MARKET WATCH 5th Oct 2012 - AsianBookie.Com Forums

05-Oct 2012 Friday 1:39 PM (4222 days ago)

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STI 3,087 +10 +0.31%
DOW 13,575 +80 +0.60%
S&P 1,461 +10 +0.69%
FTSE 5,828 +2 +0.04%
DAX 7,305 -17 -0.23%
GOLD 1,795 -2 -0.08%
OIL 91.48 -0.21 -0.23%
PRE-HK OPEN +58pts

CREDIT SUISSE GLOBAL RISK APPETITE (EQUITY): -0.84 (2 Oct 2012)
CREDIT SUISSE GLOBAL RISK APPETITE : -0.92 (2 Oct 2012)

05 Oct 2012 08:31

DJ Sembcorp Marine May Build Second Accommodation Rig for Prosafe

SINGAPORE--Sembcorp Marine Ltd. (S51.SG) said Friday its Jurong shipyard unit has signed a letter of intent to build a semi-submersible accommodation rig for operator Prosafe SE (PRS.OS)
If confirmed it will be the second such rig the Singapore company will built for Prosafe, Sembcorp Marine said in a statement to the Singapore Exchange. The statement didn't give financial details.
Sembcorp Marine won a US$291.6 million order for the first rig in December last year. That will be delivered in the second quarter of 2014.
Oslo-based Prosafe has options for two more rigs, according to the statement.

SC Global's Share price rightly drops (down 6.5% to $1.225) following the company's acnnouncement it is "engaged in discussions on possible investment and equity participation in various overseas projects, espcially in SE Asia and Greater China" and that its "bid to acquire an overseas resort hotel development was unsuccesful" Fact remains, SC Global is sitting on ">$2bln worth of inventory"

05 Oct 2012 08:34

DJ MARKET TALK:USD/SGD Lower On Upbeat Sentiment;Awaits US Jobs Data

0034 GMT [Dow Jones] The USD/SGD drifts lower and is quoted at 1.2275 in early Asian trading vs 1.2290 late Thursday amid moderately positive market sentiment and after U.S. stock markets rose overnight. The market is awaiting the results of Friday's U.S. nonfarm payrolls report as that will provide a clearer picture of the health of the U.S. economy. "The market may move sideways ahead of the nonfarm payrolls report. The Dollar-Sing may edge lower but is likely to be well supported as we expect the MAS to ease next week," says a trader at a regional bank, tipping a 1.2240-1.2340 range Friday.

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05-Oct 2012 Friday 1:40 PM (4222 days ago)

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05-Oct 2012 Friday 1:45 PM (4222 days ago)

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Sunny Side Up: Regional Telecos: India 3G roaming – To ban or not to ban?

What’s cooking

Regional Telecommunications: India 3G roaming – To ban or not to ban?
Ø India’s proposed ban on 3G roaming alliances between domestic telcos
is only the latest uncertainty in a telecom market already famous for
regulatory earthquakes.
Ø However, the impact is minimal for a couple of reasons. One, 3G
subscribers form just 2-3% of the total number of mobile phone users in
India, hence the impact on earnings is relatively small, and two, SingTel
and Axiata are insulated by their minority stakes in their Indian
associates.
Ø We maintain SELLs on SingTel (TP SGD3.03) and Idea (TP Rs68) and BUYs
on Axiata (TP MYR7.30) and Bharti Airtel (TP Rs400). We like Bharti for
its improving FCF and earnings profile, and Axiata for potential
surprises in earnings and dividends.
Click here for full report
[email protected]

Roadshows & events
Regional

1-5 Oct
UK/US Marketing
Plantation
24– 28 Oct
US Marketing

29 Oct – 2 Nov
UK/Ireland Marketing
Regional Head Research & Economics: Asia Macro
9 Nov
UK NDR
OSIM International
12-16 Nov
UK/US Marketing
Thai/Phil Strategy

Forthcoming results
10-Oct
Medi-Flex
12-Oct
Singapore Press Holdings
15-Oct
M1
17-Oct
Qian Hu
18-Oct
Singapore Exchange

Visited last week*
Company
Initial Impression
Analyst
China Minzhong
Positive
Wei Bin
Ley Choon
Positive
Alison
Pan United
Positive
Stephanie
Sound Global
Negative
Wei Bin

* includes conference calls

Visiting soon
SPH
12-Oct
Wei Bin

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05-Oct 2012 Friday 1:47 PM (4222 days ago)

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| MARKET PULSE: Oil and Gas, CapitaCommercial Trust, Sembcorp Marine, ST Engineering |
|---------------------------------------------------------------------------------------|
| 05 Oct 2012|
|---------------------------------------------------------------------------------------|
| KEY IDEA |
| |
| Oil and Gas sector: Limited impact from shale gas on offshore oil capex |
| With the shale gas boom in the US resulting in low Henry Hub prices, some investors |
| are wondering if this would affect global oil demand, given the huge price |
| differential between both energy sources. If so, this may impact oil prices and hence |
| capital expenditure in the offshore oil industry, affecting companies in the sector. |
| In this report, we contend that the US shale gas “revolution” has not, and is unlikely|
| to bring down oil prices in a significant way any time soon. Assuming the global |
| economy does not fall into a deep recession, the worry should still be on oil prices |
| being on the high side. We maintain our Overweightrating on the oil and gas sector, |
| and we expect continued good performance from Sembcorp Marine [BUY, FV: S$6.09], |
| Keppel Corp [BUY, FV: S$13.34], Ezion [BUY, FV: S$1.53] and STX OSV [BUY, FV: S$2.00].|
| (Low Pei Han, Chia Jiunyang) |
| |
| |
| MORE REPORTS |
| |
| CapitaCommercial Trust: Refinanced convertible bonds due 2013 |
| CCT recently announced that it had refinanced the outstanding balance of its |
| convertible bonds due 2013 with a new S$175m CB issue due 2017. The new 2017 CB has a |
| yield to maturity of 2.5% (versus 3.95% for the 2013 CB), and would yield net proceeds|
| of S$171.9m, of which S$141.1m would be paid for the 2013 bonds (total of S$126m face |
| value) priced at 111.30 and S$20.75m for the settlement of a clean-up call at 109.37 |
| expected on 15 Oct 2012. We like that CCT continues to comfortably manage its debt |
| expiry schedule and maintains steady access to capital markets at relatively |
| attractive rates. Maintain BUY with a higher fair value estimate of S$1.62 (versus S |
| $1.53 previously), as we incorporate firmer cap rates assumptions to reflect more |
| benign expectations for the office sector.(Eli Lee) |
| |
| Sembcorp Marine: Secures LOI for Norwegian sector newbuild rig |
| Sembcorp Marine (SMM) announced this morning that it has signed a letter of intent |
| (LOI) with repeat customer Prosafe AS for the construction of a semi-submersible |
| accommodation rig with two options for further new builds (subject to board approval).|
| The rig is of similar design as Safe Boreas, which Prosafe ordered from SMM in Dec |
| last year at a price tag of US$291.6m. Two options were also granted to Prosafe then. |
| Should this LOI turn effective (i.e. option exercised), Prosafe would, in total, have |
| options for three new builds at Jurong Shipyard. Assuming the price of this latest rig|
| is the same, it would also boost SMM’s new order wins YTD to about S$9.47b, close to |
| our full-year estimate. Maintain BUY with S$6.09 fair value estimate.(Low Pei Han) |
| |
| ST Engineering: ST Electronics won S$166m of contracts in 3Q12 |
| ST Engineering’s electronics arm ST Electronics has won about S$166m worth of |
| contracts for its Rail Electronics and Satellite Communications & Sensor solutions in |
| 3Q2012. A consortium led by ST Electronics was awarded a RMB198m (about S$39m) |
| contract in the city of Wuxi, China. ST Electronics will supply, deliver, install, |
| test and commission as well as provide warranty for an Integrated Supervisory Control |
| System for Wuxi Metro Lines 1 and 2. ST Electronics was also awarded a contract to |
| supply and maintain half height platform screen doors for the BTS SkyTrain in Bangkok,|
| Thailand. These contracts attest the capabilities of ST Electronics. We maintain BUY |
| on ST Engineering with a S$3.81 fair value.(Sarah Ong) |
|---------------------------------------------------------------------------------------|
| |
| For more information on the above, visit www.ocbcresearch.comforthe detailed report. | |---------------------------------------------------------------------------------------| | | | | | NEWS HEADLINES | | | | - US stocks rose on better-than-expected data on weekly applications for jobless | | benefits and factory orders in Aug. The Dow climbed 0.6% to end at 13,575.36. The S&P | | 500 Index rose 0.7% to 1,461.40. | | | | - Global Logistics Properties has signed a new lease agreement of ~39k sqm to Arata | | Corporation, a Japanese wholesale company, for a consumer goods distribution centre in| | Greater Osaka, Japan. | | | | - Europtronic Group has issued a profit warning for 3Q12. The company attributes the | | loss to the provision or write-off of cost of investments in two subsidiaries which | | will be undergoing a voluntary liquidation and weak demand in the electronic | | components market. | | | | - UPP Holdings has announced that there has been an extension of the long-stop date to| | 31 Dec 2012 for the proposed JV in Myanmar. | | | | - Eastern Holdings has invested S$10m in the Fullerton SGD Income Fund, using dormant | | funds in its corporate accounts. | |---------------------------------------------------------------------------------------| | | | Please refer to the full report for more information and additional disclosures. | |---------------------------------------------------------------------------------------| | | | | | | | | | OCBC Research Team | | (65) 6531 9800 | | e-mail: [email protected] | |---------------------------------------------------------------------------------------| | | |---------------------------------------------------------------------------------------|

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05-Oct 2012 Friday 1:49 PM (4222 days ago)

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05-Oct 2012 Friday 1:53 PM (4222 days ago)

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Today’s Focus

Plantation Companies – Exit on rebound. Top pick: Bumitama
Today’s Focus

 Plantation Companies – Exit on rebound. Top pick:

Bumitama

The build-up to tonight’s US September jobs data continues

with initial jobless claims (actual 367k, consensus 370k) and

factory orders (actual -5.2%, consensus -5.9%) coming in

better than expected last night. Consensus sees tonight’s

September non-farm payrolls coming in at 115k with an

unemployment rate of 8.2%.

DBSV Research has cut CY12F/13F/14F CPO prices by 8% to

9% to RM3,020/2,940/2830 on higher inventories. But recent

drop in CPO prices is excessive. We believe CPO should

fundamentally revert to RM2,800 in 4Q12. Plantation stocks

have stayed relatively more resilient, but at 14.1x forward PE,

the sector is now close to fair value. We recommend to exit

when CPO and plantation counters recover. For SGX-listed

stocks, sell-on-strength First Resources (HOLD, TP: S$2.03).

Our top buy pick remains Bumitama Agri (BUY, TP: S$1.25).

In terms of earnings revision on the back of lower CPO price

forecasts, FY12F-14F earnings for First Resources were lowered

by 12-27%. TP reduced to S$2.03 on softer earnings outlook.

Our analyst expects 3Q12F profit of between US$37-41m,

down c.23% q-o-q. For Indofood Agri Resources, FY12-14F

profit reduced by 3-6%; 3Q12F profit expected to decline 17-

24% q-o-q. Maintain HOLD, TP reduced to S$1.25 (Prev S$

1.40).

Mewah’s earnings were reduced by 0-3% for FY12-14F on

lower sales outlook due to weak Malaysian CPO exports.

Maintain FULLY VALUED call (TP: S$ 0.38) for now. However,

there is a speculative element to the stock. According to press

reports, the Malaysian government is considering a cut in CPO

export taxes to 8-10% from 23%. The matter is expected to

be brought up to the cabinet today. If successful, Malaysian

refiners will again be able to compete against their Indonesian

peers. Assuming Mewah’s bulk operating profit/MT recovers to

the average during FY08-10 of c.US$37/MT from US$29 this

year and consumer margins increases by 50% from US$56,

our analyst estimates FY13F profit will jump by 114%. In this

scenario, our TP would be raised to S$0.54.

US Indices Last Close Pts Chg % Chg

Dow Jones  13,575.4 80.8 0.6

S&P  1,461.4 10.4 0.7

NASDAQ  3,149.5 14.2 0.5

Regional Indices

ST Index  3,086.6 9.5 0.3

ST Small Cap  497.7 2.2 0.4

Hang Seng  20,908.0 19.7 0.1

HSCEI  9,848.5 20.3 0.2

HSCCI  4,075.9 7.7 0.2

KLCI  1,661.5 11.7 0.7

SET  1,306.6 (0.9) (0.1)

JCI  4,271.5 19.9 0.5

PCOMP  5,443.7 68.2 1.3

KOSPI  1,992.7 (3.3) (0.2)

TWSE  7,682.3 (2.3) (0.0)

Nikkei  8,824.6 77.7 0.9

STI Index Performance

Singapore

1,000

2,000

3,000

4,000

2006 2007 2008 2009 2010 2011 2012

100-Day MA

Index

STI

Total Market cap (US$bn) 580

Total Daily Vol (m shrs) 1,752

12m ST Index High 3,088

12m ST Index Low 2,529

Source: Bloomberg

Stock Picks – Large Cap

Rec’n Price ($)

4/10

Target Price

($)

Keppel Corp Buy 11.46 13.20

SembCorp Marine Buy 4.95 5.85

Noble Group Buy 1.290 1.53 *

Capitamall Asia Buy 1.665 2.08

CapitaLand Buy 3.290 3.42

* : Technical target

Stock Picks – Small Cap

Rec’n Price ($)

4/10

Target Price

($)

STX OSV Holdings Buy 1.610 2.00

Bumitama Agri Buy 1.040 1.25

ASL Marine Holdings Buy 0.680 0.83

Tiger Airways Buy 0.755 0.90

Source: Bloomberg, DBS

AsianBookie Tipsters Championship
Member of Team:
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Team Ranked: #17 - Team Score (Top 50 Members): AB$ 7,179,375 Total Members: 122

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