DJ MARKET TALK: Singapore's STI Set To Rise; 3020-3065 Band Tipped

0039 GMT [Dow Jones] Cues may be well-aligned for Singapore's STI to open on a positive note, with positive U.S. retail sales and gains in regional markets already trading, but it isn't clear if investors will show up for the party. "That's the million-dollar question," says Carey Wong, an analyst at OCBC. "Interest has been quite lackluster of late," he says. He notes value-traded was below the S$1 billion threshold Monday; "we haven't seen such bad volume in a while," he says. "People are not convinced that it's an opportune time. They may wait until closer to 3000 until they come in. Realistically, from here, upside is capped at 3100. Investors may find there's no meat." The STI ended Monday 1.3 points higher at 3043.05. UOB KayHian technical analysis tips 3020 support and 3065 resistance. Among stocks likely in focus, M1 (B2F.SG) reported 3Q12 net profit fell 19.5% on-year to S$33.1 million, below some analysts' expectations. K-REIT (K17U.SG) reported 9M12 DPU rose 89.5% on-year to 5.80 Singapore cents, after taking its December rights issue.


 

*DJ Keppel REIT Target Raised To S$1.09 From S$0.99 By Maybank-Kim Eng
 

Daily Review, 16 October 2012 Page 1 of 2

SGX-ST Member, SGX-DT (CNCM)

Daily Review

16 October 2012

LIM & TAN SECURITIES PTE LTD

20 CECIL STREET

#09-00 EQUITY PLAZA

SINGAPORE 049705

TEL: 65330595 FAX: 65332368

www.limtan.com.sg

RCB Reg No. 197301030W

SUMMARY

1. K-Reit ($1.19, unch): Although DPU for Q3 rose

by only 1% q-o-q to 1.96 cents (unchanged 7.8 cents

annualized ) from 1.94 cents, its 6.6% yield remains

higher than CapitaCommercial Trust’s 5.4%, to

merit a BUY, especially with office rentals stabilizing.

(K-Reit has been renamed Keppel Reit, and CCT

releases its Q3 results on Oct 25th.)

2. K-Green ($1.02, unch): The utilities business trust

is likely to consolidate after rising above $1 in recent

weeks, given no acquisition has yet been made since

listing more than 2 years ago. Net profit fell 6.6% in

Q3 taking the total for the first 9 months marginally

lower than correspondingly period last year. (Note

the element of volatility in KGT’s earnings, which are

affected by fluctuating electricity prices.) Based on

7.82 cents paid out last year, yield is 7.7%, which

also merits a BUY.

3. HI-P (93.5 cents, unch): We expect the stock to

stabilize along with Apple Inc, whose share price rose

0.8% to US$634.76 yesterday in response to news that

it has scheduled a product launch (believed to be the

7-inch iPad ) on Oct 23rd, which is 3 days before

Microsoft launches Windows 8 and the Surface

tablet. Admittedly, the mini iPad is no iPhone 5, which

has unfortunately been affected by the negative publicity

generated by the poor maps app, as well as labor

problems encountered by FoxConn in China. (Hon

Hai / FoxConn are Apple’s primary suppliers.) Our

last call on Hi-P is a HOLD.

DMG & Partners Securities Pte Ltd may have received compensation from the company(s) covered in this report for its corporate finance or its dealing activities; this report is therefore classified as a non-independent report. Please refer to important disclosures at the end of this publication. of this publication 1 See important disclosures at the end of this publication DMG Research DMG Research OSK OSK esearcDMGResearch

• Keppel Reit - Strong earnings visibility, attractive yield of 6.6%. Maintain BUY, TP at S$1.28
•  
• Today’s Focus
  • Keppel Reit - Strong earnings visibility, attractive yield of
  6.6%. Maintain BUY, TP at S$1.28
  A technical rebound in reaction to the overnight gains on Wall
  Street after Citigroup reported better-than-expected earnings
  and retail sales (actual +1.1%, consensus +0.8%) came in
  better-than-expected. Citigroup earnings were lifted by
  revenue from bond trading. For the STI, the rebound should
  lift it to either 3057 or 3072 at most today.
  Keppel Reit’s (prev Kreit Asia) 3Q results in line; 9M DPU is
  76% of our FY12 forecast. Looking ahead, we see limited
  downside risk to revenue. K-REIT has healthy take-up, stable
  rents backed by high occupancy rates and low expiry leases.
  Maintain BUY, TP unchanged at S$1.28. We continue to like
  the reit for its strong earnings visibility supported by longweighted
  lease expiry of 7.2 years. FY13/14F yields at 6.6-
  6.7%, is one of the highest among REITs.
  HPH Trust’s Yantian Port's September throughput grew by
  16.7% y-o-y to 1.06m TEU. This is the second consecutive
  month of double digit throughput growth at Yantian,
  following August growth figure of 11.7% y-o-y. While part of
  the August growth was weather-related, the higher growth in
  September is largely a function of a lower base in September
  2011, a likely return to more normal peak season patterns in
  trade, and continued market share gains. For 3Q12, Yantian
  volumes are up 10%. YTD in 2012, Yantian's throughput
  growth now stands at 4.8% y-o-y, compared to only 2%
  growth registered in 1H12.
  Over in HK, throughput growth turned positive at Kwai Tsing
  terminals for the first time in 4 months, again helped by a low
  base effect. Volume handled at Kwai Tsing terminals grew
  7.3% y-o-y to 1.46m TEUs in September. YTD, Kwai Tsing
  terminal throughput is up 1.5%. Thus, overall growth numbers
  are in line or slightly higher than our 2-4% full year growth
  forecast for Yantian and HIT. No changes to our DPU
  estimates. We forecast 6.6UScts payout for full-year FY12,
  including interim DPU of 3.1UScts. Maintain BUY, TP US$0.85.
  Despite some recent re-rating, yield remains attractive