Morning Wrap by broker – 27 Nov 13

Baltic Dry: 1512 +1.34% Gold: 1242.75 -0.73% Palm Crude: 2622 -0.30%
VIX: 12.81 +0.16% WTI Crude: 93.53 -0.16% USD/SGD: 1.2513 +0.06%
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*Wilmar(WIL) buys Vopak Terminals Pasir Gudang [VTPG] for RM45m (US$14m); Main activity of VTPG is the provision of tank facilities for storage, unloading, loading & drumming of bulk liquid chemicals.

*(GLP) leases out 140K sq ft @ GLP Park Suzhou to Geodis Group; Incl. this, Geodis leases total of 495k sq ft with GLP across 3 cities in China & Brazil.

*(DBS) prices 1st Basel 3 issue @ 4.7% @ lower end of the tender range of bet 4.7% to 4.9% & met S$800m target. Perpetuals were offered in exchange via a tender for an outstanding S$1.7b pref shr issue, helping DBS transit to the new Basel III regulatory capital rules, under which the existing pref shs no longer fully qualify as Tier 1 capital of DBS Bank. Separately, Credit Suisse
now among final bidders for SocGen PB, according to Reuters, joining DBS & ABN in the bidding war.

*(CAPL) reported interest in Australand(ALZ.AU) now reduced to 39.1% & sees booking loss of S$149.4m.

*IHH Healthcare(IHH) 3Q13 #s: NP RM117m +61%YoY (below Berg est. of RM163.5m) on REV RM1.67b +12.8%YoY (below Berg est. of RM1.798b); No div declared.

*Vallianz(VALZ) awarded $150m chartering contacts in Mideast, boosting order book 45% to record.

*United Envirotech(UENV) syas Shangzhi Tot project was terminated.

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Morning Wrap by broker – 26 Feb 13

CPO names in focus: CPO fut fell the most in 3 mths -2.53%DoD as fcst for a record U.S. soybean crop next yr deepened concern that global cooking oil supplies may increase & a tax on exports will curb demand for M’sian supplies. Dorab Mistry warned CPO probably will fall this yr after Asian producers boosted acreage & global oilseed supplies rose.

*Banks in focus; COE to drop? Govt re-introduces restrictions on car loans given by banks. From today onwards, someone buying a car with OMV S$20k can only borrow up to 50% of purchase price. Car loans also capped at 5 yrs. A new tiered ARF structure are also introduced for cars & taxis.

*Wilmar(WIL) says China soybean crushers are draining inventories as they expect prices to drop on Brazil’s record harvest, even as China struggles with shipping delays.

*(GLP) in placement: GIC selling 595.7m shs, raised S$1.55b @ S$2.60 apiece, @ low-range & a 5.5% discount to last close with stake around 13% of total shs outstanding; JPMorgan sole book-runner. GIC reassures that the sale of stake is part of a regular rebalancing & remains confident of GLP’s long-term prospect & will remain a substantial long-term shareholder. Separately, GLP signs 19,000 sqm of leases in Xi’an, China.

*(DBS): Indo’s Finance Minister says RECIPROCITY was an important consideration for the Govt as it weighed the merits of a long delayed purchase of Bank Danamon(BDMN.IJ) by DBS; Deal has been delayed for almost a yr now.

*Mapletree Greater China Comm Trust(MAGIC) priced its IPO at top range of S$0.93/shr raising ~ US$1.3b. Risk appetite rising?

Earnings:

*(OUE) 4Q12 NP of S$21.65m & EPS of S$0.024 came 39% below our fcst due to a S$40.6m fair value loss @ One Raffles Place vs S$21.3m fair value gain in 2011. We suspect that the independent valuation of ~S$2390/sq ft was probably too bullish last yr. Other key items were above fcst. Office valuation +1%YoY for OUE bay front & remained flat YoY for 6 Shenton Way (Twr 1 & 2). Declared final div of S$0.08 (S$0.03 final div + S$0.05 special), translating into FY12 div of S$0.11/shr.

*ARA Asset Mgmt(ARA) 4Q12 NP of S$17.69m +33%YoY while total REV +39%YoY to S$36.96m; FY12 NP +7%YoY while REV +9%YoY. Final cash div remained at 2.7cps, unchanged from a yr ago.

Earnings due today: SembIndus(SCI) 4Q12 @ 5.15PM
(MIDAS) 4Q12

Market Morning Wrap by broker – 06 Feb 13

* DBS (DBS.sp): headline figures looks like a miss with weaker than expected NII mitigated by non interest income. 4Q12 npat of S$760m vs S$807m (CIMB forecast). NII of S$1293m vs S$1338m, NIM of 1.62% vs 1.65%, Non interest income +6% to S$666m vs CIMB’s forecast of a 17.4% fall. Be back for analyst take.

* SIA Engg (SIE.sp): 3Q13 net profit is slightly below our expectations dragged by lower than expected revenue. We think this is the time to take some profits after an unexciting result & 33% share price outperformance against FSSTI since Jan 2012. We believe capacity growth in Changi airport & high hangar utilisationi frm airframe maintenance has been priced in. Valuations @ 18xPE13 is near its 19x peak valuations.

* FJ Benjamin (FJB.sp): 2Q13 npat -75%yoy to S$1.1m dragged by decline in sales of luxury timepieces in North & SE Asia.

* MFS (MFS.sp): FY13 npat +71%yoy driven by 12% rise in sales. Autos, office & medical continue to drive growth while PCB drags.

* Sin Heng (SHHM.sp): 2Q13 npat +21.8%yoy driven by increased contributions frm both Equipment rental & trading biz. Co annced 0.35sct interim divd vs 0.45sct a yr ago.

* Hup Steel (HUP.sp): 2Q13 npat -66%yoy to S$761k dragged by fewer project sales & sluggish demand for structural steel products.

* Stamford Land (STL.sp): FY12 npat -47%yoy to S$18.5m dragged by 52.6% fall in revenue. Absence of contributions frm completed projects dragged on topline.

* Ryobi Kiso (RYO.sp): 2Q13 npat -91%yoy to S$156k dragged by higher costs fx losses.

* Yongmao (YMAO.sp): 3Q13 npat -20.4%yoy to S$1.2m. Stronger demand in asia was offset by decline in Europe due to lower construction activities in Europe

* Sinotel (STEL.sp) / United Food (UFH.sp) / Ziwo (ZIWO.sp): Profit warning

DBS acquires MBFC2 (Tower 3) – CLSA Analyst Take

DBS acquires MBFC2(Tower3) at S$2,556psf, at 4.2-4.5% NPI yield, comparable to valuations Suntec and K-Reit previously paid in 2010

·         DBS has agreed to acquire 30% stake in Marina Bay Financial Centre Tower 3 (MBFC phase 2) from Cheung Keung

·         MBFC2 is a jointly developed super grade A office between Cheung Kong, Hong Long Land and Keppel Land with a proportionate 1/3 stake each

·         The price at S$1.035bn for a 30% stake comes with a put option for CK to sell another 3.33% stake at S$115m effectively divesting its entire 1/3 stake in MBFC2

·         Back in Oct 2010 – Suntec Reit and K-Reit each acquired a respective 1/3 stake in MBFC1 (Tower 1 & 2) for S$1.5bn (S$2,569psf) and S$1.43bn (S$2,450psf) respectively.

·         DBS’s deal at S$1,150bn (including the put option) values the MBFC2 at S$2,556psf, 0.5% lower than what Suntec paid for and 4.3% higher than what K-Reit paid for.

·         The deal also effectively means Suntec Reit will not have to acquire MBFC2 easing pressure for any equity fund raisings in the near term (should it acquire MBFC2). 

·         Assuming passing rents of S$9-10psf/mth, the deal is priced at 4.2-4.5% NPI yield, marginally higher than recent office deals at sub 4%

·         On the flipside, Suntec now loses a good quality asset from its ‘perceived sponsor”, Cheung Kong.

·         Separately, Cheung Kong is also rumoured to be leasing 150,000sqf of office space at Cheung Kong Centre for HK$105-110spf/mth to BOFA, marking one of the biggest deal in Central since 2003.

Market Morning Wrap by broker – 03 Dec 12

The FSSTI saw some selling towards the close last Friday on month end to close at 3069. US overnite not exciting as mkt traded in thin vols with a skew in turnover at close with MSCI rebals to end flat. Today we can expect the mkt to fade off in thin vols as the Dec holidays begin.

* OLAM: acquired a processor of dehydrated onions and herbs in Egypt for $30.8m. The cost to buy Dehydro Foods Ltd. includes an estimated $3.5m for net working capital. Also requested for a full day trading halt today, pending annoucment. Straits Times is saying that a potential rights issues is imminent?

* ST: Associate Bharti Airtel’s telecommunication tower unit, Bharti Infratel is set to raise US$825m next month.

* MRT: completes deportation of 29 bus drivers from China, govt says in statement yesterday.

* SIA: Delta Airlines, the biggest US airline, is understood to have offered to buy SIA’s 49% stake in Virgin Atlantic.

* DBS: Governor of Bank Indonesia said that DBS’s US$7.2bn bid for Bank Danamon has become political. He said that there has not been any more discussions since the announcement and is asking for communication with Singapore.

Market Wrap EOD by broker – 22 Nov 12

FSSTI 2987.59 +0.92%; VAL=S$1.27bn (US$1.03bn) +6% DoD

Singapore’s FSSTI opened the mormning modestly higher and did not look back as it held on to gains to help close the index near day highs. Banks and offshore marine plays led the brunt of the gains followed by property developers.

* CMA +3.9%, KPLD +2.7%, CIT +1.8%, HKL +1.4% seeing renewed buying support after retesting and bouncing off 4-month lows. SIA +1% after signing 6 tourism agreements with various state boards to promotoe Australian travel.

* KEP +2.8%/SMM +3.5% following a JPM report highlighting strong seasonality performance of the rig builders in the first 4 months of each CY.

* DBS/UOB +1.6% took the financials higher after both found support from recent underperformance. Both stocks looking technically bullish now. Fundamentally though our research view remains UW Sing banks.

* Other movers: SCI +4%, SMM +3%, KEP +2.7%, JCNC +2.3%, SIE +1.7%, SGX +1.4%, OCBC +1.2%, NOBL +1.4%, GLP -2%.

DBS’s results summarised – 1st Nov 12

DBS 3Q Net Income Beats Est.; Net Interest Margin Narrows      

Nov. 1 (Bloomberg) — 3Q net income S$856m vs est. S$801m      

(8 analysts, range S$753m-S$876m)                              

• 3Q net income rises 12% Y/y, rises 6% Q/q                    

• Net interest income rises 10% Y/y to S$1.33b                 

• Net interest margin 1.67% vs yr ago 1.73%, qtr ago 1.72%     

• Allowances for credit & other losses S$55m vs yr ago S$231m  

• Expenses S$901m vs yr ago S$847m                              

• Net fee & commission income S$422m vs yr ago S$397m          

• Other non-interest income S$250m vs yr ago S$357m            

• Cost-income ratio 45% vs yr ago 43%, 2Q was 44.8%            

• Return on equity 11.2% vs yr ago 10.8%, 2Q was 10.9%          

• Tier 1 ratio 13.4% vs yr ago 12.6%, 2Q was 12.8%