indices Last Close Pts Chg % Chg
Dow Jones 16,086.4 (10.9) (0.1)
S&P 1,805.8 (1.4) (0.1)
NASDAQ 4,059.9 15.1 0.4
Regional Indices
ST Index 3,176.4 (10.0) (0.3)
ST Small Cap 535.3 (0.5) (0.1)
Hang Seng 23,881.3 92.2 0.4
HSCEI 11,441.3 56.0 0.5
HSCCI 4,683.7 42.4 0.9
KLCI 1,812.7 5.1 0.3
SET 1,371.1 11.7 0.9
JCI 4,256.4 22.5 0.5
PCOMP 6,208.8 38.9 0.6
KOSPI 2,044.9 (0.9) (0.0)
TWSE 8,406.8 44.4 0.5
Nikkei 15,661.9 (65.3) (0.4)
STI Index Performance
Singapore
Total Market cap (US$bn) 581
Total Daily Vol (m shrs) 1,747
12m ST Index High 3,454
12m ST Index Low 3,004
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
29 Nov
Target Price
($)
Hutchison Port Holdings Trust Buy 0.680 0.82
ComfortDelgro Buy 1.965 2.19
OCBC Buy 10.440 12.40
Singapore Airlines Buy 10.460 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
29 Nov
Target Price
($)
Ezion Holdings Buy 2.100 3.30
China Merchants Buy 0.910 1.20
CSE Global Buy 1.000 1.11
Frasers Centrepoint Trust Buy 1.770 2.14
Yoma Strategic Holdings Buy 0.740 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 3
Keppel Corp is currently negotiating conversion and
liquefaction contracts with Golar LNG on the conversion of
an existing LNG carrier into a Floating Storage and
Liquefaction Vessel (FLSV). The terms and conditions of the
contracts, including the contract value and expected
completion timeline, have yet to be finalised.
GSH Corporation has signed an agreement to acquire a
prime land parcel for RM132.4m. The leasehold land parcel
of 5,800 sq metres, - which GSH plans to develop into a
residential and commercial development, is located on Jalan
Kia Peng in the prime section of Kuala Lumpur’s city centre,
popularly known as the Golden Triangle.
ST Engineering announced that its electronics arm, ST
Electronics has set up a wholly owned subsidiary, ST
Electronics (Tianjin) in Tianjin Eco-City, China with a paid up
capital of RMB 10m (about S$1.97m). ST Electronics Tianjin
is wholly owned by ST Electronics (Shanghai) Co., Ltd, a
wholly owned subsidiary of ST Electronics.
Separately, ST Engineering announced that it has
streamlined its US entities, by merging Vision Technologies
Systems, Inc., with VT Systems, Inc., through a short-form
merger. VT Systems, Inc. will be liquidated as of 30
November 2013 and all its assets and personnel will be
transferred to Vision Technologies Systems, Inc. Business will
continue seamlessly. Vision Technologies Systems, Inc.,
which has been operating as ST Engineering’s US
headquarters, will continue to leverage the global
capabilities of the Group to expand and grow in the US
market.
Wing Tai Holdings has been awarded the tender for a
leasehold land parcel Plot 17/2, Huai Hai Middle Road
Precinct No. 45 in Shanghai Huangpu District having an
approximate site area of 8,593.9 square metres at the price
of RMB1.104bn.
Innopac Holdings has moved into China's natural gas
market, after a false start in 2011. It will pay $17.1m for
81.82% stake in Shandong CNG firm. Part of the purchase
consideration at $7.2m will be in cash; the balance of $9.9m
will be met through the issuance of 300m new shares in
Innopac at an issue price of 3.3 cents per share.
Business loans continued to power Singapore's bank lending
growth in October, with total loans rising 1.4% over the
month from 1.1% in September. On a year-on-year basis,
however, credit growth slowed slightly, increasing 15.6% to
$554.3 bn last month, compared to 15.7% in September.
Loans to businesses grew 2% in October to $332.1 bn, after
rising 1.4% in September. Year-on-year growth picked up as
well to 19.4% in October, faster than the 18.6% seen in the
month before.
Business lending momentum was largely driven by the
general commerce, and transport, storage and
communication sectors. In year-on-year terms, loans growth
for the former continued to rise at a rapid clip of 28.8% in
October; the latter grew 26%. In contrast, on a year-on-year
basis, consumer loans growth slowed to 10.4%, from
September's 11.7%. Over the month, consumer loans grew
at the same pace of 0.6% in October as they did in
September, to reach $222.2 bn.
Singapore is targeting to welcome 1.5 million cruise
passengers by 2015, up from the 913,000 that sailed into
the island last year, as it sets its sights on winning a sizable
slice of the rapidly growing Asian cruise industry. The
Singapore Tourism Board (STB) believes it is able to hit these
numbers as the sector in Singapore and the region is still in a
nascent stage and has strong growth potential, especially if
it is able to attract more international cruise passengers here.
JTC Corporation has launched four industrial sites zoned for
Business-2 development, in Woodlands Industrial Park E9
and Tuas South, for sale by public tender.
The Land Transport Authority (LTA) has awarded two civil
contracts for the building of the MRT's Woodlands North
and Napier stations and their associated tunnels. The
contracts for these Thomson Line stations are worth $526m.
Woodlands North station goes to Penta-Ocean while Napier
station goes to Sinohydro.
Chinese manufacturing grew more than expected in
November, indicating that the nation's economic recovery is
sustaining momentum amid government efforts to rein in
credit growth. The Purchasing Managers' Index was 51.4.
That's the same reading as October, which was an 18-month
high, and exceeded 24 out of 26 estimates in a Bloomberg
News survey.
OCBC Report 2 Dec 13
| Oil and Gas: Good performance to continue in 2014 Summary: The FTSE Oil and Gas index has performed more or less in-line with the broader market this year. Still, it is among the top three best-performing FTSE sub-indices YTD, along with the FTSE Telecommunications and FTSE Maritime indices. Stepping into 2014, we continue to advocate a focused stock-picking strategy, overweighting companies that are operating in sub-sectors with more favourable demand-supply dynamics, and those with strong balance sheets and order books. The local rigbuilders are expected to continue securing orders at a pace that will at least match this year’s, while the offshore support vessel sub-sector should also see continued recovery as the market situation gradually tilts in favour of vessel owners. Maintain OVERWEIGHTon the oil and gas sector, preferring Keppel Corporation [BUY, FV: S$12.87], Sembcorp Marine [BUY, FV: S$5.68], Ezion Holdings [BUY, FV: S$2.57] and Nam Cheong Ltd [BUY, FV: S$0.37]. (Low Pei Han, Andy Wong) MORE REPORTS Vard Holdings: Secures NOK400m contract Summary: Vard Holdings Limited (VARD) announced that it has secured a new contract for the construction of one advanced offshore support vessel (OSV) worth ~NOK400m. This contract was awarded by Island Offshore, which is an existing customer of VARD. VARD has delivered more than 30 vessels to Island Offshore previously, while it also has five vessels under construction for Island Offshore. Delivery for this OSV is scheduled for 1Q15. This latest contract brings total YTD order wins for VARD to NOK12.3b, within our forecast of NOK12.9b. Hence, we maintain our HOLD rating and S$0.84 fair value estimate on VARD, pegged to 8x FY14F EPS. (Wong Teck Ching Andy) |
For more information on the above, visit www.ocbcresearch.comfor the detailed report. |
NEWS HEADLINES - US stocks closed mostly lower on Fri, pulling back from Wed’s record levels, but still achieved gains for the week and month. - After the great penny stock collapse of Oct, a listless month of trading in Nov saw the Singapore market lose around S$12.6b of value. - Business loans continued to power Singapore's bank lending growth in Oct, with total loans rising 1.4% MoM, according to preliminary figures released by MAS. - Keppel Corp's Keppel Shipyard is in talks with Norway's Golar LNG on a contract for a landmark conversion of an LNG carrier into a floating LNG production facility. - GSH Corporation Ltd's subsidiary signed a sales and purchase agreement with Tropicana Kia Peng to acquire a parcel of prime land in downtown Kuala Lumpur for RM132.4m (S$51.55m). - Asiatravel.com Holdings posted deeper losses of S$5.74m for FY13, from the S$3.77m loss in FY12. - Casa Holdings Ltd’s FY13 net profit rose to S$9.53m from S$9.45m a year ago. - CapitaMalls Asia will open two new shopping havens this week, one on each side of the island. |
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