Monday, September 16, 2013

OCBC Report 17 Sep 13

Golden Agri-Resources: Downside risk remains
Golden Agri-Resources (GAR), being one of the largest palm oil plantation owners in the world, is likely to feel the negative impact of further pullback in CPO (crude palm oil) prices, especially after the recent rebounds in prices of CPO and GAR shares. With demand from both China and India – two of the world’s largest import markets for CPO – likely to remain soft, we believe that the worst is not over yet for the upstream players. Hence we maintain our SELLrating and S$0.465 fair value (still based on 11x blended FY13/FY14F EPS). (Carey Wong)

MORE REPORTS

Singapore Residential Property: Buyers moving to EC market
A headline total of 1,468 new private homes (including 726 EC units) were sold in Aug 2013, up 147% MoM and down 5% YoY. Excluding EC and landed-units, however, only 793 units were sold - up 53% MoM and down 47% YoY with a softer take-up rate of 80% (versus 85% in Jul 13). We believe the market is still finding its legs after the TDSR measures which have moved buyers to further focus on issues of availability of credit and affordability. One key impact is that significant demand has moved to the EC segment, which allows for HDB upgraders to access larger amounts of credit versus private property. EC sales were bullish in Aug 13 with 726 units sold – this constituted 49% of the 1,468 headline number and increased a whopping 548% MoM and 515% YoY. Maintain NEUTRALon the SG residential sector. Our top picks are CapitaLand [BUY, S$3.77], Keppel Land [BUY, S$4.09] and CapitaMalls Asia [BUY, S$2.55]. (Eli Lee)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.


NEWS HEADLINES

- US stocks mostly rose on Mon, lifting the S&P 500 index within reach of its record after Larry Summers took his name out of the running to head the Federal Reserve.

- Blumont Group announced yesterday a move to take a 15% interest in Resource Generation Limited - a coal-miner in which Noble Group also has a stake - for up to A$22.11m.

- Logistics Holdings intended to invest about S$5m in a joint venture to build a pre-cast products manufacturing plant in Iskandar.

- FSL Trust Management, the trustee manager of First Ship Lease Trust, said yesterday that Omni Ships, the lessee of its two dry bulk carriers, has defaulted on its lease payments.

- Chip Eng Seng Corporation's subsidiary has won a S$103.8m contract from the HDB to build six blocks of residential buildings with 700 units and other community facilities in Jurong West Neighbourhood 6.

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