Thursday, October 31, 2013

How to run a stock market to the ground?


Stock markets around the world have been profitable institutions for centuries. As a collector of commissions and fees for listing and trading, it is like an evergreen ATM, always making money. The Great Depression could have temporarily halted the trading activities of a stock market, but they still picked up and ran again. It is quite near impossible to run a stock market to the ground. It would take tremendous ingenuity or stupidity to be able to do so.
 

After twenty years in the industry I have discovered how a stock market can actually be run to ground zero by a special recipe. Let me try to put this into simple steps for anyone who has the chance to do it, like how to assemble 炸蛋, fried egg, DIY online.
 

1. Invite all the big funds to play in the market.
 

2. Consult them on how to fix a system so that they can take full advantage of their high speed computers to make profits from the small investors.
 

3. First thing, allow them to hook their computers into the exchange system so that they would know what other traders/investors are buying or selling. Don’t tell people this is unfair. Better still don’t tell anyone if possible. Don’t talk about it is the best.
 

4. Reduce the commission to as low as possible, even free if can, so the big funds can trade in very big volumes without cost or with minimum charges. Then they can play big big and pay more fees to the exchange while making a killing at the same time. The small investors are there to be cannon fodder and dispensable.
 

5. No lunch break so the computers can keep on running throughout the whole session. Having lunch break is very disruptive to the computers and troublesome for the operators. Then bluff the broking houses no lunch break increases trading volumes, continuous trading means more time to do business.
 

6. Create a system to allow the funds to borrow scrips just in case they oversold some positions and need to cover for a short while. So the funds can long or short to make money either way. The trick is to protect the big funds while they eat up the small traders.
 

7. Deregulate, have as little rules as possible. No rules better still. If got rules, pretend to have dementia. Some say one eye open one eye close.
 

8. If the funds violate trading rules like churning, buying and selling without change of ownership, cornering the market, creating a false market, just ignore. Pretend not to know, not to see. Pretend nothing is wrong. The big funds must be given the fullest support to generate volume and liquidity in the market and of course to make money.
 

9. Make the small traders pay higher commission rate so they cannot get out quickly without losing or cannot make profit unless the price has moved several bids. This will allow the big funds to hold them captive and take advantage of small changes to make money, like push up one bid, push down two bids.
 

10. There is no need to provide a fair and level playing field. Bring in the HFT to make profits by skimming the differences that the small investors cannot see and not chance to see. It is a given that the HFT is sure to make profits like the big funds. No need to care where or who pay for their profits. Zero sum game? Sure.
 

These ten simple steps will definitely run a stock exchange to the ground in double quick time. All the small traders will be scooped up and hung to dry without knowing what has happened. And when there are no more small traders to slaughter, move on.

DBS Vickers 1 Nov 13

Jaya Holdings - Encouraging signs persist. Maintain
BUY call and S$0.90 TP.
􀂃 Hi-P - Guidance points to weaker 2H13, no recovery
in sight. Maintain FULLY VALUED and S$0.47 TP
Post FOMC, talks that the FED may start to taper QE as
soon as December weighed down on equities for a
second day. But our economist thinks differently as a
series of slowing trend that if sustained further, may
further postpone QE tapering beyond 2014 is observed.
Home sales and mortgage applications, retail sales,
personal consumption and payrolls have slowed in recent
months even as inflation trended lower.
Having already eased some 20pts yesterday, firm bank
results could underpin the index in the current session.
OCBC reported better-than-expected 3Q earnings of
S$750mil (+5% q-o-q, +27% y-o-y) mainly driven by
stronger-than-expected insurance contribution. Other P/L
items were inline. NIM was stable as expected at 1.63%
on both flat asset and liability yields. This was supported
by 2% q-o-q, 16% y-o-y loan growth and 3% q-o-q,
15% y-o-y deposit growth also within expectations.
Provisions were also inline. Will provide more updates
after briefing today.
Though we tweaked slightly our FY14/15F earnings for
Jaya Holdings down by about 4%/1% to account for
slightly higher operating expenses, encouraging signs still
persist. High fleet utilisation sustained at > 90% and
improving day rates boost charter income in 1Q-FY14.
Newly delivered vessels have been employed on long-term
charters immediately on delivery. Industry uptrend
continues to support Jaya’s transformation to a charter
income growth story. Our BUY call and S$0.90 TP are well
supported by independent fleet valuations and healthy
balance sheet.
Hi-P’s net profit of S$3.1m met our lowered expectations,
margins collapsed on more assembly work. Balance sheet
has deteriorated; Hi-P registered its first ever net debt
position of S$42m. Guidance from Hi-P points to weaker
2H13, no recovery in sight. The group expects lower sales
and profits in 4Q13 vs 4Q12 and maintains guidance for
lower earnings in 2H13 compared to 1H13, even though
sales are forecast to grow h-o-h. Maintain FULLY VALUED
and S$0.47 TP.
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀙 15,545.8 (73.0) (0.5)
S&P 􀀙 1,756.5 (6.8) (0.4)
NASDAQ 􀀙 3,919.7 (10.9) (0.3)
Regional Indices
ST Index 􀀙 3,210.7 (19.8) (0.6)
ST Small Cap 􀀘 537.8 0.3 0.1
Hang Seng 􀀙 23,206.4 (97.7) (0.4)
HSCEI 􀀙 10,627.0 (13.9) (0.1)
HSCCI 􀀘 4,551.0 9.9 0.2
KLCI 􀀙 1,806.9 (10.5) (0.6)
SET 􀀘 1,442.9 11.8 0.8
JCI 􀀙 4,510.6 (64.2) (1.4)
PCOMP 􀀙 6,585.4 (11.8) (0.2)
KOSPI 􀀙 2,030.1 (29.5) (1.4)
TWSE 􀀙 8,450.1 (15.0) (0.2)
Nikkei 􀀙 14,327.9 (174.4) (1.2)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 599
Total Daily Vol (m shrs) 2,066
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
31 Oct
Target Price
($)
ST Engineering Buy 4.220 4.80
ComfortDelgro Buy 1.925 2.19
OCBC Bank Buy 10.400 12.40
Singapore Airlines Buy 10.430 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
31 Oct
Target Price
($)
Ezion Holdings Buy 2.240 3.10
CSE Global Buy 0.945 1.07
Frasers Centrepoint Trust Buy 1.855 2.14
Yoma Strategic Holdings Buy 0.765 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
3Q13 earnings for Osim in line; driven by China, Taiwan and
the new uInfinity chair. Osim has raised stake in TWG Tea to
majority owner in October, we expect slight earnings
accretion (+4%) to FY14F/FY15F earnings. DPS of 1 Scts
declared, on track to meet our 5 Scts estimate for full year.
Maintain BUY, with S$2.60 (Prev S$ 2.50) TP.
2Q14 results for SMRT below expectations, net profit
slumped by 56% to S$14.4m. Fare revenue segments
continue to register EBIT losses, offset by non-fare segments.
1H14 DPS of just 1 Sct (1H13: 1.5 Scts) was declared. We
have cut earnings by 25%-28% to factor in higher operating
costs. Maintain FULLY VALUED, TP lowered to S$1.08 (Prev
S$1.20).
Soilbuild Business Space REIT declared maiden DPU of 0.76
Scts, ahead of IPO forecast but in line with our expectations.
Steady growth in distributions in 2014, supported by organic
drivers. BUY and S$0.87 TP maintained.
Kencana Agri expects to report a net loss for 3Q 2013 mainly
due to unrealised foreign exchange losses resulting from the
depreciation of the IDR against the USD.
Sin Heng registered total revenue of $47.4m in 1Q FY2014
which was 10.1% higher y-o-y. The increase was due to
increase in trading revenue, partially offset by the decrease in
equipment rental revenue. Revenue from Equipment Rental
business decreased by 5.3% y-o-y to $12.4m in 1Q FY2014,
mainly due to completion of some domestic projects.
Revenue from Trading business in 1Q FY2014 increased by
16.9% to $35.0m, mainly due to higher volume of cranes
and aerial lifts sold in the domestic and regional markets. Net
profit after tax of $3.8m for 1Q FY2014 was 14.6% higher yo-
y.
Thai Village is proposing to place 180m new shares at
S$0.138 per share. The issue price represents a premium of
approximately 17.7% to the last volume weighted average
price. The placement is proposed as part of the Group’s
strategy to diversify its businesses from its current restaurant
operations and restaurant management services, and
capitalise on opportunities in commercial properties in Asia
(including in the PRC).
Longcheer Holdings is proposing a restructuring exercise. The
proposed restructuring exercise will allow the company to
consolidate its businesses within the Group and to categorise
into mobile and non-mobile businesses. This is in line with
the company’s strategic plans and on-going efforts to redesign
its strategic direction and strengthen the Group’s
position as well as cost control.
TEE International has signed an MOU with Loxley Public
Company, a public company listed on the Stock Exchange of
Thailand to explore opportunities in renewable energy
business and related activities in the Indochina region -
Myanmar, Laos DPR, Vietnam, Thailand and Cambodia.
Businesses continue to invest and expand while consumers
are cutting back on borrowing. This divergence between
corporate and consumer loans is "a positive development",
and the trend is expected to continue in the months ahead,
according to consensus. Over the month, total domestic
banking unit (DBU) loans rose 1.1% to $546.6 bn at the end
of September, up from August's 0.3% growth. On a year-onyear
basis, lending accelerated after slowing for four
consecutive months. Loans growth grew 15.7%, up from
August's 15.4% growth. Loans to businesses grew 1.4%
over September to $325.6 bn, after remaining flat in August.
Year-on-year growth picked up as well to 18.6%, faster than
the 17.4% seen in the month before. In contrast, consumer
loans grew a slower 0.6% in September to hit $220.9 bn,
after rising 0.8% in August. On a year-on-year basis,
consumer loans growth slowed to 11.7%, from August's
12.5%.
The jobless rate in Singapore surprisingly fell to 1.8% in
September - the lowest level since last December - as layoffs
subsided in the third quarter, preliminary official figures
released yesterday showed. Employment growth remained
strong, driven mainly by the services and construction sectors,
despite slowing from the previous quarter.

Daily Summary 31 Oct 13

Dow was -62 last night closing at 15619.  Europe were mixed.  Dow's trend is up. Dow's future is now 15519.  Europe opened marginally down.

Asian bourses were mostly down.  Nikkei -174, ShanghaiC -19, Hangseng -98.  STI closed -20 at 3211. Volume was 2b shares.  Gainers were 224 to 256 losers.

Trend of STI is flat.

Top volumes were GoldenAgr +2, SkyOne +0.8, ValueMax +4.5, Digiland unchanged, Inopac +0.1, Blumont -0.2, YHM +0.1, HPHTrust -1.5, Oceanus -0.1, Asiasons +0.8.

Market opened down and was down for the whole day. It closed at day low. Blue chips were mostly down. Penny and speculatives were firmer. Volume remained very low and market was very quiet with the computers doing most of the trading.

Europe and Dow are looking weaker at the moment.

Wednesday, October 30, 2013

DBS Report 31 Oct 13

Indofood Agri Resources - Strong sequential
rebound, FY13F-15F earnings raised by 5-18%.
Maintain BUY, TP S$1.00.
􀂃 CDL Hospitality Trusts - Higher earnings on the
horizon; maintain BUY and TP S$1.80
Indofood Agri Resources registered sequentially higher
earnings, as expected. Ex-translational FX loss of
Rp88.7bn, 3Q13 earnings of Rp211.6bn (-13% y-o-y;
+220% q-o-q) were ahead. 3Q13 operating margin
rebounded to 12.3% from 5.4% in 2Q13, as unit cost
eased in line with higher output FY13F-15F earnings were
raised by 5-18%. BUY for 12% upside to revised TP of
S$1.00 (Prev S$ 0.93). We believe the market has not yet
priced in stronger 4Q13 earnings. Technically, the stock
looks set to head to the fundamentally of $1 and may
even trend beyond that eventually, once it clears the
$0.92 level.
3Q13 DPU of 2.64 Scts for CDL Hospitality Trusts in line.
As we approach the year-end peak season, we expect
CDREIT to deliver sequentially stronger performance in
4Q13. Valuations remain attractive at 1.0x P/BV, with
FY13F-15F yield of 6.5%-7.3%. Maintain BUY and TP of
S$1.80.
Results for NOL were slightly below as Intra-Asia rates
plunged, owing to capacity cascading from mainlanes,
despite rate restorations on Asia-Europe in June-July that
helped the container liner division to break even in 3Q13.
Current spot rates on Asia-Europe are back at panic levels
again, but no major capacity reduction measures seen.
Maintain HOLD with TP adjusted to S$1.10 (Prev S$ 1.13).
Singapore Post’s 2Q14 underlying profit of S$37.3m
(+13.8% y-o-y, +3.0% q-o-q) was in line, as 1H14
comprised 49.7% of our FY14F estimates. S$1.25 Scts
interim DPS was also in line. High developmental costs for
e-commerce were offset by higher rental income and
lower interest costs. Maintain BUY with a TP of S$1.50.
SingPost has S$139m net cash which can be used for
profitable acquisitions, in our view.
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀙 15,618.8 (61.6) (0.4)
S&P 􀀙 1,763.3 (8.6) (0.5)
NASDAQ 􀀙 3,930.6 (21.7) (0.5)
Regional Indices
ST Index 􀀘 3,230.4 21.6 0.7
ST Small Cap 􀀙 537.5 (2.1) (0.4)
Hang Seng 􀀘 23,304.0 457.5 2.0
HSCEI 􀀘 10,640.9 250.3 2.4
HSCCI 􀀘 4,541.1 89.1 2.0
KLCI 􀀘 1,817.4 1.7 0.1
SET 􀀙 1,431.1 (24.7) (1.7)
JCI 􀀘 4,574.9 12.1 0.3
PCOMP 􀀘 6,597.2 53.8 0.8
KOSPI 􀀘 2,059.6 7.8 0.4
TWSE 􀀘 8,465.1 44.1 0.5
Nikkei 􀀘 14,502.4 176.4 1.2
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 596
Total Daily Vol (m shrs) 3,312
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
30 Oct
Target Price
($)
ST Engineering Buy 4.230 4.80
ComfortDelgro Buy 1.915 2.19
OCBC Bank Buy 10.500 12.40
Singapore Airlines Buy 10.500 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
30 Oct
Target Price
($)
Ezion Holdings Buy 2.220 3.10
CSE Global Buy 0.890 1.07
Frasers Centrepoint Trust Buy 1.860 2.14
Yoma Strategic Holdings Buy 0.750 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
CapitaLand achieves net profit of S$135.5m in 3Q 2013,
down 9% y-o-y. Group revenue rose 52.5% to S$1.05 bn,
up 52.5%. The performance is led by higher revenue from
CapitaLand Singapore (CL Singapore), CapitaLand China (CL
China) and CapitaMalls Asia (CMA), as well as higher sales
from development projects in Australia and Vietnam. Will
follow up with more updates.
China Minzhong posted a 60% plunge in net profit to
RMB48.4m for the first quarter ended Sept 30, 2013. Higher
operating costs, mostly labour, and average selling prices not
rising fast enough to offset higher costs, pressured its
margins in both its cultivation and processed business
segments.
Yongnam Holdings is expected to record an operating loss
for 3Q FY2013, notwithstanding a healthy increase in
revenue. This is mainly due to two factors:-
1. Cost overruns from three on-going projects which pared
operating margin to new lows;
2. A significant non-recurring one-off loss on disposal of
some fixed assets that eroded the already thin bottomline
profit for the quarter.
Yongnam is still expected to report a net profit for FY2013,
but significantly lower than that of FY2012.
Metax Engineering has been awarded a tender by the
Singapore Public Utilities Board worth S$6.7m to expand the
Greasy Waste Receiving and the Associated Digestion Facility
at the Jurong Water Reclamation Plant. The award will
increase Metax Engineering’s orderbook to S$31.8m.
China Bearing is expected to report a loss for 3Q2013 and
9M2013. The significant drop in its financial performance
was mainly attributed to decrease in revenue and increase in
costs.
Sapphire Corporation will record a loss in the 3Q13 and it is
highly likely that this loss will be higher than that reported in
2Q13 due mainly to lower operating margins and additional
assets impairment.
Ziwo Holdings is expected to record a profit for 3Q 2013.
However, for the nine months ended 30 September 2013
(9M2013), the Group is expected to record a significant drop
in its revenue due to losses incurred in first and second
quarter of 2013.
Eastern Holdings expects to report significant profits for
1HFY2014, partly due to the disposal of investment
properties.
China Environment has secured five contracts worth RMB
119.1m from three customers. These contracts are scheduled
to be delivered by the first half of 2014 and are expected to
contribute positively to the earnings of the Group for FY Dec
2013 and 2014.
A survey by Nielsen shows that while Singaporeans may be
getting more upbeat about their job prospects and personal
finances, consumer confidence levels here still fall on the side
of pessimism. Confidence levels in Singapore slipped in Q4
last year and remained flat for three consecutive quarters. But
confidence bounced back in Q3 this year to the same level a
year earlier.
Asia-Pacific air freight carriers - which account for nearly
40% of the global cargo market - continue to be dogged by
weak cargo demand, with traffic slipping 3.1% y-o-y for the
region last month. Globally, traffic (in freight tonne
kilometres) edged up by 0.5%, with strong growth from the
Middle Eastern and Latin American cargo carriers, while the
European freight players turned in marginal growth,
according to figures released by the International Air
Transport Association (Iata). Capacity grew at a faster 3.3%,
resulting in a load factor of 45.1%.
The FED decided to continue with its USD85bil/mth bond
purchase as it needs to see more evidence that the economy
can continue to improve. The housing sector recovery slowed
somewhat and fiscal policy is restraining growth, it observed.
Still, the FED removed a sentence from its previous
September statement that said tighter financial conditions
could slow the improvement in the economy. This fueled
speculation that it will reduce QE in coming months. The FED
statement wasn’t as dovish as investors wished it to be,
stocks eased off.

Daily Summary 30 Oct 13


Dow and Europe were up last night.  Dow closed +111 at 15680.  Dow's trend is up.  Dow's future is not available today.  Europe opened up.

Asian markets rallied.  Nikkei +176, ShanghaiC +32, Hangseng +457.  STI +22 at 3230. Volume was 3.3b shares.  Gainers were 196 to 313 losers.

Trend of STI is turning up slightly.

Top volumes were Sunmoon unchanged, ValueMax IPO closed at 52.5. Digiland unchanged, HM -0.2, Hankore -0.4, Innopac -0.2, Blumont -1, Albedo -0.3, GoldenAgr -1.5,  MirachEner -1.8.

Market opened weak, dragged down by the poor sentiment on penny stock curbs. The rally in regional bourses added pressure to push up the index and some buying in the afternoon pushed STI to close at day high. Most blue chips were positive. Can't say much on penny and speculatives. Many were still being sold down.

European bourses are looking good at the moment.

Tuesday, October 29, 2013

Brokerages restricting trading on stocks

More broking houses are starting to enforce restricted trading on more and more penny stocks. AmFrasers is reported to have put 11 stocks in their restricted list while UOB Kay Hian has a list of 56 stocks. Such stocks can only be traded under conditions set by the broking houses like cash out front, limited volumes to buy per investor or for the whole house to limit the risk exposure, etc etc.
 

What would happen if the number of stocks on the restricted list increases into the hundreds? What are the implications,… that these stocks are dangerous, not fit to be listed in the exchange, not suitable for trading by normal investors? If these stocks are so dangerous, should not they be put into a separate list and investors be made to sign an indemnity form to declare they know the risk when they trade these stocks? We do not want them to complain that they did not know these stocks are so dangerous when they lose big sums of money, right?
 

Hopefully these stocks are not in the same category as Lehman Bonds or toxic notes, high risk and should not be touched with a ten foot pole. For these stocks to be listed in the main board they must be worth something or at least have some respectability and soundness, or have been vetted to be ok.
 

Let’s hope the restricted lists do not grow longer and the few stocks there are an anomaly, exceptions than the rule.

OCBC Report 30 Oct 13

KEY IDEA

CapitaMalls Asia: Chinese malls show underlying strength

CMA reported 3Q13 PATMI of S$64.8m, which increased 4.0% YoY mainly due to profit recognition from Bedok Residences, the opening of Star Vista and a higher contribution from CMT. Adjusting for one-time items and fair value gains, 9M13 PATMI cumulates to S$179.2m, forming 93% of our full year FY13 PATMI forecast and we judge this quarter to be above expectations due to lower-than-anticipated opening costs from newly opened malls. CMA’s Chinese portfolio assets continue to put up firm numbers; the overall committed occupancy rate increased to 97.2% as at end Sep 13 from 96.9% as at end Jun 13. 9M13 tenant sales were also up a healthy 9.8% (excluding Tier 1 cities: 11.0%) while 9M13 shopper traffic increased 1.5%. We rate the stock with a BUY rating and an unchanged fair value estimate of S$2.55. (Eli Lee)

MORE REPORTS


CDL Hospitality Trusts: 3Q13 as expected

CDLHT has reported 3Q13 results that are generally in-line with ours and the street’s expectations. 3Q13 revenue declined 0.8% YoY to S$35.9m. RevPAR for CDLHT’s Singapore hotels had declined 6.4% YoY, driven by a 5.6% drop in average room rate. As we had anticipated, the rate of RevPAR decline was less in 3Q13 than over 1H13, which saw RevPAR fall 8.1% on the back of increased supply in the sector. 3Q13 net property income fell 1.7% YoY to S$33.0m. 3Q13 DPU is 2.64 S cents (down 2.9% YoY), bringing 9M13 DPU to 8.05 S cents, versus ours and the street’s FY13 forecasts of 10.4 S cents and 11.1 S cents respectively. We maintain a BUYrating on CDLHT but place our S$1.83 fair value estimate under review. (Sarah Ong)

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

NEWS HEADLINES


- US stocks finished higher Tuesday with both blue-chip stocks and the S&P 500 index setting record closing highs, as results from Pfizer Inc. and an IBM stock buyback stoked momentum.

- Figtree Holdings has priced its IPO on the Catalist board at 22 S cents per share in a S$12m fully placed share sale.

- Sky One Holdings' collapse on Mon prompted a number of brokers to update their lists of restricted stocks this week.

- Yanlord Land Group has paid 2.88b yuan (S$586m) for a site in Nanjing with a GFA of 38.6 ha, which it plans to develop as a mixed-use project.

- Ezra’s subsea services and offshore support services divisions have secured contracts worth US$110m.

- Great Eastern Holdings has reported growth in its core insurance business although the absence of year-ago one-time gains dragged its 3Q13 bottom-line down by 54%.

- Forterra Trust sank to a net loss of S$2.3m for 3Q13 from a S$8.8m net profit a year ago.

- Singapore has once again taken pole position for being the most business-friendly country for the eighth year, ahead of Hong Kong and New Zealand.

DBSVickers Report 30 Oct 13

Ezra – Awarded US$110m new projects in subsea
construction and offshore support services
Ezra Holdings announced that its Subsea Services (EMAS
AMC) and Offshore Support Services (EMAS Marine)
divisions have been awarded projects worth US$110m.
These projects will be executed in the Gulf of Mexico and
the Asia-Pacific region. Adding to Ezra’s contract wins,
EMAS Marine has also been awarded three new charters
with a national oil company and an oil major in South East
Asia for two anchor, handling, towing and supply (AHTS)
vessels and a platform supply vessel (PSV). The contracts
have an average tenure of around 3.5 years, including
options.
Great Eastern Holdings’ 3Q13 earnings recover; non-par
fund back in the black from market recovery; underlying
business was strong. OCBC will release 3Q13 results on 1
Nov; we expect earnings to improve q-o-q. Maintain BUY
on OCBC, TP: S$12.40.
United Envirotech (UEL) has entered into an agreement to
acquire an additional 5% stake of its joint-venture
company, United Envirotech Water Treatment (Dafeng)
from the existing joint venture partner for RMB5.9m.
Dafeng will then be a 55% owned subsidiary of UEL post
acquisition.
Yanlord acquires a 386,000 sqm gross floor area (GFA)
prime integrated development site in Sino-Singapore
Nanjing Eco Hi-Tech Island for RMB2.877 bn. Ideally
situated for the development of a prime integrated
development, the project will include the development of
high-quality residential apartments, offices and
commercial units and is well connected via key
thoroughfares and the adjacent metro line 10 station.
Sembcorp Industries has entered into an agreement to
divest its entire stake in Sembcorp Enviro (India) to Ramky
International (Singapore) for S$7.25m. Sembcorp Enviro
(India) is a special purpose vehicle that owns a 51% stake
in SembRamky Environmental Management, a medical
waste collection and treatment player in India.
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀘 15,680.4 111.4 0.7
S&P 􀀘 1,772.0 9.8 0.6
NASDAQ 􀀘 3,952.3 12.2 0.3
Regional Indices
ST Index 􀀘 3,208.8 1.0 0.0
ST Small Cap 􀀙 539.7 (1.0) (0.2)
Hang Seng 􀀘 22,846.5 40.0 0.2
HSCEI 􀀘 10,390.6 132.1 1.3
HSCCI 􀀘 4,451.9 26.9 0.6
KLCI 􀀙 1,815.7 (2.7) (0.2)
SET 􀀘 1,455.9 6.2 0.4
JCI 􀀙 4,562.8 (27.8) (0.6)
PCOMP 􀀘 6,543.5 3.6 0.1
KOSPI 􀀘 2,051.8 3.6 0.2
TWSE 􀀘 8,421.0 13.1 0.2
Nikkei 􀀙 14,326.0 (70.1) (0.5)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 598
Total Daily Vol (m shrs) 2,049
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
29 Oct
Target Price
($)
ST Engineering Buy 4.180 4.80
ComfortDelgro Buy 1.910 2.19
OCBC Bank Buy 10.400 12.40
Singapore Airlines Buy 10.460 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
29 Oct
Target Price
($)
Ezion Holdings Buy 2.220 3.10
CSE Global Buy 0.885 1.07
Frasers Centrepoint Trust Buy 1.870 2.14
Yoma Strategic Holdings Buy 0.755 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
Loyz Energy draws first oil in the US, one year after inking its
landmark E&P deal. This is a milestone for the Group as a fullfledged
independent E&P player. Loyz Energy will step up the
pace as it brings other concessions to production and
selectively adds more producing assets.
Cacola Furniture has entered into a MOU to acquire a 51%
stake in Hubei Goldmine for RMB71.4m cash. The proposed
acquisition represents the company’s first acquisition within
its stated plan to expand its business into mining and related
business activities.
MAS sees inflation picking up in next few quarters before
easing towards end-2014. As overall wage growth continues
to strengthen above Singapore's historical average of 3.3%,
businesses here should brace themselves for intensifying cost
pressures amid a further tightening labour market. This was
the view of the Monetary Authority of Singapore (MAS) in its
twice-yearly Macroeconomic Review released yesterday.
The number of low-cost carrier (LCC) seats in Asia jumps
28.7% y-o-y in 1H 2013, driven largely by budget carriers in
Indonesia, India, Thailand and Malaysia. The four markets
collectively account for over half of total global LCC growth.
According to the study by technology travel firm Amadeus,
Asia, the Middle East and Africa are experiencing sharp
growth in LCC capacity while more mature markets such as
Europe and the Americas are seeing flat or marginal
increases.
US stocks rallied, underpinned by corporate earnings and as
investors await the outcome of the FOMC meeting and policy
statement. A weaker-than-expected October consumer
confidence (actual 71.2, consensus 85) lifted optimism that
the FED will delay QE tapering till next year. As US and
European markets have rallied to their highest levels in more
than 3 years, valuations have also increased. According to
Bloomberg, the S&P500 trades at 16.8x reporting earnings
that is the highest since May 2010. Likewise, the Stoxx 600
that tracks European equities is currently valued at 20.9x
reported and 14.9x projected earnings, the highest since end
2009.

Daily summary 29 Oct 13

Dow and Europe were flat last night. Dow closed -1 at 15569.  Dow's trend is up. Dow's future is now +30.  Europe opened up.

Asian bourses were mixed.  Nikkei -70, ShanghaiC -5, Hangseng +40.  STI closed +2 at 3210.  Volume was 2.1b shares.  Gainers were 197 to 253 losers.

Trend of STI is flat.

Top volumes were SkyOne -0.7, YHM -0.2, Blumont +0.1, Innopac -0.1, Sunmoon unchanged, Albedo +0.1, Digiland unchanged, LionGold -0.5, Cedar unchanged, Asiasons +1.1.

Market opened slightly down but crept up to close marginally up. It was another quiet day of trading with news a broking houses introducing more curbs on penny and speculative stocks. Blue chips were firmer. Penny and speculatives were mixed. Market is likely to trade side ways as sentiment was dampened by the curbs.

Europe and Dow are steady but directionless.

Monday, October 28, 2013

DBS Vickers Report 29 Oct 13

ARA - Growth trajectory accelerated with new
strategic partner. Maintain BUY, TP raised to S$2.08
􀂃 Hi-P - No growth for 3Q13, 2H13<1H13. Downgrade
to FULLY VALUED, TP cut to S$0.47
ARA Asset Management (ARA) and Straits Trading
Company (STC) have announced a strategic collaboration
to jointly invest in property. The transaction details: (1)
STC will acquire a 20.1% stake in ARA, from vendor share
sales by Cheung Kong and John Lim, (2) ARA will manage
STC’s entire real estate portfolio (ex hospitality) and (3)
STC and John Lim will set up a new S$950m coinvestment
vehicle (Straits Real Estate) to provide seed
capital for new fund products to be managed by ARA.
With a much-needed strong war chest to accelerate its
growth trajectory, we see exciting times ahead for ARA.
We have raised ARA’s TP to S$2.08 (Prev S$ 1.89).
Maintain BUY.
Hi-P has cut earnings guidance due to lower orders from
customers. 3Q is affected by inventory provisions; we
believe margins were lower than expected. We had earlier
warned of downside risks for Hi-P, in view of weak
demand and rising stockpiles of Blackberry and Apple
smartphones. However, the decline turned out to be more
severe than we had expected. FY13F/14F EPS cut by
37%/25%. Downgrade to FULLY VALUED, TP revised
down to S$0.47 (Prev S$0.65).
3Q13 results for Raffles Medical within expectations.
Hospital revenue growth a tad slower, but attributed to
one-off events. The group is in a strong cash position to
fund expansion plans internally. Maintain HOLD and TP of
S$3.15.
Petra Foods' deal to sell its cocoa ingredients business to
Barry Callebaut for US$950m - subject to adjustments at
completion - appears to have hit a more sour note as
Petra is now being asked by the buyer to assume a closing
price reduction to the tune of US$98.3m, on top of the
US$74m that was already cut earlier. Should Petra be
compelled to accept the closing price reduction, it would
mean a chunky 20% slice off the original offer price when
the deal was struck in December last year. This could also
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀙 15,568.9 (1.4) (0.0)
S&P 􀀘 1,762.1 2.3 0.1
NASDAQ 􀀙 3,940.1 (3.2) (0.1)
Regional Indices
ST Index 􀀘 3,207.9 2.6 0.1
ST Small Cap 􀀙 540.6 (4.7) (0.9)
Hang Seng 􀀘 22,806.6 108.2 0.5
HSCEI 􀀘 10,258.4 80.6 0.8
HSCCI 􀀘 4,425.0 2.4 0.1
KLCI 􀀘 1,818.4 0.8 0.0
SET 􀀙 1,449.6 (5.3) (0.4)
JCI 􀀘 4,590.5 9.7 0.2
PCOMP 􀀙 6,539.8 (44.0) (0.7)
KOSPI 􀀘 2,048.1 13.7 0.7
TWSE 􀀘 8,407.8 61.2 0.7
Nikkei 􀀘 14,396.0 307.9 2.2
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 600
Total Daily Vol (m shrs) 3,246
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
28 Oct
Target Price
($)
ST Engineering Buy 4.180 4.80
ComfortDelgro Buy 1.910 2.19
OCBC Bank Buy 10.400 12.40
Singapore Airlines Buy 10.460 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
28 Oct
Target Price
($)
Ezion Holdings Buy 2.220 3.10
CSE Global Buy 0.885 1.07
Frasers Centrepoint Trust Buy 1.870 2.14
Yoma Strategic Holdings Buy 0.755 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
mean that Petra's last announced initial net proceeds of
US$164m from the last agreed price of US$860m and the
net estimated gain on divestment of US$64m could be
whittled down to just US$66m in net proceeds and a
significant estimated net loss on divestment of about
US$34.3m.
ST Engineering’s aerospace arm, ST Aerospace and Jetstar
Asia has signed a three-year line maintenance contract. The
agreement covers a full suite of line maintenance support for
Jetstar Asia’s existing and future fleet of Airbus A320 aircraft.
King Wan Corp has secured five new mechanical and
electrical (M&E) contracts in Singapore worth a total of
S$26m during the period from August to October 2013.
With these new contracts, the Group’s order book to date
stands at S$168.9m, with M&E contracts which will keep the
group busy to 2016.
BH Global Corp expects to report a net loss for 3Q13, mainly
due to foreign exchange losses arising from the significant
depreciation in value of Indonesian Rupiah against Singapore
Dollar.
US markets finished mixed ahead of the mid-wk FOMC
meeting even as consensus expects the FED to continue its
USD85bil/mth bond purchases, cutting back on stimulus only
around March 2014. The US 10-year bond yield stay
generally flat around the 2.51% level in recent sessions. In
after hours, shares of Apple Inc fell 2.2% after it forecasts
lower-than-expected gross margins going forward despite
reporting better-than-expected quarterly results

Daily Summary 28 Oct 13

Dow closed +61 at 15570 on Friday. Europe closed flat.  Dow's trend is up.
Dow's future is now +27. Europe opened mixed.

Asian bourses were mostly up.  Nikkei +308, ShanghaiC +1, Hangseng +108.
STI closed at day low, +3 at 3206.  Volume was 3.2b shares.  Gainers were
130 to 354 losers.

STI's trend is flat.

Top volumes were SkyOne -37.8, Digiland unchanged, YHM -0.5, SingHaiyi
unchanged, Innopac -0.3, HanKore -0.4, Albedo -0.3, Blumont -3.5, GoldenAgr
+1, Cedar unchanged.

Market opened up but closed near its day low at +3. Blue chips were weaker.
Penny and speculatives were big losers. SkyOne -37.8 from last Friday's
closing at 47.  Sentiments for penny and speculatives were hurt likely
because of the investigation on the 3 designated counters and now the sharp
fall of SkyOne.

Regional markets were positive. Europe and Dow are looking steady too.

Sunday, October 27, 2013

OCBC Report 28 Oct 13

Wilmar: Downgrade to HOLD on valuation

Summary:
Wilmar International Limited’s (WIL) share price has done very well since we upgraded our rating to Buy on 6 Sep, rising as much as 14% to a recent high of S$3.50. As the current price is also 4% above our S$3.33 fair value (still based on 12.5x blended FY13/FY14F EPS), we downgrade our call to HOLD on valuation grounds. We also do not see any strong near-term catalysts to justify a re-rating before its 3Q13 results due 7 Nov. (Carey Wong)

MORE REPORTS


Ascott Residence Trust: 3Q13 ahead of expectations

Summary:
ART announced 3Q13 results that were ahead of ours and the street’s expectations. Revenue climbed 11% YoY to S$86.1m, chiefly due to additional revenue of S$14.1m from the properties acquired in second half last year and on 28 Jun 2013. The increase was partially offset by the decrease in revenue of S$4.7m from the divestment of Somerset Grand Cairnhill in Sep 2012 and lower contribution of S$0.7m from the existing properties, mainly properties in Philippines and Japan. The group achieved a RevPAU of S$133 in 3Q13, a decrease of 10% as compared to 3Q12. The decrease in RevPAU was mainly due to divestment of Somerset Grand Cairnhill Singapore and weaker performance from Philippines and Japan. Gross profit climbed 10% YoY to S$44.8m. Unitholders' distribution increased 17% YoY to S$30.0m. DPU rose 6% YoY to 2.37 S cents, bringing 9M13 DPU to 7.07 S cents, versus full year estimates of ours and the street of 8.9 S cents and 9.0 S cents respectively. Adjusting our assumptions, our FY13F DPU forecast increases from 8.9 S cents to 9.1 S cents and our FV increases to S$1.39 from S$1.37. We maintain our BUY rating on ART. (Sarah Ong)

First REIT: 3Q13 DPU below expectations

Summary:
First REIT (FREIT) reported 3Q13 revenue of S$22.8m and DPU of S$0.0196, representing an increase of 60.7% and 16.7% YoY, respectively. For 9M13, revenue jumped 43.1% to S$60.4m and was within our expectations. However, DPU of S$0.0555 (+14.2% after excluding exceptional distributions) was below due to higher-than-estimated expenses. Looking ahead, FREIT will continue to seek opportunities at expanding its footprint in Indonesia, given her growing healthcare market and the strong pipeline of possible acquisition targets from its sponsor Lippo Karawaci. We maintain our revenue estimates but tweak our DPU forecasts for FY13 and FY14 downwards by 4.4% and 1.9%, respectively. This correspondingly lowers our DDM-derived fair value estimate from S$1.20 to S$1.18. Given a decent FY14F dividend yield of 7.5%, we maintain our BUY rating for FREIT. (Wong Teck Ching Andy)

Starhill Global REIT: Delivering as promised

Summary:
Starhill Global REIT (SGREIT) reported 3Q13 DPU 1.21 S cents, up 9.0% YoY. This brings the 9M13 DPU to 3.77 S cents, in line with our expectations. SGREIT’s Singapore portfolio continued to benefit from Wisma Atria (WA) redevelopment and upward rent reviews at Ngee Ann City (NAC). For its overseas properties, Australia portfolio was the key performer, raking up a 25.7% increase in NPI due to incremental income from Plaza Arcade. This more than offset the lower contributions from the other overseas properties due to unfavourable forex movements and increased competition. On the capital management front, we note that SGREIT has completed the drawdown of new unsecured loan facilities to refinance its debts due in 2013, leaving it with no refinancing needs until Jun 2015. As at 30 Sep, gearing stood largely unchanged at 30.6%, while the fixed/hedged debt ratio improved to 94.0% from 81.0% seen in 2Q. We maintain BUY and S$0.95 fair value on SGREIT as we continue to like its clear growth drivers, robust financial standing and compelling valuation. (Kevin Tan)

Ezion Holdings: Secures US$65m LOI for service rig

Summary:
Ezion Holdings announced this morning that it has received a letter of intent with a contract value of up to about US$65m over a three-year period to provide a service rig for an oil major to support its oil & gas activities in SE Asia. The unit is expected to be deployed by late 3Q15, and will be funded through internal resources and borrowings, like Ezion’s earlier projects. The group is in the process of forming a JV to order and own an additional service rig in conjunction with this project, and pending more details from management, we maintain our BUY rating and fair value estimate of S$2.90 on the stock. (Low Pei Han)

Raffles Medical Group: 3Q13 results in-line with expectations

Summary:
Raffles Medical Group (RMG) reported its 3Q13 results this morning which were within our expectations. Revenue rose 8.0% YoY to S$85.1m. PATMI was up 10.3% to S$13.9m. Growth during the quarter was driven largely by a higher patient load. Both of RMG’s core divisions contributed to its topline increase, with its Hospital Services and Healthcare Services segments growing 9.4% and 5.7% YoY, respectively. For 9M13, revenue and PATMI increased 10.7% and 14.0% to S$253.0m and S$41.7m, forming 72.8% and 68.7% of our full-year estimates, respectively. 4Q is traditionally RMG’s strongest quarter and we expect this trend to continue in FY13. We will provide more details after the analyst briefing. Maintain BUYand S$3.61 fair value estimate. (Wong Teck Ching Andy)

Triyards Holdings: Secures contracts worth US$59m

Summary:
Triyards Holdings announced this morning that it has secured two contracts worth US$59m, including its 10th Self-Elevating Unit (SEU) order. The SEU order is with an Asian-based client and is for TRIYARDS’ BH 335, which has a leg length of more than 100m (~335ft). The other contract is for the construction of a turret for a Floating Storage Offloading (FSO) unit in Indonesia. As at 31 Aug 2013, the group’s net order book stood at US$217m. Pending more details such as the delivery date of the SEU, we maintain our BUY rating with S$0.88 fair value estimate on the stock. (Low Pei Han)

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


NEWS HEADLINES
- US stocks finished another week of gains with the S&P 500 index at a record high after earnings from large technology companies wowed investors with revenue growth.

- Singapore's industrial production for Sep outstripped even the most bullish of market forecasts to grow 9.3% from a year ago.

- Property consultants have given mixed reactions to the latest 3Q13 private housing data released by the Urban Redevelopment Authority.

- Fraser and Neave's move to shed its property arm and focus on its other core businesses took a step forward after Frasers Centrepoint Limited got the go-ahead for its planned listing.

- The units of three local firms - Tat Hong Holdings, Boustead Singapore and CSC Holdings - have set up a joint venture with AME Group to develop land in Iskandar Malaysia.


DBSVickers Report 28 Oct 13

Ezra - Turnaround in the offing? Upgrade to HOLD,
TP raised to S$1.34
􀂃 Starhill Global REIT - Positives priced in; downgrade
to HOLD
The 3Q results season that spans till mid-Nov should set
the tone as the calendar year heads towards the
traditional year-end holiday lull period. With few
exceptions, we expect a generally lack lustre 3Q reporting
season. We maintain our view for the STI to be range
bound from c.3150-3250 before heading towards 3300
by year-end on the assumption that the current reporting
season turns out benign with no major downward revision
to FY14F earnings forecast.
Traders looking to position into stocks that have the
potential to not only report healthy growth but also stand
a good chance of beating forecasts in their upcoming
results should consider Nam Cheong, Ezion, Centurion &
Yoma given their ample upside to TP.
Investors expect the FED not to start tapering QE at
Thursday’s FOMC meeting. The recent US federal
government partial shutdown has pushed back consensus
expectation for the start of QE tapering to March 2014. to
leave While long bond yields should remain suppressed in
the short-term and S-REITs continue to be underpinned by
tapering delay, further gains for the sector could be tame.
Delay does not mean terminate and it won’t be too long
into early 2014 when QE tapering concerns re-emerge.
Our SREITs picks are Fraser Centrepoint Trust and Cache.
Investors who seek exposure to REITs without the interest
rate risk can consider ARA. Technically, we continue to
see $1.82 upside for this stock.
4Q13 results for Ezra beat our estimates. Subsea division
turns around; we expect stable margins hereon with
legacy projects completed. FY14 core earnings were raised
by 33% on better margin assumptions, in line with
improving execution and charter market recovery. TP
raised to S$1.34 (Prev S$ 0.90); upgrade to HOLD.
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀘 15,570.3 61.1 0.4
S&P 􀀘 1,759.8 7.7 0.4
NASDAQ 􀀘 3,943.4 14.4 0.4
Regional Indices
ST Index 􀀙 3,205.2 (12.7) (0.4)
ST Small Cap 􀀙 545.3 (1.1) (0.2)
Hang Seng 􀀙 22,698.3 (137.5) (0.6)
HSCEI 􀀙 10,177.8 (144.3) (1.4)
HSCCI 􀀙 4,422.6 (14.9) (0.3)
KLCI 􀀙 1,817.6 (1.4) (0.1)
SET 􀀙 1,454.9 (11.4) (0.8)
JCI 􀀙 4,580.8 (14.0) (0.3)
PCOMP 􀀙 6,539.8 (44.0) (0.7)
KOSPI 􀀙 2,034.4 (12.3) (0.6)
TWSE 􀀙 8,346.6 (67.1) (0.8)
Nikkei 􀀙 14,088.2 (398.2) (2.7)
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$bn) 600
Total Daily Vol (m shrs) 2,264
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
25 Oct
Target Price
($)
ST Engineering Buy 4.160 4.80
ComfortDelgro Buy 1.915 2.19
OCBC Bank Buy 10.400 12.40
Singapore Airlines Buy 10.480 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
25 Oct
Target Price
($)
Ezion Holdings Buy 2.230 3.10
Goodpack Buy 1.900 2.00
CSE Global Buy 0.890 1.07
Frasers Centrepoint Trust Buy 1.865 2.14
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
3Q13 results for Starhill Global REIT in line. Weaker overseas
income mitigated by strong performances at Ngee Ann City
and Wisma Atria. Backed by a quality portfolio with good
earnings visibility, we believe that positives have already been
priced in at this level. Downgrade to HOLD, given limited
upside to our rolled-forward TP of S$0.87 (Prev S$ 0.84).
Strengthening SGD-INR continues to be a drag on Ascendas
India Trust earnings. Gross revenues and NPI declined by a
9% and 14% y-o-y to S$28.9m and S$16.4m respectively.
Development of Aviator is on track, with 100% of space
committed. Low gearing of 21% opens opportunities for
growth. Maintain HOLD, TP revised to S$0.73 (Prev S$ 0.75).
3Q13 results for Ascott Residence Trust slightly ahead.
Refurbishments completing in subsequent quarters are
expected to drive organic growth. Divestment of Somerset
Grand Fortune Garden Beijing is positive. Maintain BUY with
TP S$1.42 for its attractive 6.8%-7.2% yields.
Hi-P slashed its 3Q13 earnings guidance despite higher
revenue because of a S$4.4m inventory provision due to
lower orders from an existing customers. Y-o-y, the company
now expects 3Q13 profits to be flat. For the full year, Hi-P
now expects higher sales in 2H13 vs 1H13 but expect lower
profits. We had earlier warned of earnings downside risks for
Hi-P due to demand weakness and rising stockpiles for both
smartphone customers Blackberry and Apple. However, the
magnitude of decline is much substantial than we had
expected. Although our current forecast is already the lowest
in the street, we now expect at least another 15% downside
to our FY13F of S$38m. This is assuming 2H13 is 20% lower
h-o-h. We will review our earnings as well as TP (last @
S$0.65) and HOLD recommendation pending details from
management.
Ezion has received a letter of intent with a contract value of
up to about US$ 65m over a 3 year period to provide a
Service Rig to be used by an oil major to support its oil & gas
activities in South East Asia.
Triyards has secured 2 contracts worth an additional
US$59mil that includes its 10th Self-Elevating Unit (SEU)
order and the construction of a turret for a Floating Storage
Offloading (FSO) in Indonesia. The latest contract win lifts
total orders over the past 12 months to about US$209mil.
Rex is proposing to place up to 70m new shares at the
placement price of S$0.755 per share. The Placement Price
represents a discount of 9.6% to last weighted average price.
The company intends to use the net proceeds of about
S$50.5m mainly for exploration and drilling activities.
Lum Chang has been awarded the construction contract
worth S$178.6m for the Glades condominium at Bedok Rise.
This latest award brings the total outstanding value of
construction projects still in progress to S$566.4m.
Boustead Singapore enters into joint venture for
developments in Iskandar Malaysia. The JV Company intends
to develop six parcels of vacant industrial land in Nusajaya,
Iskandar Malaysia’s Flagship Zone B.
Sheng Siong has acquired 18,000 sq ft of shop space at
Junction Nine, a mixed development located at 18 Yishun
Avenue 9. The property has a 99 year lease period and costs
S$55m. Funding will be by internal cash. As of 3Q13, SSG
has net cash of S$107m. Immediate impact on cash; no
change to our earnings estimates and dividends.
Singapore’s industrial production for September posted its
biggest rise since February 2012, expanded by 11.3% y-o-y,
following a revised growth of 4% y-o-y in August, and better
than market expectation of a 9.3% growth. This rise is on the
back of a 20% surge in electronics output and a busy time
for rig and ship-builders. After adjusting for seasonal factors,
manufacturing output rose 3.7% m-o-m. Excluding the
biomedical cluster, output would have grown 5.8% from
August.

Friday, October 25, 2013

Daily Summary 25 Oct 13

Dow and Europe were up last night.  Dow +96 at 15509.  Dow's trend is up. Dow's future is now -3.  Europe opened down.

Asian  bourses were mostly down.  Nikkei -398, ShanghaiC -31, Hangseng -137.  STI closed -9 at 3209,  Volume was 2.2b shares.  Gainers were 192 to 263 losers.

STI's trend is slightly up.

Top volumes were Innopac -0.4, YHM unchanged, Blumont -3.7, SIICEnv +1.2, Hankore unchanged, Asiasons -4.1, LionGold -4.5, Acma unchanged, Albedo -0.1, GoldenAgr -1.

Market opened up but drifted down through the day to close near day low. Volume was low. Blue chips were mixed while penny and speculatives were weaker.  The three counters of Blumont, Asiasons and LionGold fell again with news that SGX is conducting an investigation on the volatility of these stocks that cost the lost of $8b.

Europe and Dow are looking a bit weak for a Friday.

Thursday, October 24, 2013

OCBC Report 25 Oct 13

KEY IDEA

Suntec REIT: Poised for strong harvest

Suntec REIT posted 3Q13 DPU of 2.289 S cents, up 1.8% QoQ (-2.6% YoY). This brings the 9M13 DPU to 6.766 S cents (-5.6%), meeting 73.4% of both consensus and our FY13F DPU. As at 30 Sep, both the office and retail portfolio occupancy rates were maintained at high levels of 99.8% and 98.3%, respectively. We understand that ~160,000 sqft of leases was signed in 3Q, leaving only a balance of 1.7% of office NLA due for renewal in 2013. As such, its portfolio performance is expected to stay relatively steady, despite potential weakness in 4Q13/1Q14 as Suntec REIT prepares for Phase 3 AEI. Management also updated that pre-commitment at Phase 2 retail space has improved from 70.1% in 2Q to 83.7%. While there are a few anchor tenants (which may command lower rents), Suntec REIT reiterated that ROI of 10.1% remains on track. In 4Q, we can reasonably expect revaluation gains of the portfolio assets, which may improve Suntec REIT’s gearing and P/B ratios (currently at 37.2% and 0.84x respectively). Maintain BUYwith higher fair value of S$1.85 (S$1.80 previously) as we roll our valuation to FY14. (Kevin Tan)

MORE REPORTS


Tiger Airways: Growing pains to sustain

We were disappointed by Tigerair’s (TR) 2QFY14 results, which showed a larger operating loss (S$12.8m vs. S$11.5m in 2Q13) due to higher operating costs. Performance by its associate airlines during the quarter was also weak with overall losses at almost S$24m (S$26.6m in 1Q14; S$3.8m in 2Q13), and that lead to an erosion of gains from the disposal of 60% interest in Tigerair Australia. Although there were some seasonality factors at play, the lack of demand traction and competitive fare pressures force us to temper our earlier optimism over TR’s performance for FY14/15. Lowering our FY14/15 net profit projections considerably to account for the growing pains of its associate airlines and the likelihood of depressed passenger yields for Tigerair Singapore in the near-term, we downgrade TR to HOLDwith a reduced fair value estimate of S$0.55 (S$0.79 previously). (Lim Siyi)

Triyards Holdings: Proposes maiden dividend

Triyards Holdings (Triyards) reported a 6.5% YoY drop in revenue to US$76.7m and a 32.2% decrease in net profit to US$10.3m in 4QFY13, bringing FY13 revenue and net profit to US$275.1m and US$31.4m, respectively. Though results were good, the market is likely to focus on new orders. It has been about ten months since the group secured its last SEU order, and the lack of new contracts so far has been a key factor that has weighed on the share price, in our view. The group’s net order book of US$217m will provide work for FY14, but more work has to be secured to keep its yards busy beyond that. Rolling forward our valuation to blended FY14/15F earnings with a lower P/E of 7x (prev 8x) due to the lack of orders so far, our fair value estimate dips from S$1.07 to S$0.88. Maintain BUY. Meanwhile, the group has proposed a final dividend of S$0.02/share, translating to a 3.1% dividend yield. (Low Pei Han)


Ascott Residence Trust: 3Q13 results ahead

ART has announced 3Q13 results that were ahead of ours and the street’s expectations. Revenue climbed 11% YoY to S$86.1m, chiefly due to additional revenue of S$14.1m from the properties acquired in second half last year and on 28 June 2013. The increase was partially offset by the decrease in revenue of S$4.7m from the divestment of Somerset Grand Cairnhill in September 2012 and lower contribution of S$0.7m from the existing properties, mainly properties in Philippines and Japan. The group achieved a REVPAU of S$133 in 3Q 2013, a decrease of 10% as compared to 3Q 2012. The decrease in REVPAU was mainly due to divestment of Somerset Grand Cairnhill Singapore and weaker performance from Philippines and Japan. Gross profit climbed 10% YoY to S$44.8m. Unitholder’s distribution increased 17% YoY to S$30.0m. DPU rose 6% YoY to 2.37 S cents, bringing 9M13 DPU to 7.07 S cents, versus full year estimates by us and the street of 8.9 S cents and 9.0 S cents respectively. We maintain our BUYrating on ART but place out FV of S$1.37 under review. (Sarah Ong)

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


NEWS HEADLINES


- US stocks climbed on Thu, as equities picked up steam along with large-cap companies on signs of an improving global economy.

- The total debt servicing ratio framework appears to have made a bigger dent on purchases of private homes by those with HDB addresses than by those with private addresses, according to consulting group DTZ.

- Mapletree Commercial Trust's DPU rose to 1.801 S cents in 2QFY14, up 16.5% from a year earlier, thanks to positive contributions from its properties.

- Far East Hospitality Management will launch three Singapore hotels over the next three months.

- Stamford Tyres has appointed a dealer for Sumo Firenza tyres in the United Arab Emirates to expand its presence in the Middle East.

DBSVickers Report 25 Oct 13

Singapore Banks - Stable NIM and slower loan
growth expected for 3Q
 Del Monte Pacific -Downgrade to HOLD after recent
outperformance
 Tiger Airways - Too much turbulence; downgrade to
FULLY VALUED with TP cut to S$0.47
 Mapletree Commercial Trust - Lack of acquisitions
limits upside to DPU. Downgrade to HOLD, TP revised
to S$1.32
Our analyst expects stable net interest margin (NIM) and
slower loan growth for the upcoming 3Q results for the
banks. NIM should remain fairly stable, tracking trends
recorded in 2Q13. System loan growth is trending down,
as expected. We expect loan growth to normalise at a
more modest c.2% q-o-q, after the chucky loan growth
seen in 1H13. In line with the softer capital market
environment, market-related income is expected to
moderate q-o-q. We also expect slower regional
contribution due to both currency and macro effects.
Preference for OCBC (BUY, TP: S$12.40) remains.
Although OCBC may record another relatively feeble
quarter from its insurance business contribution (we have
lowered our FY13F earnings by 5% accordingly), we
believe its banking operations will remain strong. OCBC
will release 3Q results on 1 Nov and UOB on 5 Nov.
Unlike the market’s optimism, we are neutral on Del
Monte Pacific’s proposed US$1.7bn acquisition of USbased
Del Monte Foods’s Consumer Food Business.
Earnings accretion to common equity holders is estimated
to be minor in the interim, and is highly sensitive to
acquired entity’s business performance going forward.
3Q13 earnings were in line. Going forward, the Group’s
growth profile will be altered, given the consolidation of a
larger entity with lower growth. We estimate that revenue
contribution from Philippines will drop to 14% in FY14F,
down from 62% in FY13F. Downgrade to HOLD after
recent outperformance; TP reduced slightly to S$0.96
(Prev S$0.97). There are possible downsides to dividend
payout, given its high gearing of c.1.8x post-acquisition,
in our view.
US Indices Last Close Pts Chg % Chg
Dow Jones  15,509.2 95.9 0.6
S&P  1,752.1 5.7 0.3
NASDAQ  3,929.0 21.9 0.6
Regional Indices
ST Index  3,218.0 13.1 0.4
ST Small Cap  546.4 1.3 0.2
Hang Seng  22,835.8 (164.1) (0.7)
HSCEI  10,322.1 (135.2) (1.3)
HSCCI  4,437.5 (29.6) (0.7)
KLCI  1,818.9 4.8 0.3
SET  1,466.3 9.0 0.6
JCI  4,594.8 48.3 1.1
PCOMP  6,583.8 (51.3) (0.8)
KOSPI  2,046.7 10.9 0.5
TWSE  8,413.7 20.1 0.2
Nikkei  14,486.4 60.4 0.4
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 599
Total Daily Vol (m shrs) 2,080
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
24 Oct
Target Price
($)
ST Engineering Buy 4.160 4.80
ComfortDelgro Buy 1.910 2.19
OCBC Bank Buy 10.450 12.40
Singapore Airlines Buy 10.450 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
24 Oct
Target Price
($)
Ezion Holdings Buy 2.240 3.10
Goodpack Buy 1.890 2.00
CSE Global Buy 0.880 1.07
Frasers Centrepoint Trust Buy 1.850 2.14
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
2Q-FY14 results for Tiger Airways disappoint (core net loss of
S$35m) as Tigerair Singapore slips into the red. No significant
improvement from associates in Australia, Indonesia and
Philippines either. Factoring in lower load factors and higher
costs at Tigerair Singapore and wider losses from associates,
we push up our core loss estimate for FY14 to S$80m from
S$11m previously, and we now believe the Group is unlikely
to turnaround in FY15 as well. Downgrade to FULLY VALUED
with TP cut to S$0.47 (Prev S$ 0.74).
2Q14 results for Mapletree Commercial Trust in line. Strong
rental reversions provide solid platform for organic income
growth. However, lack of acquisitions limits upside to DPU.
Downgrade to HOLD, TP revised to S$1.32 (Prev S$ 1.35).
Capitamall Trust’s 3Q13 results in line. Tampines Mall will be
undergoing S$65m of AEI works in 1Q14. Going forward,
rising labour costs could cap reversionary upside. Maintain
HOLD, TP raised to S$2.16 (Prev S$ 2.07) as we roll forward
our valuations.
Far East Hospitality Management will launch three Singapore
hotels over the next three months. These are the Village
Hotel Katong in the Marine Parade/East Coast area, Amoy at
Far East Square in the Chinatown/CBD area, and a relaunch
of the Rendezvous Grand Hotel in the Bras Basah area which
Far East Hospitality Trust (FEHT) acquired recently from Straits
Trading Company.
Tiong Seng Holdings has been awarded a contract worth
approximately $42.7m for the proposed erection of a 7-
storey industrial building with underground tanks at One-
North.
Stamford Tyres has appointed a dealer, Al Habtoor Motors,
for Sumo Firenza tyres in the United Arab Emirates to expand
its presence in the Middle East.
Changtian Plastic & Chemical expects to report a loss for the
third quarter ended 30 September 2013. This was mainly due
to an impairment loss on the Group’s property, plant and
equipment.
Mainland Chinese, Malaysians, Indonesians and Indians
continued to remain the top four nationalities among the
combined pool of foreigners and Singapore permanent
residents who bought private homes in the first nine months
of this year. Together they accounted for 81.3% of the 4,028
private homes purchased by PRs and foreigners in Jan-Sept
2013, similar to their 80.9% share of the 7,717 private
homes that PRs and foreigners picked up in 2012, according
to property consulting group DTZ.
Manufacturing activity in China has risen to a seven-month
high this month, led by new orders. The flash HSBC Markit
PMI released yesterday, a week ahead of the month's final
reading, was 50.9, above market expectations. A breakdown
of the PMI or purchasing managers index showed most subindices
over-performing. Output rose to a six-month high of
51 from 50.2; new orders were up 0.8 point to 51.6, a
seven-month high; purchases of inputs climbed above 50 for
the first time in nine months; and employment increased to
49.9 from 48.8.
US stocks rose on a busy day of results releases as earnings
generally beat estimates and signs of slower economic
growth underpinned expectations that the FED will delay QE
tapering. The US 10-year bond yield stayed around the 2.5%
mark. Of the 217 S&P500 companies that have released
results so far, 77% beat bottom line consensus estimates
while 53% beat sales estimates.

Daily Summary 24 Oct 13

Dow and Europe closed slightly down last night. Dow -54 at 15413.  Dow's
future is now +46. Dow's trend is still up.  Europe opened up.

Asian bourses were mixed.  Nikkei +60, ShanghaiC -19, Hangseng -164. STI
closed +15 at 3220. Volume was 2b shares.  Gainers were 235 to 183 losers.

Trend of STI is up.

Top volumes were YHM +0.2, SingHaiyi +0.1, Innopac +0.2, Albedo unchanged,
MDR unchanged, FreightLinks +0.7, Blumont -0.5, LionGold +0.5, Asiasons
-0.5, HanKore unchanged.

Market was slightly up in early morning and traded in a narrow range, There
were some short coverings in the last half hour to push index to close at
day high.  Blue chips were mostly up. Penny and speculatives were slightly
firmer. Volume was a low of 2b shares.

Europe and Dow are looking firm at the moment.

Wednesday, October 23, 2013

DBSVickers Report 24 Oct 13

Mapletree Industrial Trust – Rental reversion higher
than expected; maintain BUY, TP raised to S$1.44
STI’s pullback off 3235 that is modestly below our stated
3250 near-term resistance level yesterday is within
expectations. With earnings revision still in a downward
cycle, it is unlikely for the index to rise above the13.9x
(ave) FY14F PE level that is currently at c.3300. We keep
our view for STI to range within c.3150-3250 in the near
term before heading towards 3300 by year-end on the
assumption that the current reporting season turns out
benign with no major downward revision to FY14F
earnings forecast. For the current session/s, immediate
support is peg at 3193 or 3178.
2Q14 results for Mapletree Industrial Trust above
expectations. Operational performance remains strong,
with MINT reporting renewals hikes in the range of 12%
to 27%, higher than expected. Maintain BUY, TP raised to
S$1.44 (Prev S$ 1.37).
Cache Logistics Trust’s 3Q13 results in line. With minimal
renewals in FY14F, Cache offers strong income visibility.
Cache is poised for acquisitions, with opportunities
coming from overseas markets. Maintain BUY, TP S$1.33.
Yields of close to 7.3%-7.5% are one of the highest
amongst peers.
4Q13 results for Frasers Commercial Trust in line; outlook
remains positive. We expect DPU CAGR of 7-8% over
FY14-15. FCOT has resilient portfolio occupancies of
97.9%, with organic-driven growth in FY14. Maintain
BUY, TP revised slightly to S$1.46 (Prev S$ 1.44) as we roll
forward valuations. Forward yields of 6.6%-7.0% are
attractive.
Sheng Siong Group’s 3Q13 results in line; earnings
growth of 8% was driven by contribution from new
stores. Margins expanded further from lower input costs,
outperforming all quarters since listing. Maintain BUY and
S$0.80 TP; valuations are now more attractive post share
price correction.
US Indices Last Close Pts Chg % Chg
Dow Jones  15,413.3 (54.3) (0.4)
S&P  1,746.4 (8.3) (0.5)
NASDAQ  3,907.1 (22.5) (0.6)
Regional Indices
ST Index  3,204.8 (5.4) (0.2)
ST Small Cap  545.1 0.9 0.2
Hang Seng  23,000.0 (316.0) (1.4)
HSCEI  10,457.3 (196.1) (1.8)
HSCCI  4,467.1 (84.2) (1.8)
KLCI  1,814.1 10.5 0.6
SET  1,457.4 8.8 0.6
JCI  4,546.5 33.8 0.7
PCOMP  6,635.1 31.5 0.5
KOSPI  2,035.8 (20.4) (1.0)
TWSE  8,393.6 (24.6) (0.3)
Nikkei  14,426.1 (287.2) (2.0)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 598
Total Daily Vol (m shrs) 2,777
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
23 Oct
Target Price
($)
ST Engineering Buy 4.140 4.80
ComfortDelgro Buy 1.910 2.19
OCBC Bank Buy 10.390 12.40
Singapore Airlines Buy 10.370 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
23 Oct
Target Price
($)
Ezion Holdings Buy 2.240 3.10
Goodpack Buy 1.930 2.00
CSE Global Buy 0.880 1.07
Mapletree Commercial Trust Buy 1.255 1.35
Frasers Centrepoint Trust Buy 1.850 2.14
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
Keppel Land China has acquired a 10.37 ha prime residential
site in the Sino-Singapore Tianjin Eco-City (Tianjin Eco-City)
for RMB241.1m. Targeted at the upper-middle income
homebuyers, the new landed homes will be launched
progressively, starting from the second half of 2014.
Courts Asia has started construction on its first “Big-Box”
megastore in Indonesia. With more than 13,000 sqm
(140,000 sq. ft.) of retail space, Courts Megastore in Bekasi
will be the largest store in Courts’ entire portfolio.
Operational by 2014, it will offer the largest range of
electrical, furniture and IT products in Indonesia, as well as
innovative retail concepts.
Wee Hur Holdings ventures into workers’ dormitory business
through a 60% stake in joint venture (JV) company, Active
System. Active System recently awarded tender by JTC to
operate 16,800-bed workers’ dormitory at Tuas South
Avenue 1. Construction of the dormitory is expected to
complete in 2H2014. With Government’s emphasis on proper
management of accommodation for foreign workers, the
Group is cautiously optimistic on high occupancy of
dormitory upon completion.
ISDN Holdings has signed the second MOU with Japanese
corporation IDI for the development of 540 megawatt coalfired
power plant in North West Myanmar. This latest MOU
follows an earlier MOU signed in June this year to collaborate
and explore opportunities to develop and invest in energy
projects and expand international power production business
in Asia.
Digiland is proposing to place up to 5800m new share at an
issue price of S$0.001 each. The estimated net proceeds of
about S$5.8m will be used for general working capital.
Travelite Holdings expects to register a net loss in 1H FY2014,
mainly due to lower demand for the Group’s apparels.
After climbing four consecutive months, inflation in
Singapore eased to 1.6% in September from 2% in August
and also below market forecast of a 2% rise, largely due to a
decline in the cost of private road transport. Private road
transport costs fell by 2% after rising marginally by 0.1% in
August, as a correction in car prices more than offset the
increase in petrol pump prices. Services inflation, however,
was stable in September at 2.7%, as the stronger pick-up in
the cost of recreation & entertainment and holiday travel was
offset by lower contributions from education and household
services fees. Accommodation costs, meanwhile, went up by
3.9%, slightly lower than the 4.2% rise in August. MAS core
inflation - which excludes costs of accommodation and
private road transport - slowed slightly to 1.7% in
September, from 1.8% in August. The government expects
core inflation to rise "over the next few quarters", and
average 1.5-2% in 2013, and 2-3% in 2014. The
government also reiterated that headline inflation is projected
to come in at 2.5-3% in 2013, and 2-3% in 2014.
A total of 39.7 million travellers passed through Changi
Airport in the first nine months of the year, up 5.6% y-o-y.
Volume of aircraft take-offs and landings was also higher,
increasing 5.5% to 254,000, though the cargo market has
been a little more subdued, with air freight volumes
remaining virtually flat at 1.4 million tonnes, edging up
0.7%

Daily Summary 23 Oct 13

Dow and Europe were up last night. Dow +75 at 15468.  Dow's trend is up. Dow's future is now -67.  Europe opened down.

Asian bourses were mostly down after a positive opening. Nikkei -287, ShanghaiC -28, Hangseng -316. STI closed -5 at 3205.  Volume was 2.7b shares.  Gainers were 254 to 242 losers.

Trend of STI is up.

Top volumes were Digiland +0.1, SingHaiyi -0.1, Innopac -0.3, YHM -0.1, Cedar unchanged, GoldenAgr +1, LionGold -3, AsiaPhos +4.5, Albedo -0.1, Noble unchanged.

Market opened up but closed near day low at -5. Blue chips were mostly up but ended slightly weaker. Penny stocks were mixed. Market started to fall into negative territory in late afternoon when Dow's future was down and Europe also opened negative. The early morning strength disappeared quickly.

Dow and Europe are looking weak at the moment.

Tuesday, October 22, 2013

Maybank KE Report 23 Oct 13

Nam Cheong: Risk Taker Sees Rewards; Initiate BUY, TP $0.37             
                                                   NCL SP | Mkt Cap USD483m                                                        
                                                                           
  Ø  Initiate BUY and TP of SGD0.37, pegged to 9x PER on average FY13-15F 
  EPS. We see Nam Cheong benefiting from (1) a recovering Offshore Support 
  Vessel (OSV) market, (2) OSV replacement cycle, (3) Petronas’ Oil & Gas 
  capex and (4) its foresight in reading the supply-demand dynamics of the 
  sector.                                                                 
  Ø  Nam Cheong has demonstrated a strong ability to read market demand   
  with a track record of selling all build-to-stock vessels before         
  delivery. 2014 shipbuilding program is a big ramp-up over 2013 and it has
  already sold 57% of the 2014 vessels. Outstanding orderbook stands at   
  MYR1.7b. We expect the company to deliver 16% EPS CAGR over FY13-15F as 
  vessels in its ramped-up newbuild programs are readily absorbed by the   
  market.                                                                 
  Ø  At current share price, stock is trading at only 6.1x/6.6x FY14F/15F 
  PERs, inexpensive considering the robust growth prospects, higher ROEs   
  and shipbuilding margins. We also see possibility of higher dividend     
  payout in FY14F translating into a yield of about 5%.                   
                                                                           
  Click here for full report                                               
  yeakcheekeong@maybank-ke.com.sg  

OCBC Report 23 Oct 13

Frasers Centrepoint Trust: Repeating its success                                                             
Frasers Centrepoint Trust’s (FCT) FY13 DPU came in at 10.93 S cents (+9.2%), spot on with our DPU projection. 
We note that overall performance has remained robust, with portfolio occupancy maintained at a high 98.4%,   
while positive rental reversion of 10.8% was achieved. We also understand ~2% of retail space at YewTee Point 
is expected to start operating in Oct, which is likely to improve the mall’s occupancy. For Bedok Point,     
management also updated that it has successfully secured an electronics retailer as its anchor tenant for     
basement one. This may translate to a more stable performance at the mall. Looking forward, FCT reiterated CWP
and Northpoint will continue to perform, as leases at the malls amounting to 75.5% of FCT’s gross rent are due
for renewal and positive reversions are still expected. FCT also revealed that the strata title division of   
One@Changi City is progressing well, and that the asset injection may take place in 2014. We are rolling our 
valuation to FY14, while keeping our forecasts largely intact. Our fair value is in turn raised to S$2.02 from
S$1.96 previously. As upside now looks compelling, we upgrade FCT from Hold to BUY. (Kevin Tan)               
                                                                                                               
MORE REPORTS                                                                                                 
                                                                                                               
CapitaRetail China Trust: 3Q13 results in line                                                               
CRCT reported 3Q13 results that were in line with ours and the street’s expectations. Gross revenue climbed   
2.2% YoY to S$39.5m. Property expenses rose 7.8% YoY to S$14.5m, chiefly due to higher property management   
fees and staff related costs. Net property income fell 0.8% YoY to S$25.0m. Total return for the period after 
tax stayed roughly flat YoY at S$15.2m. 3Q13 distributable income grew 2.1% YoY to S$17.1m. DPU, however, fell
6.6% YoY to 2.26 S cents due to a private placement last November. Rental reversion for the multi-tenanted   
malls, excluding CapitaMall Minzhongleyuan (which is undergoing AEI), is healthy at 10.0%. We maintain our BUY
rating on CRCT but place our fair value of S$1.58 under review. (Sarah Ong)                                   
                                                                                                               
Yoma Strategic Holdings: To operate Volkswagen’s first service center in Yangon                               
Yoma reported that it will operate Volkswagen’s first service center in Yangon, Myanmar, which is expected to 
begin operations in Oct 13. Yoma’s 70% owned subsidiary, German Car Industries Company (CGI)  will enter into 
a service partner agreement with Volkswagen Aktiengesellschaft (VW) to provide maintenance and repair services
and sell genuine vehicle parts to VW automobile owners. We understand that the automotive market in Myanmar is
currently dominated by Japanese cars and that VW currently has no manufacturing facilities or car show room in
Myanmar, and hence this agreement is expected to have limited financial impact for Yoma over the near term.   
That said, we see this further strengthening the growth potential of the group’s automotive division which,   
together with a similar service agreement with Mitsubishi earlier, is one that is steadily growing –         
particularly so given that VW is a significant global player with a strong brand. We maintain a HOLD rating on
the counter with our fair value estimate of S$0.87 under review. (Eli Lee)                                   
                                                                                                               
                                                                                                               
For more information on the above, visit www.ocbcresearch.comfor the detailed report.                         
                                                                                                               
                                                                                                               
                                                                                                               
NEWS HEADLINES                                                                                               
                                                                                                               
- US stocks gained on Tue, further propelling the S&P 500’s record rise, as the Sep non-farm-payrolls report 
supported the notion that the Federal Reserve’s monthly bond purchases would continue into next year.         
                                                                                                               
- Proposed changes in auditor reporting are expected to dramatically change the way external auditors reflect 
their opinions on companies' financial statements.                                                           
                                                                                                               
- At least 8,700 shoebox units are expected to hit the resale market between now and 2017, as the Seller's   
Stamp Duty lock-in period approaches expiry.                                                                 
                                                                                                               
- Temasek Holdings has sold its entire direct stake in Keppel REIT in a share placement that started on Mon   
evening, sources close to the deal said yesterday.                                                           
                                                                         

DBSVickers Report 23 Oct 13

Frasers Centrepoint Trust - Expect acquisition of
Changi City Point in FY14 to drive earnings. Maintain
BUY and TP S$2.14.
Frasers Centrepoint Trust’s 4Q13 DPU of 2.98Scts in line.
In FY14, FCT will renew 32% of its income, out of which
75% will be derived from Causeway Point and
Northpoint. We expect positive rental reversions from
these two malls, given the strong shopper traffic and
tenant sales. However, we expect more moderate
reversion rates compared to previous years, as a
significant amount of upside from the AEI works have
already been captured. We expect the acquisition of
Changi City Point in FY14 to drive earnings. Maintain BUY
and TP S$2.14.
2Q14 results for Mapletree Industrial Trust in line.
Distributable income came in 9.7% higher y-o-y at
S$41.1m, translating to a DPU of 2.47 Scts. Operational
performance remain strong and we expect robust
reversionary trends for the quarter. DPU growth is
expected to be underpinned by MINT’s series of
development and asset enhancement projects. Will
provide more updates after meeting with management
today.
Yoma announced that its 70% owned subsidiary German
Car Industries Company (GCI) has signed a non-exclusive
agreement with Volkswagen (VW) to operate VW's first
service centre in Myanmar. This service centre will provide
maintenance and repair services for VW branded vehicles,
including the sale of spare parts for the replacement
market. This centre is scheduled to commence operation
this month. This is Yoma's second automotive service
centre tie-up. The group signed its first service centre with
Mitsubishi in May this year. We believe the automotive
division is shaping up to be a strategic line of business for
Yoma as we see the division expanding steadily. This
announcement is positive but the impact is long term and
not significant at this juncture. Near term, we look
forward to a positive set of results with 2Q14 earnings
growing y-o-y and q-o-q. The company is due to release
results on 7 Nov. We maintain our BUY call on Yoma
with TP of S$1.02.
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀘 15,467.7 75.5 0.5
S&P 􀀘 1,754.7 10.0 0.6
NASDAQ 􀀘 3,929.6 9.5 0.2
Regional Indices
ST Index 􀀘 3,210.2 14.4 0.5
ST Small Cap 􀀘 544.3 2.4 0.4
Hang Seng 􀀙 23,316.0 (122.2) (0.5)
HSCEI 􀀙 10,653.4 (14.8) (0.1)
HSCCI 􀀙 4,551.3 (19.7) (0.4)
KLCI 􀀘 1,803.6 1.0 0.1
SET 􀀘 1,457.4 8.8 0.6
JCI 􀀙 4,512.7 (65.4) (1.4)
PCOMP 􀀘 6,603.6 6.0 0.1
KOSPI 􀀘 2,056.1 3.1 0.2
TWSE 􀀙 8,418.3 (1.0) (0.0)
Nikkei 􀀘 14,713.3 19.7 0.1

Index
STI
Total Market cap (US$bn) 593
Total Daily Vol (m shrs) 3,277
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
22 Oct
Target Price
($)
ST Engineering Buy 4.210 4.80
ComfortDelgro Buy 1.910 2.19
OCBC Bank Buy 10.350 12.40
Singapore Airlines Buy 10.380 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
22 Oct
Target Price
($)
Ezion Holdings Buy 2.250 3.10
Goodpack Buy 1.860 2.00
CSE Global Buy 0.885 1.07
Mapletree Commercial Trust Buy 1.250 1.35
Frasers Centrepoint Trust Buy 1.845 2.14
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
C&G Environmental Protection Holdings entered into a letter
of intent (LOI) with a potential Purchaser, a company listed
on a stock exchange in the PRC, to facilitate the negotiation
and finalisation of a definitive sale and purchase agreement
of the Group’s waste-to-energy business and assets
(including concession rights) and its principal operating
subsidiaries in the PRC. The consideration for the proposed
sale is subject to further negotiations and shall be satisfied in
part by cash and in part by the issue and allotment of quoted
shares of the Purchaser.
Global Logistic Properties has signed lease agreements for
totaling 25,000 sqm (269,000 sq ft) with Deppon Logistics at
GLP Park Wangting in Suzhou, Eastern China and GLP Park
Hunnan in Shenyang, Northeastern China.
Temasek Holdings has sold its entire direct stake in office
landlord Keppel Reit (KReit) in a share placement. The deal
involved 104m shares offered at a price range of between
$1.195 and $1.21 per share. This represents a 1.6-1.8%
discount to the trust's last closing price of $1.23 on Oct 21.
The placement offer amounted to an estimated $125m.
Temasek's share sale works out to 3.74% of KReit,
representing the stake it had received from the dividend in
specie distributed by Keppel Corp to its shareholders during
its FY2012 final results.
Sino Grandness Food Industry Group has entered into a
Cooperation Agreement (CA) with the Municipal
Government of Anhui Province whereby the Group principally
agrees to invest RMB600m to construct a production plant to
produce canned products and beverage and the Municipal
agree to provide assistance and support in land acquisition
and infrastructure as well as necessary administrative services
to facilitate the project.
Transview Holdings has received a non-binding approach for
certain of its assets, which the Company is presently
evaluating on a preliminary basis. However, no definitive
terms are finalised at this moment and there is no assurance
as to whether or not any transaction will take place.
Industrial property developer OKH Global plans to dispose of
its IT business, which is separated from its core business,
following a $123m reverse takeover of Chinese technology
firm Sinobest. The company will divest itself of two units:
Guangzhou Sinobest Information Technology and Sinobest
Technologies (HK). To do so, OKH intends to set up an
intermediate holding company and transfer the shares it
holds in the subsidiaries to the new company. In return, OKH
will receive new shares in the holding company under a
restructuring exercise. Subsequently, OKH will undertake a
capital reduction exercise and distribute all the shares it owns
in the holding company to its shareholders rather than
distributing cash. OKH's shareholders will then hold shares in
two separate companies: OKH and the holding company. The
distribution will be made on the basis of one holding
company share for every share held in OKH. Shares in the
holding company will not be listed on the SGX. Shareholders
who do not wish to own unlisted shares of the holding
company can choose to sell their shares back to the holding
company and receive cash instead.
In property news, at least 8,700 shoebox units are expected
to hit the resale market between now and 2017, as the
Seller's Stamp Duty (SSD) lock-in period approaches expiry.
While this figure is more than double the current completed
shoebox residential stock of 3,472 units, signs in the market
suggest that demand for such resale units remains relatively
resilient amid a slow-moving overall resale market. This
figure, revealed in the latest report from the Singapore Real
Estate Exchange (SRX), is predicated on a first wave of at
least 805 resale units - comprising units bought between Aug
30, 2010 and Jan 13, 2011 - and a second wave of at least
7,910 units entering the market from 2015 to 2017.
US markets rose after a weaker-than-expected September
non-farm payrolls (actual 148k, consensus 180k) figure
underpinned expectation that the FED will postpone the start
of QE tapering till around March 2014. The 10-year treasury
yield fell to a 3-mth low at 2.51% while the USD Index
dipped to 79.23. For the STI, we continue to see a near-term
cap at 3250 and working towards 3330 by year-end on the
assumption of a benign 3Q results season. Yield plays should
be underpinned by the dip in long-bond yields.