Monday, June 30, 2014

DBSVickers Report 30 Jun 14

Today’s Focus
􀂃 STI – In healthy consolidation phase. A decline down to
3220 or even 3180 is a buying opportunity
The FIFA World Cup tournament has dragged down the
average daily value of shares traded on the Singapore exchange
below S$1bn. We expect trading activity to recover by around
30% back to pre-World Cup levels from July 2.
Investors’ attention turn towards the following 2Q results
season that starts post World-Cup around mid-July and spans
through August 15. Based on our analysts’ earnings forecasts,
small caps O&G services stocks Vard, Nam Cheong and Pacific
Radiance offer the strongest growth potential for FY14. Among
these, Vard offers the highest upside potential to our
fundamental TP.
The outcome of the Indonesian presidential election on July 9 is
one event to watch for prior to the end of the World Cup
tournament. Developments in Indonesia and fluctuations in the
Rupiah affect Indonesian related stocks listed here such index
components Jardine C&C, Jardine Matheson and Jardine
Strategic, and also CPO stocks First Resources, Golden Agri,
Indofood Agri and Wilmar International.
STI’s recent pullback falling below 3270 indicates the start of
the anticipated consolidation. The pullback should test 3220
and if this support level fails subsequently, a dip to 3170-80 is
seen. We maintain that such a consolidation is a “healthy”
one. We see the STI heading higher post pullback. A decline
down to 3220 or better yet, a probe of 3180 is a buying
opportunity.
OCBC said all the pre-conditions to an agreement to buy Hong
Kong's Wing Hang Bank had been satisfied, as various
regulators had given their blessing to the US$4.95 bn deal.
OCBC said the parties had received approvals from the Hong
Kong Monetary Authority, Monetary Authority of Singapore,
Hong Kong's Securities and Futures Commission, Insurance
Authority and Mandatory Provident Fund Schemes Authority,
as well as the Monetary Authority of Macau. The transaction is
yet to be finalised, pending satisfaction of a number of
conditions.
Singapore
Wired Daily
Page 3
Global Logistic Properties (GLP) is stepping up its growth
plans, notably in China, where companies are vastly
under- served by an inefficient logistics and transportation
sector.GLP, which already boasts a property portfolio in 63
cities covering 25m sqm, has bumped up its global
development start budget for fiscal year 2015 by 38% to
US$2.7 bn. About US$1.7bn has been earmarked for
China, US$675m for Japan and US$390m for Brazil.
Otto Marine has signed a Memorandum of Agreement
(MOA) to dispose three of its vessels known to Go Marine
Services (M) Sdn Bhd, a company incorporated in Malaysia
in which it owns 49%, for a sum of US$37.5m.
First Ship Lease Trust has entered into a time charter
agreement with Tesoro Far East Maritime Company, a
wholly-owned subsidiary of Tesoro Corporation for the
FSL Shanghai, a 115,000 dwt crude oil tanker built in
2007. The new employment is anticipated to generate
approximately US$5.7m of headline revenues over the
next 12 months. This represents an increase of US$1.6m
over the previous time charter contract, representing a
40% increase in net revenue year-on-year.
RH Petrogas has commenced the acquisition of
approximately 550 line kilometres of 2D seismic survey in
Block SK331 onshore Sarawak. The survey is expected to
be completed in November 2014. Block SK331 is a large
block covering an area of 11,600 square kilometres. RH
Petrogas is the operator of Block SK331 and holds an
80% working interest in the block.
Six local contractors and local joint ventures have snagged
all of the nearly $1.4bn worth of contracts awarded so far
for the Thomson Line (TSL). The six contracts - out of 22
major contracts - total $1.361bn. They account for 27%
of the major civil contracts for the TSL - higher than the
nine out of 37 contracts, or 24%, awarded to local players
for the Downtown Line. The $18bn TSL is Singapore's
sixth MRT line and connects northern Singapore to the
CBD and Marina Bay area. It will be ready in phases from
2019 to 2021. The 30-kilometre long line will be fully
underground with 22 stations, of which six will be
interchanges.

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