Saturday, January 24, 2015

Trending News-

United Fiber System gets SGX nod for RTO deal with Golden Energy Mines

SINGAPORE (Jan 23): United Fiber System said it has received approval-in-principle for the reverse takeover deal with Indonesian coal mine owner PT Golden Energy Mines Tbk.
Golden Energy is controlled by Indonesia's Sinar Mas Group through its listed unit PT Dian Swastatika Sentosa Tbk and holds the coal assets of the group.
The backdoor listing will give Sinar Mas Group coal-mining assets access to more funds while shifting United Fiber's business away from forestry and construction to coal-mining.

Singapore shares rally; STI above 3,400

SINGAPORE (Jan 23): Singapore stocks rallied, with the Straits Times Index rising above 3,400 for the first time since May 2013, as the European Central Bank's massive bond-buying programme boosted risk appetite.
The €60 billion ($91 billion) worth of bonds that the ECB will buy every month from March this year till September 2016 was more than what markets had expected.


Friday, January 23, 2015

Ascendas REIT cut to "hold", target lowered to $2.42 by OCBC

SINGAPORE (Jan 23): OCBC Investment has downgraded Ascendas REIT to "hold" from "buy" and trimmed its price target to $2.42 from $2.45.
Current valuations are "fair" as the stock now trades at 1.24 times FY2015 book value, according to OCBC analysts Wong Teck Ching and Eli Lee, who have also lowered their distribution per unit estimates by 1.8% for FY2015 and 2.1% for FY2016 to reflect expected lower net property income margins.
A-REIT's December-quarter DPU came in at 3.59 cents, up from 3.54 cents a year earlier, while revenue rose 11.2% to $171.7 million.

Thursday, January 22, 2015

SGX shares retreat amid concerns derivatives business may not be sustainable

SINGAPORE (Jan 22): Shares of Singapore Exchange slipped as much as 2.3% despite a decent set of December-quarter results from the bourse operator, as investor sold into strength amid concerns that growth may not be sustainable.
At 11:43am (0343 GMT), the stock was down 1.6% at $7.77, off a low of $7.72 in early trading.
Since the beginning of October last year, the stock has put on 11.7%, making it one of the best performers among Singapore blue chips during this period.

Singapore stocks edge up ahead of ECB announcement

SINGAPORE (Jan 22): Singapore shares inched up in anticipation of an announcement later today of unprecedented monetary stimulus by the European Central Bank.
At 10:16am (0216 GMT), gainers outnumbered decliners by two to one. The Straits Times Index was up 0.4% at 3,368.71.
Notable gainers among blue chips were Global Logistic Properties, up 2.4% at $2.55, Jardine Strategic Holdings, up 1.6% at US$35.49, and Jardine Cycle & Carriage, up 1.5% at $40.95.

Wednesday, January 21, 2015


  • SINGAPORE share prices opened higher on Wednesday with the Straits Times Index up 4.93 points to 3,338.95.
  • Oil rebounded in Asia on Wednesday as traders bought the commodity at cheaper prices following a slide to near six-year lows, analysts said.
  • A world-beating rally in Chinese equities is boosting derivatives revenue at the Singapore Exchange, spurring analysts to predict the first quarterly profit growth for Southeast Asia's biggest bourse in more than a year.
  • Ezion Holdings' 42% fall from its $2.02 high has priced in concerns about potentially lower demand for the company's liftboats amid weaker oil prices, according to Maybank Kim Eng.
  • CAPITACOMMERCIAL Trust, a real estate investment trust (Reit) holding central business district (CBD) offices, reported on Wednesday morning before trading hours a distribution per unit (DPU) of 2.15 cents for its fourth quarter ended Dec 31, 2014, up 2.9 per cent from 2.09 cents a year ago.
  • Shares in Keppel Corp and its property unit Keppel Land have been halted ahead of the market's open on Wednesday pending an announcement.

Tuesday, January 20, 2015

Singapore Traders Spectrum - Wired Weekly


■ Macro uncertainties weigh on STI despite attractive valuation – firm support at 3250 barring rapid deterioration of global fundamentals

■ 4Q results season – mostly SREITs over next two weeks, robust earnings expected for SMRT & CWT

Wired Weekly
Macro concerns are weighing down the Singapore market despite relatively attractive PE valuations. Currency volatility surfaced heading into the ECB’s policy meeting on Jan 22nd, and spilled over to the equities market. The ECB is widely expected to announce QE this Thursday in an attempt to prevent the Eurozone from sliding into a deflationary spiral. There is also Greece’s snap election on Jan 25th that could see the country booted out from the Eurozone if the anti-austerity Syriza party wins.
The commodities and bond markets are hinting at a slowdown in the global economy and flight to safety. Besides the oil price tumble in recent months that is partly attributed to a drop in global demand, the fall in copper price below key multi-year technical support also hints at a demand slowdown. Copper is used in many industries and often viewed as a proxy to the global economy. Unlike oil, there are no new major sources of copper supply that can explain the price decline. Then there is the drop in US bond yields and the recent rise in gold price that points to a flight to safety.
At 3300, the STI is currently trading closer to 13.02x (- 0.5SD) than 13.3x (-0.25SD) 12-mth forward PE. Barring a rapid deterioration of global fundamentals, we maintain our view that firm support for the STI is at 13.02x (-0.5SD) 12-mth forward PE, which is currently at 3250. This support level rises to 3320 by end-March.
The 4Q results season has started. The next two weeks will see SREITs releasing results. Among our coverage, REITS that are on semi-annual payment basis include Ascott Residence Trust, CapitaCommercial Trust, CapitaRetail China Trust and CDL Hospitality Trusts.
We expect SMRT and CWT to deliver robust earnings. On the other hand, Cosco Corp issued a recent profit warning to guide investors that FY14 results would show significantly lower y-o-y earnings. 

Monday, January 19, 2015

Gold trades near 4-month high on safe haven demand

Spot gold was firm at US$1,278.21 an ounce at 0046 GMT, near a four-month high of US$1,281.50 reached on Friday - AFP Photo.
Spot gold was firm at US$1,278.21 an ounce at 0046 GMT, near a four-month high of US$1,281.50 reached on Friday - AFP Photo.

SINGAPORE: Gold held close to a four-month high on Monday as uncertainty in global markets pushed investors towards the safe-haven metal, with the focus this week on the European Central Bank's policy meeting.
Spot gold was firm at US$1,278.21 an ounce by 0046 GMT, near a four-month high of US$1,281.50 reached on Friday.
The metal gained nearly 5% last week after Switzerland unexpectedly abandoned a cap on the franc.
Dealers assumed that the Swiss National Bank had moved with the knowledge that the European Central Bank would take the plunge into full scale quantitative easing at its policy meeting on Jan 22.
The euro flirted with 11-year lows early on Monday as investors braced for the ECB to take its boldest steps yet to combat deflation and revive the euro zone economy.
Sources have told Reuters the ECB may adopt a hybrid approach – buying debt and sharing some of the risk across the euro zone while national central banks make separate purchases of their own.
Volatility before the ECB meeting could see gold add to gains this week, but moves could be in a tight range on Monday with the US markets shut for a holiday.   
In a sign of increasing investor confidence in the metal, speculators raised their net long position in gold for the third straight week ending Jan. 13, US Commodity Futures Trading Commission data showed on Friday.
Also, holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 1.92% to 730.89 tonnes on Friday.
That is the fund's biggest daily percentage jump since May 2010. Total holdings, however, were not very far from a six-year low. – Reuters

First Real Estate Investment Trust - Growth Path Intact

Results broadly in-line
With locked-in master leases and revenue derived mostly from base rents, full year results came in well, with revenue (+12% YoY), NPI (+15% YoY) and DPU (+7% YoY) in-line with our forecasts. We like the continued DPU growth fuelled by acquisitions, though we keep our target price of S$1.38 unchanged. Full-year DPU of 8.05c translates to a yield of 6.3% - an attractive 4.5% spread over the 10-year risk free rate.

Sheltered from refinancing and interest rate risks
The bridge loan of S$26.5m will be refinanced to a fixed rate loan in 1H15 and come due only in 2019. After which, the earliest debt will come due only from 2017, with ~95% of the total debt hedged on fixed rates. Therefore, there is little interest rate risk in the next 2 years.
Strong potential for upward rerating remains
The potential for yield-accretive acquisitions remains given that First REIT owns only 11 out of 18 hospitals that Siloam currently operates. Management revealed that 29 hospitals remains in the pipeline, of which First REIT has the ROFR. First REIT has also highlighted the potential for asset enhancement at 3 of its original IPO assets. With the distribution reinvestment plan in place, we believe that First REIT may utilize the reinvested capital for acquisition.

Technical Analysis

Daily Chart
Maintain BUY with rerating catalysts in view
Although our target price implies only ~14% upside after including dividends, the fair value may be higher given potential yield accretion from the acquisition pipeline. We note that over the last 5 years, the total returns on First REIT is more than 200% (assuming reinvestment of dividends into the stock). This is in part contributed by 9 acquisitions that enlarged the portfolio size to 16 assets, and we believe that similar acquisitions may continue to propel growth. However, the accretion from each property will likely be at a lower rate than before as future acquisitions are likely to be partly funded by equity (and no longer solely by debt) as First REIT nears the gearing limit of 35%.