Dow and Europe were down again last
night. Dow -68 at 15822. Dow's trend is down. Dow's future is now
+42. Europe opened up at the moment.
Asian bourses were mixed. Nikkei
+122, ShanghaiC -10, Hangseng +31. STI closed -7 at 3117. Volume
was 1.8b shares. Gainers were 184 to 223 losers.
Trend of STI is down.
Top volumes were Vallianz +1.4, Transcu
-0.1, Albedo -0.1, Innopac -0.2, SingHaiyi unchanged, Blumont -0.8, GoldenAgr
-0.5, AdvSCT -0.1, CharismaEner unchanged, SingTel -4.
Market opened down but managed to climb
back and reduced its losses, closing -7 at day high. Blue chips opened
down but closed firmer. Penny and speculatives were mixed.
Europe and Dow looking firmer at the
moment, may pull back some of the losses from last night.
Friday, December 6, 2013
Thursday, December 5, 2013
DBS Vickers Report 6 Dec 13
Singapore Hospitality - A modest recovery. Top picks:
Genting Singapore (Upgrade to BUY, TP of S$1.75) and
CDREIT (BUY, S$1.80)
We expect a modest recovery for the Singapore Hospitality
sector. At 10.5m visitor arrivals (+8.5% y-o-y) as of YTD
8M13, visitor arrival growth continue to exceed expectations.
Looking ahead, we believe 2014 will continue to see higher
visitorship given: (I) Robust outlook for travel within the
ASEAN region, especially major visitor source markets of
Indonesia, India and China (c.45% of total visitors), (ii) The
expected pick-up in business activities and a healthy pipeline
of MICE and major conferences in 1H14. As such, we expect
visitor arrivals to grow 6.0% y-o-y to 16.3m in 2014.
However, upside is expected to be capped by new hotel
openings. Over 4Q13-2014, the industry will see close to an
additional 3,400 rooms or a 6% increase in room supply,
mainly in the Central Business District (CBD) and along
Orchard Road.
In terms of stock pick, Genting Singapore (Upgrade to BUY,
TP of S$1.75) remains the main beneficiary of the sustained
growth in visitor arrivals and tourists spending in 2014.
Among the hoteliers, we believe CDL Hospitality Trusts (BUY,
S$1.80) offer the most leverage to the expected uptick in
business and MICE travellers amongst competition in the
market.
Rex International has signed an agreement with North Energy
ASA to acquire a 20% stake in a new licence in Norway. With
this new licence, Rex will have stakes in seven offshore
licences in Norway, up from four at its IPO in July 2013. Rex’s
portfolio in Norway is expected to grow up to 15 licences in
2014. Financing has been secured for drilling activities in
Norway into 2015.
Cambridge Industrial Trust enters into S$250m interest rate
swaps with several banks and reduces its all-in cost of debt to
3.33% to 3.45%.
South African coal miner Resource Generation said it was
taking action to obtain funds that Blumont has not yet paid
the firm. Blumont was to have paid the firm A$22.6m
(S$25.6m) for a placement of about 102m Resource
US Indices Last Close Pts Chg % Chg
Dow Jones 15,821.5 (68.3) (0.4)
S&P 1,785.0 (7.8) (0.4)
NASDAQ 4,033.2 (4.8) (0.1)
Regional Indices
ST Index 3,124.4 (36.3) (1.1)
ST Small Cap 531.3 (2.9) (0.5)
Hang Seng 23,712.6 (16.1) (0.1)
HSCEI 11,395.7 27.0 0.2
HSCCI 4,643.5 (7.8) (0.2)
KLCI 1,824.9 3.0 0.2
SET 1,376.6 (7.3) (0.5)
JCI 4,216.9 (24.4) (0.6)
PCOMP 6,031.0 (74.3) (1.2)
KOSPI 1,984.8 (2.0) (0.1)
TWSE 8,375.5 (42.5) (0.5)
Nikkei 15,177.5 (230.5) (1.5)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 580
Total Daily Vol (m shrs) 2,325
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$)
5 Dec
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.645 0.82
ComfortDelgro Buy 1.920 2.19
OCBC Buy 10.120 12.40
Singapore Airlines Buy 10.420 11.40
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
5 Dec
Target Price
($)
Ezion Holdings Buy 2.250 3.30
China Merchants Buy 0.925 1.20
CSE Global Buy 1.020 1.11
Nam Cheong Buy 0.295 0.42
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
Generation shares at 22 Australian cents per share. This was
said to have been due on Wednesday. The proceeds were to
be used to develop Resource Generation's Boikarabelo coal
mine in Waterberg, South Africa. The subscription of the new
shares from Resource Generation was to give Blumont a 15%
stake in the company.
Home-grown international fashion label, Raoul, will expand to
the Middle East after clinching a franchise deal with The
Chalhoub Group, a leading player in the luxury business in the
region. The agreement, signed between FJ Benjamin Holdings
and Chalhoub's CGR FZE, will see nine standalone Raoul
stores open by 2017, with the first two in the United Arab
Emirates and Bahrain by next year. The deal is for an initial
period of five years with an option to renew for another five,
subject to compliances.
JTC changes industrial property rules. Industrialists and thirdparty
facility providers such as property funds/developers who
own industrial properties on JTC-leased sites will now be
required to hold these properties for a longer period before
they may sell them. JTC has also extended the minimum
occupation period for anchor tenants of third-party facility
providers. The changes took effect on Nov 15. The move is
aimed at safeguarding Singapore's scarce industrial land
resources for optimal use by genuine industrialists and
dampening property speculation. Market watchers say the
latest changes in JTC policies will benefit genuine industrial
users but discourage property speculators.
Global passenger traffic is picking up pace, clocking 6.6%
growth y-o-y in October, which is higher than the 5.2% rise
seen a month earlier. According to data from the International
Air Transport Association (Iata), this was more or less matched
by a 6.5% expansion in capacity, keeping load factor
essentially flat at 78.9%. Of the three regions with the biggest
share of the passenger traffic market - Asia-Pacific, Europe and
North America - Asia-Pacific carriers reported the strongest
increase with a 7.8% y-o-y rise in passenger traffic in October.
Capacity was 7.1% higher from the corresponding month in
2012, prompting load factor to gain 0.5 percentage point to
76.4%.
The European Central Bank (ECB) raised its eurozone
economic growth forecast to 1.1% for 2014 yesterday and
predicted 1.5% growth the following year. It has also
maintained its forecast that the 17-member eurozone
economy would shrink by 0.4% this year. The central bank has
kept its interest rates unchanged at 0.25%.
US market was down for a fifth consecutive day despite
positive economic data. The government has revised its initial
report on 3Q economic growth to 3.6%, up from the previous
estimate of 2.8%. The improvement was largely driven by
inventory growth as companies restocked their shelves ahead
of the holiday shopping season. And the number of Americans
filing first-time claims for unemployment benefits fell more
than expected last week, though the decline may have been
distorted by the Thanksgiving holiday.-----------------------------------
CONFIDENTIAL NOTE:
This message is intended only for use of the addressee and may contain
information that is privileged and confidential. If you are not the
intended recipient, you are hereby notified that any use or dissemination
of this communication is strictly prohibited. If you have received this
communication in error, please notify us immediately by reply and delete
this message from your system.
Genting Singapore (Upgrade to BUY, TP of S$1.75) and
CDREIT (BUY, S$1.80)
We expect a modest recovery for the Singapore Hospitality
sector. At 10.5m visitor arrivals (+8.5% y-o-y) as of YTD
8M13, visitor arrival growth continue to exceed expectations.
Looking ahead, we believe 2014 will continue to see higher
visitorship given: (I) Robust outlook for travel within the
ASEAN region, especially major visitor source markets of
Indonesia, India and China (c.45% of total visitors), (ii) The
expected pick-up in business activities and a healthy pipeline
of MICE and major conferences in 1H14. As such, we expect
visitor arrivals to grow 6.0% y-o-y to 16.3m in 2014.
However, upside is expected to be capped by new hotel
openings. Over 4Q13-2014, the industry will see close to an
additional 3,400 rooms or a 6% increase in room supply,
mainly in the Central Business District (CBD) and along
Orchard Road.
In terms of stock pick, Genting Singapore (Upgrade to BUY,
TP of S$1.75) remains the main beneficiary of the sustained
growth in visitor arrivals and tourists spending in 2014.
Among the hoteliers, we believe CDL Hospitality Trusts (BUY,
S$1.80) offer the most leverage to the expected uptick in
business and MICE travellers amongst competition in the
market.
Rex International has signed an agreement with North Energy
ASA to acquire a 20% stake in a new licence in Norway. With
this new licence, Rex will have stakes in seven offshore
licences in Norway, up from four at its IPO in July 2013. Rex’s
portfolio in Norway is expected to grow up to 15 licences in
2014. Financing has been secured for drilling activities in
Norway into 2015.
Cambridge Industrial Trust enters into S$250m interest rate
swaps with several banks and reduces its all-in cost of debt to
3.33% to 3.45%.
South African coal miner Resource Generation said it was
taking action to obtain funds that Blumont has not yet paid
the firm. Blumont was to have paid the firm A$22.6m
(S$25.6m) for a placement of about 102m Resource
US Indices Last Close Pts Chg % Chg
Dow Jones 15,821.5 (68.3) (0.4)
S&P 1,785.0 (7.8) (0.4)
NASDAQ 4,033.2 (4.8) (0.1)
Regional Indices
ST Index 3,124.4 (36.3) (1.1)
ST Small Cap 531.3 (2.9) (0.5)
Hang Seng 23,712.6 (16.1) (0.1)
HSCEI 11,395.7 27.0 0.2
HSCCI 4,643.5 (7.8) (0.2)
KLCI 1,824.9 3.0 0.2
SET 1,376.6 (7.3) (0.5)
JCI 4,216.9 (24.4) (0.6)
PCOMP 6,031.0 (74.3) (1.2)
KOSPI 1,984.8 (2.0) (0.1)
TWSE 8,375.5 (42.5) (0.5)
Nikkei 15,177.5 (230.5) (1.5)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 580
Total Daily Vol (m shrs) 2,325
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$)
5 Dec
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.645 0.82
ComfortDelgro Buy 1.920 2.19
OCBC Buy 10.120 12.40
Singapore Airlines Buy 10.420 11.40
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
5 Dec
Target Price
($)
Ezion Holdings Buy 2.250 3.30
China Merchants Buy 0.925 1.20
CSE Global Buy 1.020 1.11
Nam Cheong Buy 0.295 0.42
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
Generation shares at 22 Australian cents per share. This was
said to have been due on Wednesday. The proceeds were to
be used to develop Resource Generation's Boikarabelo coal
mine in Waterberg, South Africa. The subscription of the new
shares from Resource Generation was to give Blumont a 15%
stake in the company.
Home-grown international fashion label, Raoul, will expand to
the Middle East after clinching a franchise deal with The
Chalhoub Group, a leading player in the luxury business in the
region. The agreement, signed between FJ Benjamin Holdings
and Chalhoub's CGR FZE, will see nine standalone Raoul
stores open by 2017, with the first two in the United Arab
Emirates and Bahrain by next year. The deal is for an initial
period of five years with an option to renew for another five,
subject to compliances.
JTC changes industrial property rules. Industrialists and thirdparty
facility providers such as property funds/developers who
own industrial properties on JTC-leased sites will now be
required to hold these properties for a longer period before
they may sell them. JTC has also extended the minimum
occupation period for anchor tenants of third-party facility
providers. The changes took effect on Nov 15. The move is
aimed at safeguarding Singapore's scarce industrial land
resources for optimal use by genuine industrialists and
dampening property speculation. Market watchers say the
latest changes in JTC policies will benefit genuine industrial
users but discourage property speculators.
Global passenger traffic is picking up pace, clocking 6.6%
growth y-o-y in October, which is higher than the 5.2% rise
seen a month earlier. According to data from the International
Air Transport Association (Iata), this was more or less matched
by a 6.5% expansion in capacity, keeping load factor
essentially flat at 78.9%. Of the three regions with the biggest
share of the passenger traffic market - Asia-Pacific, Europe and
North America - Asia-Pacific carriers reported the strongest
increase with a 7.8% y-o-y rise in passenger traffic in October.
Capacity was 7.1% higher from the corresponding month in
2012, prompting load factor to gain 0.5 percentage point to
76.4%.
The European Central Bank (ECB) raised its eurozone
economic growth forecast to 1.1% for 2014 yesterday and
predicted 1.5% growth the following year. It has also
maintained its forecast that the 17-member eurozone
economy would shrink by 0.4% this year. The central bank has
kept its interest rates unchanged at 0.25%.
US market was down for a fifth consecutive day despite
positive economic data. The government has revised its initial
report on 3Q economic growth to 3.6%, up from the previous
estimate of 2.8%. The improvement was largely driven by
inventory growth as companies restocked their shelves ahead
of the holiday shopping season. And the number of Americans
filing first-time claims for unemployment benefits fell more
than expected last week, though the decline may have been
distorted by the Thanksgiving holiday.-----------------------------------
CONFIDENTIAL NOTE:
This message is intended only for use of the addressee and may contain
information that is privileged and confidential. If you are not the
intended recipient, you are hereby notified that any use or dissemination
of this communication is strictly prohibited. If you have received this
communication in error, please notify us immediately by reply and delete
this message from your system.
DBS Report 9 Dec 13
F&N - Sweetened its offer to bondholders by tacking
an additional 375 to 600 basis points to its original
proposal
We continue to see the prospect for the STI to head
higher towards 3290. But, the likelihood of this
happening looks to be delayed beyond the year-end lull
period.
On the economy, China’s recent data suggests that the
country’s economy is stabilising after a long slowdown.
Manufacturing and services PMIs have stabilized and the
producer price index has also stopped falling, offering
hope of a recovery.
Companies that can benefit from China’s anticipated
recovery include OSIM, which is poised to benefit from
rising consumption in China, given that 55% of its sales
are from North Asia. Midas is a recovery play on
expectations of more high-speed bullet train contracts
from China. Prospects for China Merchant remain bright.
Economic conditions in the G3 are improving as well.
Policy stimulus has lifted economic performance in Japan
while Europe is out of recession. The US is still on the
recovery path, albeit a slow one. With the macro
backdrop improving, being an export driven country,
Singapore is poised to benefit from the improved global
outlook. This has led our economist to raise Singapore
GDP growth forecasts for 2013 and 2014. One of the
sectors to benefit from the improving Singapore GDP
growth is the banking sector. Our pick is OCBC (BUY, TP:
S$12.40). Our banking analyst believes that there is
potential upside surprise for loan growth while net
interest margin is on a gradual uplift.
F&N has sweetened its offer to bondholders by tacking an
additional 375 to 600 basis points to its original proposal,
to avert a bond technical default as the group plans listing
spin-off of property business. F&N sought bondholders'
approval to give it a call option to redeem its $108.25m of
5.5% notes due 2016 at par plus 6.5%, vs its earlier offer
for this series, which was rejected last month, for par plus
2.75%. For the $200m 6% notes due 2019, F&N raised
its proposed early redemption offer to par plus 9%. The
earlier proposal of par plus 3% was also rejected.
CordLife Group has increased its stake in its associated
company, StemLife Berhad to approximately 31.81%
stake after acquiring an additional 11.89% stake for
RM17.7m cash from various shareholders of Stemlife.
US Indices Last Close Pts Chg % Chg
Dow Jones 16,020.2 198.7 1.3
S&P 1,805.1 20.1 1.1
NASDAQ 4,062.5 29.4 0.7
Regional Indices
ST Index 3,114.2 (10.2) (0.3)
ST Small Cap 529.6 (1.7) (0.3)
Hang Seng 23,743.1 30.5 0.1
HSCEI 11,376.2 (19.6) (0.2)
HSCCI 4,646.2 2.7 0.1
KLCI 1,827.0 2.1 0.1
SET 1,361.6 (15.1) (1.1)
JCI 4,180.8 (36.1) (0.9)
PCOMP 6,014.9 (16.0) (0.3)
KOSPI 1,980.4 (4.4) (0.2)
TWSE 8,367.7 (7.8) (0.1)
Nikkei 15,299.9 122.4 0.8
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 574
Total Daily Vol (m shrs) 1,732
12m ST Index High 3,454
12m ST Index Low 3,004
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
6 Dec
Target Price
($)
Hutchison Port Hldgs Trust (US$) Buy 0.650 0.82
ComfortDelgro Buy 1.960 2.19
OCBC Buy 10.050 12.40
Singapore Airlines Buy 10.220 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
6 Dec
Target Price
($)
Ezion Holdings Buy 2.210 3.30
China Merchants Buy 0.925 1.20
CSE Global Buy 1.020 1.11
Nam Cheong Buy 0.290 0.42
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 3
Wilmar and global consumer goods leader Unilever signed a
Memorandum of Understanding (MoU) that aims to
accelerate sustainable market transformation for palm oil. In
parallel, and key part of the MoU, Wilmar launched a new
“No Deforestation, No Peat, No Exploitation” policy that
aims to advance an environmentally and socially responsible
palm oil industry.
Ipco International signed a Framework Agreement with the
Haiyang City Housing & Construction Planning Authority for
a 30-year natural gas distribution concession in Haiyang City,
Shandong Province, Peoples Republic of China. As
construction is expected to commence in the second half of
2014, there should be no significant impact in the current
financial year. The total investment cost is estimated at RMB
120m.
Separately, Ipco said that it is expected to report a loss and
asset impairment for the half year ended 31 October 2013.
This is primarily attributable to declines in value of Financial
Assets, of which the most significant is the Groups holding
of 9.74% of the issued share capital of Blumont Group Ltd
(Blumont).
Hiap Seng Engineering has been awarded, under a
consortium with Petroleum Maintenance Service Joint Stock
Company of Vietnam, a turnaround maintenance contract
worth approximately US$10m for the provision of
maintenance, overhaul and repair services including
inspection, testing and cleaning of process equipment for
Dung Quat Refinery in Vietnam.
Vallianz Holdings is exploring options to establish an Islamic
Trust Certificates Programme to broaden and deepen its
investors' pool.
Cacola Furniture is proposing to issue 2.0% equity linked
redeemable structured convertible notes due 2016 with an
aggregate principal amount of up to S$60m. The proceeds
are expected to be used for development and exploration of
new investment opportunities and other corporate activities.
China's exports handily beat forecasts in November, adding
to recent evidence of a stabilisation in the world's secondlargest
economy as its leaders embark on an ambitious
restructuring plan. Exports rose 12.7% y-o-y, against a
median forecast of a 7.1% rise. Imports rose 5.3%, below a
forecast of 7.2%, leaving a trade surplus of US$33.8 bn
against forecasts for US$21.7 bn
an additional 375 to 600 basis points to its original
proposal
We continue to see the prospect for the STI to head
higher towards 3290. But, the likelihood of this
happening looks to be delayed beyond the year-end lull
period.
On the economy, China’s recent data suggests that the
country’s economy is stabilising after a long slowdown.
Manufacturing and services PMIs have stabilized and the
producer price index has also stopped falling, offering
hope of a recovery.
Companies that can benefit from China’s anticipated
recovery include OSIM, which is poised to benefit from
rising consumption in China, given that 55% of its sales
are from North Asia. Midas is a recovery play on
expectations of more high-speed bullet train contracts
from China. Prospects for China Merchant remain bright.
Economic conditions in the G3 are improving as well.
Policy stimulus has lifted economic performance in Japan
while Europe is out of recession. The US is still on the
recovery path, albeit a slow one. With the macro
backdrop improving, being an export driven country,
Singapore is poised to benefit from the improved global
outlook. This has led our economist to raise Singapore
GDP growth forecasts for 2013 and 2014. One of the
sectors to benefit from the improving Singapore GDP
growth is the banking sector. Our pick is OCBC (BUY, TP:
S$12.40). Our banking analyst believes that there is
potential upside surprise for loan growth while net
interest margin is on a gradual uplift.
F&N has sweetened its offer to bondholders by tacking an
additional 375 to 600 basis points to its original proposal,
to avert a bond technical default as the group plans listing
spin-off of property business. F&N sought bondholders'
approval to give it a call option to redeem its $108.25m of
5.5% notes due 2016 at par plus 6.5%, vs its earlier offer
for this series, which was rejected last month, for par plus
2.75%. For the $200m 6% notes due 2019, F&N raised
its proposed early redemption offer to par plus 9%. The
earlier proposal of par plus 3% was also rejected.
CordLife Group has increased its stake in its associated
company, StemLife Berhad to approximately 31.81%
stake after acquiring an additional 11.89% stake for
RM17.7m cash from various shareholders of Stemlife.
US Indices Last Close Pts Chg % Chg
Dow Jones 16,020.2 198.7 1.3
S&P 1,805.1 20.1 1.1
NASDAQ 4,062.5 29.4 0.7
Regional Indices
ST Index 3,114.2 (10.2) (0.3)
ST Small Cap 529.6 (1.7) (0.3)
Hang Seng 23,743.1 30.5 0.1
HSCEI 11,376.2 (19.6) (0.2)
HSCCI 4,646.2 2.7 0.1
KLCI 1,827.0 2.1 0.1
SET 1,361.6 (15.1) (1.1)
JCI 4,180.8 (36.1) (0.9)
PCOMP 6,014.9 (16.0) (0.3)
KOSPI 1,980.4 (4.4) (0.2)
TWSE 8,367.7 (7.8) (0.1)
Nikkei 15,299.9 122.4 0.8
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 574
Total Daily Vol (m shrs) 1,732
12m ST Index High 3,454
12m ST Index Low 3,004
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
6 Dec
Target Price
($)
Hutchison Port Hldgs Trust (US$) Buy 0.650 0.82
ComfortDelgro Buy 1.960 2.19
OCBC Buy 10.050 12.40
Singapore Airlines Buy 10.220 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
6 Dec
Target Price
($)
Ezion Holdings Buy 2.210 3.30
China Merchants Buy 0.925 1.20
CSE Global Buy 1.020 1.11
Nam Cheong Buy 0.290 0.42
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 3
Wilmar and global consumer goods leader Unilever signed a
Memorandum of Understanding (MoU) that aims to
accelerate sustainable market transformation for palm oil. In
parallel, and key part of the MoU, Wilmar launched a new
“No Deforestation, No Peat, No Exploitation” policy that
aims to advance an environmentally and socially responsible
palm oil industry.
Ipco International signed a Framework Agreement with the
Haiyang City Housing & Construction Planning Authority for
a 30-year natural gas distribution concession in Haiyang City,
Shandong Province, Peoples Republic of China. As
construction is expected to commence in the second half of
2014, there should be no significant impact in the current
financial year. The total investment cost is estimated at RMB
120m.
Separately, Ipco said that it is expected to report a loss and
asset impairment for the half year ended 31 October 2013.
This is primarily attributable to declines in value of Financial
Assets, of which the most significant is the Groups holding
of 9.74% of the issued share capital of Blumont Group Ltd
(Blumont).
Hiap Seng Engineering has been awarded, under a
consortium with Petroleum Maintenance Service Joint Stock
Company of Vietnam, a turnaround maintenance contract
worth approximately US$10m for the provision of
maintenance, overhaul and repair services including
inspection, testing and cleaning of process equipment for
Dung Quat Refinery in Vietnam.
Vallianz Holdings is exploring options to establish an Islamic
Trust Certificates Programme to broaden and deepen its
investors' pool.
Cacola Furniture is proposing to issue 2.0% equity linked
redeemable structured convertible notes due 2016 with an
aggregate principal amount of up to S$60m. The proceeds
are expected to be used for development and exploration of
new investment opportunities and other corporate activities.
China's exports handily beat forecasts in November, adding
to recent evidence of a stabilisation in the world's secondlargest
economy as its leaders embark on an ambitious
restructuring plan. Exports rose 12.7% y-o-y, against a
median forecast of a 7.1% rise. Imports rose 5.3%, below a
forecast of 7.2%, leaving a trade surplus of US$33.8 bn
against forecasts for US$21.7 bn
Wednesday, December 4, 2013
DBS Vickers Report 5 Dec 13
Courts Asia – Upgrade to BUY on attractive valuations.
Target price remains at S$0.77.
CDL Hospitality Trust - Second foray into Maldives offers
strong growth potential. Maintain BUY, TP raised to
S$1.84.
Our analyst upgrades Courts Asia to BUY on attractive
valuations, and believe share price have more than factored in
the negative aspects. The recent 22% share price correction
presents accumulation opportunities. We believe credit
tightening has already factored into share price; and is likely
to end post FYE Mar’14. FY15F growth is expected to be
driven by new stores and relaxation of credit tightening.
Target price remains at S$0.77.
CDL Hospitality Trust (CDREIT) announced its acquisition of
Jumeirah Dhevanafushi, a 35-villa top-end luxury resort
located in Maldives, for US$59.6m (S$74.8m). This is
CDREIT’s 2nd acquisition in Maldives and will see its
contribution increase to c.7.8% (vs. 4.6% previously) of
FY14F net property income. This acquisition offers strong
growth potential; FY15F yield is estimated to hit a high of
7.7%. Maintain BUY, TP raised to S$1.84 (Prev S$1.80).
Cosco's Zhoushan yard has secured contracts worth US$54m
from an Asian buyer to build two 64k dwt bulk carriers. The
two bulk carriers are scheduled for delivery in the 4Q14. With
these contracts, YTD wins is lifted to slightly over US$3bn.
While Cosco's strong order win momentum is encouraging,
we need to monitor its execution and ability to translate these
orders to bottomline. In addition, overhang risk from drillship
saga persists. Maintain FULLY VALUED call; TP: S$0.76.
Yoma Strategic Holdings has entered into a new joint venture
with LCT Investment (LCT) and First Myanmar Investment
(FMI) to establish a Myanmar-incorporated joint venture
company to build and operate a steel mesh products
manufacturing plant in Yangon. Parties will invest in the Joint
Venture by way of equity and shareholders’ loans amounting
to an aggregate of US$6.5m.
US Indices Last Close Pts Chg % Chg
Dow Jones 15,889.8 (24.9) (0.2)
S&P 1,792.8 (2.3) (0.1)
NASDAQ 4,038.0 0.8 0.0
Regional Indices
ST Index 3,160.7 (27.0) (0.8)
ST Small Cap 534.2 (2.1) (0.4)
Hang Seng 23,728.7 (181.8) (0.8)
HSCEI 11,368.8 (79.6) (0.7)
HSCCI 4,651.3 (28.4) (0.6)
KLCI 1,821.9 (2.4) (0.1)
SET 1,376.6 (7.3) (0.5)
JCI 4,241.3 (47.5) (1.1)
PCOMP 6,105.2 (74.3) (1.2)
KOSPI 1,986.8 (22.6) (1.1)
TWSE 8,418.0 25.5 0.3
Nikkei 15,407.9 (341.7) (2.2)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 585
Total Daily Vol (m shrs) 2,277
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$)
4 Dec
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.670 0.82
ComfortDelgro Buy 1.950 2.19
OCBC Buy 10.250 12.40
Singapore Airlines Buy 10.540 11.40
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
4 Dec
Target Price
($)
Ezion Holdings Buy 2.210 3.30
China Merchants Buy 0.925 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
Swissco Holdings has placed orders for two anchor handling
tug supply vessels (AHTS) and a fast utility/crew boat with a
one plus one option. The newbuild vessels, excluding owner
supplied equipment, are worth an aggregate of S$42m.
Swissco continuously renews its fleet to maintain a low age
profile and to capitalise on strong demand for offshore
support vessels.
Ascendas Hospitality Trust (A-HTRUST), has signed a 5-year
management agreement with Oakwood Asia Pacific to
operate its serviced apartment property in Tokyo, Japan.
SBI Offshore proposed issue or placement of 22m new shares
at S$0.125 per share. The Placement Shares represents 14.1%
of the existing issued share capital and 12.38% of the
enlarged issued share capital. The Placement Price represents a
premium of approximately 12% to the last volume weighted
average price. The net proceeds of approximately S$2.7m will
be used for working capital and funding for existing projects
and for new market expansion, new business development
plans and new projects.
The global air cargo market continues gradual recovery with
the industry posting 4% y-o-y growth in traffic in October, as
most regions registered an expansion thanks to an improving
business environment. Global capacity was up 4.9%, which
caused freight load factor to come in at 46.4%, according to a
report by the International Air Transport Association (Iata).
However, load factors are showing signs of bottoming out
after a year of continued decline, Iata noted. The airfreight
market was also stronger in October compared to the month
before, when traffic contracted 0.3%. Asia-Pacific carriers,
which account for nearly 40% of global cargo traffic,
rebounded with volumes increasing by 2% in October after
posting year-on-year declines throughout 2013. However, this
was outstripped by a 4.1% bump in capacity, resulting in a
load factor of 56.2%.
US stocks ended mixed despite better-than expected economic
reports. In its Beige Book report on regional economic activity,
the Fed said the economy expanded at a "modest to moderate
pace" from early October to mid-November. It noted gains in
the auto and high-tech industries and reported that retailers
are "hopeful, but cautious" about the holiday shopping
season
Target price remains at S$0.77.
CDL Hospitality Trust - Second foray into Maldives offers
strong growth potential. Maintain BUY, TP raised to
S$1.84.
Our analyst upgrades Courts Asia to BUY on attractive
valuations, and believe share price have more than factored in
the negative aspects. The recent 22% share price correction
presents accumulation opportunities. We believe credit
tightening has already factored into share price; and is likely
to end post FYE Mar’14. FY15F growth is expected to be
driven by new stores and relaxation of credit tightening.
Target price remains at S$0.77.
CDL Hospitality Trust (CDREIT) announced its acquisition of
Jumeirah Dhevanafushi, a 35-villa top-end luxury resort
located in Maldives, for US$59.6m (S$74.8m). This is
CDREIT’s 2nd acquisition in Maldives and will see its
contribution increase to c.7.8% (vs. 4.6% previously) of
FY14F net property income. This acquisition offers strong
growth potential; FY15F yield is estimated to hit a high of
7.7%. Maintain BUY, TP raised to S$1.84 (Prev S$1.80).
Cosco's Zhoushan yard has secured contracts worth US$54m
from an Asian buyer to build two 64k dwt bulk carriers. The
two bulk carriers are scheduled for delivery in the 4Q14. With
these contracts, YTD wins is lifted to slightly over US$3bn.
While Cosco's strong order win momentum is encouraging,
we need to monitor its execution and ability to translate these
orders to bottomline. In addition, overhang risk from drillship
saga persists. Maintain FULLY VALUED call; TP: S$0.76.
Yoma Strategic Holdings has entered into a new joint venture
with LCT Investment (LCT) and First Myanmar Investment
(FMI) to establish a Myanmar-incorporated joint venture
company to build and operate a steel mesh products
manufacturing plant in Yangon. Parties will invest in the Joint
Venture by way of equity and shareholders’ loans amounting
to an aggregate of US$6.5m.
US Indices Last Close Pts Chg % Chg
Dow Jones 15,889.8 (24.9) (0.2)
S&P 1,792.8 (2.3) (0.1)
NASDAQ 4,038.0 0.8 0.0
Regional Indices
ST Index 3,160.7 (27.0) (0.8)
ST Small Cap 534.2 (2.1) (0.4)
Hang Seng 23,728.7 (181.8) (0.8)
HSCEI 11,368.8 (79.6) (0.7)
HSCCI 4,651.3 (28.4) (0.6)
KLCI 1,821.9 (2.4) (0.1)
SET 1,376.6 (7.3) (0.5)
JCI 4,241.3 (47.5) (1.1)
PCOMP 6,105.2 (74.3) (1.2)
KOSPI 1,986.8 (22.6) (1.1)
TWSE 8,418.0 25.5 0.3
Nikkei 15,407.9 (341.7) (2.2)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 585
Total Daily Vol (m shrs) 2,277
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$)
4 Dec
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.670 0.82
ComfortDelgro Buy 1.950 2.19
OCBC Buy 10.250 12.40
Singapore Airlines Buy 10.540 11.40
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
4 Dec
Target Price
($)
Ezion Holdings Buy 2.210 3.30
China Merchants Buy 0.925 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
Swissco Holdings has placed orders for two anchor handling
tug supply vessels (AHTS) and a fast utility/crew boat with a
one plus one option. The newbuild vessels, excluding owner
supplied equipment, are worth an aggregate of S$42m.
Swissco continuously renews its fleet to maintain a low age
profile and to capitalise on strong demand for offshore
support vessels.
Ascendas Hospitality Trust (A-HTRUST), has signed a 5-year
management agreement with Oakwood Asia Pacific to
operate its serviced apartment property in Tokyo, Japan.
SBI Offshore proposed issue or placement of 22m new shares
at S$0.125 per share. The Placement Shares represents 14.1%
of the existing issued share capital and 12.38% of the
enlarged issued share capital. The Placement Price represents a
premium of approximately 12% to the last volume weighted
average price. The net proceeds of approximately S$2.7m will
be used for working capital and funding for existing projects
and for new market expansion, new business development
plans and new projects.
The global air cargo market continues gradual recovery with
the industry posting 4% y-o-y growth in traffic in October, as
most regions registered an expansion thanks to an improving
business environment. Global capacity was up 4.9%, which
caused freight load factor to come in at 46.4%, according to a
report by the International Air Transport Association (Iata).
However, load factors are showing signs of bottoming out
after a year of continued decline, Iata noted. The airfreight
market was also stronger in October compared to the month
before, when traffic contracted 0.3%. Asia-Pacific carriers,
which account for nearly 40% of global cargo traffic,
rebounded with volumes increasing by 2% in October after
posting year-on-year declines throughout 2013. However, this
was outstripped by a 4.1% bump in capacity, resulting in a
load factor of 56.2%.
US stocks ended mixed despite better-than expected economic
reports. In its Beige Book report on regional economic activity,
the Fed said the economy expanded at a "modest to moderate
pace" from early October to mid-November. It noted gains in
the auto and high-tech industries and reported that retailers
are "hopeful, but cautious" about the holiday shopping
season
Daily summary 4 Dec 13
Europe and Dow were firmly down last
night. Dow -94 at 15915. Dow's trend is down. Dow's future
is now +40. Europe opened marginally up.
Asian bourses were mixed. Nikkei -342, ShanghaiC +30, Hangseng -182. STI -30 closing at 3158. Volume was 2.2b shares. Gainers were 141 to 286 losers.
Trend of STI turned back down.
Top volumes were Albedo +0.3, Vallianz +0.8, CharismaEner +0.3, KLW unchanged, GSH unchanged, HanKore -0.2, Blumont -1.7, Ipco -0.2, Transcu -0.1, MDR unchanged.
Market opened weaker with the weakness in Europe and Dow. It held quite steady but went tumbling in the afternoon to close near day low at -27.
Blue chips were mostly down. Penny and speculatives were weaker as well. Today saw another likely computer trading error when SkyOne was sold down from 12.9c to 1c. It quickly recovered to close -0.3c.
There were quite a bit of selling and volume increased to above 2b shares.
Europe and Dow are looking to recoup some of yesterday's losses.
Asian bourses were mixed. Nikkei -342, ShanghaiC +30, Hangseng -182. STI -30 closing at 3158. Volume was 2.2b shares. Gainers were 141 to 286 losers.
Trend of STI turned back down.
Top volumes were Albedo +0.3, Vallianz +0.8, CharismaEner +0.3, KLW unchanged, GSH unchanged, HanKore -0.2, Blumont -1.7, Ipco -0.2, Transcu -0.1, MDR unchanged.
Market opened weaker with the weakness in Europe and Dow. It held quite steady but went tumbling in the afternoon to close near day low at -27.
Blue chips were mostly down. Penny and speculatives were weaker as well. Today saw another likely computer trading error when SkyOne was sold down from 12.9c to 1c. It quickly recovered to close -0.3c.
There were quite a bit of selling and volume increased to above 2b shares.
Europe and Dow are looking to recoup some of yesterday's losses.
Tuesday, December 3, 2013
DBS Vickers Report 4 Dec 13
Singapore Banks - proxy for positive GDP momentum
Banks are a proxy for positive GDP momentum. Our
economist has upgraded Singapore 2014 GDP growth to
4.0% (from 3.5%). While banks have generally guided for
high single digit loan growth in 2014, there is room for
upside surprises given the positive outlook on the global front
which should pair nicely with Singapore’s GDP growth
outlook. NIM (net interest margin) may start to inch up as
credit spreads are expected to widen and we do not have to
wait for an upswing in the interest rate cycle. In the event of
an interest rate cycle revival, NIM and earnings would almost
certainly see an upswing. In terms of stock pick, we are
sticking to OCBC (BUY, TP: S$12.40) vs UOB (HOLD, TP:
S$21.90), a contrarian view.
CDL Hospitality Trusts is acquiring a second Maldives
property, Jumeirah Dhevanafushi. To be acquired at
US$59.6m at a pro forma annualised net property income
yield of 6.2% for the nine months ended 30 September
2013, this acquisition is DPS accretion of 2.2%, with potential
upside as the resort is currently still undergoing gestation.
This new high quality resort is well-positioned in the luxury
segment to benefit from the growing affluence of Asian
travellers and attendant demand for top-tier resort
experiences, presenting opportunity for CDLHT to further
participate in the buoyant hospitality sector of the premium
Maldives market, one of the highest RevPAR markets in the
world.
Tiong Seng Holdings has secured a S$204.5m contract from
Housing and Development Board (HDB) to construct 11
blocks of 14/16-storey residential building together with two
blocks of multi-storey carpark, commercial/community
facilities, precinct pavilion at Woodlands Crescent and
Woodlands Rise. The new contract win brings latest order
book to S$1.28 bn.
Global Logistic Properties has signed a lease agreement of
approximately 30,000 sqm with Womai.com, the B2C ecommerce
platform of COFCO, China’s largest food
processing, manufacturing and trading company. GLP’s
partnership with COFCO now extends to three cities.
US Indices Last Close Pts Chg % Chg
Dow Jones 15,914.6 (94.1) (0.6)
S&P 1,795.2 (5.8) (0.3)
NASDAQ 4,037.2 (8.1) (0.2)
Regional Indices
ST Index 3,187.7 (1.1) (0.0)
ST Small Cap 536.2 1.1 0.2
Hang Seng 23,910.5 (128.1) (0.5)
HSCEI 11,448.4 (99.7) (0.9)
HSCCI 4,679.7 (23.6) (0.5)
KLCI 1,824.3 6.1 0.3
SET 1,383.9 9.6 0.7
JCI 4,288.8 (33.2) (0.8)
PCOMP 6,179.5 (43.9) (0.7)
KOSPI 2,009.4 (21.4) (1.1)
TWSE 8,392.6 (22.1) (0.3)
Nikkei 15,749.7 94.6 0.6
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 583
Total Daily Vol (m shrs) 1,642
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$)
3 Dec
Target Price
(S$)
Hutchison Port Holdings Trust Buy 0.680 0.82
ComfortDelgro Buy 1.960 2.19
OCBC Buy 10.350 12.40
Singapore Airlines Buy 10.530 11.40
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
3 Dec
Target Price
($)
Ezion Holdings Buy 2.190 3.30
China Merchants Buy 0.925 1.20
CSE Global Buy 0.985 1.11
Nam Cheong Buy 0.295 0.42
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
WE Holdings has entered into an agreement to acquire
Everbest Industrial with profit guarantee from vendor of at
least US$1m a year for each of FY2015, FY2016 and FY2017.
Everbest Industrial is a Hong Kong-based components
distributor with 13 years of history and profitable track record
for past three financial years. This acquisition is in line with the
group’s plan to achieve economies of scale in its electronic and
component business and to broaden the revenue stream.
Singapore's latest purchasing managers' index (PMI) reflects a
mixed manufacturing performance in November. While the
overall PMI reading fell short of expectations mainly due to
dips in orders and output - dipping 0.4 to expand at 50.8 last
month - the electronics index continued to strengthen. The
electronics PMI - which expanded further to 51.2 from 51 in
October - gels well with recent economic indicators; just a
week ago, another double- digit jump in electronics output
boosted Singapore's manufacturing performance in October.
Singapore households have been given a clean bill of health as
far as their debt is concerned. Despite warnings of an
increasing exposure to mortgages, net wealth has grown
robustly over the past decade and stands at about four times
GDP, according to the Monetary Authority of Singapore
Financial Stability Review 2013. While household debt
continues to increase, savings are piling up faster and massive
cash deposits outweigh total liabilities, the review showed.
Alongside firm growth of household sector assets and net
wealth over the past few years, household debt has trended
up, with mortgages accounting for a large share of household
sector liabilities. Property assets account for a large share of
household assets, and property price increases have been the
key driver of the significant rise in household net wealth over
the past few years. Housing loans account for about threequarters
of total household liabilities, and could be a
significant source of risk for households, MAS said.
The household debt-to-income ratio has risen from a low of
1.9 times in 2008 during the Lehman crisis to 2.1 times in
2012. In addition, household debt has grown more quickly
than household assets since Q2 2011. In Q3 2013, household
debt grew by 7.9% y-o-y, while household assets grew by
6.8%
Banks are a proxy for positive GDP momentum. Our
economist has upgraded Singapore 2014 GDP growth to
4.0% (from 3.5%). While banks have generally guided for
high single digit loan growth in 2014, there is room for
upside surprises given the positive outlook on the global front
which should pair nicely with Singapore’s GDP growth
outlook. NIM (net interest margin) may start to inch up as
credit spreads are expected to widen and we do not have to
wait for an upswing in the interest rate cycle. In the event of
an interest rate cycle revival, NIM and earnings would almost
certainly see an upswing. In terms of stock pick, we are
sticking to OCBC (BUY, TP: S$12.40) vs UOB (HOLD, TP:
S$21.90), a contrarian view.
CDL Hospitality Trusts is acquiring a second Maldives
property, Jumeirah Dhevanafushi. To be acquired at
US$59.6m at a pro forma annualised net property income
yield of 6.2% for the nine months ended 30 September
2013, this acquisition is DPS accretion of 2.2%, with potential
upside as the resort is currently still undergoing gestation.
This new high quality resort is well-positioned in the luxury
segment to benefit from the growing affluence of Asian
travellers and attendant demand for top-tier resort
experiences, presenting opportunity for CDLHT to further
participate in the buoyant hospitality sector of the premium
Maldives market, one of the highest RevPAR markets in the
world.
Tiong Seng Holdings has secured a S$204.5m contract from
Housing and Development Board (HDB) to construct 11
blocks of 14/16-storey residential building together with two
blocks of multi-storey carpark, commercial/community
facilities, precinct pavilion at Woodlands Crescent and
Woodlands Rise. The new contract win brings latest order
book to S$1.28 bn.
Global Logistic Properties has signed a lease agreement of
approximately 30,000 sqm with Womai.com, the B2C ecommerce
platform of COFCO, China’s largest food
processing, manufacturing and trading company. GLP’s
partnership with COFCO now extends to three cities.
US Indices Last Close Pts Chg % Chg
Dow Jones 15,914.6 (94.1) (0.6)
S&P 1,795.2 (5.8) (0.3)
NASDAQ 4,037.2 (8.1) (0.2)
Regional Indices
ST Index 3,187.7 (1.1) (0.0)
ST Small Cap 536.2 1.1 0.2
Hang Seng 23,910.5 (128.1) (0.5)
HSCEI 11,448.4 (99.7) (0.9)
HSCCI 4,679.7 (23.6) (0.5)
KLCI 1,824.3 6.1 0.3
SET 1,383.9 9.6 0.7
JCI 4,288.8 (33.2) (0.8)
PCOMP 6,179.5 (43.9) (0.7)
KOSPI 2,009.4 (21.4) (1.1)
TWSE 8,392.6 (22.1) (0.3)
Nikkei 15,749.7 94.6 0.6
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 583
Total Daily Vol (m shrs) 1,642
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$)
3 Dec
Target Price
(S$)
Hutchison Port Holdings Trust Buy 0.680 0.82
ComfortDelgro Buy 1.960 2.19
OCBC Buy 10.350 12.40
Singapore Airlines Buy 10.530 11.40
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
3 Dec
Target Price
($)
Ezion Holdings Buy 2.190 3.30
China Merchants Buy 0.925 1.20
CSE Global Buy 0.985 1.11
Nam Cheong Buy 0.295 0.42
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
WE Holdings has entered into an agreement to acquire
Everbest Industrial with profit guarantee from vendor of at
least US$1m a year for each of FY2015, FY2016 and FY2017.
Everbest Industrial is a Hong Kong-based components
distributor with 13 years of history and profitable track record
for past three financial years. This acquisition is in line with the
group’s plan to achieve economies of scale in its electronic and
component business and to broaden the revenue stream.
Singapore's latest purchasing managers' index (PMI) reflects a
mixed manufacturing performance in November. While the
overall PMI reading fell short of expectations mainly due to
dips in orders and output - dipping 0.4 to expand at 50.8 last
month - the electronics index continued to strengthen. The
electronics PMI - which expanded further to 51.2 from 51 in
October - gels well with recent economic indicators; just a
week ago, another double- digit jump in electronics output
boosted Singapore's manufacturing performance in October.
Singapore households have been given a clean bill of health as
far as their debt is concerned. Despite warnings of an
increasing exposure to mortgages, net wealth has grown
robustly over the past decade and stands at about four times
GDP, according to the Monetary Authority of Singapore
Financial Stability Review 2013. While household debt
continues to increase, savings are piling up faster and massive
cash deposits outweigh total liabilities, the review showed.
Alongside firm growth of household sector assets and net
wealth over the past few years, household debt has trended
up, with mortgages accounting for a large share of household
sector liabilities. Property assets account for a large share of
household assets, and property price increases have been the
key driver of the significant rise in household net wealth over
the past few years. Housing loans account for about threequarters
of total household liabilities, and could be a
significant source of risk for households, MAS said.
The household debt-to-income ratio has risen from a low of
1.9 times in 2008 during the Lehman crisis to 2.1 times in
2012. In addition, household debt has grown more quickly
than household assets since Q2 2011. In Q3 2013, household
debt grew by 7.9% y-o-y, while household assets grew by
6.8%
DBS Vickers Report 4 Dec 13
Singapore Banks - proxy for positive GDP momentum
Banks are a proxy for positive GDP momentum. Our
economist has upgraded Singapore 2014 GDP growth to
4.0% (from 3.5%). While banks have generally guided for
high single digit loan growth in 2014, there is room for
upside surprises given the positive outlook on the global front
which should pair nicely with Singapore’s GDP growth
outlook. NIM (net interest margin) may start to inch up as
credit spreads are expected to widen and we do not have to
wait for an upswing in the interest rate cycle. In the event of
an interest rate cycle revival, NIM and earnings would almost
certainly see an upswing. In terms of stock pick, we are
sticking to OCBC (BUY, TP: S$12.40) vs UOB (HOLD, TP:
S$21.90), a contrarian view.
CDL Hospitality Trusts is acquiring a second Maldives
property, Jumeirah Dhevanafushi. To be acquired at
US$59.6m at a pro forma annualised net property income
yield of 6.2% for the nine months ended 30 September
2013, this acquisition is DPS accretion of 2.2%, with potential
upside as the resort is currently still undergoing gestation.
This new high quality resort is well-positioned in the luxury
segment to benefit from the growing affluence of Asian
travellers and attendant demand for top-tier resort
experiences, presenting opportunity for CDLHT to further
participate in the buoyant hospitality sector of the premium
Maldives market, one of the highest RevPAR markets in the
world.
Tiong Seng Holdings has secured a S$204.5m contract from
Housing and Development Board (HDB) to construct 11
blocks of 14/16-storey residential building together with two
blocks of multi-storey carpark, commercial/community
facilities, precinct pavilion at Woodlands Crescent and
Woodlands Rise. The new contract win brings latest order
book to S$1.28 bn.
Global Logistic Properties has signed a lease agreement of
approximately 30,000 sqm with Womai.com, the B2C ecommerce
platform of COFCO, China’s largest food
processing, manufacturing and trading company. GLP’s
partnership with COFCO now extends to three cities.
US Indices Last Close Pts Chg % Chg
Dow Jones 15,914.6 (94.1) (0.6)
S&P 1,795.2 (5.8) (0.3)
NASDAQ 4,037.2 (8.1) (0.2)
Regional Indices
ST Index 3,187.7 (1.1) (0.0)
ST Small Cap 536.2 1.1 0.2
Hang Seng 23,910.5 (128.1) (0.5)
HSCEI 11,448.4 (99.7) (0.9)
HSCCI 4,679.7 (23.6) (0.5)
KLCI 1,824.3 6.1 0.3
SET 1,383.9 9.6 0.7
JCI 4,288.8 (33.2) (0.8)
PCOMP 6,179.5 (43.9) (0.7)
KOSPI 2,009.4 (21.4) (1.1)
TWSE 8,392.6 (22.1) (0.3)
Nikkei 15,749.7 94.6 0.6
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 583
Total Daily Vol (m shrs) 1,642
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$)
3 Dec
Target Price
(S$)
Hutchison Port Holdings Trust Buy 0.680 0.82
ComfortDelgro Buy 1.960 2.19
OCBC Buy 10.350 12.40
Singapore Airlines Buy 10.530 11.40
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
3 Dec
Target Price
($)
Ezion Holdings Buy 2.190 3.30
China Merchants Buy 0.925 1.20
CSE Global Buy 0.985 1.11
Nam Cheong Buy 0.295 0.42
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
WE Holdings has entered into an agreement to acquire
Everbest Industrial with profit guarantee from vendor of at
least US$1m a year for each of FY2015, FY2016 and FY2017.
Everbest Industrial is a Hong Kong-based components
distributor with 13 years of history and profitable track record
for past three financial years. This acquisition is in line with the
group’s plan to achieve economies of scale in its electronic and
component business and to broaden the revenue stream.
Singapore's latest purchasing managers' index (PMI) reflects a
mixed manufacturing performance in November. While the
overall PMI reading fell short of expectations mainly due to
dips in orders and output - dipping 0.4 to expand at 50.8 last
month - the electronics index continued to strengthen. The
electronics PMI - which expanded further to 51.2 from 51 in
October - gels well with recent economic indicators; just a
week ago, another double- digit jump in electronics output
boosted Singapore's manufacturing performance in October.
Singapore households have been given a clean bill of health as
far as their debt is concerned. Despite warnings of an
increasing exposure to mortgages, net wealth has grown
robustly over the past decade and stands at about four times
GDP, according to the Monetary Authority of Singapore
Financial Stability Review 2013. While household debt
continues to increase, savings are piling up faster and massive
cash deposits outweigh total liabilities, the review showed.
Alongside firm growth of household sector assets and net
wealth over the past few years, household debt has trended
up, with mortgages accounting for a large share of household
sector liabilities. Property assets account for a large share of
household assets, and property price increases have been the
key driver of the significant rise in household net wealth over
the past few years. Housing loans account for about threequarters
of total household liabilities, and could be a
significant source of risk for households, MAS said.
The household debt-to-income ratio has risen from a low of
1.9 times in 2008 during the Lehman crisis to 2.1 times in
2012. In addition, household debt has grown more quickly
than household assets since Q2 2011. In Q3 2013, household
debt grew by 7.9% y-o-y, while household assets grew by
6.8%
Banks are a proxy for positive GDP momentum. Our
economist has upgraded Singapore 2014 GDP growth to
4.0% (from 3.5%). While banks have generally guided for
high single digit loan growth in 2014, there is room for
upside surprises given the positive outlook on the global front
which should pair nicely with Singapore’s GDP growth
outlook. NIM (net interest margin) may start to inch up as
credit spreads are expected to widen and we do not have to
wait for an upswing in the interest rate cycle. In the event of
an interest rate cycle revival, NIM and earnings would almost
certainly see an upswing. In terms of stock pick, we are
sticking to OCBC (BUY, TP: S$12.40) vs UOB (HOLD, TP:
S$21.90), a contrarian view.
CDL Hospitality Trusts is acquiring a second Maldives
property, Jumeirah Dhevanafushi. To be acquired at
US$59.6m at a pro forma annualised net property income
yield of 6.2% for the nine months ended 30 September
2013, this acquisition is DPS accretion of 2.2%, with potential
upside as the resort is currently still undergoing gestation.
This new high quality resort is well-positioned in the luxury
segment to benefit from the growing affluence of Asian
travellers and attendant demand for top-tier resort
experiences, presenting opportunity for CDLHT to further
participate in the buoyant hospitality sector of the premium
Maldives market, one of the highest RevPAR markets in the
world.
Tiong Seng Holdings has secured a S$204.5m contract from
Housing and Development Board (HDB) to construct 11
blocks of 14/16-storey residential building together with two
blocks of multi-storey carpark, commercial/community
facilities, precinct pavilion at Woodlands Crescent and
Woodlands Rise. The new contract win brings latest order
book to S$1.28 bn.
Global Logistic Properties has signed a lease agreement of
approximately 30,000 sqm with Womai.com, the B2C ecommerce
platform of COFCO, China’s largest food
processing, manufacturing and trading company. GLP’s
partnership with COFCO now extends to three cities.
US Indices Last Close Pts Chg % Chg
Dow Jones 15,914.6 (94.1) (0.6)
S&P 1,795.2 (5.8) (0.3)
NASDAQ 4,037.2 (8.1) (0.2)
Regional Indices
ST Index 3,187.7 (1.1) (0.0)
ST Small Cap 536.2 1.1 0.2
Hang Seng 23,910.5 (128.1) (0.5)
HSCEI 11,448.4 (99.7) (0.9)
HSCCI 4,679.7 (23.6) (0.5)
KLCI 1,824.3 6.1 0.3
SET 1,383.9 9.6 0.7
JCI 4,288.8 (33.2) (0.8)
PCOMP 6,179.5 (43.9) (0.7)
KOSPI 2,009.4 (21.4) (1.1)
TWSE 8,392.6 (22.1) (0.3)
Nikkei 15,749.7 94.6 0.6
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 583
Total Daily Vol (m shrs) 1,642
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$)
3 Dec
Target Price
(S$)
Hutchison Port Holdings Trust Buy 0.680 0.82
ComfortDelgro Buy 1.960 2.19
OCBC Buy 10.350 12.40
Singapore Airlines Buy 10.530 11.40
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
3 Dec
Target Price
($)
Ezion Holdings Buy 2.190 3.30
China Merchants Buy 0.925 1.20
CSE Global Buy 0.985 1.11
Nam Cheong Buy 0.295 0.42
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
WE Holdings has entered into an agreement to acquire
Everbest Industrial with profit guarantee from vendor of at
least US$1m a year for each of FY2015, FY2016 and FY2017.
Everbest Industrial is a Hong Kong-based components
distributor with 13 years of history and profitable track record
for past three financial years. This acquisition is in line with the
group’s plan to achieve economies of scale in its electronic and
component business and to broaden the revenue stream.
Singapore's latest purchasing managers' index (PMI) reflects a
mixed manufacturing performance in November. While the
overall PMI reading fell short of expectations mainly due to
dips in orders and output - dipping 0.4 to expand at 50.8 last
month - the electronics index continued to strengthen. The
electronics PMI - which expanded further to 51.2 from 51 in
October - gels well with recent economic indicators; just a
week ago, another double- digit jump in electronics output
boosted Singapore's manufacturing performance in October.
Singapore households have been given a clean bill of health as
far as their debt is concerned. Despite warnings of an
increasing exposure to mortgages, net wealth has grown
robustly over the past decade and stands at about four times
GDP, according to the Monetary Authority of Singapore
Financial Stability Review 2013. While household debt
continues to increase, savings are piling up faster and massive
cash deposits outweigh total liabilities, the review showed.
Alongside firm growth of household sector assets and net
wealth over the past few years, household debt has trended
up, with mortgages accounting for a large share of household
sector liabilities. Property assets account for a large share of
household assets, and property price increases have been the
key driver of the significant rise in household net wealth over
the past few years. Housing loans account for about threequarters
of total household liabilities, and could be a
significant source of risk for households, MAS said.
The household debt-to-income ratio has risen from a low of
1.9 times in 2008 during the Lehman crisis to 2.1 times in
2012. In addition, household debt has grown more quickly
than household assets since Q2 2011. In Q3 2013, household
debt grew by 7.9% y-o-y, while household assets grew by
6.8%
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