Tuesday, June 11, 2013

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: OUE Ltd
Company Name: OVERSEAS UNION ENTERPRISE LTD
Research House: UOB KayHianPrice Call: BUYTarget Price: 3.63

Stock Name: Swiber
Company Name: SWIBER HOLDINGS LIMITED
Research House: OCBCPrice Call: BUYTarget Price: 0.86

Stock Name: Tiong Seng
Company Name: TIONG SENG HOLDINGS LIMITED
Research House: DBS VickersPrice Call: BUYTarget Price: 0.33




Market Compass


11 June 2013~ Good Morning Singapore!


Singapore Idea Snippets:
11 June 2013~ Good Morning Singapore!

Central Execution Team - The Excellence of Execution

This product is made available by your Central Execution Team, for you as TRs of OCBC Securities to help you with your business and therefore it is confidential and only for internal circulation. It is not intended for onward circulation to non-OSPL TRs, clients or any other third party in this or any other version. Neither is this intended to be relied upon as a sole basis for any recommendation. TRs must also consider their clients' investment objectives, financial position and needs when intending to make or making any recommendation. For the front desk, by the front desk. All feedback to make this a better product is welcome.

Global Flash: While You Were Sleeping



Source: Marketwatch

Quote for the day : Someone's sitting in the shade today because someone planted a tree a long time ago.
- WARREN BUFFETT

Singapore: The Day Ahead

SINGAPORE DAYBOOK:No single brand to dominate Sports Hub

WHILE the door is wide open for companies to be involved in the new $1.33 billion Singapore Sports Hub, no single commercial brand must "overshadow or dominate" the project's national identity.
With construction of the mega-project in Kallang approaching the final stretch ahead of its targeted April 2014 opening, the consortium members are in talks with potential corporate partners and sponsors.
Acting Culture, Community and Youth Minister Lawrence Wong said that it was important to have a strong level of corporate involvement in such a large-scale project.
"Companies enable us to have more impact and outreach in sports. That's why we entered into this project on a public-private-partnership (PPP) model," he told reporters after making a site visit to the Sports Hub yesterday. (Source: The Business Times)

MARKET SCOOP

CNAGroup plans investment in Australia
KeppelInfra unit wins $80m to date
Fitchrates UOB's offshore renminbi notes 'AA-(EXP)
Raffles Medical to sell 30 Bideford Rd after failing to get nod for medical centre
Deutsche Bank to open 200-tonne gold storage facility in Singapore
Ascottto manage 8th serviced residence in the Philippines
Petra'scocoa unit sale gets European Commission nod
Del Monte's major shareholder places 150m shares at PhP26.40 each

(Source: The Business Times)

UOB KAY HIAN says...

OVERSEAS UNION ENTERPRISE | BUY | TP: S$3.63

OUE H-Trust (OUE Hospitality Trust) imminent with Mandarin Orchard (S$1,190m) and Mandarin Gallery (S$540m) confirmed as initial assets
The properties will be divested to OUE H-Trust at a minimum price of S$1,705m (maximum 1.4% discount to valuations of S$1,730m), comprising gross cash proceeds of S$$1,359.5m and OUE H-Trust units worth S$345.5m
Special dividend of 6-10%, assuming OUE distributes at least 30-50% of the proceeds
OUE has committed to distribute up to 50% (S$305m) of the gross cash proceeds (S$610m) following the repayment of existing S$750m debt secured against the properties
OUE is expected to retain a 30% stake (S$345.5m) in OUE H-Trust post-listing
EGM on 25 June for shareholders to approve the divestment of Mandarin Orchard and Mandarin Gallery into OUE H-Trust and the distribution of special dividends
Gearing to improve to 14.8% post-listing of OUE H-Trust from 62.1% currently
Asset-light strategy with Mandarin Orchard Hotel master-leased back to OUE for a period of 15 years on an underlying fixed rental of S$45m per year
The minimum divestment price of S$1,705m is S$18m (1.1%) above our built-in RNAV estimate of S$1,687m (Mandarin Orchard S$1,151m and Mandarin gallery at S$536m) for the two properties
The divestment at the minimum price would result in a marginal 1 S cent accretion to our RNAV of S$4.54
However, the NTA is likely to rise 33% to S$4.59
The choice of Mr Chong Kee Hiong as CEO of OUE H-Trust should be viewed favourably by the market
OUE has granted a Right of First Refusal (ROFR) to OUE H-Trust to acquire relevant hospitality assets in the pipeline
REIT offers new management fee income base as OUE is expected to retain 100% interest in the REIT manager\
Maintain BUY with unchanged target price of S$3.63/share, which is pegged at a 20% discount to our RNAV of S$4.54/share

OCBC Securities says ...

SWIBER HOLDINGS | BUY | TP: S$0.86

According to Upstream, PEMEX is preparing to begin a bid process that aims to offer a contract to deliver and install four Ayatsil platforms
The group is in the prequalification phase for the contract, and heavy-lift contractors such as Saipem, Heerema and Swiber Holdings are said to be interested
The entire package is estimated to be worth ~US$300m
Swiber recently saw its share price run up about 23% from 14 May (pre-1Q13 results announcement) to its close on Friday, after we upgraded our rating from Hold to Buy
However we still see an upside potential of about 12% over a one year time frame
Maintain BUY with S$0.86 fair value estimate

DBS VICKERS Securities says...

TIONG SENG HOLDINGS | BUY | TP: S$0.33

Tiong Seng Holdings (Tiong Seng)V announced it had signed a non-binding Memorandum of Understanding ("MOU") with Shwe Taung Development Co., Ltd (Shwe Taung), one of the most prominent corporations in Myanmar, to consider a joint venture to set up a precast plant in Myanmar
The proposal is for a 30%-70% structure with Tiong Seng taking a minority stake
This comes on the back of the group's plan to expand its precast facilities in the region - it recently acquired a piece of land in Iskandar to build a pre-cast facility
The partner, Shwe Taung, is one of Myanmar's prominent corporations with a diverse business portfolio and the country's largest employer
This may in the longer term be another avenue to extend its business contacts and potentially a new business arm into Myanmar
The Myanmar Ministry of Construction's plan to build more than 1 million houses nationwide over the next 20 years and residential construction accounts for 51%, or US$1.5 billion, of Myanmar's total construction output
In Yangon alone, demand for affordable housing is 200,000 units each year compared to only 20,000 units supplied every year



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