OCBC Report 11 Jun 14

KEY IDEA Telecom Sector: Depressed broadband ARPUs a concern Despite a likely dull earnings outlook this year, the forecast yields averaging around 4.5% should still have some attraction for yield seekers; this as most banks are offering less than 1% for 1-year fixed deposit in comparison. Hence we maintain our NEUTRAL rating. Our top pick is still SingTel (BUY, S$4.00 FV is under review). Key risk in the sector remains the depressed broadband ARPUs which could continue to weigh on margins. (Carey Wong)

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NEWS HEADLINES - The US stock market picked up steam in late trading on Tue and finished the session marginally higher. The Dow eked out its 10th record close this year. - Asia-Pacific Strategic Investments, which is turning into an Armenian gold miner through a reverse takeover, will be used as a vehicle to acquire more mines, said its future major shareholder George Richmond. - Vard Holdings announced that the contract for the design and construction of a large Offshore Subsea Construction Vessel has been made effective. - Chasen Holdings has completed an agreement with Amber Digital Solutions (Beijing) Pte Ltd for the usage of its digital imaging technology and know-how in exchange for a 30.0% Amber shareholding. - TEE International Limited reported that its JV company has acquired the remaining 20% issued share capital of CMC Communications (Singapore) Pte Ltd for S$400k. - Interra Resources Limited has commenced drilling development well CHK 1189 in the Chauk oil field of Myanmar. - Singapore's YCH Group signed a MOU with a Chinese state-owned steel manufacturer to develop a cutting-edge supply-chain facility in the major seaport of Qingdao in China's Shandong province.