Dow and Europe were marginally up last
night. Dow +40 at 16573. Dow's trend is up with a golden crossing.
Dow's future is now +18. Europe opened slightly down.
Asian bourses were mixed. Nikkei
+126, ShanghaiC -15, Hangseng +41. STI closed +25 at 3218. Volume
was 2.4b shares. Gainers were 267 to 215 losers.
Trend of STI is up.
Top volumes were HanKore -0.3, KLW unchanged,
Noble +6, Transcu unchanged, LionGold -2.6, AusGroup +6.5, Albedo unchanged,
Memstar -0.1, Blumont -0.1, WCorp +0.8.
Market gapped up on opening and remained
up the whole day. It closed near day high. Blue chips were mostly
firmer. Penny and speculatives were mixed. The three counters of LionGold,
Blumont and Asiason fell on reports of CAD investigation.
Both the trends of STI and Dow are moving
up. Dow and Europe are looking firm at the moment. Tomorrow could see a
bit of profit taking at the end of session after the last few days of gains.
Thursday, April 3, 2014
DBS Vickers Report
Today’s Focus
Noble Group – Proposed disposal of the agriculture arm a
positive move. Upgrade to BUY; target price raised to
S$1.53
Noble Group’s proposed disposal of a 51% stake in its
agriculture arm - Noble Agriculture Limited (NAL) to COFCO is
a positive move. This is consistent with Noble’s asset-light
strategy, enabling capital recycling to enhance shareholders’
returns and allowing Noble to channel focus to its more
profitable Energy and Metals, Minerals and Ores (MMO)
segments. Agriculture segment suffered losses last year and has
been a big concern and drag to Noble’s share price. We believe
the reduced exposure to this segment (to be deconsolidated
and reclassified as a 49%- owned associate), improved balance
sheet & ROE post divestment and potential higher return from
capital recycling, warrant a re-rating on the stock. Upgrade to
BUY; target price raised to S$ 1.53 (Prev S$ 1.09).
Biosensors and Terumo Corporation announced an extension
of their existing licensing agreements and an expansion of their
sales collaboration in Japan, with regard to Terumo’s Nobori®
drug-eluting stent. Under the agreements, Terumo will
continue to incorporate BioMatrix™ technology in the
production, marketing and sales of the Nobori® drug-eluting
stent in territories outside of Japan, excluding the United
States, until December 2016. As per the original agreements,
Terumo currently benefits from its existing rights in Japan to
manufacture, market and sell Nobori®. By expanding the
existing sales collaboration between Terumo and Biosensors
Japan, the Japanese subsidiary of Biosensors, the companies
intend to bolster Japanese sales of Nobori® and increase its
market share.
The man who led the transformation of Malaysian natural gas
exporter Petronas into a global oil-and-gas company will soon
helm Sembcorp Marine. Mohd Hassan Marican, who is now
deputy chairman of Sembcorp Marine, succeeds Goh Geok
Ling as chairman of the board on April 22. He will also assume
Mr Goh's role as chairman of both the Executive Committee
and the Executive Resource & Compensation Committee as
well as a member of the Nominating Committee.
US Indices Last Close Pts Chg % Chg
Dow Jones 16,573.0 40.4 0.2
S&P 1,890.9 5.4 0.3
NASDAQ 4,276.5 8.4 0.2
Regional Indices
ST Index 3,192.8 (5.7) (0.2)
ST Small Cap 543.3 (0.1) (0.0)
Hang Seng 22,523.9 75.4 0.3
HSCEI 10,022.8 (75.5) (0.7)
HSCCI 4,224.5 28.0 0.7
KLCI 1,852.0 4.2 0.2
SET 1,396.6 9.1 0.7
JCI 4,870.2 (3.7) (0.1)
PCOMP 6,587.7 73.0 1.1
KOSPI 1,997.3 5.3 0.3
TWSE 8,905.5 32.3 0.4
Nikkei 14,946.3 154.3 1.0
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 594
Total Daily Vol (m shrs) 2,307
12m ST Index High 3,454
12m ST Index Low 2,960
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
2 Apr
Target Price
(S$)
ComfortDelgro Buy 2.02 2.19
Global Logistic Properties Buy 2.59 3.31
Keppel Corp Buy 10.84 12.60
Stock Picks – Small Cap
Rec’n Price (S$)
2 Apr
Target Price
(S$)
Ezion Holdings Buy 2.17 3.26
Goodpack Buy 2.18 2.60
China Merchants Buy 0.96 1.32
Pacific Radiance Ltd Buy 1.08 1.20
Nam Cheong Buy 0.355 0.46
Centurion Corporation Buy 0.735 0.86
Singapore
Wired Daily
Page 2
Jason Holdings is proposing a share split of every one (1)
share in the capital of the Company into two (2) shares.
Upon the completion of the Proposed Share Split, the
Company shall have an issued and paid-up share capital of
S$9.1m comprising 216m shares.
The auditor for airport logistics services company Pteris
Global has flagged "significant doubt" over the firm's ability
to continue as a going concern. This comes as a major
shareholder and director tries to oust the chairman and
other directors from the board, and calls for a review of the
terms of a proposed reverse takeover (RTO) by passenger
boarding bridge manufacturer Tianda Group. Pteris Global's
net losses of $29.7m exceed its net current assets at Dec 31,
2003, of $6.63m, KPMG noted.
Singapore’s overall Purchasing Managers' Index (PMI)
dipped 0.1 to 50.8 in March, below market forecast for a
reading of 51.1. The dip in overall PMI was attributed to
lower new orders as well as lower levels of production
output and inventory. The electronics PMI rose 0.4 to a
reading of 51.6 last month - exactly in line with economists'
expectations. Sub-indices for the electronics sector index
seem to bear this out - growth was registered in new orders
from domestic and overseas markets, and electronics
production output and imports continued to expand.
In property news, Spring Grove in the prime Grange Road
area has arrived at the requisite 80% consensus from
owners to put the condominium up for en bloc sale, after
offer price was raised to $2,600 psf from the earlier
reported $2,100 psf offered last March. Given that the
strata area of the condominium is about 438,576 sq ft, the
condominium could hit the market at a reserve price of
$1.14 bn, according to the market.
MCL Land's upcoming condominium project, Lakeville,
located in the Jurong Lake District, will be launched with an
average price of $1,250 to $1,350 psf. This development
sits on a 240,654 sq ft plot with a 99-year lease. It was
snapped up by MCL in January last year for $439m, or $651
psf per plot ratio.
US markets rose, bonds fell after the March ADP
employment report showed companies added 191k jobs
(consensus 195k). The non-farm payrolls number scheduled
for release tomorrow is expected to register a reading of
200k. The USD strengthened as it climbed to a 2-month
high against the yen. Copper advanced 0.2% and gold also
gained ground.
Noble Group – Proposed disposal of the agriculture arm a
positive move. Upgrade to BUY; target price raised to
S$1.53
Noble Group’s proposed disposal of a 51% stake in its
agriculture arm - Noble Agriculture Limited (NAL) to COFCO is
a positive move. This is consistent with Noble’s asset-light
strategy, enabling capital recycling to enhance shareholders’
returns and allowing Noble to channel focus to its more
profitable Energy and Metals, Minerals and Ores (MMO)
segments. Agriculture segment suffered losses last year and has
been a big concern and drag to Noble’s share price. We believe
the reduced exposure to this segment (to be deconsolidated
and reclassified as a 49%- owned associate), improved balance
sheet & ROE post divestment and potential higher return from
capital recycling, warrant a re-rating on the stock. Upgrade to
BUY; target price raised to S$ 1.53 (Prev S$ 1.09).
Biosensors and Terumo Corporation announced an extension
of their existing licensing agreements and an expansion of their
sales collaboration in Japan, with regard to Terumo’s Nobori®
drug-eluting stent. Under the agreements, Terumo will
continue to incorporate BioMatrix™ technology in the
production, marketing and sales of the Nobori® drug-eluting
stent in territories outside of Japan, excluding the United
States, until December 2016. As per the original agreements,
Terumo currently benefits from its existing rights in Japan to
manufacture, market and sell Nobori®. By expanding the
existing sales collaboration between Terumo and Biosensors
Japan, the Japanese subsidiary of Biosensors, the companies
intend to bolster Japanese sales of Nobori® and increase its
market share.
The man who led the transformation of Malaysian natural gas
exporter Petronas into a global oil-and-gas company will soon
helm Sembcorp Marine. Mohd Hassan Marican, who is now
deputy chairman of Sembcorp Marine, succeeds Goh Geok
Ling as chairman of the board on April 22. He will also assume
Mr Goh's role as chairman of both the Executive Committee
and the Executive Resource & Compensation Committee as
well as a member of the Nominating Committee.
US Indices Last Close Pts Chg % Chg
Dow Jones 16,573.0 40.4 0.2
S&P 1,890.9 5.4 0.3
NASDAQ 4,276.5 8.4 0.2
Regional Indices
ST Index 3,192.8 (5.7) (0.2)
ST Small Cap 543.3 (0.1) (0.0)
Hang Seng 22,523.9 75.4 0.3
HSCEI 10,022.8 (75.5) (0.7)
HSCCI 4,224.5 28.0 0.7
KLCI 1,852.0 4.2 0.2
SET 1,396.6 9.1 0.7
JCI 4,870.2 (3.7) (0.1)
PCOMP 6,587.7 73.0 1.1
KOSPI 1,997.3 5.3 0.3
TWSE 8,905.5 32.3 0.4
Nikkei 14,946.3 154.3 1.0
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 594
Total Daily Vol (m shrs) 2,307
12m ST Index High 3,454
12m ST Index Low 2,960
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
2 Apr
Target Price
(S$)
ComfortDelgro Buy 2.02 2.19
Global Logistic Properties Buy 2.59 3.31
Keppel Corp Buy 10.84 12.60
Stock Picks – Small Cap
Rec’n Price (S$)
2 Apr
Target Price
(S$)
Ezion Holdings Buy 2.17 3.26
Goodpack Buy 2.18 2.60
China Merchants Buy 0.96 1.32
Pacific Radiance Ltd Buy 1.08 1.20
Nam Cheong Buy 0.355 0.46
Centurion Corporation Buy 0.735 0.86
Singapore
Wired Daily
Page 2
Jason Holdings is proposing a share split of every one (1)
share in the capital of the Company into two (2) shares.
Upon the completion of the Proposed Share Split, the
Company shall have an issued and paid-up share capital of
S$9.1m comprising 216m shares.
The auditor for airport logistics services company Pteris
Global has flagged "significant doubt" over the firm's ability
to continue as a going concern. This comes as a major
shareholder and director tries to oust the chairman and
other directors from the board, and calls for a review of the
terms of a proposed reverse takeover (RTO) by passenger
boarding bridge manufacturer Tianda Group. Pteris Global's
net losses of $29.7m exceed its net current assets at Dec 31,
2003, of $6.63m, KPMG noted.
Singapore’s overall Purchasing Managers' Index (PMI)
dipped 0.1 to 50.8 in March, below market forecast for a
reading of 51.1. The dip in overall PMI was attributed to
lower new orders as well as lower levels of production
output and inventory. The electronics PMI rose 0.4 to a
reading of 51.6 last month - exactly in line with economists'
expectations. Sub-indices for the electronics sector index
seem to bear this out - growth was registered in new orders
from domestic and overseas markets, and electronics
production output and imports continued to expand.
In property news, Spring Grove in the prime Grange Road
area has arrived at the requisite 80% consensus from
owners to put the condominium up for en bloc sale, after
offer price was raised to $2,600 psf from the earlier
reported $2,100 psf offered last March. Given that the
strata area of the condominium is about 438,576 sq ft, the
condominium could hit the market at a reserve price of
$1.14 bn, according to the market.
MCL Land's upcoming condominium project, Lakeville,
located in the Jurong Lake District, will be launched with an
average price of $1,250 to $1,350 psf. This development
sits on a 240,654 sq ft plot with a 99-year lease. It was
snapped up by MCL in January last year for $439m, or $651
psf per plot ratio.
US markets rose, bonds fell after the March ADP
employment report showed companies added 191k jobs
(consensus 195k). The non-farm payrolls number scheduled
for release tomorrow is expected to register a reading of
200k. The USD strengthened as it climbed to a 2-month
high against the yen. Copper advanced 0.2% and gold also
gained ground.
OCBC Report
| KEY IDEA Noble Group: To dispose 51% stake in Noble Agri Limited Noble Group Limited has entered into a share sale agreement with COFCO (Hong Kong) Limited to dispose its 51% stake in Noble Agri Limited (NAL) for an initial payment of US$1.5b. The closing amount will be adjusted after completion so that the final consideration is equal to 1.15x of 51% of the audited book value of NAL Group for FY14. As before, we see the proposed disposal as being consistent with Noble’s asset-light strategy, where it does not have to own upstream assets as long as it can secure the off-take. Anyway, it is still too early to make any drastic estimate changes, given that the deal is subject to several conditions with a long stop date of 31 Dec 2014 (unless mutually extended or terminated). Nevertheless, our fair value improves from S$1.03 to S$1.26 as we are raising our valuation peg from 11x to 13.5x FY14F EPS to reflect the improved investor sentiment towards commodity plays in general. Maintain HOLD. (Carey Wong) MORE REPORTS Biosensors International Group: Enhances relationship with Terumo Biosensors International Group (BIG) announced last evening that it had struck a deal with Terumo Corporation to extend its licensing agreement, such that the latter may continue to incorporate BIG’s BioMatrix™ drug-eluting stent (DES) technology in the production, marketing and sales of the Nobori DES in territories outside the U.S. and Japan until Dec 2016. The previous licensing agreement was supposed to expire in Dec 2014. This is the second time in which this licensing agreement has been extended. Terumo’s Nobori DES is currently sold in over 20 countries across Europe, Asia and Latin America. But given that Terumo is planning to launch its next-generation “Ultimaster™“ in Jun 2014, we believe it is highly probable that this could be the last licensing extension with BIG for this current agreement. Meanwhile, BIG also said that it is expanding its existing sales collaboration with Terumo in Japan in a bid to increase its market share amid strong competitive pressures. We maintain our SELL rating on BIG with a fair value estimate of S$0.77. (Wong Teck Ching Andy) |
For more information on the above, visit www.ocbcresearch.comfor the detailed report. |
NEWS HEADLINES - The S&P 500 closed at another record high as signs of steady private-sector hiring suggested that the economy was slowly building momentum after a winter-related pullback. - Singapore's latest PMI fell short of expectations, dipping a marginal 0.1 to 50.8 in Mar. - Capitaland's wholly owned serviced residence business unit, The Ascott Limited, has acquired an operating serviced residence in Hong Kong for HK$545m (S$88.8m). - Global Logistic Properties has signed two lease agreements, for space totalling 13,000 sqm, with China National Pharmaceutical Group in an expansion of their partnership. - Yangzijiang Shipbuilding has secured 18 new orders to take its newbuild contracts for this year past the US$1b mark. - The auditor for Pteris Global has flagged "significant doubt" over the firm's ability to continue as a going concern. - CAD announced information about key executives and directors of Blumont Group and LionGold Corp is sought, amid investigations into suspected trading irregularities, |
Wednesday, April 2, 2014
OCBC Report
| KEY IDEA Goodpack Limited: Promising but fairly priced now We draw investors’ attention back to fundamentals as speculation about possible share offer for Goodpack wanes. Since our last BUY call in Feb-14, the share price has gained 15%. We keep our fair value estimate of S$2.17 intact and downgrade to a HOLD. We acknowledge that Goodpack continues to hold compelling value propositions: its global presence and ~20% cost savings over alternatives. There are also barriers to entry from IBC design patent, stickiness of existing clients, and large capex spending. We believe Goodpack is among the top choices for any new synthetic rubber (SR) plant, as exemplified by Goodpack being the supplier for Singapore’s new SR plants, including the latest Sumitomo Chemical plant opened in Mar-14. Further catalysts for rerating could be 1) current trial-stage auto parts manufacturers switching over fully to IBCs before 2QFY15 as assumed in our base case, and 2) another upside risk is higher-than-expected demand from rubber industry. (Yap Kim Leng) MORE REPORTS Noble Group: To dispose 51% stake in Noble Agri Limited Noble Group Limited has entered into a share sale agreement with COFCO (Hong Kong) Limited to dispose 51% stake in Noble Agri Limited (NAL). Upon completion, COFCO will make an initial payment of US$1.5b. The closing amount will be adjusted after completion so that the final consideration is equal to 1.15x of 51% of the audited book value of NAL Group for FY14. As of end FY13, the audited book value of NAL Group was ~US$2.8b and net debt was ~US$2.5b. However, the deal is subject to several conditions with a long stop date of 31 Dec 2014 (unless mutually extended or terminated). According to Noble, the excess over book value is US$47.6m; the estimated gain on disposal is ~US$64.8m. We will be speaking to management to get more colour. In the meantime, we place our Hold rating and S$1.03 fair value under review. (Carey Wong) |
For more information on the above, visit www.ocbcresearch.comfor the detailed report. |
NEWS HEADLINES - US stocks rose for a third straight session, with S&P 500 ending at a record close, after positive data on factory activity indicated economic growth gaining ground after a harsh winter. - China Mining International is acquiring China Minerals Energy for around S$1b as it seeks to transform itself from a property development company into a pure mining play through a RTO. - Swissco Holdings has finalised the terms of a S$285m RTO deal with privately owned oil and gas contractor Scott and English Energy. - Japan’s economy entered a more uncertain phase as the national consumption tax rose for the first time in 17 years from 5% to 8%, threatening to snuff out recovery and as a BOJ survey forecast a decline in business sentiment in coming months. - GIC opened an office yesterday in Brazil, as it looks for more investment opportunities in Latin America. - Competition Commission of Singapore issued a proposed infringement decision against an alleged cartel of freight forwarders for fixing rates for shipments from Japan to Singapore. |
DBS Vickers Report
Today’s Focus
OCBC – Acquisition of Wing Hang Bank long-term
positive; EPS and ROE are expected to be accretive by
2017
OCBC’s Wing Hang Bank’s (WHB) acquisition deal is priced at
S$6.3bn or 1.77x Dec 13 book value which is below market
expectations. As OCBC completes the deal prior to WHB’s exrights
date (5 May), OCBC will compensate WHB’s shareholders
by adding dividends (interim and final) of HK$2.08 per share to
the selling price, which essentially bumps up valuations to 1.8x
BV. Earnings per share (EPS) and return on equity (ROE) are
expected to be accretive by 2017. Funding plans have yet to be
disclosed; we have assumed an 80% equity raising. EPS and
ROE could dilute by 7% and 1.1ppts respectively. Share price
should remain neutral in the near term, pending funding plan
disclosure. We believe this acquisition would be long-term
positive for OCBC. Maintain Buy and target price S$12.40.
COFCO Corporation and Noble Group have entered into
definitive agreements to form an agribusiness joint venture,
Noble Agri Limited (NAL). COFCO will acquire a 51% stake in
Noble Agri from Noble Group in an all cash transaction to
establish a 51%/49% joint venture. The transaction values
Noble Agri equity at 1.15x 2014 book value. On completion,
COFCO will make an initial payment of US$1,500m, which will
be adjusted so that the final consideration will be equal to
1.15x of 51% of the audited book value of NAL Group for
FY2014.
Yangzijiang gives an update on the shipbuilding contracts
entered by the Group. Following the 8 new effective orders
that were announced in February, there are an additional 18
effective orders worth US$815m secured by the Group in
March 2014. The 18 new effective orders comprise of two
82,000DWT, one 208,000DWT bulk carriers and four
10,000TEU containerships converted from existing options, and
11 new orders for 82,000DWT bulk carriers. The total of 18
new effective contracts are scheduled for deliveries in year
2015 to 2017. Year to date, the Group has secured a total of
26 effective shipbuilding contracts with an aggregate value of
US$1.07bn.
US Indices Last Close Pts Chg % Chg
Dow Jones 16,532.6 75.0 0.5
S&P 1,885.5 13.2 0.7
NASDAQ 4,268.0 69.0 1.6
Regional Indices
ST Index 3,198.5 9.9 0.3
ST Small Cap 543.5 (0.5) (0.1)
Hang Seng 22,448.5 297.5 1.3
HSCEI 10,098.3 23.2 0.2
HSCCI 4,196.5 35.3 0.8
KLCI 1,847.8 (1.5) (0.1)
SET 1,387.5 11.2 0.8
JCI 4,873.9 105.7 2.2
PCOMP 6,514.7 86.0 1.3
KOSPI 1,992.0 6.4 0.3
TWSE 8,873.2 23.9 0.3
Nikkei 14,792.0 (35.8) (0.2)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 592
Total Daily Vol (m shrs) 2,033
12m ST Index High 3,454
12m ST Index Low 2,960
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
1 Apr
Target Price
(S$)
ComfortDelgro Buy 1.995 2.19
Global Logistic Properties Buy 2.620 3.31
Keppel Corp Buy 10.830 12.60
Stock Picks – Small Cap
Rec’n Price (S$)
1 Apr
Target Price
(S$)
Ezion Holdings Buy 2.130 3.26
Goodpack Buy 2.120 2.60
China Merchants Buy 0.950 1.32
Pacific Radiance Ltd Buy 1.100 1.20
Nam Cheong Buy 0.350 0.46
Centurion Corporation Buy 0.740 0.86
Singapore
Wired Daily
Page 2
KTL Global has entered into sale and purchase agreements
to purchase four commercial units in a development known
as KL Trillion for RM6.3m. The construction of the units is
scheduled to be completed in 2015 and the total area of
the units is approximately 6,007 sq ft. The units were
purchased for investment purposes.
China Mining International (CMI) is acquiring China
Minerals Energy (CME) for around $1 billion as it seeks to
transform itself from a property development company into
a pure mining play through a reverse takeover deal.
Following the acquisition, CME will undergo a restructuring
exercise where it will be the sole shareholder of Yukuang
Mujistone, Yukuang Nigeria, Yukuang Australia as well as
Excel Leading (Hong Kong), giving it interests in five mines.
Of the five, two are in China, one in South Australia, one in
Nigeria and one in Tajikistan. China Mining International is
also proposing a share consolidation, in line with the SGX
listing rules.
Prices of both private homes and HDB resale flats continued
their slide in the first quarter of this year based on the
government's flash estimates, and this is expected to set the
tone for the rest of this year. The HDB's Resale Price Index
dropped for the third consecutive quarter, by 1.5%. URA’s
private residential property index fell 1.3% islandwide over
the first three months, after a 0.9% decline in the fourth
quarter. This was in tandem with the decline in sales
transactions, with just 1,676 caveats lodged in the first
quarter, down from 4,260 a quarter earlier. Prices of nonlanded
homes declined across all regions, with those in the
core central region (CCR) sliding further for the fourth
consecutive quarter - 1.3%, after the 2.1% decline in Q4. In
the outside central region (OCR), prices dipped 0.3%, after
a one per cent decline in Q4. Private home prices in the rest
of central region (RCR) fell the most in Q1, 2.8%, against a
0.4% rise in the previous quarter, as fewer transactions
were made. Prices of landed homes slipped 0.6% in Q1,
after a one per cent decline in Q4.
China’s manufacturing activity improved slightly in March
from the month before, even as the HSBC/Markit
Purchasing Managers' Index (PMI) fell to an eight- month
low. The official Purchasing Managers' Index (PMI) came in
at 50.3, a touch higher than the 50.2 reading in February.
But the final HSBC PMI reading for March was only at 48,
lower than the flash estimate of 48.1 released last week.
U.S. stocks rose, led by consumer and technology shares
after the March ISM manufacturing (actual, 53.7, consensus
54) showed an improvement over the February reading of
53.2 that underpinned the hope that the US economy is
pulling out of the severe winter weather. Cisco Systems Inc.
led technology shares higher. MGM Resorts International
led casino stocks higher after Macau gambling revenue
increased last month. Ford Motor Co. rose after March sales
topped estimates. In other news, Goldman Sachs Group Inc.
is in talks to sell its New York Stock Exchange marketmaking
unit to IMC Financial Markets.
OCBC – Acquisition of Wing Hang Bank long-term
positive; EPS and ROE are expected to be accretive by
2017
OCBC’s Wing Hang Bank’s (WHB) acquisition deal is priced at
S$6.3bn or 1.77x Dec 13 book value which is below market
expectations. As OCBC completes the deal prior to WHB’s exrights
date (5 May), OCBC will compensate WHB’s shareholders
by adding dividends (interim and final) of HK$2.08 per share to
the selling price, which essentially bumps up valuations to 1.8x
BV. Earnings per share (EPS) and return on equity (ROE) are
expected to be accretive by 2017. Funding plans have yet to be
disclosed; we have assumed an 80% equity raising. EPS and
ROE could dilute by 7% and 1.1ppts respectively. Share price
should remain neutral in the near term, pending funding plan
disclosure. We believe this acquisition would be long-term
positive for OCBC. Maintain Buy and target price S$12.40.
COFCO Corporation and Noble Group have entered into
definitive agreements to form an agribusiness joint venture,
Noble Agri Limited (NAL). COFCO will acquire a 51% stake in
Noble Agri from Noble Group in an all cash transaction to
establish a 51%/49% joint venture. The transaction values
Noble Agri equity at 1.15x 2014 book value. On completion,
COFCO will make an initial payment of US$1,500m, which will
be adjusted so that the final consideration will be equal to
1.15x of 51% of the audited book value of NAL Group for
FY2014.
Yangzijiang gives an update on the shipbuilding contracts
entered by the Group. Following the 8 new effective orders
that were announced in February, there are an additional 18
effective orders worth US$815m secured by the Group in
March 2014. The 18 new effective orders comprise of two
82,000DWT, one 208,000DWT bulk carriers and four
10,000TEU containerships converted from existing options, and
11 new orders for 82,000DWT bulk carriers. The total of 18
new effective contracts are scheduled for deliveries in year
2015 to 2017. Year to date, the Group has secured a total of
26 effective shipbuilding contracts with an aggregate value of
US$1.07bn.
US Indices Last Close Pts Chg % Chg
Dow Jones 16,532.6 75.0 0.5
S&P 1,885.5 13.2 0.7
NASDAQ 4,268.0 69.0 1.6
Regional Indices
ST Index 3,198.5 9.9 0.3
ST Small Cap 543.5 (0.5) (0.1)
Hang Seng 22,448.5 297.5 1.3
HSCEI 10,098.3 23.2 0.2
HSCCI 4,196.5 35.3 0.8
KLCI 1,847.8 (1.5) (0.1)
SET 1,387.5 11.2 0.8
JCI 4,873.9 105.7 2.2
PCOMP 6,514.7 86.0 1.3
KOSPI 1,992.0 6.4 0.3
TWSE 8,873.2 23.9 0.3
Nikkei 14,792.0 (35.8) (0.2)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 592
Total Daily Vol (m shrs) 2,033
12m ST Index High 3,454
12m ST Index Low 2,960
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
1 Apr
Target Price
(S$)
ComfortDelgro Buy 1.995 2.19
Global Logistic Properties Buy 2.620 3.31
Keppel Corp Buy 10.830 12.60
Stock Picks – Small Cap
Rec’n Price (S$)
1 Apr
Target Price
(S$)
Ezion Holdings Buy 2.130 3.26
Goodpack Buy 2.120 2.60
China Merchants Buy 0.950 1.32
Pacific Radiance Ltd Buy 1.100 1.20
Nam Cheong Buy 0.350 0.46
Centurion Corporation Buy 0.740 0.86
Singapore
Wired Daily
Page 2
KTL Global has entered into sale and purchase agreements
to purchase four commercial units in a development known
as KL Trillion for RM6.3m. The construction of the units is
scheduled to be completed in 2015 and the total area of
the units is approximately 6,007 sq ft. The units were
purchased for investment purposes.
China Mining International (CMI) is acquiring China
Minerals Energy (CME) for around $1 billion as it seeks to
transform itself from a property development company into
a pure mining play through a reverse takeover deal.
Following the acquisition, CME will undergo a restructuring
exercise where it will be the sole shareholder of Yukuang
Mujistone, Yukuang Nigeria, Yukuang Australia as well as
Excel Leading (Hong Kong), giving it interests in five mines.
Of the five, two are in China, one in South Australia, one in
Nigeria and one in Tajikistan. China Mining International is
also proposing a share consolidation, in line with the SGX
listing rules.
Prices of both private homes and HDB resale flats continued
their slide in the first quarter of this year based on the
government's flash estimates, and this is expected to set the
tone for the rest of this year. The HDB's Resale Price Index
dropped for the third consecutive quarter, by 1.5%. URA’s
private residential property index fell 1.3% islandwide over
the first three months, after a 0.9% decline in the fourth
quarter. This was in tandem with the decline in sales
transactions, with just 1,676 caveats lodged in the first
quarter, down from 4,260 a quarter earlier. Prices of nonlanded
homes declined across all regions, with those in the
core central region (CCR) sliding further for the fourth
consecutive quarter - 1.3%, after the 2.1% decline in Q4. In
the outside central region (OCR), prices dipped 0.3%, after
a one per cent decline in Q4. Private home prices in the rest
of central region (RCR) fell the most in Q1, 2.8%, against a
0.4% rise in the previous quarter, as fewer transactions
were made. Prices of landed homes slipped 0.6% in Q1,
after a one per cent decline in Q4.
China’s manufacturing activity improved slightly in March
from the month before, even as the HSBC/Markit
Purchasing Managers' Index (PMI) fell to an eight- month
low. The official Purchasing Managers' Index (PMI) came in
at 50.3, a touch higher than the 50.2 reading in February.
But the final HSBC PMI reading for March was only at 48,
lower than the flash estimate of 48.1 released last week.
U.S. stocks rose, led by consumer and technology shares
after the March ISM manufacturing (actual, 53.7, consensus
54) showed an improvement over the February reading of
53.2 that underpinned the hope that the US economy is
pulling out of the severe winter weather. Cisco Systems Inc.
led technology shares higher. MGM Resorts International
led casino stocks higher after Macau gambling revenue
increased last month. Ford Motor Co. rose after March sales
topped estimates. In other news, Goldman Sachs Group Inc.
is in talks to sell its New York Stock Exchange marketmaking
unit to IMC Financial Markets.
Daily Summary 2 Apr 14
Dow and Europe were all up last night.
Dow +75 at 16533. Dow's trend is turning up. Dow's future is
now +20. Europe opened mixed.
Asian bourses were mostly up. Nikkei +154, ShanghaiC +12, Hangseng +75. STI -9 at 3190. Volume ws 2.3b shares. Gainers were 219 against 244 losers.
Trend of STI is up.
Top volumes were Noble +6, HanKore -0.3, CharismaEner unchanged, AdvSct unchanged, Blumont -0.9, Transcu unchanged, ICP unchanged, TTInt +0.6, Rowsley +2, Albedo -0.1.
Market opened up but slipped to negative in late afternoon trade. Blue chips were mixed. Penny and speculatives were also mixed. STI has been up for nearly two weeks and looks like some profit taking is setting in.
Europe and Dow are looking positive for tonight.
Asian bourses were mostly up. Nikkei +154, ShanghaiC +12, Hangseng +75. STI -9 at 3190. Volume ws 2.3b shares. Gainers were 219 against 244 losers.
Trend of STI is up.
Top volumes were Noble +6, HanKore -0.3, CharismaEner unchanged, AdvSct unchanged, Blumont -0.9, Transcu unchanged, ICP unchanged, TTInt +0.6, Rowsley +2, Albedo -0.1.
Market opened up but slipped to negative in late afternoon trade. Blue chips were mixed. Penny and speculatives were also mixed. STI has been up for nearly two weeks and looks like some profit taking is setting in.
Europe and Dow are looking positive for tonight.
Tuesday, April 1, 2014
Daily Summary 1 Apr 14
Europe were slightly down but Dow +135
closing at 16458 last night. Dow's trend is starting to turn up.
Dow's future is now +30. Europe opened positive.
Asian bourses were mostly up. Nikkei -36, ShanghaiC +14, Hangseng 297. STI +14 at 3203. Volume was 2.1b shares. Gainers were 216 to 217 losers.
Trend of STI is up.
Top volumes were Digiland unchanged, Albedo +0.1, HanKore -0.1, CharismaEner +0.2, Transcu unchanged, LionGold -0.1, Memstar unchanged, Globa +0.2, SkyOne +0.5, SIIC -0.1.
Market was up the whole day. Blue chips were firmer. Penny and speculatives were mixed. Prices were mostly moving in a very small range with computers doing most of the trading I supposed.
Europe and Dow are looking firm for tonight and hopefully a stronger gain in both region could kick the STI higher tomorrow.
Asian bourses were mostly up. Nikkei -36, ShanghaiC +14, Hangseng 297. STI +14 at 3203. Volume was 2.1b shares. Gainers were 216 to 217 losers.
Trend of STI is up.
Top volumes were Digiland unchanged, Albedo +0.1, HanKore -0.1, CharismaEner +0.2, Transcu unchanged, LionGold -0.1, Memstar unchanged, Globa +0.2, SkyOne +0.5, SIIC -0.1.
Market was up the whole day. Blue chips were firmer. Penny and speculatives were mixed. Prices were mostly moving in a very small range with computers doing most of the trading I supposed.
Europe and Dow are looking firm for tonight and hopefully a stronger gain in both region could kick the STI higher tomorrow.
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