STI Market Live

Sembcorp Industries: Not your typical utilities company Summary: Sembcorp Industries (SCI) is a major industrial group primarily involved in the businesses of 1) utilities, 2) marine and 3) urban development. The nature of its utilities business is relatively stable, while growth is driven by asset acquisition and construction. SCI's marine arm is also well-positioned to capitalise on demand from the offshore oil and gas industry, given its market-leading position. Finally, the urban development segment possesses growth potential with its focus on emerging markets. The long-term outlook for its businesses look bright, though the Singapore utilities business may, in the short term, be impacted by an expected increase in competition. The group has been consistent in paying out dividends of at least S$0.15/share each year since 2009, implying a minimum dividend yield of 3.1% at current prices. Initiate with BUY and S$6.48 (based on sum-of-parts method) fair value estimate. MORE REPORTS Tat Hong Holdings: Time to take profit Summary: Since our last upgrade on Tat Hong Holdings ("Poised for Recovery", 9/1/2012), the group's crane fleet grew by ~20% (in tonnage), utilization rate by 5 ppt and rental rates by an estimated 10-15%, resulting in a 66% jump in FY13 PATMI. In our view, the easy money has already been made. Investors who have heeded our call would have made 45% return in 1.5 years and should now consider taking some profit. Looking ahead, the macro environment looks increasingly uncertain with sluggish data points coming out of China. Tat Hong's crane fleet expansion is also expected to slow after a 79% surge in crane tonnage over the past five years. Finally, there is a possible share overhang resulting from private equity AIF Capital's conversion of convertible preference shares to 53.3m ordinary shares. Downgrade to HOLD with lower FV estimate of S$1.31 (previously S$1.75). (Chia Jiunyang)

NEWS HEADLINES

- AusGroup is suing Karara Mining Limited for A$54.7m for works carried out in Western Australia. - Baker Technology has divested its entire 20.29% stake in Discovery Offshore SA for NOK199m (S$41.9m). - Swissco has secured contracts worth S$8.24m for three of its crew boats. - Yongnam Holdings has secured two new specialist civil engineering subcontracts worth HK$166m (S$27m). - Z-Obee's FY13 net income fell 17% to US$4.26m as impairment losses from the group's asset portfolio wiped out an increase in fair value gains.

Singapore’s equity top picks tips

key themes in Singapore’s equity space: 1) earnings quality with an overseas bias; 2) China domestic demand; 3) visitor arrivals to Singapore; 4) stock-specific stories.

For the first, it likes SembCorp Marine (S51.SG) as it is well-positioned for an expected order surge in 2H and has a healthy order book, Vard (MS7.SG) with its improving order outlook and asset enhancement investments, and Genting Hong Kong (S21.SG) given its valuations and improving asset performance.


For the second, it likes CapitaMalls Asia (JS8.SG) as Singapore’s best play on Asian retail and consumption, Global Logistic Properties (MC0.SG) as China’s 12th five-year plan highlighted the logistics sector as a pillar industry, and China Minzhong Food (K2N.SG) as its large-scale vegetables origination and processing business in China is well poised to grow given a burgeoning population and urbanisation trend.


On the third, it likes Genting Singapore (G13.SG) as it runs a high-traffic casino in Singapore’s protected two-player market, which has 25-year concession visibility. On the fourth, it likes Hongkong Land (H78.SG) as it provides the greatest leverage to a recovery in the Hong Kong Central office market, Neptune Orient Lines (N03.SG) on expectations for a rebound in net profit, and ARA Asset Management (D1R.SG) given its track record of growing assets under management and its scalable business model.

OVERNIGHT MARKET : Implications for Singapore

US equities posted modest gains on Friday but still fell for the week as fears over stimulus withdrawal dominated investor sentiment.

P&G (+2.9%) led gains for the Dow on Fri but the index fell 1.8% for its worst week performance since Apr. The S&P 500 saw some bargain hunting for defensive sectors on Fri but lost 2.1% for the week. Rounding off the major indices, the NASDAQ Composite declined 1.9% for the week. NYSE composite volume exceeded 5.6b (4.8b previously).

WTI Crude for Aug lost US$1.45, or 1.5%, to end at US$93.69/barrel while Brent for Aug delivery lost US$1.24, or 1.2%, to settle at US$100.91/barrel. For the week, WTI and Brent lost 4.5% and 4.7% each.

Gold for Aug delivery added US$5.80, or 0.5%, to end at US$1,292.10/ounce while Silver for Jul gained 14 cents, or 0.7%, to settle at US$19.96/ounce. For the week, gold and silver lost 6.9% and 9.1% each. 

Implications for Singapore

The modest gains by the US indices last Friday night and the positive Nikkei start (up 0.9% now) could provide some mild inspiration to the local bourse this morning.

Despite plunging below the 3100 key support intraday on Friday, the STI managed to regain most of its earlier losses and close back above this vital level.

With today's tone likely to turn a tad more optimistic, the index could inch higher in the direction of the 3230 key resistance; however, the risk of investors selling into strength again as the index recovers still remains.

Beyond the 3230 level, the next obstacle is pegged at the 3320 resistance. On the downside, 3100 is still the immediate support, followed by the next base at the 3000 psychological level.

SGX on CapitaLand Hospitality

While visitor arrivals increased by 6.4% in 1Q13, gross lettings for 1Q13 grew by only ~2.8% to 2.8m room nights. This means that on a per capita basis, visitor arrivals are converting into fewer room nights, continuing a trend we note for 2012. With regard to the haze, we understand from an industry source that hotel bookings are not being negatively affected just yet. However, we think a blip in hotel performance through 3Q13 is likely given that the haze could last at least several weeks. Keeping in mind the mild oversupply situation for hotels we see building up, we remain NEUTRAL on the hospitality sector. We prefer Global Premium Hotels [BUY, FV: S$0.33], a longer-term asset value play in the Economy and Mid-tier space. (Sarah Ong) Mapletree Logistics Trust: Scaling up presence in Korea Mapletree Logistics Trust (MLT) has entered into a sale and purchase agreement with supply chain management company, Oakline Co. Ltd, for the acquisition of The Box Centre in South Korea. Oakline will lease back the property for a period of six years with built-in rental escalation from second year onwards. At a purchase consideration of KRW28.75b (~S$32.0m), the property is expected to provide an initial NPI yield of 8.4%. Management expects to fund the acquisition fully by debt, which is expected to increase its aggregate leverage marginally from 34.1% as at 31 Mar to 34.6%. This is likely to add ~0.03 S cents to FY14 DPU, based on our projections. We now factor in the acquisition into our forecasts, with the assumption that it will be completed in Jul. However, we reduce our fair value from S$1.34 to S$1.15 on higher cost of equity to reflect a higher risk-free rate, higher beta and reduced market risk appetite for interest-rate sensitive stocks. We maintain HOLD on MLT due to valuation grounds. (Kevin Tan) CapitaLand Limited: Top bid for Coronation site Yesterday evening, CapitaLand (CAPL) put in the top bid of S$366 million for a 99-year leasehold landed residential site at Coronation Road. The 37,441 sqm site is located within an established landed housing estate and enjoys good accessibility to Bukit Timah Rd and Pan Island Expressway. The GLS tender attracted 12 bids and CAPL's top bid was 17% higher than the second highest bidder - signaling the group's confidence in this project. We understand CAPL intends to develop a landed project comprising semi-detached and bungalows. We expect selling prices in the range of S$1.6k - S$1.8k psf and the project to accrete 1.3 - 2.2 S-cents to CAPL's RNAV. Pending the award of the site, we would keep our fair value estimate unchanged at S$4.29 (20% discount to RNAV). Maintain BUY. (Eli Lee)

NEWS HEADLINES - US stocks tumbled on Thurs, with the S&P 500 suffering its worst session since Nov 2011, hit by fear that the Federal Reserve will scale back its bond buying later this year. - South Korea's Lotte Shopping Co Ltd is looking to raise US$800m to US$1b by listing a REIT in Singapore as early as this year, according to IFR, a Thomson Reuters publication. - China's flash HSBC Purchasing Managers' Index for June dropped to a nine-month low yesterday, pointing to continuing weakness in local and external demand. - Armstrong Industrial Corporation Limited said that it has received a proposal from a consortium involving its major shareholder that may result in the delisting of the company. - Former Novena Holdings CEO Toh Soon Huat is leading a group of 17 investors, including a unit of mainboard-listed Serial System, to pump a total of S$15.04m into Jubilee Industries Holdings. - ISDN Holdings Limited plans to raise up to S$111.6m in gross proceeds from the issue and exercise of warrants. - Stamford Tyres Corporation posted an 18.5% rise in earnings for its full fiscal year ended April 30, boosted by a one-time gain from the sale of its stake in an associate.

STI down 0.6% with 3150 support

Singapore shares slipped into the red in early trading, joining Asian peers in poor health as investors continued to mull mixed economic signals out of Asia and the US.

The STI drops 0.6% to 3,180.80, retreating to near its 2013 lows.
"Given mixed Wall Street seen overnight and the lack of catalyst for any rally, do expect the STI to remain range-bound at 3,150-3,210," OCBC says in a note. Penny stocks find favour in thin volume, with 729.8 million shares worth $385.6 million changing hands. Decliners outnumber gainers 236 to 71.

Property-related stocks, which had helped lift the index Monday, handed back much of those gains. Global Logistic Properties (MC0.SG) led decliners on the STI with a 1.8% fall to $2.76, while CapitaLand (C31.SG) retreated 2.4% to $3.26. City Developments (C09.SG) meanwhile slipped 1.1% to $10.04.
Banks are also in the red: DBS Group Holdings (D05.SG) is down 0.4% at $16.02, UOB (U11.SG) falls 0.4% to $20.00, while OCBC (O39.SG) eases 0.7% to $10.07.

Banks down STI on 4 ½ month Low

STI shares fell down lowest pts, due to decline in Banking Sectors.

The STI fell 2.9% to 3169.23, down 7.7% from this year peak on 22 May 2013.

The MSCI’s broadest index also dropped 2.9%.

United Overseas Bank shares fell 2.4 % to $20.29. 

DBS Group Holdings fell 1.8% to $16.10.

S-REITs Nam Cheong

Singapore REITs: Capitalize on over-reaction We see two key factors driving the S-REITs price correction over the last two weeks. First, increased expectations that the Federal Reserve could taper its bond purchases as early as 2H13; and secondly, opportunistic profit-taking on the back of a strong performance over 2012-13. At this juncture, however, we see the selling to be overdone. In our view, the odds of the Fed tapering bond purchases in 2H13 are roughly 50-50 and we see fundamental valuations for the S-REITs sector (370bp against the 10Y government bonds) to be undemanding currently. In addition, S-REITs sector would likely continue to deliver, in 2013, firm earnings from asset enhancement initiatives/development projects, yield-accretive acquisitions and active leasing efforts. Maintain our OVERWEIGHT rating on the S-REITs sector. Starhill Global REIT [BUY, S$1.05 FV] is our top pick in the sector due to its growth potential, strong fundamentals and compelling valuations. We also like CapitaCommercial Trust [BUY, S$1.80 FV] and Fortune REIT [BUY, HK$8.64 FV] for the quality of their portfolio assets, positive rental reversion profiles and low gearing. (S-REITs Team) MORE REPORTS Nam Cheong: Ride the upcycle! Nam Cheong Limited recently announced that its Executive Director, Mr. Leong Seng Keat, has been re-designated as the CEO. Mr. Leong, also the son-in-law of ex-CEO Datuk Tiong Su Kouk, has been with the group since 2005. We expect the leadership transition to be smooth. Meanwhile, we continue to like Nam Cheong for its market leadership in the increasingly active Malaysia oil & gas industry. Having seen a healthy pick-up in order wins, Nam Cheong recently expanded its shipbuilding programme to 28 vessels for FY14F (FY13: 19 vessels). Its large order-book of MYR1.3b, for 26 vessels delivered over FY13-15F, helps to mitigate its risk by providing a base level of earnings. Maintain BUY with a higher FV of S$0.35 (previously S$0.30). (Chia Jiunyang)

NEWS HEADLINES - Datapluse Technology posted a 23.2% increase in net profit to S$2.19m for its 3QFY13 ended 30 Apr. - NH Ceramics entered into a purchase agreement to buy BlackGold Asia Resources Pte Ltd and BlackGold Energy Limited for US$150m. The two BlackGold firms control about 53,000 hectares of coal concessions in Indonesia. - Asian Micro Holdings is planning to acquire Oxley Global Limited in a proposed RTO deal. - Halcyon Agri announced that it would acquire Malaysian rubber processor Chip Lam Seng for RM63m (S$25.7m). - According to the latest purchasing managers' index, Singapore's industrial activity grew at a faster pace in May, also signalling a fourth consecutive month of growth for the electronics sector.

STI on Downfall

STI dropped 0.61% to 3,291.08. 

The top trading stock are Ramba gain +28.93%, Singtel keep flat, DBS dropped -1.81%, OCBC Bk gained +1.55% and UOB also gained +1.96%.

Real Estate Investment Trusts (REITs) gained +1.72% 
but fall was recorded in CapitaComm -0.66% and CapitaMall of -1.40%.

STI stay with Fall

The STI dropped 0.74% with 24.64 points to 3311.37 .

Singapore Telecommunications Ltd's shares biggest loser with 5.3% fall.

Singapore Press Holdings also fall 2.06 % to Sg$4.27.

 But DBS Bank up 1.12% at Sg$17.16.

A spike in bond yields appeared to be the key factor behind the fall in share prices of Singapore-listed telecoms, Daiwa Capital Markets said in a report dated May 30.

"We find Singapore, Malaysia and Philippines telecom stocks to be vulnerable to yield spikes," it said.

The rallies seen among defensive stocks in ASEAN telecoms over the past three years had more do with falling risk premiums rather than changes in earnings outlooks, it said. As such, the recent spike in 10-year bond domestic yields in various ASEAN markets is a matter of concern, it said.

STI 5 weeks low with Property Bank Fall

SGX shares fall down lowest in 5 weeks. 
The STI dropped 1.4% to S$3,321.08 while MCSI's broadest index also show 0.5% down.

Global Logistic Properties falls 4.6 % to S$2.72 become biggest loser in STI. 

CapitaMall Trust also down 2.8%.

In Banking, United Overseas Bank dropped 3.6%. 

DBS Group Holdings also down 2% at S$16.77.

Soilbuild Up 56% with Huge Volume in SGX

Soilbuild Construction Group Ltd's equities move up 56% on its debut in Singapore. It rise up S$0.39 from its offer price of S$0.25. Soilbuild Group also offers new 168M shares to raise nearly S$40 million. It had got two contracts in Myanmar. Its also expects to further expand. The company has a total market value of about S$259 million.

STI Up with Olam's 6 month High

STI rise up 0.6 % at 3433.96 other side MSCI's broadest index also gained 0.2%.

Olam International Ltd's shares gained up with 2.6% to S$1.77, a high value since Nov 12. Singapore palm oil company Wilmar International Ltd gained up a 23 % up in first-quarter net profit.

Sembcorp Marine Ltd's equities also rise up with 2.1% to S$4.44, the highest since April 3, 2012.

Ezion Holdings Ltd, a Singapore-based offshore service provider, said its net profit for the first three months of the year more than tripled. The company's share price rose more than 2 percent to a one-month high of S$2.19.

SGX Market News

INSTRUMENT LAST PCT CHG NET CHG

S&P 500 1617.5 0.19% 3.080
USD/JPY 99.26 -0.07% -0.070
10-YR US TSY YLD 1.7571 -- -0.007
SPOT GOLD 1467.69 -0.08% -1.200
US CRUDE 95.76 -0.42% -0.400
DOW JONES 14968.89 -0.03% -5.07
ASIA ADRS 143.66 -0.09% -0.13

MARKET NEWS
> Nikkei up 2.8 pct to pass 14,000 after U.S. jobs data
> S&P 500 closes at record again; financials, Apple lead
> Bond yields at three-week high ahead of auctions
> Euro tripped by ECB, Aussie eyes rate decision
> Gold eases in low volume, ETF outflows in focus
> Oil up over $105 per barrel on Mideast tensions
> Key political risks to watch in Singapore

GLOBAL MARKETS-Asian shares steady on higher Wall Street
SE ASIA STOCKS-Mostly up; Malaysia at record high after election

STOCKS TO WATCH
-- DYNAMIC COLOURS LTD, INTRACO LTD
- Intraco Ltd, a trading company that owns 39.48 percent of Dynamic Colours (DCL), has made a mandatory conditional cash offer for all of DCL's issued ordinary shares at S$0.185 per share.
-- OKH GLOBAL LTD
- Property and construction firm OKH Global Ltd, formerly known as Sinobest Technology Holdings Ltd, will begin trading from 9 a.m. (0100 GMT) on the Singapore Exchange.
-- HEALTHWAY MEDICAL CORP LTD
- Healthway Medical has proposed an additional distribution
in specie to shareholders of up to 675,324 shares, representing
up to 3.38 percent of the healthcare services group.

Its downgraded time for Genting SGX Stock

SGX shares drop down now, after touching 5 year high level. Genting Singapore PLC drop heavly in more after 3 years.

STI was down 0.7% at 3378.60, with this MSCI's broadest index come up 0.3%.

Genting Singapore PLC's equities fell down up to 9% to S$1.47, with just company shows 44% drop in profit on core earnings. It was actively traded on friday with target price to S$1.41 from S$1.52.

STI scored 5 year high with US Stock : SGX Live

STI rise up 0.6% at 3382, highest since Jan 2008. 

It's parallel come with US Stock that also get record high in last season. 

MSCI's broadest index also get 1% up.

Chinese Banking Corp was traded same level at S$10.92, get 16% down fall from S$11.07 last week. 

Aussino Group Ltd's shares rise up 7% to S$0.107.

STI gets up with CapitaLand leads : SGX Stock Live

SGX shares come up with the leading performance by CapitaLand Ltd. CapitaLand gained strong first-quarter results.

The STI gets up 0.2% at 3354.34, a high value since 2008. That is also same with MSCI's broadest index.

CapitaLand Equities is now top traded stock, it gained 3.3% to S$3.77 highest since Mar 7. Genting Singapore PLC's shares also rise up as 2.6% to S$1.56. Its second-most traded stock.

STI 5-year peak, Capital-Land boost stock market

SGX shares on 5 year peak, with Capital-Land's gain boost stock market on Friday.

STI grew up 0.2% at 3342.74, a peak value since Jan 2008. Besides it MSCI's broadest index also gain 0.2% higher.

CapitaLand Equities really perform well, they gained 2.5 percent to S$3.67, high pt since Mar 8.
Singapore Telecommunications Ltd Equities fall 1.6% to S$3.72, just by make Singtel share Barclays Premier League content with StarHub Ltd.

Genting Singapore's shares also keep up value 2.7 % of S$1.52. Genting Singapore was activly traded in SGX stock market with 21M shares get up n down in hands.

STI on 4.5 year high with Genting's gains

SGX Shares rise to a 4.5 years up, With Genting's gains. STI Index get up 0.3 % at S$3332.54 pts, MSCI Index also on gain of 0.7%.

Genting Equities rise up 4.2% to S$1.485, its a peak value from April start. It was most traded stock. Bank of America-Merrill Lynch gear-up Genting Singapore to "buy" from "neutral" and raised its target price to S$1.81 from S$1.63.

Index Level Up with REITs High Value : SGX Stock Live

With high peaks of REITs, SGX equities level up their values on Wednesday.

STI get 0.3% up at 3,295.03, on other-side MSCI's broadest index gained 1%.

REIT get up 0.7 % at S$1.41 just after healthcare real estate investment trust announcement of its distribution per unit rise up 9.4 % as-per last year value. In Mar 2013, REIT holdup two hospitals in Indonesia with S$190.4 million.

Another news of MapleTree Industrial Trust, it rise up 1.6 percent to S$1.585 with max level till 2010. It adds that distribution per unit rose 6.8 percent to 2.37 Singapore cents from a year earlier.

F'N Down, Index remain same : SINGAPORE STOCK LIVE

SGX Equities remain constant, while Fraser and Neave Ltd down towards its six month lowest value, as-per trading on Monday .

Finally ST Index keep constant value, where as MSCI up with 0.2 % of its value. F'N Equities down 5.5% to S$8.88.

F'N commented it has until July 19 to restore its public float.

Thai Bev PLC, hold 30% F'N stock, rise up 4.4 % to S$ 0.59, that keep better way in SGX market.

Its stated that without Tahi Bev, F'N share price will keep fall. F'N share price give 1 to 4 Singapre cents on Thai Bev's sum-of-the-parts valuation