SG: MARKET PULSE: Tat Hong, Golden Agri (9 Oct 2013)

Stock Name: Tat Hong
Company Name: TAT HONG HOLDINGS LTD

Research House: OCBC

Price Call: HOLD

Target Price: 0.96

MARKET PULSE: Tat Hong, Golden Agri

9 Oct 2013

KEY IDEA Tat Hong Holdings: Weakness already priced in Following our recent discussion with Tat Hong's management, we are upgrading Tat Hong to HOLD and raise our valuation peg to 11x (previously 9x) and fair value estimate to S$0.96 (previously S$0.80). We feel that the stock has bottomed since the sell-off after its disappointing 1Q14 results, and that the street has adequately priced in its expectations for a weakened performance for the remainder of FY14. Its key market of Australia should start to see a pickup in business activity by early FY15 on commitments on infrastructure spending by the new Coalition government and as improving business confidence translate to actual spending. In the interim, relative stability from its SEA and greater China markets will help to offset some of the shortfall in performance figures for FY14. (Lim Siyi) MORE REPORTS Golden Agri: Headwinds remain Golden Agri-Resources (GAR), being one of the largest palm oil plantation owners in the world, could continue to underperform with average CPO prices down 22% YoY and 2% QoQ in 3Q13. Outlook for CPO prices is also likely to remain muted, with stockpiles growing faster than expected going into 2H13. Market watchers are expecting an excess supply of oilseeds (soy, corn etc) to further weigh on CPO prices. Meanwhile, the impasse over the raising of the US debt ceiling could send the US economy into a recession, further weighing on global sentiment. In light of the headwinds ahead, we maintain our SELL rating on the stock with an unchanged fair value of S$0.465. (Carey Wong)

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

NEWS HEADLINES - US stocks fell sharply on Tue hit by growing jitters over the budget impasse in Washington, with the partial government shutdown extending into a second week with few signs of a deal to end it or raise the nation's debt ceiling. - Singapore's central bank is widely expected to keep the Singapore dollar on its rising path next Monday even as growth is expected to slow. - Despite a sputtering global economy, business sentiment in Singapore remains positive for 4Q13, said Dun & Bradstreet Singapore's latest Business Optimism Index. - SunMoon Food Company's latest debt restructuring has finally removed the proverbial sword of Damocles hanging over its head and given it a fresh impetus for growth. - The proposed IPO of a Philippine casino joint venture between Genting Hong Kong and Philippine conglomerate Alliance Global Group is back on the table, but looks to raise about half its initial target of up to 42.3b pesos (S$1.22b). - The vendor of Reflections Oasis Inc, the company that steel trader Albedo is trying to acquire in a reverse takeover deal to transform itself into a property play, has stressed its commitment to see the deal go through.

SG: MARKET PULSE: Keppel Corp, AREIT (8 Oct 2013) (Amended copy)

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 12.87

MARKET PULSE: Keppel Corp, AREIT

8 Oct 2013

KEY IDEA Keppel Corporation: Healthy order wins and expecting more Keppel Corporation (KEP) has secured new orders worth about S$4.9b YTD, close to our original forecast of S$5b. With good order momentum that is supported by prospects in the O&M sector, we increase our new order win forecast to S$6b for this year, while keeping our S$6.75b target for FY14F unchanged for now. KEP also recently announced that it will jointly develop, own and operate a yard facility in Mexico, in line with its "Near Market, Near Customer" strategy that we have always believed will put it in good stead to win new orders, especially with increasing focus on local content requirements. Besides more orders expected from Mexico, we also look to other growth areas such as West Africa, the Caspian Sea and the Gulf of Mexico. Our SOTP-based fair value estimate rises from S$12.53 to S$12.87; maintain BUY. (Low Pei Han) MORE REPORTS Ascendas REIT: Heading for another harvest We are positive that Ascendas REIT (A-REIT) will put up a firm showing in FY14, as it is likely to benefit not only from incremental rental income from The Galen and continued positive rental reversions, but also from the completion of its various investment projects. While the industrial property market was relatively static in 3Q13 amid uncertainty in the manufacturing economy, we understand that the demand in the high-tech and business park segments has continued to hold up well. Given A-REIT's significant exposure in these sub-markets, we believe A-REIT is in better position to shield off any fatigue in the industrial rental market. Maintain BUY and S$2.45 fair value on A-REIT. (Kevin Tan)

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

NEWS HEADLINES - US stocks declined on Mon, with the S&P 500 index closing at a four-week low, as a stalemate on Capitol Hill over preventing a government default persisted. - Boustead Singapore said that the value of contracts secured by the group since Apr has topped the S$300m mark, surpassing that for the whole of the preceding financial year. - Phospate miner AsiaPhos' shares closed 58% above its offer price of 25 S cents in its trading debut yesterday, making it the best performing IPO so far this year in percentage terms. - Climate Holding, a special purpose vehicle in which its shareholders have a collective 43% control of Devotion Energy Group, is seeking voluntary delisting of the company. - Catalist-listed Albedo yesterday disclosed additional information on its proposed S$774.14m reverse takeover deal - first announced about two weeks ago. - ICP Ltd announced that it would be selling its factory building and leasehold land at 5 Loyang Drive to Chang Hua Construction Pte Ltd for S$11.8m.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: Cambridge
Company Name: CAMBRIDGE INDUSTRIAL TRUST

Research House: CIMB

Price Call: HOLD

Target Price: 0.74

Stock Name: RH PetroGas
Company Name: RH PETROGAS LIMITED

Research House: OSK-DMG

Price Call: BUY

Target Price: 1.33

Stock Name: 5WH
Company Name: REX INTERNATIONAL HOLDING LTD

Research House: UOB KayHian

Price Call: BUY

Target Price: 1.47

Market Compass

07 October 2013~ Good Morning Singapore!

Singapore Idea Snippets:

07 Oct 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 : I don't want to be the next Michael Jordan, I only want to be Kobe Bryant. - KOBE BRYANT Singapore: The Day Ahead SINGAPORE DAYBOOK : SGX unlocks volatile trio, but adds shackles. No short-selling or contra for Asiasons, Blumont and LionGold [SINGAPORE] Singapore Exchange (SGX) will allow the three volatile counters it had suspended to trade today - but with curbs. The shares of Asiasons Capital, Blumont Group and LionGold Corp will resume trading with restrictions against short-selling and taking on new contra positions, according to a regulatory announcement issued by the exchange yesterday. The move is expected to offer an escape route, albeit a potentially costly one, for traders who had open positions on the affected stocks after Friday's surprise intervention by SGX in suspending the counters, and possibly pave the way towards normalised trading. "It's a good move," one trader said. "Hopefully it will calm the market a little bit after last Friday, because it triggered a tsunami, you know. Carnage, man, pure carnage." (Source: The Business Times) MARKET SCOOP Blumont scraps S$146m coal mine purchase AsiaPhos' IPO 3.8 times subscribed Singapore's LionGold says in talks to acquire stake in gold miner Asiasons, ISDN, InnoPac say in compliance with listing rules Innopac, ISR Capital, ISDN shares trading off lows after SGX query BreadTalk targets S$1b in revenue by 2016 (Source: The Business Times) CIMB Securities says ... CAMBRIDGE INDUSTRIAL TRUST | NEUTRAL | TP: S$0.74 With a more challenging acquisition market, we expect CIT to grow at a slower pace in 2014 We have lowered our capex assumption for FY14 to S$85m from S$150m previously Consequently, we have reduced FY14/15 DPUs by about 6.8% on average Downgrade to Neutral from Outperform with lower DDM-based target price of S$0.74 As the industrial landscape becomes more regulated through various government policies, such as i) the shortening of industrial land leases and ii) upfront payment of land rents, both the acquisition and development market have become more challenged as investors find it more difficult to achieve similar returns as before Also, due to the availability of liquidity and with current low interest rates, the mismatch in pricing expectations between vendors and REIT managers has continued On this basis, we expect CIT to rely less on acquisitions or development for growth and more on AEIs in 2014 Previously, management indicated that it would focus on three key issues in 2H13: i) reduce the lease expiry profile in 2014; ii) refinance the S$308m debt that will be due in FY14 and iii) the sale of Lam Soon Industrial Of the three key issues, Lam Soon has successfully been divested at S$140.8m, while the refinancing of the debt due next year was previously highlighted to be at an 'advanced stage of negotiations' with several financial institutions For the 2014 lease expiry profile, we remain confident of management's ability to lower the level on a quarterly basis We have downgraded CIT to Neutral on the back of a more challenging growth environment in FY14 DMG OSK Securities says ... RH PETROGAS | BUY | TP: S$1.33 RH Petrogas (RHP) will issue 116m new shares, at SGD0.63/share, to a group of institutional investors, raising USD56m to fund drilling activities in the Basin and Island PSCs, which we expect to accelerate in FY14 The stock remains deeply undervalued, with current assets worth SGD0.98/share Multiple catalysts are expected over October and 4Q13 Maintain BUY with its TP adjusted to SGD1.33 postplacement Institutional support for drilling activity. 90% of the proceeds will be used in exploration, development or production activities in the Basin and Island production-sharing contracts (PSCs) in Indonesia We believe that the large cash inflow will allow RHP to expand its drilling programme in FY14 Also, this increases RHP's free float from 23% to 36%, which may improve its trading liquidity - thereby lowering the "illiquidity discount" RHP should trade at SGD0.98 for today's assets Based on our assessment of RHP's 2P reserves and 2C contingent resources, RHP should trade at SGD0.98 today (post-placement) to reflect the market value of its reserves and resource We expect RHP to announce the results of the Zircon-1 well next week as well as the spudding of the exploration well Klagalo-1 in 4Q13 Subject to oil finds, additional appraisal wells may be drilled in the Zircon and Koi prospects this quarter Additional catalysts would be: i) the signing of new PSCs in Myanmar/Asean region, ii) approval to commence production in Fuyu-1 in China, and potentially iii) news of exploration and production (E&P) players like Sona Petroleum (SONA MK, NR) or Rex International (REXI SP, NR) acquiring a stake in RHP As the cash inflow to RHP adds to its value today, this implies a dilution of less than 20% The cash will be used productively in drilling new wells and raising the market value of resources by proving and then transferring them to 2P reserves Maintain BUY with its TP adjusted to SGD1.33 based on parity to our NPV-and-risking model UOB KAY HIAN says... REX INTERNATIONAL | BUY | TP: S$1.47 We initiate coverage with a BUY and target price of S$1.47 (based on expected monetary value of Rex's exploration assets using forecast from traditional geologist findings), representing a 58.1% upside Rex's most valuable asset is its access to the proprietary Rex Technologies that may significantly improve the odds of successful oil exploration With more than 80% accuracy in blind and live tests, Rex Technologies showed great promise and has helped Rex to secure strategic partnerships and concessions Results from Rex's first few exploration wells will be critical and is a potential catalyst A successful oil discovery may see a re-rating of the stock Results of the first exploration well are expected to be known by 1Q14 Using proprietary satellite and seismic imaging technologies, management believes Rex Technologies can produce an exploration success rate in excess of 50%, compared with a global average of 10-15% In addition, Rex Technologies also cuts the exploration process to 18-60 months from the 72-114 months required under conventional technologies Rex has conducted blind tests for Hibiscus and Fram and has shown an impressive 100% accuracy Over the past two years, Rex had analysed 59 prospects for North energy, accurately predicting 35 of the 41 wells that had been drilled (85% accuracy) Rex successfully predicted 24 out of 25 dry wells and 11 out of 16 commercial oil wells As Rex Technologies gains traction among market players, Rex has been able to secure concessions on better terms, such as eliminating common industry practices of paying entrance fees With its leverage, Rex has successfully farmed into 15 concessions ASX-listed Bass Strait Oil Company (BAS) is Rex's newest strategic partner as it partners with REX to reassess specific exploration opportunities in Gippsland Basin of Australia A potential multi-bagger with exploration target of 2,183mmbbl unrisked resources (EMV range: US$1.31-5.39/share) Oman Block 50, Rak Offshore and Sharjah Central form almost 90% of our total risked NAV, and are estimated to have a risked value attributable to Rex of US$1,319m (US$1.31/share) based on conventional chances of success To derive our target price of S$1.47, we applied a 20% discount to our risked NAV to account for the concentration risks from Oman Block 50, which forms almost two thirds of our risked NAV estimate

SG: MARKET PULSE: Tee Int'l, China Environment (7 Oct 2013)

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.38

MARKET PULSE: Tee Int'l, China Environment

7 Oct 2013

KEY IDEA TEE International: Scrip dividend scheme in place Summary: Tee International announced that its scrip dividend scheme will apply to the final tax-exempt (one-tier) dividend of 2.5 S-cents per ordinary share for the financial year ended 31 May 2013. Management updates that the price for the new shares issued under the scheme will be set at not more than a 10% discount, nor shall it exceed the average of the last traded prices for the period between 9 Oct 2013 and 11 Oct 2013 (both dates included). We believe this scrip dividend scheme allows shareholders who are looking to re-invest dividends into the counter to do so conveniently, and also enable the group to retain such capital for allocation into future opportunities. While we hold our fair value estimate of S$0.38 per share unchanged, we are upgrading our rating to a BUY (from hold previously) on valuation grounds as the share price has weakened marginally from our last update. (Eli Lee) MORE REPORTS China Environment: Focus on air pollution control Summary: China Environment Ltd (CEL) is a provider of industrial waste gas treatment solutions in China, which is likely to benefit from the Chinese government's increased focus on cleaning up the environment in China. The Chinese government has reiterated its stance to clean up the environment, this time with the intent to spend RMB1.7t to combat air pollution, where a key focus is on reducing the amount of PM2.5 particle in the air. With its new facility in Anhui nearing completion, which will increase its capacity to process 80k tonnes of steel to over 350k tonnes, as well as the recent RMB80m share place, CEL feels that it has sufficient working capital to take on bigger and more jobs. We currently do not have a rating on the stock. (Carey Wong)

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

NEWS HEADLINES - US stocks ended higher Fri but closed mostly lower for the week, as investors stayed sensitive to news about the government shutdown. - KS Energy Limited has extended its reach into Mexico with the signing of a memorandum of agreement with one of Mexico's renowned conglomerate Empresas ICA, S.A.B. de C.V. - Blumont Group has called off plans to buy Australia-listed Cokal Ltd for S$146m for now, after its shares came crashing down after announcing the deal. - BreadTalk wants to more than double its revenue to S$1b by 2016, and to have more than 2,000 outlets across its business segments by 2018. - Indofood's S$1.12 a share general offer for China Minzhong is "not fair but reasonable", said the independent financial adviser appointed by China Minzhong's directors. - Keppel Offshore & Marine has signed a Memorandum of Understanding with two Mexican oil majors, to jointly develop, own and operate a yard facility there.

Singapore shares on track for 2nd weekly loss, US impasse weighs

Stock Name: HKLand US$
Company Name: HONGKONG LAND HOLDINGS LIMITED

Research House: Citigroup

Price Call: BUY

Target Price: 7.90

Singapore shares touched a three-week low on Friday and were on course for a second week of losses as investors stayed on the sidelines to watch for repercussions from the U.S. government shutdown.

The Singapore Exchange also suspended trading of three stocks - Asiasons Capital, LionGold Corp and Blumont Group - after their share prices tumbled earlier in the day.

The benchmark Straits Times Index was nearly flat at 3,144.75 points after slipping earlier to 3,131.14, its lowest since Sept. 13. Some 64 million shares changed hands, less than a quarter of the 30-day average daily volume.

The index was headed for a weekly decline of 2%, its biggest such fall in over a month.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.2%.

Hongkong Land Holdings was the worst performer on the index, down 2% to US$6.40 ($8.00) in its third day of declines, though Citi analysts believe there is room for the share price to grow.

“We expect HKL’s earnings will see continuous growth on a higher development profit from property sales in Singapore and China,” Citi said in a research note, putting the target price at US$7.90.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: Yangzijiang
Company Name: YANGZIJIANG SHIPBLDG HLDGS LTD

Research House: OCBC

Price Call: HOLD

Target Price: 1.04

Stock Name: Wing Tai
Company Name: WING TAI HLDGS LTD

Research House: Nomura

Price Call: BUY

Target Price: 2.54

Market Compass

04 October 2013~ Good Morning Singapore!

Singapore Idea Snippets:

04 Oct 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 : Many of life's failures are people who did not realize how close they were to success when they gave up. - THOMAS A. EDISON Singapore: The Day Ahead SINGAPORE DAYBOOK : M1 dealt record-breaking $1.5m fine for service disruption. M1 failed to ensure good electrical installation practices while upgrading: IDA [SINGAPORE] M1, Singapore's smallest telco, has been slapped with the industry's largest fine on record in the country's history - $1.5 million - for the disruption of its 2G and 3G mobile phone services in January. These 2G and 3G mobile service disruptions lasted about 71 hours and 63 hours respectively in mid- January, affecting some 250,000 M1 customers. When the Infocomm Development Authority of Singapore (IDA) announced its record-breaking decision yesterday, a spokesman said the regulator was "extremely concerned about the length and scope of M1's telecom service disruption, especially when it affected services heavily relied upon by both consumers and businesses". According to IDA, the service disruption was caused by M1's "failure to ensure good electrical installation practices" during its upgrading works, which then set off a chain of events - sparks, smoke, the activation of a gas suppression system and, ultimately, the activation of a water sprinkler that caused one of M1's mobile network switches to fail. IDA's mammoth fine is more than treble the previous record held by SingTel: a $400,000 fine for a 3G mobile service outage that lasted more than 20 hours in September 2011. SingTel had in turn broken another record of M1's: a $300,000 fine that the orange-hued telco had to fork out for an outage in May 2011. On a national level, M1's latest fine likely occupies a podium position regardless of industry. One of the largest fines in recent memory is the $2 million one dealt to train operator SMRT last July, but that figure was split evenly between breakdowns on the North-South Line on two separate dates in December 2011. M1's financial penalty this time around was levied under the Service Resiliency Code, which carries a fine of up to $1 million or 10 per cent of a licensee's annual turnover, whichever is higher. At $1.5 million, this fine represents 0.14 per cent of M1's last full year of operating revenue, which stands at $1.08 billion. Responding to IDA's decision yesterday, an M1 spokesman said: "IDA did not agree with our reconsideration request to reduce the quantum of the fine in light of our strong mitigating factors including our view that the incident was unexpected and beyond our reasonable control." "We are accordingly evaluating the decision," he added. At this stage, M1 has the option of appealing to Minister for Communications and Information Yaacob Ibrahim. For the industry, more compliance hurdles might loom. Following a review of the network resiliency for all three operators - SingTel Mobile, M1 and StarHub Mobile - IDA noted yesterday that while they generally met international standards, there was "room for improvement". It will implement a new audit framework to review network resiliency regularly, IDA added. (Source: The Business Times) MARKET SCOOP MAS obtains default judgement against Ong Beng Hock for false trading, market manipulation China Gaoxian fined S$2.3m by Korean authority Mixed-use and hotel deals drive surge in investment activity: DTZ SMEs prefer to recruit locals, but face challenge in hiring SGX says trading, clearing volumes up in Sept (Source: The Business Times) OCBC Securities says... YANGZIJIANG SHIPBUILDING | HOLD | TP: S$1.04 Following the announcement of eight shipbuilding contracts in early Sep totaling US$214m, Yangzijiang Shipbuilding (YZJ) has secured 17 more contracts worth about US$871m, bringing total orders won YTD to US$2.096b The 17 new contracts are scheduled for deliveries in 2015-2016, and provide much-anticipated replenishment of the order book for execution of orders further down the road - indeed the company may have to rely on a higher volume turnover as it starts executing more of its newer orders (also lower-margin) to maintain the yard's profit level Meanwhile, the group still has a total of 28 options outstanding worth about US$1.36b As Exhibits 2 and 3 illustrate, newbuild prices for bulk carriers in Chinese yards have been on a slow but steady uptrend since early this year This has been more apparent in the larger ships, such as the Capesize carriers (e.g. US$50m in Sep 2013 vs US$45m in Dec 2012) Indeed, according to RS Platou, spot earnings for Capesize tonnage rose substantially over the last month due to higher Chinese iron ore imports The strength in Capesize has also influenced the Panamax sector positively as charterers started to take two Panamaxes instead of one Capesize when the spread in freight rates became greater than normal In the longer term, a gradual recovery in the world economy should drive the demand for tonnage With a gradually recovering newbuild market, we raise our peg from 8x to 9x P/E, while rolling forward our valuations from blended FY13/14F earnings to FY14F earnings, resulting in a slight rise in YZJ's fair value estimate to S$1.04 (prev. S$0.99) While the newbuild price trend of ships by Chinese yards looks positive, additional monitoring is needed to determine its sustainability, which is dependent on the global economic recovery, the rate of China's yard consolidation process as well as any further tightening in China's money supply that would affect financing terms offered by yards Maintain HOLD CIMB Securities says ... OFFSHORE AND MARINE | OVERWEIGHT | Keppel (KEP) may have the upper hand as PEMEX and Transocean are existing customers Sembmarine (SMM) will benefit from its experience with Mexican owners such as Oro Negro (likely to be chartered to PEMEX) and the jack-ups it built for Global SantaFe (before Transocean acquired it) KEP is our top pick for its lower execution risks in Brazil Maintain Overweight on the sector, with more orders as catalysts PEMEX will start the tendering process for 10 jack-up rigs in Dec-13 Delivery for the first unit will be in 28 months, with each subsequent unit to be delivered at an interval of three months The orders can go to two yards, with one building six and the other four (Source: ODS-Petrodata) Transocean is also expected to receive bids for up to 10 high-specification jack-ups by end-Oct and has approached yards in Singapore, Korea and China, with speedy delivery (27 months) as a key criterion (Source: Upstream) Global average jack-up day rates have risen 10% yoy to about US$123k/day and utilisation rate is above 80% We believe this may encourage more jack-up orders from speculators and drillers We think KEP can win US$2.2bn worth of jack-ups from the PEMEX/Transocean tenders, assuming it snatches six jack-ups from PEMEX and five from Transocean, given its long history with both the companies Including the operators' units, KEP has built/is building five jack-ups for PEMEX and seven units for Transocean SMM can win up to US$1.4bn (four from PEMEX and three from Transocean) SMM delivered three jack-ups in 2006-09 that were chartered to PEMEX in addition to the six units it is building for Oro Negro, likely to be deployed by PEMEX in 2014-15 It also has a relationship with Transocean, via the two jack-ups it built for Global Santa Fe (acquired by Transocean in 2007) We assume that Dalian shipyard in China can win two jack-ups from Transocean due to its track record with Seadrill Stay invested, We see upside to order wins in 2014, boosted by jack-up rigs on top of the semi-subs, drillships and FPSOs NOMURA Securities says... WING TAI HOLDINGS | BUY | TP: S$2.54 We met with management recently for a company update and found that while the prime luxury market is still relatively quiet, WING sold another unit at ultra luxury Le Nouvel Ardmore to a foreign buyer in September and Belle Vue Residences is now fully sold Following the recent success at The Tembusu, WINGT is looking to launch the Prince Charles Crescent project in 1Q14 at c.SGD2,000psf, which is similar to what nearby Mon Jervois is fetching While the initial take-up at Mon Jervois has been relatively slow, we think the smaller unit size at WINGT's project is likely to be an advantage Management believes there are already signs that developers are more cautious in bidding for land but going forward, the incremental capital could be deployed in Malaysia With The Tembusu already launched (and well taken up) and the special dividend of SGD0.09/share already proposed, it appears there are few positive catalysts that investors can look forward to, at least in the near term, in our view One such catalyst could be better-than-expected takeup at the Prince Charles Crescent project when it is launched We raise our NAV to SGD3.35 (from SGD3.27) and TP to SGD2.54 (from SGD2.49) to chiefly reflect the better-than-expected sales at The Tembusu and higher market value of WING Stock remains fundamentally undervalued despite an apparent lack of near term catalysts

SG: MARKET PULSE: Telco sector (4 Oct 2013)

Stock Name: SingTel
Company Name: SINGTEL

Research House: OCBC

Price Call: HOLD

Target Price: 3.81

Stock Name: StarHub
Company Name: STARHUB LTD

Research House: OCBC

Price Call: SELL

Target Price: 3.82

MARKET PULSE: Telco sector

4 Oct 2013

KEY IDEA Telco Sector: MDA explains BPL ruling In a report recently, MDA (Media Development Authority) explained that it forced SingTel to share its BPL (Barclays Premier League) content as the telco had made it "commercially unviable" for StarHub to separately purchase the rights. The cross-carriage ruling resulted in the two telcos offering hefty "subsidies" to either lure subscribers to switch or retain subscribers. But we do not expect the migration of Pay TV customers from SingTel to StarHub to be significant, given that it may still be cheaper for existing subscribers to watch BPL on the mio TV platform. We have a NEUTRAL rating on the sector, with a HOLDon SingTel (S$3.81 FV) and SELL on StarHub (S$3.82 FV). (Carey Wong)

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

NEWS HEADLINES - US stocks closed lower Thu after bouncing off intraday lows following a report that House Speaker John Boehner is determined to prevent a federal default as the Treasury Department warned that such a default would have potentially catastrophic effects. - M1 has been slapped with the industry's largest fine on record in the country's history - S$1.5m - for the disruption of its 2G and 3G mobile phone services in Jan. - China Gaoxian Fibre Fabric Holdings might have resumed trading on the SGX but its past has returned to haunt it, with a Korean regulatory authority fining it S$2.3m over a securities registration statement lodged in 2011. - CapitaMalls Asia and Sime Darby Property yesterday began the construction of their shopping mall on prime commercial land in the Taman Melawati commercial area north-east of Kuala Lumpur. - Hiap Hoe Ltd has entered into an MOU with Probuild Construction (Aust) Pty Ltd to pursue JV opportunities for the group's recently acquired sites in Pearl River Road and Lonsdale Street in Melbourne, Australia.