Tuesday, December 17, 2013

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: SuperGroup
Company Name: SUPER GROUP LTD.
Research House: UOB KayHianPrice Call: HOLDTarget Price: 3.86

Stock Name: RafflesMG
Company Name: RAFFLES MEDICAL GROUP LTD
Research House: OSKPrice Call: HOLDTarget Price: 3.30




Market Compass


17 December 2013~ Good Morning Singapore!


Singapore Idea Snippets:
17 Dec 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 : Keep a cool head and maintain a low profile. Never take the lead - but aim to do something big.
- DENG XIAOPING
Singapore: The Day Ahead

SINGAPORE DAYBOOK :November new home sales show buyers in charge

[SINGAPORE] Sales figures for new private homes last month underline a new reality in which location and attractive pricing are the main draws for buyers who are becoming more selective, analysts believe.
Data from the Urban Redevelopment Authority (URA) yesterday showed that excluding executive condominiums (ECs), developers moved 1,228 units in November, a 15 per cent increase from the 1,070 in October.
This works out to a take-up rate of 95 per cent for the 1,293 new private homes launched last month, and is comparable to the previous month when 1,124 units was released.
Buyers have turned more cautious following a total debt service ratio (TDSR) framework put in place in late June; developers sold just 481 private homes in July, less than a third of June's 1,806. But consultants believe that last month's tally shows that there is still interest for attractively priced and well-located projects.
Said Christine Li, head of research and consultancy at OrangeTee: "This could imply that there is demand in the market, and investors are simply biding their time."
November sales were boosted by strong demand for the Duo Residences in Bugis, where 600 units were sold at a median price of $1,999 per square foot (psf), and Alex Residences at Redhill, where 171 units were moved at a median price of $1,706 psf. The pricing for Duo Residences was seen as particularly attractive by analysts.
Successful developers adjusted prices to match current buyer sentiment, said Mohamed Ismail, CEO of PropNex Realty.
Alan Cheong, head of research at Savills Singapore, said that the November numbers affirm his belief that the TDSR won't cause a "slash and burn" in the market and will merely slow down the rate of sales.
In terms of performance by region, Core Central Region (CCR) saw more homes sold than the Rest of Central Region (RCR) and Outside Central Region (OCR) combined last month. Only two new CCR projects were launched, Duo Residences and Clermont Residence at Tanjong Pagar, but the overall sales of 662 units made up 54 per cent of all transactions.
But Nicholas Mak, executive director for research and consultancy at SLP International, said that this was an "unusual" event unlikely to repeat itself often in the near future, as there are not many projects like Duo Residences in the pipeline.
RCR sales volume was up 29 per cent from October at 352 units, backed by sales at Alex Residences, while OCR transactions fell 70 per cent to 214 homes, primarily on the lack of new launches.
Chia Siew Chuin, director of research and advisory at Colliers International said that homebuyers may be turning to reasonably priced homes in CCR and RCR given the narrowing price gaps between mid-to-high-end homes and mass market homes.
She said that some 73 per cent of new homes sold last month were in the range of $1,500-2,500 psf. "This is a contrast from past trends, where the majority of new homes were transacted at below $1,500 psf."
The lowest selling price on a psf basis in November was for a unit at The Inflora in Tampines sold at $723 psf, while the most expensive unit was one at Twin Peaks in Leonie Hill that transacted at $3,052 psf, SLP's Mr Mak said.
Including ECs, 1,714 new homes were sold last month, 42 per cent higher than the month before. Sky Park Residences in Sembawang and Waterwoods in Punggol were the best sellers for ECs last month.
For the first 11 months of the year, 14,678 new private homes (excluding ECs) were sold. Analysts are expecting total sales for this year to be close to 16,000, a significant dip from the record 22,197 last year.
Desmond Sim, associate director at CBRE Research, believes that prices will see a "marginal rise of around 2 per cent" on the year.
December should be fairly quiet due to the festive season, with sales below 1,000 units, analysts said, and with demand likely to pick up again after Chinese New Year as pending projects hit the market.
"Going forward, pricing is key and developers have to price attractively to move units quickly," said Eugene Lim, key executive officer at ERA Realty.
Projects that may be launched in the first half of next year include Marina One developed by M+S, City Development's South Beach Residences, The Panorama by Wheelock Properties and Keppel Land's project at Kim Tian Road. Sales could be anywhere from 10,000 to 16,000 units next year, with some consultants expecting prices to be flat or marginally lower.
(Source: The Business Times)

MARKET SCOOP

GLP pre-leases 35,000 sqm in China to Haier Logistics
GIC subscribes for US$35m of bonds in Green Dragon Gas
M1 in exclusive partnership with music streaming service Deezer
Developers sold 1,228 private homes in Nov: URA
Singapore to "shape the taper" in public housing: Khaw
China Airlines, Tigerair to set up Taiwan budget carrier
Temasek redeems S$500m zero coupon exchangeable bonds due 2013
13 industrial sites for 1H2014, JTC takes over sales of new state land
(Source: The Business Times)

UOB KAY HIAN says ...

SUPER GROUP | HOLD | TP: S$3.86

We spoke with management of Super Group (Super) recently
This note highlights the key takeaways and our earnings and target price adjustments
After the 3-10% price increases in Oct 13, the initial knee-jerk reaction was a 8% decline in sales volume
However, we understand sales volume has stabilised in November
Super remains the runaway leader in terms of market share (45-50%) and continues to enjoy early-mover advantages, such as a strong distribution network
Nestle, which has been more active in promotions (particularly in Yangon and Mandalay)
since 2Q13, has a market share of only 2-3%
In terms of competition, we think the group will have a closer watch over local coffee brands, such as Premier (15-20% market share) and Sunday (8-10%)
The Philippines remains a very competitive market
Super's plan in this market is to focus on product innovation and development with partner San Miguel
Otherwise, 4Q13 turnover could also be impacted by typhoon Haiyan which hit Philippines in early-November
Consumer branded sales in core markets such as Thailand and Malaysia remained solid with 9M13 turnover up 8% yoy and 7% yoy respectively
Singapore sales dipped 3% yoy, attributable to more keen competition in the form of promotions
All things considered, management is targeting 2014 sales growth of up to 13% yoy for the consumer branded segment
In our view, this should be achievable given its rebranding exercise in 2013 and the normalisation in markets, such as Myanmar
We believe Super has had a promising start in China since the launch of its consumer branded segment in Aug 13 (estimated 30-40% yoy rise in 4Q13 sales up to November)
Super's strategy in China will be to target the younger and "aspiration/lifestyle" coffee consumers
From a low base, we think there is more upside as coffee consumption and Super's brand positioning gain momentum in China
In our view, China could form part of its new growth trajectory in the coming years
In the medium term, the group's focus for consumer branded will be rebranding and product innovation
In our view, these two areas are critical in the face of dynamic consumer markets as well as markets with intensifying competition, such as Myanmar, Philippines and Indonesia
For the food ingredient segment, a key area to focus on will be new markets and this has been promising with contributions from new markets, such as the Middle East and Europe
In addition, the group's emphasis on product innovation would raise the entry to barrier in the segment
We cut our 2013-15 net profit forecasts by 4-18% as we build in more conservative top-line growth in branded consumer (14-15% vs 19-22% previously)
Key risks to our view are raw material prices, irrational competition and execution risks in China
Maintain HOLD with a lower target price of S$3.86 (previously S$4.50), based on 1.3x PEG, a 20% discount to peers' given near-term challenges
We would revisit our call when more positive datapoints from China emerge or if
there is a substantial rebound in core markets like Myanmar
Possible share price catalysts include recovering branded sales in key markets and
positive datapoints from China branded segment

OSK DMG Securities says ...

RAFFLES MEDICAL | NEUTRAL | TP: S$3.30

Raffles Medical has announced the acquisition of a property at 100 Taman Warna, located at the junction of Taman Warna and Holland Avenue and within the Holland Village enclave, for a purchase consideration of SGD54.8m
The 99-leasehold site sits on a land area of 1,942sqm and is adjacent to the Holland Village MRT Station
Raffles Medical intends to redevelop the existing property into a 5-storey commercial building with a gross floor area of 67,720 sf
On completion, it will lease 2 storeys of the revamped building for its outpatient medical and specialist clinics, while leasing out the remaining space to DBS Bank and other retail tenants
With all-in development cost at SGD65m, the acquisition is reasonably priced at S$1036 psf ppr, enabling the group to secure its own medical premises on attractive terms while
generating rental income from the excess space
Raffles Medical is increasingly spreading its wings into overseas markets
In China, it has secured joint venture agreements to develop 2 hospitals this year, the first in Shenzhen to develop a private hospital with the China Merchant Group, and the second one in Shanghai with the Shanghai government to develop an international hospital
It owns a majority stake of 70% in both projects, which are expected to cost a total
development cost of SGD400m
Its Singapore operation, meanwhile, continues to grow steadily, underpinned by operating leverage from its hospital operation
We expect robust healthcare demand in Singapore to translate into continuing
earnings growth for the group
Maintain Neutral with TP of SGD3.30 on valuation grounds



Wednesday, December 11, 2013

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: M1
Company Name: M1 LIMITED
Research House: NomuraPrice Call: BUYTarget Price: 3.70




Market Compass


11 December 2013~ Good Morning Singapore!


Singapore Idea Snippets:
11 Dec 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 : Those who deny freedom to others deserve it not for themselves.
- ABRAHAM LINCOLN
Singapore: The Day Ahead

SINGAPORE DAYBOOK :Stable bottom line for local telcos next year

PROFITABILITY for the telco sector in Singapore is set to remain stable, with data revenue cushioning the bumps on the road ahead, according to the Fitch Ratings 2014 outlook report for telcos in the region.
While revenue from text messages and international service will fall, a 20 per cent increase in mobile data revenue will offset the declines, resulting in a flat topline for the industry.
"Data revenue will increase as a greater portion of users move to tiered data bundles, currently around 25-30 per cent of the overall subscriber base," the report said.
"The data pricing structure has improved as customers now have to pay for incremental data use above 4 gigabytes (GB) per month; previously, users had a fixed monthly allocation of 10GB.".
(Source: The Business Times)

MARKET SCOOP

Lum Chang incorporates two subsidiaries; buys UK property
Far East Organization unit tops bids for Gambas Crescent Parcel 3
S'pore market offers 'safer path to growth' : Credit Suisse
No TPP breakthrough after all, ministers to try again next month
(Source: The Business Times)

NOMURA Securities says ...

M1 | BUY | TP: S$3.70

M1 will double its excess data usage charges from SGD5.30 to SGD10.7 per month per GB from 1 January 2014
Also for excess outgoing local voice calls, there will be a minimum one-minute charge
and they will be billed per second thereafter
At face value, the data re-pricing could boost revenues and EBITDA by 1-3%, but... 1) there could be some customers who may migrate to higher plans (especially if their excess usage is more than 2GB, we think customers could even become more vigilant towards their usage patterns, and cut back on usage
As of Sept-13, M1 had 32% of its post-paid subs on tiered plans (or 322k subs), and around 16% were exceeding data bundles (or 52k subs)
This is yet another attempt by the Singaporean operators to reprice data up, which is a positive for ARPUs
SingTel also doubled its excess usage charges in September this year
We maintain Buy on M1 - it is a simple story with simple catalysts
There is a lot of focus on ARPUs since the operators moved away from 12GB to tiered pricing plans
At a reported level, we haven't seen much improvement yet but a majority of this is
attributed to falling roaming rates, which are still around 10-15% of wireless revenues we understand
We think the Singaporean telcos missed out on a perfect opportunity to increase the base-line prices for all plans when 4G/LTE was launched - initially the operators intended to charge another SGD10/mth for 4G VAS, but it was waived during the
promotion period, which seems to be continuing still
This could potentially be introduced, and may provide a further boost to ARPUs
Valuation Methodology Our DCF-based target price of SGD3.7 uses a WACC of 7.3% and terminal growth rate of 2%, with cashflows discounted to FY16F
The benchmark index for this stock is MSCI Singapore
Risks that may impede the achievement of the target price 1) More aggressive competition in Singapore; 2) limited ability to offer fixed-mobile bundles; and 3) a macro slowdown in Singapore

OCBC Securities says ...

COMMODITIES | NEUTRAL |

As expected, the commodities sector performed relatively poorly against the broader market for most part of 2013, after we maintained our Underweight rating from 2012
Against the STI's 0.4% showing until 6 Dec 2013, the commodities stocks under coverage fell by an average of 6%
They had also fallen by as much as 19% at their lowest versus the STI's 6% slide before staging a recovery in late 2H13
Part of the recovery was buoyed by news that economies are slowly recovering, led by the US
According to its latest World Economic Outlook (WEO) report out in Oct, the IMF (International Monetary Fund) now expects World Output to grow 3.6% in 2014, up slightly from the likely 2.9% growth in 2013. However, it warns that downside risks remain
Some of the "fresh" risks include slowing growth in China, which may affect many other economies, notably the commodity exporters among the emerging and developing economies
However, IMF believes slower near-term growth is a worth-while trade-off as there will be positive net effects in the longer term, which should lead to more stable demand for commodities
While market sentiment may remain somewhat cautious until investors get a better handle on the magnitude and extent of the Fed tapering (widely expected to take place sooner rather than later), we believe that further signs of a firmer recovery in the US economy could lead investors to adopt a more "risk on" approach
And with the valuations of some of the commodity plays still looking relatively inexpensive, we could see potential upgrades for some of them if there is an over-correction in the market
Hence we also upgrade our rating from Underweight to NEUTRAL

OCBC Securities says...

MIDAS HOLDINGS | BUY | TP: S$0.64

We expect firm earnings rebound for Midas in FY14F as high speed railway (HSR) contracts roll in
Midas won its first HSR contract (Rmb168m) in over two years in October, as China
resumed its HSR development programme, with more likely to come
We believe the Group could win a substantial order arising from the recent second rolling stock tender for 314 train sets, or about 2,500 train carriages
Over the next two years, we believe a further 700 over train sets could be tendered for, resulting in further wins for Midas in the HSR segment
At the same time, we expect (PRC) metro orders to continue flowing in, and overseas orders, which have grown substantially in 2013, to continue to be robust as Midas looks
to maintain a more diversified earnings base
Maintain BUY, with our 12-month TP raised to S$0.64 (Prev S$0.60), based on 1.2x FY14F P/BV
We believe current valuations are attractive for a stock whose earnings are poised for a strong rebound into FY14F and FY15F



Thursday, December 5, 2013

SG: MARKET PULSE: CDL Hospitality Trusts (5 Dec 2013)

Stock Name: CDL HTrust
Company Name: CDL HOSPITALITY TRUSTS
Research House: OCBCPrice Call: BUYTarget Price: 1.84




MARKET PULSE: CDL Hospitality Trusts
5 Dec 2013
KEY IDEA

CDL Hospitality Trusts: Proposed acquisition of Jumeirah Dhevanafushi
CDL Hospitality Trusts (CDLHT) has entered into conditional land and business sale agreements with Xanadu Holdings Pvt Ltd for the acquisition of Jumeirah Dhevanafushi in the Maldives at US$59.6m (~S$74.8m). Based on the purchase price and assuming that CDLHT owned the property from 1 Jan 2013, the pro forma annualised net property income yield of the property for the nine months ended 30 Sep 2013 would be 6.2%. While management indicated that the 4Q13 and 1Q14 performance for its Singapore hotels is still lackluster, this is within our expectations. We roll over our DDM model to FY14 numbers. Despite using a more conservative risk free rate of 3.0% (instead of 2.4% previously), our FV increases from S$1.83 to S$1.84 and we maintain our BUY rating on CDLHT. (Sarah Ong)

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


NEWS HEADLINES

- US stocks ended mostly lower on Wed, with the S&P 500 and the Dow Jones Industrial Average extending their losing streak to four straight sessions.

- Singapore's economic growth will stay strong in the next two years relative to the other countries in Asean, the Centre for Economics and Business Research has predicted.

- SGX and Hong Kong Exchanges & Clearing said they have agreed to cooperate in various areas, including developing yuan-denominated products jointly.

- Genting Hong Kong and other shareholders have agreed to sell up to 25.3m shares in Nasdaq-listed Norwegian Cruise Line Holdings in a secondary public offering.

- WE Holdings is acquiring Hong Kong-based electronics distributor Everbest Industrial (International) for US$7.4m.

- Swissco Holdings has placed orders to add S$42m worth of vessels to its fleet, while Cosco Corporation has secured a US$54m contract.

- Yoma Strategic Holdings has unveiled plans for a joint-venture company to build and operate a steel mesh products manufacturing plant in Yangon, Myanmar.





Wednesday, December 4, 2013

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: TigerAir
Company Name: TIGER AIRWAYS HOLDINGS LIMITED
Research House: UOB KayHianPrice Call: SELLTarget Price: 0.43

Stock Name: Yoma
Company Name: YOMA STRATEGIC HOLDINGS LTD
Research House: DBS VickersPrice Call: BUYTarget Price: 1.02




Market Compass


04 December 2013~ Good Morning Singapore!


Singapore Idea Snippets:
04 Dec 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 : An advertising agency is 85 percent confusion and 15 percent commission.
- FRED ALLEN
Singapore: The Day Ahead

SINGAPORE DAYBOOK : Property fuels surge in S'poreans' net wealth. MAS review shows household debt rising, but savings piling up faster; cautions that risks remain.

[SINGAPORE] Singapore households have been given a clean bill of health as far as their debt is concerned. Despite warnings of an increasing exposure to mortgages, net wealth has grown robustly over the past decade and stands at about four times GDP, according to the Monetary Authority of Singapore Financial Stability Review 2013.
While household debt continues to increase, savings are piling up faster and massive cash deposits outweigh total liabilities, the review showed yesterday.
Measures to cool the residential property market are having a significant impact, too.
"However caution is in order as uncertainties and risks remain," MAS warned.
(Source: The Business Times)

MARKET SCOOP

Nov PMI dips to 50.8, points to slower growth
SGX derivatives and clearing activities grow
Yuan overtakes euro in trade finance
S'pore household net wealth robust: MAS
S'pore shadow banking small: MAS
S'pore-based banks lending more to China, India: MAS
S'pore jumps 50 spots up on World Giving Index
(Source: The Business Times)

UOB KAY HIAN says ...

TIGERAIR | SELL | TP: S$0.43

We are not confident of Tigerair's prospects in 2HFY14 due to weak loads out of Singapore
We, thus, lower our fair value to S$0.43, valuing the stock at 0.9x FY14F P/B from 1.0x P/B
October pax load factor (LF) fell to a 21-month low as the 21% capacity growth vastly outstripped the 8% traffic growth
The 74.4% load was substantially lower than the 88.0% breakeven load achieved in 2QFY14
The weak October loads do not bode well for 4Q13, which is a peak quarter for Tigerair
As such, we have lowered our FY14 traffic growth by 5ppt to 20% and revise down our pax LF by 2ppt to 79%
2QFY14 LF was at its lowest in eight quarters, declining 5.6ppt yoy
The weak October loads suggest little leeway in raising prices and yields are thus unlikely to improve in 2HFY14
At the 2QFY14 analysts briefing, Tigerair highlighted the possibility of implementing fuel surcharges on select routes after a successful implementation on Indonesian routes
However, October's weak loads suggest that Tigerair does not have much pricing power and the odds of the airline implementing surcharges appear low
One of the key concerns we have on Tigerair is the uncertainty regarding the financial stability of its associates and the extent and duration of continued financial backing
For 1HFY14, combined associate losses and impairments amounted to S$99m
Despite the losses, Tigerair invested an additional S$71m in associates during 2QFY14
We assume just S$34m in associate losses and impairment for 2HFY14
If November's operating statistics do not show an improvement, we believe the stock will face further downward pressure
Political unrest in Thailand, which is a key sector for Tigerair would very likely lead to lower loads
Under such a scenario, we believe that the odds of Tigerair underperforming for the next six months are high
We lower our FY14 earnings forecast by S$20.0m and now expect Tigerair to report a net loss of S$19m compared to S$1m net profit previously
The downward revision is mainly due to a 5ppt reduction in pax traffic growth assumptions
We lower our target price by 17% to S$0.43 after lowering the fair value
to 0.9x FY14F P/B from 1.0x
It is worth noting that parent airline SIA's own airline operations are implicitly valued at a lower 0.7x P/B after adjusting for its stake in SIA Engineering

DBS Securities says ...

YOMA STRATEGIC HOLDINGS | BUY | TP: S$1.02

Yoma announced that its telecom JV with Digicel and FMI named Digicel Asian Holdings, has signed an agreement with Ooredoo Myanmar, one of the winners of Myanmar's telco operating licence, to develop, construct and lease telecom towers to the latter
This joint venture will be amongst the first telecoms tower companies to begin construction in Myanmar and will accept multi-tenancy agreements
This development is in line with Yoma's aspiration to be a conglomerate and we believe it will contribute positively to the company in the long haul although the accretion may be insignificant
Yoma has not released any quantifiable details at this stage
But, Yoma would surely need funding to invest in this JV although we believe their stake would not be substantial
Based on Myanmar government's timeline to expand mobile penetration from less than 5% to 80% by 2015-2016, we believe this would be a fast-paced development and should start no later than 2014
That said, we do not expect immediate profits in its first year of operations considering start up expenses
We expect further update on this JV over the next few weeks and will update accordingly
Maintain Buy on Yoma with TP of S$1.02

OCBC Securities says...

YOMA STRATEGIC HOLDINGS | HOLD | TP: S$0.84

Yoma reported that a consortium, Digicel Asian Holdings, comprising Digicel Group, First Myanmar Investment Co., Ltd and Yoma Strategic Holdings Ltd, has signed an agreement with Ooredoo Myanmar to develop, construct and lease telecommunications towers in Myanmar
This will facilitate Ooredoo's commitment to rapidly achieve coverage across the country after winning a coveted telecommunication license earlier this year
We understand that Digicel Asian Holdings' company in Myanmar, Myanmar Tower Company, will construct multi-tenancy towers in Myanmar and aim to work with multiple telecommunications operating companies
We will speak further with management regarding this development and, in the meantime, maintain a HOLD rating with our fair value estimate of S$0.84 under review



SG: MARKET PULSE: Yoma Strategic, CDLHT (4 Dec 2013)

Stock Name: Yoma
Company Name: YOMA STRATEGIC HOLDINGS LTD
Research House: OCBCPrice Call: HOLDTarget Price: 0.84

Stock Name: CDL HTrust
Company Name: CDL HOSPITALITY TRUSTS
Research House: OCBCPrice Call: BUYTarget Price: 1.83




MARKET PULSE: Yoma Strategic, CDLHT
4 Dec 2013
KEY IDEA

Yoma Strategic Holdings: Signs agreement with Ooredoo

Summary: Yoma reported that its consortium, Digicel Asian Holdings, comprising Digicel Group, First Myanmar Investment Co., Ltd and Yoma Strategic Holdings Ltd, has signed an agreement with Ooredoo Myanmar to develop, construct and lease telecommunications towers in Myanmar. We understand from management that detailed terms regarding ownership and capital outlay for the consortium are still being negotiated and will be announced in due time. Digicel Asian Holdings' company in Myanmar, Myanmar Tower Company, will construct multi-tenancy towers in Myanmar and aim to work with multiple telecommunications operating companies, including Ooredoo's to facilitate its commitment to rapidly achieve coverage across the country after winning a coveted telecommunication license earlier this year. Maintain HOLD with an unchanged fair value estimate of S$0.84. (Eli Lee)

MORE REPORTS

CDL Hospitality Trusts: Proposed acquisition of Jumeirah Dhevanafushi in the Maldives

Summary: CDL Hospitality Trusts (CDLHT) has entered into conditional land and business sale agreements with Xanadu Holdings Pvt Ltd for the acquisition of Jumeirah Dhevanafushi in the Maldives at US$59.6m (~S$74.8m). Based on the purchase price and assuming that CDLHT owned the property from 1 Jan 2013, the pro forma annualised net property income yield of the property for the nine months ended 30 Sep 2013 would be 6.2%. On a pro forma annualised basis for the nine months ended 30 September 2013, this translates to a DPS accretion of 2.2%, with potential for improvement as the property is currently still gestating as it only opened on 1 Nov 2011. These transactions will entail the activation of the CDLHT's business trust (HBT). Upon the completion of the acquisition, the HBT lessee will lease the property from the H-REIT (CDLHT's REIT) lessor pursuant to a lease agreement. We maintain a BUY rating on CDLHT but place our fair value estimate of S$1.83 under review pending a call with management. (Sarah Ong)

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


NEWS HEADLINES

- US stocks fell Tue, with the S&P 500 and the Dow falling for a third straight day over uncertainty on the Fed tapering and fears that the market was overdue for a pullback from record levels.

- Singapore's Nov purchasing managers' index fell short of expectations, dipping 0.4 point to 50.8, but the electronics index continued to strengthen, pointing to a surer-footed recovery for the sector.

- Dynamic Colours is selling Suzhou Huiye Chemical & Light Industry Co and Suzhou Huiye Plastic Industry Co to AEI Compounds for about US$15m.

- Tiong Seng Holdings has boosted its order book with a S$204.5m contract win from the Housing and Development Board (HDB).

Tuesday, December 3, 2013

SG: MARKET PULSE:Telecoms Sector, Yoma (3 Dec 2013)

Stock Name: Yoma
Company Name: YOMA STRATEGIC HOLDINGS LTD
Research House: OCBCPrice Call: HOLDTarget Price: 0.84




MARKET PULSE: Telecoms Sector, Yoma
3 Dec 2013
KEY IDEA

Telecoms Sector: Limited growth, steady dividends

Summary: Going into 2014, we believe that there is a possibility of investors switching out of more defensive stocks into the cyclical ones as the developed economies continue to improve. And because of their outperformance in 2013, dividend yields have fallen to around 4.5%, making them merely "decent" when compared to the STI's 3.5%. In summary, we think that the telcos will likely see just limited growth in the mobile market; stiffer competition in the broadband market; and a relatively unexciting Pay TV market. As such, earnings growth is not likely to be exciting. Hence we maintain our NEUTRAL rating on the sector. (Carey Wong)

MORE REPORTS

Yoma Strategic Holdings: Signs agreement with Ooredoo Myanmar

Summary: Yoma reported that a consortium, Digicel Asian Holdings, comprising Digicel Group, First Myanmar Investment Co., Ltd and Yoma Strategic Holdings Ltd, has signed an agreement with Ooredoo Myanmar to develop, construct and lease telecommunications towers in Myanmar. This will facilitate Ooredoo's commitment to rapidly achieve coverage across the country after winning a coveted telecommunication license earlier this year. We understand that Digicel Asian Holdings' company in Myanmar, Myanmar Tower Company, will construct multi-tenancy towers in Myanmar and aim to work with multiple telecommunications operating companies. We will speak further with management regarding this development and, in the meantime, maintain a HOLD rating with our fair value estimate of S$0.84 under review. (Eli Lee)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES

- US stock indexes ended lower on Mon, with the Dow briefly falling below 16,000 ahead of the closing bell as investors debated whether a record rally has become overextended.

- The massive construction of HDB flats will start to taper off from next year as balance is restored between demand and supply in the market, Minister Khaw Boon Wan said.

- Better-quality Chinese companies will come to Singapore following last month's agreement between the regulators of the two countries.

- Sitra Holdings has obtained JTC approval to sell its Sungei Kadut property to World Furnishing Hub Pte Ltd for S$8.65m.

- Sembcorp Industries' new S$154m multi-utilities centre at Banyan sector has started supplying steam, water and on-site logistics services to petrochemical plants there.

- A "software bug" gave M1's mobile data service the sniffles yesterday, with some of its users experiencing patchy 3G data access for several hours.

- LionGold Corp, together with a subsidiary of associated firm ISR Capital and Chinese firm Suzhou Power, is partnering a new private equity fund that invests in natural resources.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED
Research House: OCBCPrice Call: HOLDTarget Price: 0.84




Market Compass


03 December 2013~ Good Morning Singapore!


Singapore Idea Snippets:
03 Dec 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 : You can have peace. Or you can have freedom. Don't ever count on having both at once.
- ROBERT A.HEINLEIN
Singapore: The Day Ahead

SINGAPORE DAYBOOK : The constraints and advantages that S'pore has: Tharman

[SINGAPORE] The global economy, especially the developed countries, should expect to go through a period of "sub-normal growth" for several years to come, says Deputy Prime Minister Tharman Shanmugaratnam.
And while this will cause problems for everyone, he said Singapore is "fortunate" because of the many opportunities available to its people across regions such as Asia, Africa and Latin America that will help "balance the loss of demand growth" in the advanced economies.
He made these points during a question-and-answer session after delivering the S Rajaratnam Lecture yesterday, an annual event organised by the Ministry of Foreign Affairs' Diplomatic Academy in honour of Singapore's first and longest-serving foreign minister.
Mr Tharman, who is also Finance Minister, said the government is doing all it can to improve the lives of Singaporeans, especially the lower-income group.
(Source: The Business Times)

MARKET SCOOP

Keppel confirms BT report of Norway deal, with option for two more
Do Not Call registry opens; businesses required to sign up
Genting Singapore near one-month high on CIMB upgrade; index flat
Private housing site beside Aljunied MRT triggered from reserve list
Andrew Tan to become MPA's CEOfrom Jan 1
HDB construction to taper from '14: Khaw
(Source: The Business Times)

UOB KAY HIAN says ...

PROPERTY - SINGAPORE | OVERWEIGHT |

Maintain OVERWEIGHT as the market has priced in an overly bearish scenario for
property and REITs stocks on expectations of a rise in interest rates with the Fed's tapering
Tapering will have minimal impact on short-term rates and we expect a growth pick-up to
offset a rise in long-term rates
We are already factoring in a 3% rate for bond yields (60bp higher than the current yields of 2.4%)
We prefer diversified, deep-value developers and high-beta REITs in the office space with OUE, Ho Bee and CapitaCommercial Trust as our top BUYs
Most upbeat on the office segment, wich is turning around with spot rents picking up and positive rental reversions accelerating, underpinned by healthy demand and limited supply
We forecast office rents to pick up by 8% yoy in 2014
Retail rents are expected to remain stable, rising 0-2% yoy in 2014, while industrial rental growth will likely moderate to 0-2% yoy following a larger upcoming supply in 2014-15
REITs: High-beta office and industrial REITs to outperform as the economic recovery
gains momentum
We expect S-REITs to transition from yield vehicles to growth vehicles, led by the rental growth pick-up in the office segment
Business parks and high-tech industrial spaces should follow as these segments are closely linked to the office segment
Suntec REIT, CapitaCommercial Trust and Ascendas REIT are our preferred REIT picks
Developers are deep in value but lack near-term catalysts
Peak/trough P/B multiples suggest developers offer an attractive upside potential of 131% vs a downside risk of 40%
However, near-term newsflow from the residential segment is likely to be negative as the
latest property measures will result in a 5-10% yoy fall in property prices and 20-30% yoy fall in volumes in 2014
Slowing residential demand and elevated land prices are prompting developers to explore overseas land acquisitions
We prefer diversified developers with exposure to the commercial segment
CapitaLand, OUE and Ho Bee are our preferred picks

OCBC Securities says ...

VARD HOLDINGS | HOLD | TP: S$0.84

Vard Holdings Limited (VARD) announced that it has secured a new contract for the construction of one advanced offshore support vessel (OSV) worth ~NOK400m
This contract was awarded by Island Offshore, which is an existing customer of VARD
VARD has delivered more than 30 vessels to Island Offshore previously, while it also has five vessels under construction for Island Offshore
Delivery for this OSV is scheduled for 1Q15
This latest contract brings total YTD order wins for VARD to NOK12.3b, within our forecast of NOK12.9b
Hence, we maintain our HOLD rating and S$0.84 fair value estimate on VARD, pegged to 8x FY14F EPS

OCBC Securities says...

Oil and Gas: Good performance to continue in 2014 | OVERWEIGHT |

Index mostly in-line with market; among top three best performing sub-indices
The FTSE Oil and Gas index has performed more or less in-line with the broader market this year. Still, it is among the top three best-performing FTSE sub-indices YTD, along with the FTSE Telecommunications and FTSE Maritime indices. On the other hand, price performances of individual stocks have differed greatly, with the key outperformers being Kreuz Holdings (+95% YTD) and Ezion Holdings (+45% YTD) in the Offshore & Marine space.
Positive on the rig building sector and certain OSV segments
Stepping into 2014, we continue to advocate a focused stock-picking strategy, overweighting companies that are operating in sub-sectors with more favourable demand-supply dynamics, and those with strong balance sheets and order books. The local rigbuilders are expected to continue securing orders at a pace that will at least match this year's, while the offshore support vessel sub-sector should also see continued recovery as the market situation gradually tilts in favour of vessel owners - the Indonesian and Malaysian OSV sectors are especially looking relatively promising. Meanwhile, subsea tendering activity remains firm.
Solid long-term fundamentals; near term driven by macro events
We believe that the offshore sector has strong long-term fundamentals as countries have an interest in fulfilling as much domestic demand as possible in order to boost energy security. Investors should be mindful, however, that macro events remain a key driver of the broader sector in the near term. Going into 2014, we remain OVERWEIGHT on the oil and gas sector, as we expect that the favourable oil price environment will continue to be conducive for capital expenditure. Our preferred picks are Keppel Corporation [BUY, FV: S$12.87], Sembcorp Marine [BUY, FV: S$5.68], Ezion Holdings [BUY, FV: S$2.57] and Nam Cheong Ltd [BUY, FV: S$0.37].



Monday, December 2, 2013

SG: Market Pulse: Oil & Gas Sector, Vard (2 Dec 2013)

Stock Name: Vard Holdings
Company Name: VARD HOLDINGS LIMITED
Research House: OCBCPrice Call: HOLDTarget Price: 0.84




MARKET PULSE: Oil & Gas Sector, Vard
2 Dec 2013
KEY IDEA

Oil and Gas: Good performance to continue in 2014

Summary: The FTSE Oil and Gas index has performed more or less in-line with the broader market this year. Still, it is among the top three best-performing FTSE sub-indices YTD, along with the FTSE Telecommunications and FTSE Maritime indices. Stepping into 2014, we continue to advocate a focused stock-picking strategy, overweighting companies that are operating in sub-sectors with more favourable demand-supply dynamics, and those with strong balance sheets and order books. The local rigbuilders are expected to continue securing orders at a pace that will at least match this year's, while the offshore support vessel sub-sector should also see continued recovery as the market situation gradually tilts in favour of vessel owners. Maintain OVERWEIGHT on the oil and gas sector, preferring Keppel Corporation [BUY, FV: S$12.87], Sembcorp Marine [BUY, FV: S$5.68], Ezion Holdings [BUY, FV: S$2.57] and Nam Cheong Ltd [BUY, FV: S$0.37]. (Low Pei Han, Andy Wong)

MORE REPORTS

Vard Holdings: Secures NOK400m contract

Summary: Vard Holdings Limited (VARD) announced that it has secured a new contract for the construction of one advanced offshore support vessel (OSV) worth ~NOK400m. This contract was awarded by Island Offshore, which is an existing customer of VARD. VARD has delivered more than 30 vessels to Island Offshore previously, while it also has five vessels under construction for Island Offshore. Delivery for this OSV is scheduled for 1Q15. This latest contract brings total YTD order wins for VARD to NOK12.3b, within our forecast of NOK12.9b. Hence, we maintain our HOLD rating and S$0.84 fair value estimate on VARD, pegged to 8x FY14F EPS. (Wong Teck Ching Andy)

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


NEWS HEADLINES

- US stocks closed mostly lower on Fri, pulling back from Wed's record levels, but still achieved gains for the week and month.

- After the great penny stock collapse of Oct, a listless month of trading in Nov saw the Singapore market lose around S$12.6b of value.

- Business loans continued to power Singapore's bank lending growth in Oct, with total loans rising 1.4% MoM, according to preliminary figures released by MAS.

- Keppel Corp's Keppel Shipyard is in talks with Norway's Golar LNG on a contract for a landmark conversion of an LNG carrier into a floating LNG production facility.

- GSH Corporation Ltd's subsidiary signed a sales and purchase agreement with Tropicana Kia Peng to acquire a parcel of prime land in downtown Kuala Lumpur for RM132.4m (S$51.55m).

- Asiatravel.com Holdings posted deeper losses of S$5.74m for FY13, from the S$3.77m loss in FY12.

- Casa Holdings Ltd's FY13 net profit rose to S$9.53m from S$9.45m a year ago.

- CapitaMalls Asia will open two new shopping havens this week, one on each side of the island.