OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: Centurion
Company Name: CENTURION CORPORATION LIMITED

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.77

Stock Name: SV3U
Company Name: SOILBUILD BUSINESS SPACE REIT

Research House: OCBC

Price Call: BUY

Target Price: 0.82

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: OSK-DMG

Price Call: BUY

Target Price: 12.24

Market Compass

20 September 2013~ Good Morning Singapore!

Singapore Idea Snippets:

20 Sept 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 : The only disability in life is a bad attitude. - SCOTT HAMILTON Singapore: The Day Ahead SINGAPORE DAYBOOK :S-EA to drive IPO growth in S'pore: Bocker. Japanese, European companies also show more interest in listing here. SOUTH-EAST Asian companies will continue to be a key source of new listings for the Singapore Exchange (SGX), even as interest from Japanese and European companies picks up, SGX chief executive Magnus Bocker said yesterday at the market operator's annual general meeting. "SGX is one of the most international exchanges in the world" with 40 per cent of its listed companies based outside of Singapore, Mr Bocker said, in response to questions from shareholders about the exchange's ability to attract foreign issuers. Looking ahead, the immediate region will remain the key contributor to new listings. "I think you will see an increased number of listings from Asean," Mr Bocker said. Singapore's political and regulatory stability is attractive to asset managers, and gives SGX a leg-up over its regional rivals in attracting initial public offerings, he said. "It's because of the trust in Singapore, in SGX." (Source: The Business Times) MARKET SCOOP Singapore Airlines, India's Tata to establish new carrier SingTel closing e-book service skoob Blumont invests A$116m in Bostwanacopper producer CapitaLand to issue bonds worth up to S$700m Nam Cheong to co-invest in Indonesian shipping firm Asian Trust raises stake in Logistics Holdings to 5.6% (Source: The Business Times) DBS Securities says... CENTURION CORPORATION | BUY | TP: S$0.77 Centurion is a premier player in the foreign worker dormitory business, garnering c.11% market share with 18,000 beds in three dormitories in Singapore The Group has also expanded into Malaysia since 2011, operating 11,000 beds as the first and only purpose-built dormitory operator in the country With its aggressive growth strategy, the Group has grown from operating 5,300 beds in 2011 to c.30,000 today, with another 25,000 beds in the pipeline by 2015 As an operator of approved dormitories, Centurion is a beneficiary of increasing government rigour in ensuring that minimum housing standards for foreign workers are adopted However, the availability of such dormitories is limited - there are c.740k foreign workers vs. c.160k purpose-built dormitories today - and as a result, monthly bed rents have increased c.30% over the past three years This shortage should continue to support further rent increases over the next few years Meanwhile, supply of dormitory land remains scarce due to the relative difficulty in identifying socially and commercially viable land plots for development Key growth drivers are continued rent increases (we assumed 5% p.a.), higher occupancy and 50% expansion in beds in Singapore from 2013 to 2015 and 120% in Malaysia by 2015 Beyond worker's dormitory business, Centurion has also expanded its mandate to include student accommodation in the region Including the potential dilution from a proposed 1-for-10 bonus issue of warrants, we derived a DCF-based TP of S$0.77, assuming 6.97% WACC Further acquisitions and higher than expected rent rates are potential upsides, while there are risks of higher land/construction costs resulting from competition and regulatory changes OCBC Securities says ... SOILBUILD BUSINESS SPACE REIT | BUY | TP: S$0.82 We are initiating coverage on Soilbuild Business Space REIT (Soilbuild REIT) with a BUY rating Our fair value of S$0.82 is based on the dividend discount model, and implies an attractive total expected return of 20.1% At current price, Soilbuild REIT is trading at the steepest discount of 8.8% to its book value, compared to an average P/B of 1.10x seen across its subsector peers This is unjustified in our view given Soilbuild REIT's quality portfolio assets, growth potential and respectable FY14F yield of 7.8% Soilbuild REIT currently owns a young portfolio of seven modern business space properties in Singapore which enjoy excellent connectivity In addition, Soilbuild REIT has the largest exposure to the business park segment relative to the other industrial S-REITs We like Soilbuild REIT's exposure in this space because demand in the local scene has been growing steadily throughout the years due to its high quality and lower rents relative to traditional office spaces The Sponsor for Soilbuild REIT is Soilbuild Group Holdings, a leading integrated property group based in Singapore It is one of the few Singapore construction companies that are allowed to tender for public sector projects without any value limitations Given Soilbuild Group's track record and expertise, we believe Soilbuild REIT is able to leverage on the capabilities of its Sponsor to grow its income Soilbuild REIT is granted Right of First Refusal (ROFR) by its Sponsor over all its income-producing business space assets in Singapore The ROFR currently covers four industrial properties, providing Soilbuild REIT with a clear acquisition pipeline In addition, several of its properties have under-utilized plot ratios, and present opportunities for growth As of the listing date, Soilbuild REIT is sitting at healthy gearing ratio of 29.9%, while 75.0% of its interest rates are fixed This not only gives Soilbuild REIT ample debt headroom to pursue its growth plans but also limits its exposure to rising interest costs DMG OSK Securities says... KEPPEL CORPORATION | BUY | TP: S$12.24 Keppel Corp (KEP) has secured two FPSO conversion contracts This lifts its YTD new orders to SGD4.3bn, accounting for 72% of our SGD6bn order win estimate for FY13 The contracts are positive as they reflect the group's strong execution capability and raise its net order book to SGD14.4bn We maintain our EPS estimates, BUY rating and TP of SGD12.24 Conversion project from SBM, a repeat customer The first contract from SBM Offshore (SBMO NA, NR) is for the conversion of a floating, production, storage and offloading (FPSO) unit that will be used for the Stones ultra deepwater development by Shell in the Gulf of Mexico The FPSO is designed with a processing capacity of 60,000 barrels of oil per day (bopd) and will be able to store 800,000 barrels of crude oil Beating MMHE to bag M3nergy FPSO conversion contract The second contract, awarded by M3nergy, involves the conversion of a FPSO for the Petronas-operated Bukit Tua Field, 35km north of Madura Island in Indonesia The conversion is expected to be completed in 2Q14 The FPSO will have a production capacity of 25,000 bopd and a storage capacity of 630,000 barrels We understand KEP beat other yards to the job, including Malaysia Marine and Heavy Engineering Holdings (MMHE MK, NEUTRAL, FV: MYR4.11) We value the stock using a SOP approach according to the following: i) Keppel O&M at an 18x FY14F P/E (previously 16x), ii) infrastructure at 8x FY14F, iii) Keppel Land (KPLD SP, NR) at SGD4.36 per share, iv) KGreen Trust (KGT SP, NR) at SGD1.20 based on a 6.5% yield, and v) the market prices of the group's other listed companies

SG: MARKET PULSE: CapitaLand, Telecom sector (20 Sep 2013)

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 3.77

MARKET PULSE: CapitaLand, Telecom sector

20 Sep 2013

KEY IDEA CapitaLand Limited: New convertible bond issue Yesterday, CAPL priced its proposed S$750m 2023 convertible bond issue at 1.95% yield to maturity with a conversion price of S$4.212. The group announced that they will use ~95%-100% of the proceeds to refinance its existing indebtedness and has set up an invitation to repurchase for cash existing CBs due in 2016 and 2018. We see this as a positive move that would reduce interest payments and lengthen the group's average debt expiry. We also look forward to CAPL's new condominium launch - the 694-unit Sky Vue in Bishan. While we estimate fairly slim profit margins in the low teens due to the pricing, we believe a strong launch would be taken positively by the market, particularly now that the group has a large unsold exposure of over a thousand units in the Bishan locality in Sky Habitat (340 units unsold) and Sky Vue (694 units unsold). Maintain BUY with an unchanged fair value estimate of S$3.77. (Eli Lee) Telecom Sector: Price plans for new iPhones out All three telcos have announced their price plans for the new Apple iPhone 5S/5C recently. For the 16GB model of the more powerful 5S, the telcos are offering the phone between S$515 and S$532 on a 2-year contract under their basic plans, versus the Apple Store's retail price of S$988. This translates to an upfront subsidy of ~S$470 per subscriber. For the 5C, basic plan subscribers would need to fork out between S$318 and S$355 for the entry-level 16GB model on a 2-year contract. This amounts to a subsidy of ~S$515 against the retail price of S$848 found in the Apple Store. However, with Samsung launching its new Galaxy Note 3 around the same time, this may temper the demand for the new iPhone. We have a NEUTRAL rating on the sector. (Carey Wong)

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

NEWS HEADLINES - US stocks on Thu mostly fell, with benchmark indexes retreating from record highs that came with the Federal Reserve's unexpected decision not to begin cutting stimulus. - Singapore Airlines tied up with Tata Group, owner of the Jaguar and Land Rover brands, to start an airline in India. - Asian Trust Investment has become a substantial shareholder in Logistics Holdings, following the acquisition of about 1.06m shares. This raises Asian Trust Investment's stake to 5.60% from 4.97%. - Albedo has agreed to a S$774.1m reverse takeover with Tan Sri Dato' Danny Tan's company to buy land in Iskandar.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: PLife REIT
Company Name: PARKWAYLIFE REIT

Research House: DBS Vickers

Price Call: HOLD

Target Price: 2.51

Stock Name: Ezra
Company Name: EZRA HOLDINGS LIMITED

Research House: OCBC

Price Call: SELL

Target Price: 0.99

Stock Name: FirstRes
Company Name: FIRST RESOURCES LIMITED

Research House: UOB KayHian

Price Call: BUY

Target Price: 2.40

Market Compass

19 September 2013~ Good Morning Singapore!

Singapore Idea Snippets:

19 Sept 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 : Physical fitness is not only one of the most important keys to a healthy body, it is the basis of dynamic and creative intellectual activity. - JOHN F. KENNEDY Singapore: The Day Ahead SINGAPORE DAYBOOK :Market tremors keep lid on Q3 Singapore M&As. Steep 76% plunge for Singapore firms partly due to last year's F&N, APB blockbusters. [SINGAPORE] Merger and acquisition (M&A) activity in the third quarter in Singapore slowed to its quietest level in more than four years as companies struggled to build deals in a shaky market. Announced deals involving Singapore companies fell 76 per cent year-on-year to US$5.9 billion (S$7.4 billion) in the three months ending September, preliminary data from Thomson Reuters showed. The year-on-year decline looks steep partly because the food-and-beverage takeover battles for Fraser and Neave (F&N) and Asia Pacific Breweries (APB) contributed more than US$15 billion of volume a year ago. Nevertheless, the past three months were the slowest for M&A here since the second quarter of 2009. Year-to-date, M&A volumes are down 46 per cent from the year-ago period, at US$24.8 billion. Industry insiders pinpointed highly volatile markets - sparked by speculation about the US Federal Reserve's tapering of its asset-purchase programme and tensions in Syria - as the main culprit for the slowdown. Companies are currently sitting on strong balance sheets, and market corrections in the middle of the year have rendered valuations attractive, Credit Suisse co-head of South-east Asia Investment Banking Edwin Low said. Those factors would normally bode well for M&A activity. "However, what you also find starting in May was a lot of market volatility," Mr Low said. "The problem with volatility is a lot of clients sit on the sidelines to wait out the market." United Overseas Bank head of M&A Tan Chee Yang said the volatility reflected a souring of sentiment. "Sentiment towards emerging markets were adversely affected by funds pulling back to the developed markets due to nascent evidence of improving economies in the West and uncertainties around the timing and extent of quantitative easing tightening," Mr Tan said. Despite the muted quarter, Mr Low noted active deal-making in some niches. Privatisations, for example, remained a prominent theme. "In a down market, you tend to see a bit of activity in privatisation and a lot of delisting offers," Mr Low said. And while corporates were averse to making major moves in the midst of the market turbulence, cash-rich families kept their fingers on the trigger. "When the markets are unstable, a lot of the larger corporates tend to sit on the sidelines but you will also see a lot of families tend to be more active," Mr Low said, pointing to investment firm GK Goh's pouncing on a weak Aussie dollar to make a A$136.7 million (S$160.9 million) offer for a 48 per cent stake in an Australian provider of residential aged care services. The bankers are nevertheless hopeful that volumes will recover. UOB's Mr Tan noted an abundance of eager buyers lurking in the shadows. "The fundamentals of many of these countries remain strong and we expect deal flows to continue, given that buyers remain keen to grow inorganically and sellers are likely to be more rational in their price expectations under the current business and economic environment," he said. "At the same time, many private-equity funds have raised significant amount of capital dedicated for emerging markets and these funds will be looking to be deployed into suitable investments." Credit Suisse's Mr Low expects cross-border deals and intra-Asia transactions to be a major theme when stability returns to the market. "This is actually a very good time for companies to evaluate their strategy and shed businesses," he said. "The universe of buyers willing to pay up is actually optimal. There are a lot of cashed-up corporates looking to buy growth." The tapering of quantitative easing should have limited impact. "Only to the extent that it creates market instability," Mr Low said. "Aside from that, (tapering of) QE leads to share prices being slightly reduced because of hot money coming out, which makes acquisitions cheaper." (Source: The Business Times) MARKET SCOOP PSA International, ICTSI tie up to develop Colombian port PPHS to cover more families, allow faster move in China Gaoxian names new CEO, CFO and chairman Rex acquires 2 more licenses inNorway (Source: The Business Times) DBS Securities says... PARKWAY LIFE REIT | HOLD | TP: S$2.51 PREIT announced that it has entered into 2 conditional sales and purchase agreements to acquire a further five nursing homes in Japan for a total consideration of JPY4.5bn (S$59.2m) The average net property yield is 7%, and is roughly in line with its existing Japan assets The purchase will be fully funded by a 6-year unsecured JPY loan at a cost of c.1.75% With this acquisition, the REIT's gearing will increase to about 34.8%, from 32% as of 31 July 2013 The acquisition is expected to complete by end Oct 2013 With this latest acquisition, the PREIT's Japan portfolio stands at 32.9% of the Group's portfolio The rationale for investing further in Japan is consistent with its past strategy and to leverage on Japan's ageing population Each of the nursing homes will enter into a fresh 20-year building lease with the operator This will raise PREIT's weighted lease expiry further to 11.14 years, from 10.69 years (as at July 2013), thus providing long term stability to the REIT's lease structure We have increased our FY14F/15F DPU forecasts by c.3% each after taking into account this acquisition Our DCF-backed TP is adjusted marginally to S$2.51 (from S$2.49 previously) While we like PREIT's stable and defensive revenue, we maintain our HOLD recommendation on valuation At current price, the stock is trading at the highest valuations amongst our SREITs universe at c.1.5x P/NAV and FY13F/14F yields of 4.8%/5.1% OCBC Securities says ... EZRA HOLDINGS | SELL | TP: S$0.99 Ezra Holdings' share price surged 40% since early last week Prompted by a query from the SGX, it replied that it was not aware of any information that might explain the unusual trading activity There was market speculation that there may be a potential takeover offer by Samsung Heavy Industries, but Ezra had clarified earlier that it was not aware nor has it been engaged on the subject of a takeover by Samsung However, this does not exclude the possibility that there could be other offers by potential acquirers along the way The recent episode has drawn market attention to Ezra's stock, which has been a stark underperformer before the price spike amongst the offshore and marine stocks Companies looking for strategic partnerships with a long-term view may also be prompted to do more research on Ezra's capabilities for any acquisition opportunities On the operations' side, there has been no perceptible change since it announced a disappointing set of 3QFY13 results in mid Jul The subsea segment had went into the red again with delays in project execution and additional costs that were previously unexpected by management We believe execution risks remains, despite an order book of more than US$2b, as this is susceptible to project delays and cost overruns Without a formal takeover offer or sizeable contract wins, the recent price spike appears overdone at current level Our fair value estimate of S$0.99 is based on P/B of 0.7x (in line with its peers), although a takeover offer, if it materializes, could be a price driver depending on offer price Based on fundamentals and at current price, we downgrade our rating to SELL UOB KAY HIAN says... FIRST RESOURCES | BUY | TP: S$2.40 FR has announced its monthly statistics Its Aug 13 nucleus FFB production grew by 1.0% mom (15.5% yoy) while its CPO production was up 5.2% mom (22.9% yoy) Higher yoy CPO production growth was mainly boosted by better oil extraction rate (OER) and higher third-party crop intake Ytd, its nucleus FFB production grew by 3.2% yoy to 1.25m tonnes and CPO production recorded a stronger growth of 9.2% Also, it has purchased about 166,510 tonnes of FFB, about 4.5x more than the previous year Based on historical trend, FFB production tends to dip mom during the month of Hari Raya However, in Aug 13, FR reported a marginal growth of 1.0% mom (+15.5% yoy) in FFB production likely due to strong yield recovery from water stress in 1H13 FR's FFB production of 3.2% ytd is on track to meet management guidance of 0-5% FR has been delivering strong FFB production growth of about 12-19% yoy in the past two years Slower growth rate is expected this year because FFB yield has been affected by the tree stress and dry weather in 1H13 We are expecting FFB production to continue to pick up with the yield recovery FFB production is likely to peak in Sep/Oct 13 with the recovery in FFB yield and pick-up in harvesting activities after the Hari Raya break Thus, FR's FFB production could potentially be higher than our expectation Based on our sensitivity analysis, for every 1% higher-than-expected FFB production, FR's net profit would be 1.4% higher than our forecast Plasma FFB production was up 16.4% mom but down 4.5% yoy It was also down 11.0% ytd This is mainly because the plasma areas have not yet recovered from their abnormal high productivity in 2H12 Maintain BUY with target price of S$2.40, based on 15x 2014F PE FR remains our favourite as its balanced age profile will support earnings growth

SG: MARKET PULSE: Soilbuild REIT, BreadTalk, S-REITs, OUEHT (19 Sep 2013)

Stock Name: SV3U
Company Name: SOILBUILD BUSINESS SPACE REIT

Research House: OCBC

Price Call: BUY

Target Price: 0.82

Stock Name: BreadTalk
Company Name: BREADTALK GROUP LIMITED

Research House: OCBC

Price Call: SELL

Target Price: 0.77

MARKET PULSE: Soilbuild REIT, BreadTalk, S-REITs, OUEHT

19 Sep2013

KEY IDEA Soilbuild Business Space REIT: Best proxy to Singapore industrial market We are initiating coverage on Soilbuild Business Space REIT (Soilbuild REIT) with a BUY rating. Soilbuild REIT currently owns a young portfolio of seven modern business space properties in Singapore and has the largest exposure to the business park segment. We like Soilbuild REIT's exposure in this space because demand in the local scene has been growing steadily throughout the years. We also believe that Soilbuild REIT is able to leverage on the capabilities of its Sponsor, Soilbuild Group, to grow its income given its track record and expertise. Soilbuild REIT is granted Right of First Refusal (ROFR) by its Sponsor over all its income-producing business space assets in Singapore. The ROFR currently covers four industrial properties, providing Soilbuild REIT with a clear acquisition pipeline. As of the listing date, Soilbuild REIT is sitting at healthy gearing ratio of 29.9%, while 75.0% of its interest rates are fixed. This not only gives Soilbuild REIT ample debt headroom to pursue its growth plans but also limits its exposure to rising interest costs. Our fair value of S$0.82 implies an attractive total expected return of 20.1%. At current price, Soilbuild REIT is also trading at the steepest discount of 8.8% to its book value, compared to its subsector peers. This is unjustified in our view given Soilbuild REIT's quality portfolio assets, growth potential and respectable FY14F yield of 7.8%. (Kevin Tan) MORE REPORTS BreadTalk Group: Why the rush? With BreadTalk's share price seemingly poised to cross the S$1 barrier again, we remain steadfast in our analysis and assertion that valuations are stretched at current levels. While the group's growth proposition appears attractive, realizing future potential takes time, and more importantly, carries significant operating and execution risks. Its operating margins have also remained in the low single-digit region. Furthermore, the group's valuation is expensive when compared to more established regional peers that compete in the same markets. We maintain our SELL rating with an unchanged fair value at S$0.77, and will look to re-rate the stock only when its margins arrest their decline and operations approach a steady-state. A takeover angle at this juncture is also unlikely as we do not envision MINT launching a takeover bid anytime soon in the coming quarters at current price levels. (Lim Siyi) Singapore REITS: Expect bounce from no Fed tapering This morning, the Fed announced that it would not reduce asset purchases in Sep-13 and reiterated that the job market remains a key economic concern. This outcome is above view, given that the consensus was for a tapering of US$5b-S$10b. In addition, we note Chairman Bernanke also indicated that, even after winding down assets purchases ahead, the "Fed's rate guidance and its ongoing holdings of securities will ensure that monetary policy remains highly accommodative, consistent with an aggressive pursuit of our mandated objectives of maximum employment and price stability." As a result of this dovish stance, the yield on the 10Y Treasury note dipped 15bp to 2.7% and the S&P500 rallied 1.22% overnight. While our rating on the sector is NEUTRAL, we believe the REIT sector would likely see a short-term bounce ahead and continue to advocate counters that show significant value at current prices. Our top picks in the sector are CapitaCommercial Trust [BUY, FV: S$1.61], Starhill Global REIT [BUY, FV: S$0.95] and Suntec REIT [BUY, FV: S$1.80]. (Eli Lee) OUE Hospitality Trust: Declined stakes in Chinese hotels from sponsor OUE Hospitality Trust (OUEHT) has declined an offer from its sponsor, OUE Limited, for the acquisition of a 100% stake in Meritus Mandarin Haikou and an 80% stake Meritus Shantou China for purchase considerations of S$58.7m and S$49.3m, respectively. These stakes were part of the sponsor's ROFR pipeline. The offer was declined as the acquisition would not have been accretive to the distribution per stapled security of OUEHT. Our current model does not assume any acquisitions and this development does not affect our valuation. We believe a number of investors like OUEHT because of its Singapore-based assets, and are interested in the last asset in the ROFR pipeline - the 100% stake in Crowne Plaza Changi Airport, for which an additional 200 rooms are expected to be developed by the end of 2015, which means any offer by the sponsor would likely come after that. We maintain our fair value of S$0.94 on OUE Hospitality Trust and our BUYrating. (Sarah Ong)

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

NEWS HEADLINES - US stocks climbed to record highs on Wed and the benchmark 10-year Treasury yield fell sharply after the Federal Reserve abstained from reducing its bond buys. - Keppel Shipyard has secured two FPSO conversion contracts from repeat customers worth a total of S$190m. - Yanlord Land Group has achieved about CNY2.607b (S$536m) in sales in the first two weeks of this month. - Hyflux has officially opened Singapore's second desalination plant with a capacity to process 70m gallons of seawater daily.

SG: MARKET PULSE: Ezra (18 Sep 2013)

Stock Name: Ezra
Company Name: EZRA HOLDINGS LIMITED

Research House: OCBC

Price Call: SELL

Target Price: 0.99

MARKET PULSE: Ezra

18 Sep 2013

KEY IDEA Ezra Holdings: No change in fundamentals The share price of Ezra Holdings has seen an astounding increase of about 40% in the past week. Though Ezra has clarified earlier that it was not aware nor has it been engaged on a takeover by Samsung Heavy Industries, there could possibly be other offers by potential acquirers along the way. Still, there has been no change to the company's fundamentals since its disappointing 3QFY13 results. Looking ahead, we believe that execution risks are still not over for Ezra, despite an order book of more than US$2b, as this is susceptible to project delays and cost overruns. Without any official offer or significant contract wins, the recent price gain appears overdone. Based on fundamentals, we are retaining our fair value estimates of S$0.99, and at current price, we downgrade our rating to SELL. (Low Pei Han)

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

NEWS HEADLINES - US stocks rose on Tue, with the S&P 500 index finishing above 1,700 for the first time since early Aug, after Microsoft hiked its dividend and as Wall Street awaited the next day's monetary-policy decision from the Federal Reserve. - Asiasons Capital breaks into Oil & Gas sector by acquiring 27.5% stake of US-based Black Elk for S$218m. Acquisition will be funded by the issuance of 194,642,712 new ordinary shares at S$1.1948 per share. - Rex International Holding announced the acquisition of stakes in two more licences in Norway, with total number of licences increases to 15 in four regions from initial 10 as at listing on 31 Jul. - Parkway Life REIT announced that the acquisition of five Japanese nursing home properties generates accretive net property yield of 7.0%. - SingTel has beaten StarHub and M1 to the punch for new iPhone price plans.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: SIA
Company Name: SINGAPORE AIRLINES LTD

Research House: CIMB

Price Call: HOLD

Target Price: 10.50

Stock Name: GoldenAgr
Company Name: GOLDEN AGRI-RESOURCES LTD

Research House: OCBC

Price Call: SELL

Target Price: 0.465

Stock Name: Nam Cheong
Company Name: NAM CHEONG LIMITED

Research House: OSK-DMG

Price Call: BUY

Target Price: 0.37

Market Compass

18 September 2013~ Good Morning Singapore!

Singapore Idea Snippets:

18 Sept 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 : Find joy in everything you choose to do. Every job, relationship, home... it's your responsibility to love it, or change it. - CHUCK PALAHNIUK Singapore: The Day Ahead SINGAPORE DAYBOOK : August non-oil domestic exports disappoint [SINGAPORE] Two months into the second half of 2013 and still no whiff of the anticipated export recovery. Instead, latest trade data for August points to a higher risk that the Singapore economy will slip in the current quarter - with exports falling short of the official projection. Not only did non-oil domestic exports (NODX) stay in negative territory last month - private-sector economists were expecting 2.4 per cent year-on-year growth - the 6.2 per cent decline was steeper than July's NODX which fell a revised 1.9 per cent (it was first estimated to be a 0.7 per cent dip). August NODX's dismal showing, announced yesterday by the government's trade promotion agency, International Enterprise Singapore, marked the seventh straight monthly decline. Compared with July, NODX fell a seasonally adjusted 6 per cent in August, after a revised 1.8 per cent drop (originally -1.1 per cent) in the previous month. Except for China and Hong Kong, NODX shipments to all of Singapore's 10 biggest markets fell last month, with the European Union, South Korea and Taiwan being the top three contributors to the fall. The only bright spot was non-oil re-exports (NORX), which jumped 14.4 per cent from a year ago, extending the 8.1 per cent rise in July. (Source: The Business Times) CIMB Securities says... SINGAPORE AIRLINES | NEUTRAL | TP: S$10.50 WE leave our target price and estimates unchanged and maintain our Neutral rating We base our CY14 target price of S$10.50 on a trough multiple of 4.2x CY14 EV/EBITDAR to reflect the long-term de-rating that we believe SIA is undergoing due to competition from Middle East airlines and LCCs (low-cost carriers) Mainline passenger loads improved 4% pts in Aug as travel was boosted by strong leisure travel over the summer as well as the shift in the Hari Raya period from late Aug to early Aug Traffic rose 9% even though capacity increased just 3% yoy Encouragingly, improvement in load factors was evident across all route regions last month In contrast, SilkAir's loads declined 2% pts as capacity growth of 13% outpaced traffic growth of 11% last month Cargo growth fell 6% yoy even though capacity declined just 5% last month Excluding Chinese New Year distortions, air freight traffic has waned for 20 consecutive months SIA notes that passenger yields are likely to remain under pressure due to promotional efforts to boost loads Apart from discounting, we believe that the persistent strength of the S$ against other operating currencies is also contributing to weak pricing We believe cargo weakness will continue to be a drag on SIA Despite the divestment of SIA's Virgin Atlantic stake, we believe that its net cash balance of S$4.6bn as at Jun 2013 is insufficient to warrant a large special dividend, as we expect it to be just enough to cover estimated capitalised operating lease costs We believe that SIA tends to distribute a significantly larger part of its earnings to investors when these costs are covered by more than S$1bn We prefer Cathay Pacific (Outperform, target price HK$16) to SIA due to the former's greater reliance on traffic and revenues from North America, where we see less intense competition OCBC Securities says ... GOLDEN AGRI-RESOURCES | SELL | TP: S$0.465 The outlook for CPO (crude palm oil) prices is likely to remain weak as market watchers continue to expect further weakness in 2H13, weighed by expectations of higher CPO production and also increased supply from vegetable substitutes like soy and corn oils According to Dorab Mistry, director at Godrej International Ltd, "the rally in CPO prices has just about run its course and will face downward pressure from here" Mistry now expects to see new lows in vegetable oil and particularly in palm and lauric oil in early Jan1 Golden Agri-Resources (GAR), being one of the largest palm oil plantation owners in the world, is likely to feel the negative impact the most Over the past three years, GAR share price has shown a strong 0.8 correlation to CPO prices And in wake of the recent rebound in CPO prices and the corresponding rebound in GAR share price, we suspect that any pullback could come quite swiftly Nevertheless, management continues to remain upbeat about the long-term prospects of the palm oil industry, and will continue to increase its production of sustainable palm oil, improve operating efficiency and also optimise its downstream value chain opportunities But in the short term, the prospects for GAR remain more negative We also note that import of vegetable oils into India has fallen by nearly 17% MoM in Aug, led by crude soy oil (down 46%) and RBD palm olein (down 33%) We note that Fitch has recently warned that CPO plantation companies in Asia could face slower demand from both China and India - two of its largest import markets As such, we do not believe that the worst is over yet and hence we maintain our SELL rating and S$0.465 fair value (still based on 11x blended FY13/FY14F EPS) DMG OSK Securities says... NAM CHEONG | BUY | TP: S$0.37 We showcased NCL at our Hong Kong Asean Corporate Day last Thursday Investors warmed up to the company's business model, growth prospects and low valuations, which struck a chord with the value- and growth-oriented funds Meanwhile, the recovery of commercial shipbuilding in China is a strong support to vessel prices Investors especially liked Nam Cheong's strong customer base in Malaysia, which effectively mitigates the build-to stock model risk The company's MYR1.4bn-strong orderbook, consistent profitability during the financial crisis and solid prospects of securing more orders found fans among a diverse group of investors "Why can't customers bypass NCL and order directly from Chinese yards?" The answers to these are: i) as Chinese state-owned yards are not allowed to build-to-stock, any vessel ordered will need an 18-24 month lead time; ii) financing is an issue for smaller private yards; iii) operators do not have the required shipbuilding expertise to supervise the construction process, and iv) NCL's large orders allow yards to achieve economies of scale, thus making NCL a preferred customer Management said the only time when vessels were cancelled was during 2009 when bank financing dried up The vessels were resold at even higher prices due to the shorter time to delivery As a gesture of goodwill, NCL returned the deposits to the customers, who have since reciprocated with more orders Management said NCL is looking at creating a different product range that can "dominate the market in the next few years", while remaining understandably coy about the details We expect more information in mid-FY14 on this Maintain BUY, TP SGD0.37 TP As the recovery in commercial shipbuilding may reduce pressure on offshore asset prices, we upgraded the O & G sector to OVERWEIGHT As a global industry leader at low valuations, NCL is one of our top picks

SG: MARKET PULSE: GAR, SG Residential Property (17 Sep 2013)

Stock Name: GoldenAgr
Company Name: GOLDEN AGRI-RESOURCES LTD

Research House: OCBC

Price Call: SELL

Target Price: 0.465

MARKET PULSE: GAR, SG Residential Property

17 Sep 2013

KEY IDEA Golden Agri-Resources: Downside risk remains Golden Agri-Resources (GAR), being one of the largest palm oil plantation owners in the world, is likely to feel the negative impact of further pullback in CPO (crude palm oil) prices, especially after the recent rebounds in prices of CPO and GAR shares. With demand from both China and India - two of the world's largest import markets for CPO - likely to remain soft, we believe that the worst is not over yet for the upstream players. Hence we maintain our SELLrating and S$0.465 fair value (still based on 11x blended FY13/FY14F EPS). (Carey Wong) MORE REPORTS Singapore Residential Property: Buyers moving to EC market A headline total of 1,468 new private homes (including 726 EC units) were sold in Aug 2013, up 147% MoM and down 5% YoY. Excluding EC and landed-units, however, only 793 units were sold - up 53% MoM and down 47% YoY with a softer take-up rate of 80% (versus 85% in Jul 13). We believe the market is still finding its legs after the TDSR measures which have moved buyers to further focus on issues of availability of credit and affordability. One key impact is that significant demand has moved to the EC segment, which allows for HDB upgraders to access larger amounts of credit versus private property. EC sales were bullish in Aug 13 with 726 units sold - this constituted 49% of the 1,468 headline number and increased a whopping 548% MoM and 515% YoY. Maintain NEUTRALon the SG residential sector. Our top picks are CapitaLand [BUY, S$3.77], Keppel Land [BUY, S$4.09] and CapitaMalls Asia [BUY, S$2.55]. (Eli Lee)

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

NEWS HEADLINES - US stocks mostly rose on Mon, lifting the S&P 500 index within reach of its record after Larry Summers took his name out of the running to head the Federal Reserve. - Blumont Group announced yesterday a move to take a 15% interest in Resource Generation Limited - a coal-miner in which Noble Group also has a stake - for up to A$22.11m. - Logistics Holdings intended to invest about S$5m in a joint venture to build a pre-cast products manufacturing plant in Iskandar. - FSL Trust Management, the trustee manager of First Ship Lease Trust, said yesterday that Omni Ships, the lessee of its two dry bulk carriers, has defaulted on its lease payments. - Chip Eng Seng Corporation's subsidiary has won a S$103.8m contract from the HDB to build six blocks of residential buildings with 700 units and other community facilities in Jurong West Neighbourhood 6.