04 Dec 2013 ~ Good Morning Singapore!
Central Execution Team - The Excellence of Execution
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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 AheadSINGAPORE 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 |
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