SIA – Firm August operating statistics; maintain BUY,
TP: S$11.40
SIA reported August operating statistics that were firm,
with passenger carriage up 8.6% yoy to 8,560m p-km on
3.1% growth in capacity, with load factor up by 4.1
percentage points to 82.4%. This was attributed to strong
leisure travel demand during the Lebaran/Hari Raya
holidays coupled with returning summer traffic. YTD, the
Group's passenger business is tracking our assumptions,
with carriage up by 3.5% on 3.6% increase in capacity,
and load factor at 79.5%. However, SIA also warned that
yields remain under pressure due to ongoing efforts to
stimulate demand.
The cargo business remained weak, with carriage
declining 5.7% yoy to 541 tonne-km on 5% decrease in
capacity, and load factor dropping slightly to 60.1%.
Silkair posted 10.7% increase in carriage to 482m p-km,
but with a 13.4% increase in capacity, load factor was
slightly lower at 71.7% for the month.
Ezra Holdings has issued S$25m in aggregate principal
amount of 5.00% Fixed Rate Notes due 2015. The net
proceeds from the issue will principally be used by the
company for financing general working capital, corporate
purposes and to refinance existing borrowings of the
company and its subsidiaries.
United Engineers (UE) has entered into a deal to buy
Hewlett-Packard's freehold premises on Alexandra Road -
an industrial building and a commercial office tower - for
$402m. HP will lease back the 12-storey office tower
fronting Alexandra Road for three years, with two options
to extend for periods of six months each. HP will also
lease back the eight-storey industrial building behind the
tower for five years, with three options to renew for five
years each. These leases provide UE with an immediate
and steady rental income stream while it evaluates the
longer term redevelopment plan for the sites.
DMX has been awarded a four-year contract to supply IT
Professional Services to the Hong Kong Government.
Under this new four-year award, DMX will provide an
array of professional information security and
independent testing services for the various departments
and bureaus of Hong Kong Government.
US Indices Last Close Pts Chg % Chg
Dow Jones �� 15,494.8 118.7 0.8
S&P �� 1,697.6 9.6 0.6
NASDAQ �� 3,717.8 (4.3) (0.1)
Regional Indices
ST Index �� 3,179.5 59.2 1.9
ST Small Cap �� 559.1 8.4 1.5
Hang Seng �� 23,252.4 337.1 1.5
HSCEI �� 10,706.6 167.7 1.6
HSCCI �� 4,461.3 43.0 1.0
KLCI �� 1,770.8 (1.6) (0.1)
SET �� 1,445.1 44.0 3.1
JCI �� 4,522.2 146.7 3.4
PCOMP �� 6,302.7 169.5 2.8
KOSPI �� 2,013.4 19.1 1.0
TWSE �� 8,255.3 112.9 1.4
Nikkei �� 14,404.7 17.4 0.1
STI Index Performance
Singapore
Total Market cap (US$bn) 580
Total Daily Vol (m shrs) 3,772
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
16 Sep
Target Price
($)
ST Engineering Buy 4.210 4.80
ComfortDelgro Buy 1.915 2.19
OCBC Bank Buy 10.280 12.40
Spore Airlines Buy 10.390 11.40
Suntec REIT Buy 1.600 1.78
Stock Picks – Small /Mid Cap
Rec’n Price ($)
16 Sep
Target Price
($)
Ezion Holdings Buy 2.330 3.20
Goodpack Buy 1.680 2.00
CSE Global Buy 0.900 1.07
Mapletree Commercial Trust Buy 1.160 1.35
CDL Hospitality Trust Buy 1.590 1.80
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
Blumont is planning significant investment in coal miner
Resource Generation. Blumont will subscribe for new
shares to be issued by RES at a placement price of A$0.22
per share for a total investment consideration of between
A$20.97m and A$22.1m. This will represent
approximately 15% of the potential enlarged share
capital of RES. The proceeds will be used for the further
advancement of RES’s Boikarabelo coal mine located in
South Africa, which has probable reserves of 744.8m
tonnes and existing gross resources of 6.4 bn tonnes.
Blumont will fund the investment from internal resources.
SGX-listed Noble Group has a 12.85% stake in RES and a
strategic partnership which includes substantial off-take
contracts and a secured loan facility.
Chip Eng Seng has been awarded a S$103.8m contract
by HDB for the construction works at Jurong West
Neighbourhood 6 Contract 31. The contract comprises
the construction of 6 blocks of residential buildings with
700 dwelling units and other community facilities. The
construction period is approximately 31 months.
Logistics Holdings intends to invest about $5m in a joint
venture to build a pre-cast products manufacturing plant
in Iskandar. Its partner, Coninco, a licensed supplier of
pre-cast building materials approved by the HDB, will hold
a 20% stake.
Asiasons Capital has placed out 212.6m new shares to
raised S$254m. The proceeds will equip the Company
with readily available cash resources to capitalise on
potential opportunities as and when they arise, in
particular, in the mineral and oil & gas industries due to
the recent volatilities giving rise to many good
opportunities.
Singapore's non-oil exports unexpectedly fell in August
due to a decline in both electronics and non-electronics
shipments. Exports of goods made in Singapore fell 6.2%
y-o-y in August, the seventh consecutive month of
contraction. The data is lower than market expectation
for exports to expand 2.4% and also lower than July’s
1.9% drop. Compared with the previous month, exports
fell 6%, after contracting 1.8% in July. Electronics exports
declined 9.2% on year, after falling 11.1% in July, while
non-electronics shipments fell 4.7%, compared with a
2.9% rise in July. In the non-electronics sector,
pharmaceutical exports fell 31.1%, after contracting
32.0% in the previous month. Shipments to the European
Union, its second biggest export destination, fell 20.8% in
August from a year earlier, compared with a 38.5% onyear
fall in the previous month. Exports to the U.S. fell
6.7% on year after rising 17.4% in July. Exports to China,
however, accelerated to 15.3% after the previous
month's 4.8% increase. China is now Singapore’s biggest
export destination.
New private home sales recovered last month but
remained subdued by the double whammy of the Total
Debt Servicing Ratio (TDSR) framework and the Hungry
Ghost month. Only 742 private homes transacted in
August, excluding transactions for the hybrid executive
condominiums (ECs). This was 54% higher than July's
482 units, but was just over half the 1,427 sales recorded
in the corresponding month last year. Developers
launched 927 units for sale last month, an improvement
over July's 557 homes. Mass-market residences continued
to dominate activity in August, with Outside Central
Region (OCR) homes making up 73% of sales and 76%
of launches. Units from the Rest of Central Region (RCR)
made up 15% of sales and 13% of launches, while Core
Central Region homes accounted for 12% of sales and
10% of launches. Including ECs, 1,468 homes were
moved in August, compared with 1,819 homes launched.
Demand for ECs remained sturdy, with 726 units sold last
month, compared with July's 112 units. Property
consultants believe sales will improve this month, with
developers having launched the Glades and The
Skywoods, and with Thomson Three to be launched soon.
Prime office rents crept up in Q3 amid higher leasing
enquiries, a report released by Knight Frank showed.
Reversing seven consecutive quarters of negative or flat
growth, prime Grade A+ rents in Marina Bay and Raffles
Place posted an increase of 1.4% quarter-on-quarter,
hitting between $9.90 and $12.00 psf. Outside of the
Central Business District (CBD), Orchard Road's average
office rents for Grade A space rose 3.1% year-on-year,
bolstered by rising asking rents for smaller office spaces.
Compared with the last quarter, Orchard's average office
rents inched up 0.6%, reaching between $7.00 and
$10.90 psf. In the Suntec/Marina Centre/City Hall area,
average rents held firm, rising 0.5% quarter-on-quarter.
Knight Frank expects overall rents to creep up by around
0.3% quarter-on-quarter in Q4, buoyed by improving
business sentiment, rising rent expectations from
landlords, and the addition of new office developments.
Average rents in the CBD are likely to stay firm or notch
up modest increases of 0.2 to 0.3% in Q4.
China's cabinet has detailed plans to speed construction
of urban infrastructure projects in the latest move to
boost domestic consumption by urbanization. The
government will focus on projects ranging from
underground sewage and household waste treatment to
gas pipes and heating systems as well as public transport
and power grid upgrades. The National Development and
Reform Commission is expected to unveil an urbanisation
plan in the second half of this year.
US markets rallied, bond yields dipped and the USD fell
after Lawrence Summers withdrew his bid to be the next
FED chairman and both America & Russia agreed on a
Singapore
Wired Daily
Page 3
plan to remove Syria’s chemical weapons. Brent crude fell
2.4% to USD110pbl. US 10-yr bond yield slipped to
2.855%. Having reacted to news of Summers’ withdrawal
yesterday, the rally in Asian bourses are likely to pause in
the next 2 sessions as investors await the outcome of the
FOMC meeting and QE tapering possibility this
Wednesday.
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