Stock Name: KepLand
Company Name: KEPPEL LAND LIMITED
Stock Name: Global Palm
Company Name: GLOBAL PALM RESOURCES HLGS LTD
Market Pulse: Singapore Office Sector & Global Palm (21 Sep 2011)
FOCUS
Singapore Office Sector: Muted interest for Robinson Rd site
Summary: Yesterday evening, Far East Organization affiliates (Boo Han Holdings and Pearlvine) bid highest for the Robinson Rd/Cecil St land parcel at S$312m, or S$882 psf per plot ratio. We estimate a development cost at S$140m - S$180m and therefore an all-in price around S$1,600 - S$1,700 per sq ft NLA. Putting this against S$1,916 psf achieved at the Anson House transaction (85 years remaining) in May 11, and considering there were only three bidders, this indicates capital values expectations have at least stagnated over 3Q11 and that office developers are increasingly cognizant of heightened risks ahead. Maintain NEUTRALon the office sector. We believe current prices of major office landlord Keppel Land (KPLD) continue to show fundamental value, despite a lowered RNAV and a heavier discount. Maintain BUY on KPLD with a fair value estimate of S$3.97 (20% discount to RNAV). (Eli Lee)
Global Palm: Expansion is slower than projected
Summary: Global Palm Resources (GPR) has recently announced that its group financial controller (FC) Zhang Xiaoyu has left the company to "pursue other career opportunities"; this after being appointed to the position on 5 Jul 2011, or just slightly over two months on the job. GPC did not immediately announce a replacement, suggesting that Zhang's departure was quite sudden. However, GPR does not expect to experience much of a disruption, saying that its CFO (currently based in Indonesia) can handle the work. Nevertheless, we note that the latest staff movement does not inspire confidence, especially in the current volatile market. Having said that, we only expect the FC's resignation to have a modest negative short-term impact on GPR; hence we maintain our HOLDrating and S$0.21 fair value. But the longer-term issue remains its ability to aggressively expand its plantation as set out in its IPO prospectus. (Carey Wong)
For more information on the above, visit www.ocbcresearch.comfor detailed report.
NEWS HEADLINES
- IMF stated in its World Economic Outlook report, that the global economy has entered a "dangerous" phase - with advanced economies facing weak growth and prospects for emerging economies propping up global growth turning uncertain.
- S&P downgrades Italy's credit rating, due to poor growth prospects, adding pressure on a debt-stressed Eurozone.
- The USD has risen to a six-month high against the SGD, with the greenback fetching S$1.2717 yesterday.
- GIC, the largest shareholder of UBS, met the Swiss bank's top management yesterday and urged the bank to take firm action to restore confidence in the bank.
- DBS announced that it will spend S$250m over the next five years to grow its private banking business.
- Advanced Holdings announced that it has secured S$16.8m worth of oil & gas and petrochemical projects to be carried out in China, Thailand, Saudi Arabia and Singapore.
- Vodafone, after choosing to terminate its partnership with M1, will adopt StarHub as its exclusive partner. This will set StarHub to become the cellular port of call for subscribers of British telecoms giant.
Company Name: KEPPEL LAND LIMITED
| Research House: OCBC | Price Call: BUY | Target Price: 3.97 |
Stock Name: Global Palm
Company Name: GLOBAL PALM RESOURCES HLGS LTD
| Research House: OCBC | Price Call: HOLD | Target Price: 0.21 |
Market Pulse: Singapore Office Sector & Global Palm (21 Sep 2011)
FOCUS
Singapore Office Sector: Muted interest for Robinson Rd site
Summary: Yesterday evening, Far East Organization affiliates (Boo Han Holdings and Pearlvine) bid highest for the Robinson Rd/Cecil St land parcel at S$312m, or S$882 psf per plot ratio. We estimate a development cost at S$140m - S$180m and therefore an all-in price around S$1,600 - S$1,700 per sq ft NLA. Putting this against S$1,916 psf achieved at the Anson House transaction (85 years remaining) in May 11, and considering there were only three bidders, this indicates capital values expectations have at least stagnated over 3Q11 and that office developers are increasingly cognizant of heightened risks ahead. Maintain NEUTRALon the office sector. We believe current prices of major office landlord Keppel Land (KPLD) continue to show fundamental value, despite a lowered RNAV and a heavier discount. Maintain BUY on KPLD with a fair value estimate of S$3.97 (20% discount to RNAV). (Eli Lee)
Global Palm: Expansion is slower than projected
Summary: Global Palm Resources (GPR) has recently announced that its group financial controller (FC) Zhang Xiaoyu has left the company to "pursue other career opportunities"; this after being appointed to the position on 5 Jul 2011, or just slightly over two months on the job. GPC did not immediately announce a replacement, suggesting that Zhang's departure was quite sudden. However, GPR does not expect to experience much of a disruption, saying that its CFO (currently based in Indonesia) can handle the work. Nevertheless, we note that the latest staff movement does not inspire confidence, especially in the current volatile market. Having said that, we only expect the FC's resignation to have a modest negative short-term impact on GPR; hence we maintain our HOLDrating and S$0.21 fair value. But the longer-term issue remains its ability to aggressively expand its plantation as set out in its IPO prospectus. (Carey Wong)
For more information on the above, visit www.ocbcresearch.comfor detailed report.
NEWS HEADLINES
- IMF stated in its World Economic Outlook report, that the global economy has entered a "dangerous" phase - with advanced economies facing weak growth and prospects for emerging economies propping up global growth turning uncertain.
- S&P downgrades Italy's credit rating, due to poor growth prospects, adding pressure on a debt-stressed Eurozone.
- The USD has risen to a six-month high against the SGD, with the greenback fetching S$1.2717 yesterday.
- GIC, the largest shareholder of UBS, met the Swiss bank's top management yesterday and urged the bank to take firm action to restore confidence in the bank.
- DBS announced that it will spend S$250m over the next five years to grow its private banking business.
- Advanced Holdings announced that it has secured S$16.8m worth of oil & gas and petrochemical projects to be carried out in China, Thailand, Saudi Arabia and Singapore.
- Vodafone, after choosing to terminate its partnership with M1, will adopt StarHub as its exclusive partner. This will set StarHub to become the cellular port of call for subscribers of British telecoms giant.
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