By Kristina Peterson
NEW YORK (MarketWatch) -- U.S. stocks erased early losses on Tuesday as a better-than-expected reading of consumer confidence provided some encouragement to investors bracing for slower economic growth.
The Dow Jones Industrial Average rose 43 points, reclaiming the 10000 level. Stocks wiped out an early decline, following after consumer confidence increased more than expected in August, raising expectations about future economic activity.
"Housing is continuing to be really weak. The jobs market is the thing the market's most concerned about," said Bill Vaughn, portfolio manager at Evercore Wealth Management, who said the economy still seems to be haltingly improving in a "stair-step" fashion.
"That's a normal pattern whether it's the macro-economy or the market," he said.
Heading into the final day of August, key indexes are on track for a month of steep losses. The Dow has shed nearly 4.1% this month, its first down August in five years. This month is on track to be the blue-chip measure's worst August since 2001.
Small-capitalization stocks have taken an even bigger hit this month. The Russell 2000 index of small-cap stocks is on pace to post its worst August performance in 12 years.
The market weathered mixed housing and manufacturing data earlier in the morning, helping benchmark indexes stay above key support levels. The Standard & Poor's 500-share index rose 0.3% to 1052, after bouncing off the key 1040 level. The Nasdaq Composite gained 0.2% to 2123.
The Dow was recently up 0.3% to 10045, boosted by a 1.9% rise in Caterpillar.
However, technology components weakened after technology researcher Gartner cut its 2010 projection for worldwide personal-computer shipments, saying the second half won't be a strong as it previously expected. Intel fell 0.7%, while Cisco Systems shed 0.2%.
Continuing the buzz around recent deal activity, luxury-fashion retailer Saks rallied 23%. Saks' climb was fueled by speculation that a private-equity consortium is preparing a cash bid of $1.7 billion, or $11 a share, for the retailer, according to the Daily Mail newspaper, citing unidentified sources. A Saks spokesman couldn't immediately be reached for comment.
Food-processing company H.J. Heinz rose 1% after projecting first-quarter earnings above analysts' recent views as the food-processing company said results again were driven by emerging markets.
Biotech agribusiness company Monsanto dropped 4.6% after predicting its fiscal-year earnings will come in at the low end of its prior view.
Investors fretting over the pace of the economic recovery have been closely focused on the Federal Reserve's assessment of the economy. In the early afternoon, the central bank will release the minutes from the Aug. 10 meeting of the Federal Open Market Committee.
The U.S. dollar weakened against both the euro and the yen. The euro was trading recently at $1.2724, up from $1.2665 late Monday in New York. Demand for Treasurys was mixed, with the two-year note flat and the 10-year note up to push its yield down to 2.51%. Crude-oil prices edged down, while gold futures advanced.
Tuesday, August 31, 2010
Mr Obama - Biggest Bad move of the year? I feel you are.
Obama Blows Off 3 Billion Wannabe Billionaires: William Pesek
By William Pesek - Aug 30, 2010 3:00 AM GMT+0800
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William Pesek
For a guy who talked big about re- engaging Asia, Barack Obama has a funny way of showing it.
Nobody doubts the U.S. president’s team is supremely busy juggling oil spills, Muslim cultural centers, convincing ignoramuses he has a birth certificate and averting recession. Yet there’s no excuse for blowing off last week’s Association of Southeast Asian Nations trade meeting in Vietnam.
It was a dreadful decision and its significance didn’t escape members of the fourth-biggest market for U.S. goods. This is no time for the U.S. to be taking the most dynamic economies for granted. Not with China becoming an ever-bigger player both in Asia and globally.
On any list of George W. Bush’s failings, ignoring Asia deserves a prominent mention. When his administration bothered with Asia, it was all terrorism all the time. There was little talk about potential, cooperation or partnership. Bush just wanted to know how many bad guys governments were rounding up.
He tried to make amends in the twilight of his presidency, naming a U.S. ambassador to Asean in 2008. Recently, Obama tapped that official, Scot Marciel, to be U.S. ambassador to Indonesia. Obama hasn’t bothered to name a new Asean envoy.
The U.S. missed a timely opportunity last week to confer with the economic ministers of Asean’s 10 members, along with counterparts from Australia, China, India, Japan, South Korea, New Zealand and Russia.
Blowing Off Asia
At a time of global crisis, one the U.S. caused, does Obama really want to be sending a message of indifference to Asia? Coming a week after the announcement that China’s economy has surpassed Japan’s, the U.S.’s closest Asian ally, you would think the White House would be stepping up a charm offensive. Instead, it risks turning off the region.
“Confidence in the United States and its ability to lead and follow through on commitments is based on its economic well- being, and that status is being questioned by friends and competitors alike in Asia,” Ernest Bower, an analyst at the Center for Strategic and International Studies in Washington, wrote in a recent report.
China’s rapid growth is slowly, but surely, chipping away at the U.S.’s importance. Granted, at almost three times China’s economy, the U.S. will long be a vital customer for Asia’s goods. Officials here also know that depending on growth in a developing economy is risky.
U.S. Brand
Yet neglecting future trade ties with the liveliest economies is just plain dumb. Asia is churning out a fast- growing number of billionaires and is home to 3 billion consumers who aspire to join them. The U.S. wants to be in on that process.
Obama must not forget just how much the 2008 meltdown damaged the U.S. brand. During Asia’s 1990s crisis, U.S. officials preached the free-market gospel. They told leaders to raise interest rates to support currencies, slash spending and debt, scrap subsidies and avoid bailing out industries. When the U.S. faced a crisis, it did exactly the opposite.
There’s also considerable grumbling over the dollar. True or not, the theory that the U.S. is devaluing to help exporters is making the rounds. That perception is a problem if you want China to let its currency strengthen. It doesn’t play well in Japan, where panic is rising over the strong yen.
Nor can the U.S. complain about corruption in Asia. Incestuous ties between Washington and Wall Street helped cause the U.S. crisis. Conflicts of interest between regulators and oil companies led to BP Plc’s devastating Gulf of Mexico leak. The U.S. has little moral high ground on dodgy dealings.
Corruption’s Cost
That’s a shame, considering the magnitude of Asia’s corruption fight. In Indonesia, for example, officials face an uphill battle to weed out graft and allow more of the nation’s people to benefit from 6 percent growth.
In the Philippines, the honeymoon enjoyed by Benigno Aquino, since becoming president in June, ended last week in gunfire. Eight Hong Kong tourists being held hostage in Manila died in a botched rescue attempt. The tragedy was emblematic of what plagues the nation’s economy.
The gunman was a former police inspector who was dismissed on allegations of extortion. The standoff’s surreal finale suggested a breakdown in the nation’s security apparatus, ineptness at many levels and weak diplomacy. Corruption is the common link in all these shortcomings.
Lost Opportunity
Obama got off to a good start, becoming the first U.S. leader to meet with Asean in November. Vietnam was the perfect opportunity to go further -- to discuss views on credit markets, North Korea’s provocations, China’s currency, Australia’s election, Russia’s growth prospects, and Japanese deflation.
This last topic is a growing concern. Not only have consumer prices fallen for 17 consecutive months, but Japan now has a leadership battle on its hands. Prime Minister Naoto Kan faces a challenge to remain head of the ruling party by veteran kingmaker Ichiro Ozawa. It’s the last thing Japan needs: its sixth prime minister in three years.
Obama’s team could have learned about all of this, and much more, if it had only shown up in Asia. It should do so as soon as possible.
(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: William Pesek in Tokyo at wpesek@bloomberg.net
By William Pesek - Aug 30, 2010 3:00 AM GMT+0800
Email Share
Business ExchangeTwitterDeliciousDiggFacebookLinkedInNewsvinePropellerYahoo! BuzzPrint Bloomberg Opinion
William Pesek
For a guy who talked big about re- engaging Asia, Barack Obama has a funny way of showing it.
Nobody doubts the U.S. president’s team is supremely busy juggling oil spills, Muslim cultural centers, convincing ignoramuses he has a birth certificate and averting recession. Yet there’s no excuse for blowing off last week’s Association of Southeast Asian Nations trade meeting in Vietnam.
It was a dreadful decision and its significance didn’t escape members of the fourth-biggest market for U.S. goods. This is no time for the U.S. to be taking the most dynamic economies for granted. Not with China becoming an ever-bigger player both in Asia and globally.
On any list of George W. Bush’s failings, ignoring Asia deserves a prominent mention. When his administration bothered with Asia, it was all terrorism all the time. There was little talk about potential, cooperation or partnership. Bush just wanted to know how many bad guys governments were rounding up.
He tried to make amends in the twilight of his presidency, naming a U.S. ambassador to Asean in 2008. Recently, Obama tapped that official, Scot Marciel, to be U.S. ambassador to Indonesia. Obama hasn’t bothered to name a new Asean envoy.
The U.S. missed a timely opportunity last week to confer with the economic ministers of Asean’s 10 members, along with counterparts from Australia, China, India, Japan, South Korea, New Zealand and Russia.
Blowing Off Asia
At a time of global crisis, one the U.S. caused, does Obama really want to be sending a message of indifference to Asia? Coming a week after the announcement that China’s economy has surpassed Japan’s, the U.S.’s closest Asian ally, you would think the White House would be stepping up a charm offensive. Instead, it risks turning off the region.
“Confidence in the United States and its ability to lead and follow through on commitments is based on its economic well- being, and that status is being questioned by friends and competitors alike in Asia,” Ernest Bower, an analyst at the Center for Strategic and International Studies in Washington, wrote in a recent report.
China’s rapid growth is slowly, but surely, chipping away at the U.S.’s importance. Granted, at almost three times China’s economy, the U.S. will long be a vital customer for Asia’s goods. Officials here also know that depending on growth in a developing economy is risky.
U.S. Brand
Yet neglecting future trade ties with the liveliest economies is just plain dumb. Asia is churning out a fast- growing number of billionaires and is home to 3 billion consumers who aspire to join them. The U.S. wants to be in on that process.
Obama must not forget just how much the 2008 meltdown damaged the U.S. brand. During Asia’s 1990s crisis, U.S. officials preached the free-market gospel. They told leaders to raise interest rates to support currencies, slash spending and debt, scrap subsidies and avoid bailing out industries. When the U.S. faced a crisis, it did exactly the opposite.
There’s also considerable grumbling over the dollar. True or not, the theory that the U.S. is devaluing to help exporters is making the rounds. That perception is a problem if you want China to let its currency strengthen. It doesn’t play well in Japan, where panic is rising over the strong yen.
Nor can the U.S. complain about corruption in Asia. Incestuous ties between Washington and Wall Street helped cause the U.S. crisis. Conflicts of interest between regulators and oil companies led to BP Plc’s devastating Gulf of Mexico leak. The U.S. has little moral high ground on dodgy dealings.
Corruption’s Cost
That’s a shame, considering the magnitude of Asia’s corruption fight. In Indonesia, for example, officials face an uphill battle to weed out graft and allow more of the nation’s people to benefit from 6 percent growth.
In the Philippines, the honeymoon enjoyed by Benigno Aquino, since becoming president in June, ended last week in gunfire. Eight Hong Kong tourists being held hostage in Manila died in a botched rescue attempt. The tragedy was emblematic of what plagues the nation’s economy.
The gunman was a former police inspector who was dismissed on allegations of extortion. The standoff’s surreal finale suggested a breakdown in the nation’s security apparatus, ineptness at many levels and weak diplomacy. Corruption is the common link in all these shortcomings.
Lost Opportunity
Obama got off to a good start, becoming the first U.S. leader to meet with Asean in November. Vietnam was the perfect opportunity to go further -- to discuss views on credit markets, North Korea’s provocations, China’s currency, Australia’s election, Russia’s growth prospects, and Japanese deflation.
This last topic is a growing concern. Not only have consumer prices fallen for 17 consecutive months, but Japan now has a leadership battle on its hands. Prime Minister Naoto Kan faces a challenge to remain head of the ruling party by veteran kingmaker Ichiro Ozawa. It’s the last thing Japan needs: its sixth prime minister in three years.
Obama’s team could have learned about all of this, and much more, if it had only shown up in Asia. It should do so as soon as possible.
(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: William Pesek in Tokyo at wpesek@bloomberg.net
Monday, August 30, 2010
First China Shopping Mall S-REIT
CAPITARETAIL CHINA TRUST (CRCT)
First China Shopping Mall S-REIT
Presentation Slides for US NDR
30 August – 2 September 2010
First China Shopping Mall S-REIT
Presentation Slides for US NDR
30 August – 2 September 2010
Singapore Tightens Loan Limits to Cool Housing Market
Singapore increased down payments for second mortgages and imposed a stamp duty on property held for less than three years to curb speculation after home prices surged 38 percent in the second quarter.
Buyers who hold more than one mortgage can only borrow up to 70 percent of a property’s value, versus 80 percent previously, and must pay 10 percent in cash, up from 5 percent, the government said in a statement today. A seller’s stamp duty will apply to all residential units and land sold within three years of purchase, from one year. The changes take effect today.
Singapore joins Hong Kong and China in introducing measures this year to cool their property markets amid concerns that asset bubbles are forming as home prices surge. Hong Kong said this month it will tighten mortgage lending rules and increase the supply of land, while China’s restrictions include higher down payments and mortgage rates for multiple-home buyers.
“The government is taking a preemptive approach to make sure prices don’t get out of hand,” said Donald Han, a Singapore-based managing director at real estate adviser Cushman & Wakefield Inc. “Most of the measures are really targeting repeat buyers and speculators who buy and sell over the short term, which is now defined as within three years.”
Stocks, Bonds
CapitaLand Ltd., Southeast Asia’s biggest developer, dropped 1 percent to S$3.96 as of 1:15 p.m. in Singapore trading, while the benchmark Straits Times Index rose 0.6 percent. City Developments Ltd., the island’s second-largest developer by market value, fell 3.2 percent to S$11.58, headed for its biggest decline since February.
CapitaLand’s S$250 million ($185 million) in 4.35 percent notes due 2019 fell to 101.88 cents on the dollar from 102.48 cents on Aug. 27, the lowest in about two weeks, according to Standard Chartered Plc prices. City Developments’ S$90 million in 2.92 percent notes due 2014 fell to 101.68 cents, the lowest since Aug. 10, according to DBS Group Holdings Ltd.
Property prices have surged as Singapore’s $182 billion economy rebounded from last year’s global slump to expand at a record 17.9 percent pace in the six months through June.
The city-state has been attempting to rein in home prices since last year when the government barred interest-only loans for some housing projects and stopped allowing developers to absorb interest payments for apartments still being built.
Previous Measures
The government in February said it will levy a seller’s stamp duty on all residential properties and land that are sold within one year from the date of purchase. The city-state then also lowered the loan-to-value limit to 80 percent from 90 percent for all housing loans provided by financial institutions regulated by the Monetary Authority of Singapore.
The island nation’s Prime Minister Lee Hsien Loong yesterday said previous measures failed to keep prices in check.
“We twice attempted to cool the property market, once last year and once in February this year, but the prices are still rising,” Lee said in a televised speech. “Our purpose is to make sure in the long term, Singaporeans can own their homes and afford it and it will be a gradually appreciating asset which will grow as Singapore grows.”
Singapore’s property market would form a bubble if the current momentum continued, Mah Bow Tan, Minister of National Development, said today after the measures.
Prices Surge
“The property market is currently very buoyant,” the government said in the latest statement. “The government’s objective is to ensure a stable and sustainable property market where prices move in line with economic fundamentals.”
Singapore private residential prices rose 38 percent in the second quarter from a year earlier, according to the Urban Redevelopment Authority.
The island led 36 markets around the world in property- value changes last quarter, gaining 34 percent from a year earlier, according to the Global Property Guide in its survey of house prices.
Price levels have exceeded the historical peak in the second quarter of 1996, the government said today.
The government expects gross domestic product to grow 13 percent to 15 percent this year after the nation in 2009 exited its worst recession since independence 45 years ago.
‘Severe Implications’
“Should economic growth falter and the market corrects, property buyers could face capital losses, with implications on their own finances and the economy as a whole,” the government said. “Moreover, the current low global interest rate environment will not continue indefinitely, and higher interest rates could have severe implications for buyers who have overextended themselves.”
Hong Kong Aug. 13 raised down payments for apartments costing HK$12 million ($1.54 million) or more to 40 percent, from 30 percent. The government has been accelerating its auctions of land for development in a bid to cool prices that have soared about 45 percent since the beginning of 2009, boosted by mortgage rates at the lowest in two decades and buying by mainland Chinese.
John Tsang, Hong Kong’s financial secretary, said home prices are approaching the level of 1997, the height of a previous bubble that was followed by a six-year slump.
China, South Korea
In China, the banking regulator has ordered stress tests for lenders to gauge the impact of home prices falling as much as 60 percent in the hardest-hit markets, a person with knowledge of the matter said. China’s property prices rose at the slowest pace in six months in July as the government cracked down on speculation to prevent asset bubbles.
China has restricted pre-sales by developers, curbed loans for third-home purchases, raised minimum mortgage rates and tightened down-payment requirements for multiple-home purchases. It has also instructed lenders to halt third-home loans in areas with “excessive price gains.”
Taiwan in June introduced a 70 percent cap on loans for second homes, after low borrowing costs fueled lending and a jump in home prices. Central Bank Governor Perng Fai-nan wrote to the chairmen of all financial institutions on the island last month, asking them to take steps to prevent housing speculation.
Malaysia’s central bank has written to financial institutions to get their feedback on the possibility of capping the loan-to-value ratio for mortgages at 80 percent, the Edge weekly reported Aug. 28, citing unidentified people familiar with the matter.
South Korea may be an exception in Asia as the government steps up measures to spur the property market. The government yesterday said it will ease mortgage lending rules and extend tax breaks to encourage buyers back after home sales slumped to the lowest level in almost a year and a half.
To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net; Joyce Koh in Singapore at jkoh38@bloomberg.net
Buyers who hold more than one mortgage can only borrow up to 70 percent of a property’s value, versus 80 percent previously, and must pay 10 percent in cash, up from 5 percent, the government said in a statement today. A seller’s stamp duty will apply to all residential units and land sold within three years of purchase, from one year. The changes take effect today.
Singapore joins Hong Kong and China in introducing measures this year to cool their property markets amid concerns that asset bubbles are forming as home prices surge. Hong Kong said this month it will tighten mortgage lending rules and increase the supply of land, while China’s restrictions include higher down payments and mortgage rates for multiple-home buyers.
“The government is taking a preemptive approach to make sure prices don’t get out of hand,” said Donald Han, a Singapore-based managing director at real estate adviser Cushman & Wakefield Inc. “Most of the measures are really targeting repeat buyers and speculators who buy and sell over the short term, which is now defined as within three years.”
Stocks, Bonds
CapitaLand Ltd., Southeast Asia’s biggest developer, dropped 1 percent to S$3.96 as of 1:15 p.m. in Singapore trading, while the benchmark Straits Times Index rose 0.6 percent. City Developments Ltd., the island’s second-largest developer by market value, fell 3.2 percent to S$11.58, headed for its biggest decline since February.
CapitaLand’s S$250 million ($185 million) in 4.35 percent notes due 2019 fell to 101.88 cents on the dollar from 102.48 cents on Aug. 27, the lowest in about two weeks, according to Standard Chartered Plc prices. City Developments’ S$90 million in 2.92 percent notes due 2014 fell to 101.68 cents, the lowest since Aug. 10, according to DBS Group Holdings Ltd.
Property prices have surged as Singapore’s $182 billion economy rebounded from last year’s global slump to expand at a record 17.9 percent pace in the six months through June.
The city-state has been attempting to rein in home prices since last year when the government barred interest-only loans for some housing projects and stopped allowing developers to absorb interest payments for apartments still being built.
Previous Measures
The government in February said it will levy a seller’s stamp duty on all residential properties and land that are sold within one year from the date of purchase. The city-state then also lowered the loan-to-value limit to 80 percent from 90 percent for all housing loans provided by financial institutions regulated by the Monetary Authority of Singapore.
The island nation’s Prime Minister Lee Hsien Loong yesterday said previous measures failed to keep prices in check.
“We twice attempted to cool the property market, once last year and once in February this year, but the prices are still rising,” Lee said in a televised speech. “Our purpose is to make sure in the long term, Singaporeans can own their homes and afford it and it will be a gradually appreciating asset which will grow as Singapore grows.”
Singapore’s property market would form a bubble if the current momentum continued, Mah Bow Tan, Minister of National Development, said today after the measures.
Prices Surge
“The property market is currently very buoyant,” the government said in the latest statement. “The government’s objective is to ensure a stable and sustainable property market where prices move in line with economic fundamentals.”
Singapore private residential prices rose 38 percent in the second quarter from a year earlier, according to the Urban Redevelopment Authority.
The island led 36 markets around the world in property- value changes last quarter, gaining 34 percent from a year earlier, according to the Global Property Guide in its survey of house prices.
Price levels have exceeded the historical peak in the second quarter of 1996, the government said today.
The government expects gross domestic product to grow 13 percent to 15 percent this year after the nation in 2009 exited its worst recession since independence 45 years ago.
‘Severe Implications’
“Should economic growth falter and the market corrects, property buyers could face capital losses, with implications on their own finances and the economy as a whole,” the government said. “Moreover, the current low global interest rate environment will not continue indefinitely, and higher interest rates could have severe implications for buyers who have overextended themselves.”
Hong Kong Aug. 13 raised down payments for apartments costing HK$12 million ($1.54 million) or more to 40 percent, from 30 percent. The government has been accelerating its auctions of land for development in a bid to cool prices that have soared about 45 percent since the beginning of 2009, boosted by mortgage rates at the lowest in two decades and buying by mainland Chinese.
John Tsang, Hong Kong’s financial secretary, said home prices are approaching the level of 1997, the height of a previous bubble that was followed by a six-year slump.
China, South Korea
In China, the banking regulator has ordered stress tests for lenders to gauge the impact of home prices falling as much as 60 percent in the hardest-hit markets, a person with knowledge of the matter said. China’s property prices rose at the slowest pace in six months in July as the government cracked down on speculation to prevent asset bubbles.
China has restricted pre-sales by developers, curbed loans for third-home purchases, raised minimum mortgage rates and tightened down-payment requirements for multiple-home purchases. It has also instructed lenders to halt third-home loans in areas with “excessive price gains.”
Taiwan in June introduced a 70 percent cap on loans for second homes, after low borrowing costs fueled lending and a jump in home prices. Central Bank Governor Perng Fai-nan wrote to the chairmen of all financial institutions on the island last month, asking them to take steps to prevent housing speculation.
Malaysia’s central bank has written to financial institutions to get their feedback on the possibility of capping the loan-to-value ratio for mortgages at 80 percent, the Edge weekly reported Aug. 28, citing unidentified people familiar with the matter.
South Korea may be an exception in Asia as the government steps up measures to spur the property market. The government yesterday said it will ease mortgage lending rules and extend tax breaks to encourage buyers back after home sales slumped to the lowest level in almost a year and a half.
To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net; Joyce Koh in Singapore at jkoh38@bloomberg.net
Sold SMRT, Small Profits.
Sold SMRT earning a small profit of SGD18. Enough for me? Yes. I live to trade another day.
I bought some smaller counters. Will reveal when I sold them.
I bought some smaller counters. Will reveal when I sold them.
Starhub target lifted to $2.85 by BNP, keeps Buy
Written by The Edge
Friday, 27 August 2010 12:05
BNP Paribas lifts Starhub (CC3.SG) target price to $2.85 from $2.65, based on discounted cash-flow valuation, after accounting for lower pay-TV churn rate assumption, rolling over valuation base to 2011 vs 2010, says Dow Jones.
BNP says despite losing EPL football broadcast rights to SingTel (Z74.SG), Starhub’s pay-TV churn rate only slightly higher than before EPL loss. “StarHub’s non-sports content remains superior to SingTel’s.” Lowers 2010 pay-TV churn rate estimate to 10% vs 15%. Keeps Buy call.
Notes, “StarHub’s prospective (dividend) yield of 8.5% is attractive, especially in current volatile market environment.”
Friday, 27 August 2010 12:05
BNP Paribas lifts Starhub (CC3.SG) target price to $2.85 from $2.65, based on discounted cash-flow valuation, after accounting for lower pay-TV churn rate assumption, rolling over valuation base to 2011 vs 2010, says Dow Jones.
BNP says despite losing EPL football broadcast rights to SingTel (Z74.SG), Starhub’s pay-TV churn rate only slightly higher than before EPL loss. “StarHub’s non-sports content remains superior to SingTel’s.” Lowers 2010 pay-TV churn rate estimate to 10% vs 15%. Keeps Buy call.
Notes, “StarHub’s prospective (dividend) yield of 8.5% is attractive, especially in current volatile market environment.”
Singapore to spend $60b over next decade on rail network
Written by Bloomberg
Sunday, 29 August 2010 20:59
Singapore will spend $60 billion over the next decade to develop and double its rail network, Prime Minister Lee Hsien Loong said in a televised speech today.
Sunday, 29 August 2010 20:59
Singapore will spend $60 billion over the next decade to develop and double its rail network, Prime Minister Lee Hsien Loong said in a televised speech today.
Mah says property market was heading for a bubble
Singapore’s property market would form a bubble if the current momentum continued, Mah Bow Tan, Minister of National Development, said in Singapore today.
Singapore moves to cool property market
Written by Thomson Reuters
Monday, 30 August 2010 10:09
Singapore on Monday announced restrictions on people buying second homes as part of new measures to cool its residential property market, hurting property stocks.
The new measures, which take immediate effect, include decreasing the amount people can borrow to buy second properties to 70% from 80 perent, as well as extending a stamp duty on sellers who buy and sell within three years.
Monday, 30 August 2010 10:09
Singapore on Monday announced restrictions on people buying second homes as part of new measures to cool its residential property market, hurting property stocks.
The new measures, which take immediate effect, include decreasing the amount people can borrow to buy second properties to 70% from 80 perent, as well as extending a stamp duty on sellers who buy and sell within three years.
Sembcorp plans to issue $200m of notes due 2017, 2025
Written by Bloomberg
Monday, 30 August 2010 12:50
SembCorp Industries plans to sell $200 million of notes under its $1.5 billion medium-term note program, according to a Singapore stock exchange statement.
$100 million of 4.25% bonds will mature in 2025 while a further $100 million of notes which will pay interest of 0.55% more than the six-month Singapore dollar swap offer rate will mature in 2017, the statement said.
Proceeds will be used to repay debt and for general working capital purposes and DBS Group Holdings is managing the sale, the statement said.
Monday, 30 August 2010 12:50
SembCorp Industries plans to sell $200 million of notes under its $1.5 billion medium-term note program, according to a Singapore stock exchange statement.
$100 million of 4.25% bonds will mature in 2025 while a further $100 million of notes which will pay interest of 0.55% more than the six-month Singapore dollar swap offer rate will mature in 2017, the statement said.
Proceeds will be used to repay debt and for general working capital purposes and DBS Group Holdings is managing the sale, the statement said.
Watch 2,955 mark: Phillip Securities
Written by The Edge
Monday, 30 August 2010 13:00
Gains across Asian bourses keeping sentiment in Singapore market generally buoyant, although property stocks buck advance on additional government measures to rein in housing market, says Dow Jones.
Monday, 30 August 2010 13:00
Gains across Asian bourses keeping sentiment in Singapore market generally buoyant, although property stocks buck advance on additional government measures to rein in housing market, says Dow Jones.
Singapore’s DBS consumer head resigns: Update
Written by Thomson Reuters
Monday, 30 August 2010 15:06
DBS’s (DBSM.SI) head of consumer banking, Rajan Raju, has resigned after spending 11 years with Southeast Asia’s biggest lender, sources familiar with the move told Reuters on Monday.
Raju, who joined Singapore’s DBS from Citibank (C.N), will end his current role on Aug 31, His official last day is on Sept 30, according to a staff memo made available to Reuters. His successor will be announced shortly, the memo said. DBS confirmed Raju’s departure.
Monday, 30 August 2010 15:06
DBS’s (DBSM.SI) head of consumer banking, Rajan Raju, has resigned after spending 11 years with Southeast Asia’s biggest lender, sources familiar with the move told Reuters on Monday.
Raju, who joined Singapore’s DBS from Citibank (C.N), will end his current role on Aug 31, His official last day is on Sept 30, according to a staff memo made available to Reuters. His successor will be announced shortly, the memo said. DBS confirmed Raju’s departure.
Wing Tai, CityDev fall on government moves
Written by Thomson Reuters
Monday, 30 August 2010 15:53
Shares of property developers Wing Tai Holdings (WTHS.SI) and City Developments (CTDM.SI) fell more than 4% after the Singapore government announced measures to cool the residential property market.
Wing Tai and City Developments have relatively greater exposures to the mass residential segment of the market.
Monday, 30 August 2010 15:53
Shares of property developers Wing Tai Holdings (WTHS.SI) and City Developments (CTDM.SI) fell more than 4% after the Singapore government announced measures to cool the residential property market.
Wing Tai and City Developments have relatively greater exposures to the mass residential segment of the market.
Saturday, August 28, 2010
STI gains 0.4% to 2,938.74 at closing
Singapore’s Straits Times Index gained 0.4% to 2,938.74 at the close, pushing the gauge 0.1% higher this week. Two stocks rose for each that fell on the 30-member gauge.
Shares on the measure trade at an average 14.2 times estimated earnings, compared with about 17.4 times at the beginning of the year, according to Bloomberg data. The following shares were among the most active in the market.
Shares on the measure trade at an average 14.2 times estimated earnings, compared with about 17.4 times at the beginning of the year, according to Bloomberg data. The following shares were among the most active in the market.
Kian Ann Engineering (KAE SP), a supplier of tractor and diesel engine parts, gained 2.6% to 20 cents. The company said full-year profit increased 15% to $13.2 million from a year earlier.
MCL Land (MCL SP) surged 26% to $2.45, its biggest advance on record, after its parent Hongkong Land Holdings (HKL SP) offered to buy the rest of the Singapore- based homebuilder for $2.45 a share. Hongkong Land, which holds about 77.4% of MCL Land, rose 1.5% to US$5.40 ($7.32).
Olam International (OLAM SP), a Singapore-based supplier of agricultural commodities, jumped 6.8% to $2.68. The company said fourth-quarter net income doubled to $92.3 million from $46.7 million a year earlier. Credit Suisse Group AG raised its share-price estimate to $4.25 from $3.50 and kept its “outperform” rating, saying the company’s earnings beat estimates.
Wilmar International (WIL SP), the world’s biggest palm-oil trader, rose 0.5% to $6.21. The company said its unit PGEO Group agreed to buy the remaining 8.6% of Natural Oleochemicals from National Land Finance Co-operative Society for 42.5 million ringgit ($18.3 million). PGEO last month acquired 91.4% of Natural Oleochemicals from Kulim (Malaysia) Bhd.
Friday, August 27, 2010
Wall St slumps on economy woes; Dow below 10,000
On Friday 27 August 2010, 5:04 SGT
By Leah Schnurr
NEW YORK (Reuters) - U.S. stocks sagged on Thursday and the Dow closed below 10,000 a day ahead of an expected downward revision in U.S. second-quarter economic growth and a major speech by Federal Reserve Chairman Ben Bernanke .
Major technology shares were among the biggest losers, with the Nasdaq falling more than the Dow and S&P 500 . Tech shares have been seen as a proxy for economic growth. Cisco Systems fell 2.4 percent to $20.70, while Intel gave up 1.6 percent at $18.18.
Stocks initially rose on data showing first-time claims for jobless benefits fell more than expected last week, but the number was still too high to signal a shift in the weak labor market. The four-week average of new claims, regarded as a better gauge of trends, rose to the highest since late November.
"The best the bull can say is that the recovery is evening itself out now, it's not accelerating any more," said Linda Duessel, market strategist at Federated Investors in Pittsburgh.
"We think it's a soft patch and not a double dip, but the market is pricing more and more for a double dip, so you're vulnerable to the upside."
The Dow Jones industrial average fell 74.25 points, or 0.74 percent, to 9,985.81. The Standard & Poor's 500 Index shed 8.11 points, or 0.77 percent, to 1,047.22. The Nasdaq Composite Index lost 22.85 points, or 1.07 percent, to 2,118.69.
It was the first time the Dow has closed below the psychologically important 10,000 level since July 6. The market then began a rebound and logged seven straight days of gains.
In his speech on Friday Bernanke is likely to discuss the uncertain prospects for the economy but isn't expected to give many clues about whether the U.S. central bank will pump more cash into the economy to keep the recovery going.
Bernanke and central bankers from around the world are gathering for their annual meeting in Jackson Hole, Wyoming, with the agenda expected to include a discussion of printing yet more money to spur growth.
After a recent spate of poor economic numbers, there were jitters the GDP data could show the economy is weaker than originally thought. The government's preliminary reading is expected to come in at 1.4 percent, down from 2.4 percent estimated a month ago. Estimates range broadly from 0.9 percent to 2.2 percent, according to a Reuters poll.
On the technical picture, investors were still looking for the 1,040 level on the S&P to act as support. Some consider a dip below that level to be a buying opportunity, as was seen on Wednesday when the index briefly fell below it.
In deal news, Dell Inc raised its bid for data storage company 3PAR Inc to $1.6 billion, offering slightly more than bigger rival Hewlett-Packard Co.
HP came back with a revised proposal after the closing bell, sending 3PAR's shares up 7.2 percent to $27.90 in extended-hours trading. Shares of 3PAR closed at $26.76. HP closed down 0.1 percent at $38.22, while Dell ended down 0.3 percent to $11.75
A drop in shares of coal companies weighed on the energy sector for a second day as the price of natural gas fell, raising concerns that power plants would switch to gas from coal. Massey Energy fell 4.2 percent to $27.93, while the S&P energy sector fell 1 percent.
(Reporting by Leah Schnurr; Editing by Kenneth Barry)
(For more news visit Reuters India)
By Leah Schnurr
NEW YORK (Reuters) - U.S. stocks sagged on Thursday and the Dow closed below 10,000 a day ahead of an expected downward revision in U.S. second-quarter economic growth and a major speech by Federal Reserve Chairman Ben Bernanke .
Major technology shares were among the biggest losers, with the Nasdaq falling more than the Dow and S&P 500 . Tech shares have been seen as a proxy for economic growth. Cisco Systems fell 2.4 percent to $20.70, while Intel gave up 1.6 percent at $18.18.
Stocks initially rose on data showing first-time claims for jobless benefits fell more than expected last week, but the number was still too high to signal a shift in the weak labor market. The four-week average of new claims, regarded as a better gauge of trends, rose to the highest since late November.
"The best the bull can say is that the recovery is evening itself out now, it's not accelerating any more," said Linda Duessel, market strategist at Federated Investors in Pittsburgh.
"We think it's a soft patch and not a double dip, but the market is pricing more and more for a double dip, so you're vulnerable to the upside."
The Dow Jones industrial average fell 74.25 points, or 0.74 percent, to 9,985.81. The Standard & Poor's 500 Index shed 8.11 points, or 0.77 percent, to 1,047.22. The Nasdaq Composite Index lost 22.85 points, or 1.07 percent, to 2,118.69.
It was the first time the Dow has closed below the psychologically important 10,000 level since July 6. The market then began a rebound and logged seven straight days of gains.
In his speech on Friday Bernanke is likely to discuss the uncertain prospects for the economy but isn't expected to give many clues about whether the U.S. central bank will pump more cash into the economy to keep the recovery going.
Bernanke and central bankers from around the world are gathering for their annual meeting in Jackson Hole, Wyoming, with the agenda expected to include a discussion of printing yet more money to spur growth.
After a recent spate of poor economic numbers, there were jitters the GDP data could show the economy is weaker than originally thought. The government's preliminary reading is expected to come in at 1.4 percent, down from 2.4 percent estimated a month ago. Estimates range broadly from 0.9 percent to 2.2 percent, according to a Reuters poll.
On the technical picture, investors were still looking for the 1,040 level on the S&P to act as support. Some consider a dip below that level to be a buying opportunity, as was seen on Wednesday when the index briefly fell below it.
In deal news, Dell Inc raised its bid for data storage company 3PAR Inc to $1.6 billion, offering slightly more than bigger rival Hewlett-Packard Co.
HP came back with a revised proposal after the closing bell, sending 3PAR's shares up 7.2 percent to $27.90 in extended-hours trading. Shares of 3PAR closed at $26.76. HP closed down 0.1 percent at $38.22, while Dell ended down 0.3 percent to $11.75
A drop in shares of coal companies weighed on the energy sector for a second day as the price of natural gas fell, raising concerns that power plants would switch to gas from coal. Massey Energy fell 4.2 percent to $27.93, while the S&P energy sector fell 1 percent.
(Reporting by Leah Schnurr; Editing by Kenneth Barry)
(For more news visit Reuters India)
Thursday, August 26, 2010
Casino cash may inject $1.5 bln into Singapore annually-DBS
On Thursday 26 August 2010, 16:15 SGT
SINGAPORE, Aug 26 (Reuters) - Revenues from two new casino-resorts could contribute as much as S$2 billion ($1.47 billion) annually to Singapore's economy, which is expected by the government to grow by up to 15 percent this year, DBS Bank said on Thursday.
The two resorts have already contributed S$470 million or 0.3 percentage points to gross domestic product (GDP), which grew 17.9 percent in the first half of 2010 from a year earlier, DBS economist Irvin Seah wrote in a report.
"If the GDP contributions by the integrated resorts continue to rise at the same pace going forward, we can expect full-year GDP contributions of about S$2 billion from these projects," Seah said in the note.
That would translate into adding 0.7 percentage points to GDP for the whole of 2010, he said.
Singapore is counting on the two resorts opened earlier this year by Malaysia's Genting Bhd and Las Vegas Sands to help fuel tourism and economic growth. It hopes to double visitor arrivals to 17 million by 2015.
In July alone, at least 1 million people visited Singapore, the highest number the city-state ever saw in a month, after seven consecutive months of record monthly visitor arrivals.
"However, the contributions derived from the GDP statistics reflect only the direct impact of the IRs. The overall economic gains to the economy are likely to be significantly larger if the spinoffs to other industries are taken into account," he said. ($1=1.358 Singapore dollar) (Reporting by Nopporn Wong-Anan; Editing by Kim Coghill)
SINGAPORE, Aug 26 (Reuters) - Revenues from two new casino-resorts could contribute as much as S$2 billion ($1.47 billion) annually to Singapore's economy, which is expected by the government to grow by up to 15 percent this year, DBS Bank said on Thursday.
The two resorts have already contributed S$470 million or 0.3 percentage points to gross domestic product (GDP), which grew 17.9 percent in the first half of 2010 from a year earlier, DBS economist Irvin Seah wrote in a report.
"If the GDP contributions by the integrated resorts continue to rise at the same pace going forward, we can expect full-year GDP contributions of about S$2 billion from these projects," Seah said in the note.
That would translate into adding 0.7 percentage points to GDP for the whole of 2010, he said.
Singapore is counting on the two resorts opened earlier this year by Malaysia's Genting Bhd and Las Vegas Sands to help fuel tourism and economic growth. It hopes to double visitor arrivals to 17 million by 2015.
In July alone, at least 1 million people visited Singapore, the highest number the city-state ever saw in a month, after seven consecutive months of record monthly visitor arrivals.
"However, the contributions derived from the GDP statistics reflect only the direct impact of the IRs. The overall economic gains to the economy are likely to be significantly larger if the spinoffs to other industries are taken into account," he said. ($1=1.358 Singapore dollar) (Reporting by Nopporn Wong-Anan; Editing by Kim Coghill)
Wednesday, August 25, 2010
QUOTE OF THE WEEK: Value Investing - Money Mind
It's like buying Christmas cards in January, at about half the price of the same cards a month earlier- Warren Buffet. Catch Money Mind this Sunday at 7.30pm to know more.
Tuesday, August 24, 2010
Wednesday Bull Day for Shorts and Gap Down.
Please read this article below. Going to be a very RED day tomorrow. Watch out for Shorts. Very likely GAP DOWN.
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NEW YORK (MarketWatch) -- U.S. stocks fell Tuesday as investors, fretting over recent economic weakness, moved to the safety of the dollar and Treasurys ahead of key housing data.
The Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 10,017, -157.42, -1.55%) dropped 92 points, or 0.9%, to 10082, in early trading. All 30 of the measure's components were in the red. Leading the slide, Caterpillar, Inc. /quotes/comstock/13*!cat/quotes/nls/cat (CAT 64.76, -2.08, -3.11%) dropped 2.3%, Walt Disney /quotes/comstock/13*!dis/quotes/nls/dis (DIS 32.25, -0.69, -2.08%) dropped 2% and Cisco Systems Inc. /quotes/comstock/15*!csco/quotes/nls/csco (CSCO 21.35, -0.34, -1.55%) declined 1.9%.
The Nasdaq Composite /quotes/comstock/10y!i:comp (COMP 2,121, -38.29, -1.77%) fell 1.4% to 2129. The Standard & Poor's 500 index /quotes/comstock/21z!i1:in\x (SPX 1,051, -16.76, -1.57%) declined 1.2% to 1055, with all its sectors in the red, led by technology and materials.
AM Report: Fed Split on Move to Bolster EconomyAs the economic recovery showed signs of sputtering, at least seven of 17 Fed officials spoke against or expressed reservations about a plan to alter the way the Fed manages its huge portfolio of securities before the move was approved on Aug. 10. Jon Hilsenrath discusses. Also, Jenny Strasburg discusses a Chinese sovereign-wealth fund in talks to invest a large sum of money in a hedge fund devoted to profiting from 'Black Swan' market swoons.
The broad decline, which puts stocks on track for their fourth-straight day in the red, comes as investors have grown increasingly concerned about the global economy.
Despite strong second-quarter earnings and a recent uptick in merger-and-acquisition activity, economic data have been disappointing. Investors are fearful that if economic numbers continue to come in weak, the economy could be headed toward a double-dip.
"Investors are running away from risk," said John Apruzzese, partner and equity portfolio manager at Evercore Wealth Management. "It's clearly concern about economic growth in the U.S. as well as globally."
Crude-oil futures fell below $72 a barrel and gold futures declined as investors fled to the safety of the dollar and Treasurys. The U.S. Dollar Index /quotes/comstock/11j!i:dxy0 (DXY 83.13, +0.01, +0.01%) , which tracks the U.S. currency against a basket of six others, climbed 0.3%. Gains in Treasurys pushed the yield on the 10-year note /quotes/comstock/31*!ust10y (UST10Y 2.51, -0.09, -3.54%) down to 2.52%. The 10-year note earlier touched 2.509%, its lowest level since March 2009.
The data on tap Tuesday and this week are expected to provide more insight into the health of the economy, with existing-home sales due Tuesday, new-home sales to be released Wednesday and the government's second reading of second-quarter economic growth due Friday. That report is expected to show a significant slowdown in U.S. economic growth, with the estimate for second-quarter gross domestic product predicted to be cut to 1.3% growth from 2.4% growth.
Ahead of those reports, the market is particularly jittery.
"Investors are hyper sensitive to macro economic data because they got burned two years ago and they're afraid of it happening again," Apruzzese said.
---------------------------------
NEW YORK (MarketWatch) -- U.S. stocks fell Tuesday as investors, fretting over recent economic weakness, moved to the safety of the dollar and Treasurys ahead of key housing data.
The Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 10,017, -157.42, -1.55%) dropped 92 points, or 0.9%, to 10082, in early trading. All 30 of the measure's components were in the red. Leading the slide, Caterpillar, Inc. /quotes/comstock/13*!cat/quotes/nls/cat (CAT 64.76, -2.08, -3.11%) dropped 2.3%, Walt Disney /quotes/comstock/13*!dis/quotes/nls/dis (DIS 32.25, -0.69, -2.08%) dropped 2% and Cisco Systems Inc. /quotes/comstock/15*!csco/quotes/nls/csco (CSCO 21.35, -0.34, -1.55%) declined 1.9%.
The Nasdaq Composite /quotes/comstock/10y!i:comp (COMP 2,121, -38.29, -1.77%) fell 1.4% to 2129. The Standard & Poor's 500 index /quotes/comstock/21z!i1:in\x (SPX 1,051, -16.76, -1.57%) declined 1.2% to 1055, with all its sectors in the red, led by technology and materials.
AM Report: Fed Split on Move to Bolster EconomyAs the economic recovery showed signs of sputtering, at least seven of 17 Fed officials spoke against or expressed reservations about a plan to alter the way the Fed manages its huge portfolio of securities before the move was approved on Aug. 10. Jon Hilsenrath discusses. Also, Jenny Strasburg discusses a Chinese sovereign-wealth fund in talks to invest a large sum of money in a hedge fund devoted to profiting from 'Black Swan' market swoons.
The broad decline, which puts stocks on track for their fourth-straight day in the red, comes as investors have grown increasingly concerned about the global economy.
Despite strong second-quarter earnings and a recent uptick in merger-and-acquisition activity, economic data have been disappointing. Investors are fearful that if economic numbers continue to come in weak, the economy could be headed toward a double-dip.
"Investors are running away from risk," said John Apruzzese, partner and equity portfolio manager at Evercore Wealth Management. "It's clearly concern about economic growth in the U.S. as well as globally."
Crude-oil futures fell below $72 a barrel and gold futures declined as investors fled to the safety of the dollar and Treasurys. The U.S. Dollar Index /quotes/comstock/11j!i:dxy0 (DXY 83.13, +0.01, +0.01%) , which tracks the U.S. currency against a basket of six others, climbed 0.3%. Gains in Treasurys pushed the yield on the 10-year note /quotes/comstock/31*!ust10y (UST10Y 2.51, -0.09, -3.54%) down to 2.52%. The 10-year note earlier touched 2.509%, its lowest level since March 2009.
The data on tap Tuesday and this week are expected to provide more insight into the health of the economy, with existing-home sales due Tuesday, new-home sales to be released Wednesday and the government's second reading of second-quarter economic growth due Friday. That report is expected to show a significant slowdown in U.S. economic growth, with the estimate for second-quarter gross domestic product predicted to be cut to 1.3% growth from 2.4% growth.
Ahead of those reports, the market is particularly jittery.
"Investors are hyper sensitive to macro economic data because they got burned two years ago and they're afraid of it happening again," Apruzzese said.
Singapore H1 GDP grew 17.9 pct, sees global risks
Reuters - Monday, August 9
SINGAPORE, Aug 8 - Singapore's economy grew 17.9 percent in the first half of 2010, a pace likely to moderate in the second half, Prime Minister Lee Hsien Loong said on Sunday.
There are still risks facing the economies of Europe and the United States and the global financial system is yet to fully recover from the credit crisis, Lee said in a televised speech on the eve of a national day celebrating Singapore's 45th year of independence.
Lee maintained a government forecast for 13-15 percent growth in 2010, which would make Singapore one of the world's fastest growing economies.
The first-half GDP figure showed the economy expanded at a slightly lower pace in the second quarter from an earlier estimate of 19.3 percent released on July 14. [ID:nSGE673073]
The government had earlier estimated the economy grew 18.1 percent in the first half of 2010 from a year earlier.
Lee did not provide the final second quarter growth figure.
"Growth is likely to moderate in the second half," said Lee. "Risks remain in the world economy, especially in Europe and the U.S. The global financial system is not fully mended."
Lee also touched upon the issue of foreign workers, saying while the government will control the flow the country needed immigrants to make up for a shortage of local workers.
We will control the inflow, to ensure that it is not too fast, and not too large," Lee said. "We will only bring in people who can contribute to Singapore, and work harder to integrate them into our society. And we will make clear that citizens come first."
SINGAPORE, Aug 8 - Singapore's economy grew 17.9 percent in the first half of 2010, a pace likely to moderate in the second half, Prime Minister Lee Hsien Loong said on Sunday.
There are still risks facing the economies of Europe and the United States and the global financial system is yet to fully recover from the credit crisis, Lee said in a televised speech on the eve of a national day celebrating Singapore's 45th year of independence.
Lee maintained a government forecast for 13-15 percent growth in 2010, which would make Singapore one of the world's fastest growing economies.
The first-half GDP figure showed the economy expanded at a slightly lower pace in the second quarter from an earlier estimate of 19.3 percent released on July 14. [ID:nSGE673073]
The government had earlier estimated the economy grew 18.1 percent in the first half of 2010 from a year earlier.
Lee did not provide the final second quarter growth figure.
"Growth is likely to moderate in the second half," said Lee. "Risks remain in the world economy, especially in Europe and the U.S. The global financial system is not fully mended."
Lee also touched upon the issue of foreign workers, saying while the government will control the flow the country needed immigrants to make up for a shortage of local workers.
We will control the inflow, to ensure that it is not too fast, and not too large," Lee said. "We will only bring in people who can contribute to Singapore, and work harder to integrate them into our society. And we will make clear that citizens come first."
Singapore Stocks-SingTel lifts index; upside seen at 2950 pts
Reuters - Tuesday, August 24Send IM Story Print
* Index up 0.6 percent, seen in 2900-2950 range near term
* SingTel rose 2 percent by midday
By Charmian Kok
SINGAPORE, Aug 24 - Singapore shares rose 0.61 percent on Tuesday, outperforming regional bourses like Hong Kong, as the benchmark index got a boost from Southeast Asia's largest telcom firm Singapore Telecommunications.
By the midday break the Straits Times Index <.FTSTI> was up 17.91 points at 2,943.90. More than 129.3 million shares had changed hands.
SingTel's shares rose 2 percent to S$3.00 as investors shrugged off previous concerns that a potential weakness in the Australian dollar resulting from Australia's political stalemate will hit its bottom line.
"There could be some bargain hunting going on as investors recover from yesterday's knee-jerk reaction to news of Australia's hung parliament. The actual impact on SingTel's bottomline isn't so great," said Carey Wong, an investment analyst at OCBC Investment Research.
SingTel's Australian subsidiary, SingTel Optus, accounted for about 19 percent of its bottom line for the fiscal year ended March 31, although it made up 64 percent of its revenue.
Shipbuilders like Yangzijiang Shipbuildingand Cosco Corporation outperformed the broader index, as Cosco secured new contracts and Yangzijiang said it would buy a site in China that can be used to expand its yard. [ID:nSGE67N01B]
Shares of Yangzijiang rose as much as 2.6 percent on Tuesday to S$1.55, while Cosco rose 1.9 percent to S$1.58.
"I expect the STI to continue trading in a tight range (of 2,900-2,950) for the next two weeks. The problem is the earnings season has ended and there's no major economic data we expect in the coming week," said Tey Tze Ming, a market strategist at Saxo Capital Markets.
* Index up 0.6 percent, seen in 2900-2950 range near term
* SingTel rose 2 percent by midday
By Charmian Kok
SINGAPORE, Aug 24 - Singapore shares rose 0.61 percent on Tuesday, outperforming regional bourses like Hong Kong, as the benchmark index got a boost from Southeast Asia's largest telcom firm Singapore Telecommunications
By the midday break the Straits Times Index <.FTSTI> was up 17.91 points at 2,943.90. More than 129.3 million shares had changed hands.
SingTel's shares rose 2 percent to S$3.00 as investors shrugged off previous concerns that a potential weakness in the Australian dollar resulting from Australia's political stalemate will hit its bottom line.
"There could be some bargain hunting going on as investors recover from yesterday's knee-jerk reaction to news of Australia's hung parliament. The actual impact on SingTel's bottomline isn't so great," said Carey Wong, an investment analyst at OCBC Investment Research.
SingTel's Australian subsidiary, SingTel Optus, accounted for about 19 percent of its bottom line for the fiscal year ended March 31, although it made up 64 percent of its revenue.
Shipbuilders like Yangzijiang Shipbuilding
Shares of Yangzijiang rose as much as 2.6 percent on Tuesday to S$1.55, while Cosco rose 1.9 percent to S$1.58.
"I expect the STI to continue trading in a tight range (of 2,900-2,950) for the next two weeks. The problem is the earnings season has ended and there's no major economic data we expect in the coming week," said Tey Tze Ming, a market strategist at Saxo Capital Markets.
Genting Malaysia faces down stockholder revolt
Reuters - Wednesday, August 25Send IM Story Print
KUALA LUMPUR, Aug 24 - Genting Malaysiashareholders backed the company's move to acquire the UK casino operations of Genting Singapore in a 340 million pound deal despite a large number of votes against.
Shareholder revolts in Malaysia are rare and 38 percent of the stockholders voting disapproved of the move in the resolution put to Tuesday's extraordinary meeting.
"People wanted assurances over the next three years to come over Genting UK's profitability," said Genting's deputy chairman Mohammed Hanif Omar.
Genting Malaysia stock was down 2.23 percent at 3.07 ringgit at 0914GMT, underperforming a 0.l9 percent rise in the main Kuala Lumpur stock index <.KLSE>.
(Reporting by Fong Min Hun; Writing by David Chance; Editing by Niluksi Koswanage)
KUALA LUMPUR, Aug 24 - Genting Malaysia
Shareholder revolts in Malaysia are rare and 38 percent of the stockholders voting disapproved of the move in the resolution put to Tuesday's extraordinary meeting.
"People wanted assurances over the next three years to come over Genting UK's profitability," said Genting's deputy chairman Mohammed Hanif Omar.
Genting Malaysia stock was down 2.23 percent at 3.07 ringgit at 0914GMT, underperforming a 0.l9 percent rise in the main Kuala Lumpur stock index <.KLSE>.
(Reporting by Fong Min Hun; Writing by David Chance; Editing by Niluksi Koswanage)
Singapore lifts ban on brokers on sale of structured notes
Reuters - 2 hours 27 minutes agoSend IM Story Print
SINGAPORE, Aug 24 - Singapore's central bank lifted a ban on the sale of structured notes for six brokerages on Tuesday after they complied with the regulator's orders.
The ban was imposed last year after a probe into the sale and marketing of the derivatives linked to failed Wall Street bank Lehman Brothers.
The brokerages are CIMB Securities Pte Ltd, DMG & Partners Securities Pte Ltd, Kim Eng Securities Pte Ltd, OCBC Securities Pte Ltd, Phillip Securities Pte Ltd and UOB Kay Hian Pte Ltd, the Monetary Authority of Singapore said in a statement.
The central bank said the six financial institutions have publicly pledged to implement various measures to ensure these products are fairly marketed and sold to retail investors. "These include stepping up training and supervision of their staff and enhancing the policies and procedures on their sales and advisory process, it said.
Thousands of Singapore investors lost money in 2008 after they bought risky derivatives linked to the collapsed U.S. investment bank that had been marketed as relatively safe alternatives to fixed deposits, sparking several protests in the tightly controlled city-state. [ID:nSIN22393]
Under MAS' directions, the financial institutions were required to appoint an external person to review their action plan and report on its implementation.
SINGAPORE, Aug 24 - Singapore's central bank lifted a ban on the sale of structured notes for six brokerages on Tuesday after they complied with the regulator's orders.
The ban was imposed last year after a probe into the sale and marketing of the derivatives linked to failed Wall Street bank Lehman Brothers.
The brokerages are CIMB Securities Pte Ltd, DMG & Partners Securities Pte Ltd, Kim Eng Securities Pte Ltd, OCBC Securities Pte Ltd, Phillip Securities Pte Ltd and UOB Kay Hian Pte Ltd, the Monetary Authority of Singapore said in a statement.
The central bank said the six financial institutions have publicly pledged to implement various measures to ensure these products are fairly marketed and sold to retail investors. "These include stepping up training and supervision of their staff and enhancing the policies and procedures on their sales and advisory process, it said.
Thousands of Singapore investors lost money in 2008 after they bought risky derivatives linked to the collapsed U.S. investment bank that had been marketed as relatively safe alternatives to fixed deposits, sparking several protests in the tightly controlled city-state. [ID:nSIN22393]
Under MAS' directions, the financial institutions were required to appoint an external person to review their action plan and report on its implementation.
OCBC'S STOCK COMMENT: Wilmar International
OCBC'S STOCK COMMENT: Wilmar International expands into the sugar business by acquiring a sugar refinery in Indonesia and a sugar trading company in Singapore. Asia Pac sugar consumption to see 6% growth over the next few years with demand outstripping supply. Still early days before meaningful contributions from its sugar business, we hold off adjusting our estimates. Our S$7.25 fair value and BUY rating maintained.
Catch Money Mind this Sunday (Aug 29)
Catch Money Mind this Sunday (Aug 29) as we go on the trail of some of the world's greatest investors - many of whom owe their success to just one man - Benjamin Graham. But who is he? And what is his magic money-making formula?
European Stocks, U.S. Futures Retreat; Rio Tinto, CRH Fall
Stocks dropped for a fourth day, U.S. futures slipped and commodities fell while the yen strengthened to a 15-year high against the dollar on concern the economic recovery is dissipating. Government bonds rallied.
The Stoxx Europe 600 Index declined 1.3 percent at 10:25 a.m. in London, while Japan’s Nikkei 225 Stock Average entered a bear market. Standard & Poor’s 500 Index futures sank 0.8 percent. The yen appreciated against all of its 16 major peers. German 10-year bonds jumped, widening the yield difference with Irish debt to within nine basis points of its euro-era record. Oil and copper retreated for a fifth day.
Sales of existing U.S. homes probably tumbled in July to the lowest level since March 2009, according to a Bloomberg survey. CRH Plc, the world’s second-largest maker of building materials, forecast lower earnings, citing concern about the U.S. outlook. Slower Asian economic growth will have a “serious negative impact,” Olli Rehn, the European Union’s economic chief, said yesterday in a Bloomberg Television interview.
“Yields down, yen up, risk off,” a team led by Kit Juckes, head of foreign-exchange research at Societe Generale SA in London, wrote today in a report. “Today’s key economic data will come in the form of U.S. existing home sales, and the only straw anyone could snatch at is that no-one has any hope of good news. Equities are vulnerable today.”
CRH, Vedanta, Cairn
The MSCI World Index of stocks in 24 developed nations fell 0.6 percent. Construction and materials companies led declines by all 19 industries on Europe’s Stoxx 600, while more than 16 shares dropped for every one that gained. CRH slumped 15 percent, the biggest intraday drop since 2002. Vedanta Resources Plc tumbled 5.7 percent to a 10-month low. Cairn Energy Plc sank 1.4 percent after its first well off Greenland found natural gas rather than crude oil. WPP Plc, the world’s largest advertising company, lost 3 percent after profit missed estimates.
Rio Tinto Group slipped 2.8 percent after the Globe and Mail reported that the world’s third-largest mining company may be considering a bid for Potash Corp. of Saskatchewan Inc. together with a Chinese partner to rival a $40 billion proposal by BHP Billiton Ltd. Dell Inc. fell 1.1 percent in Germany as a person close to the matter said the company may raise its bid for 3Par Inc. after Hewlett-Packard Co. offered to buy the maker of data-center equipment for about $1.6 billion, 33 percent higher than Dell’s offer.
Bear Markets
The MSCI Asia Pacific Index sank 0.8 percent as Japan’s Nikkei 225 fell to its lowest close since May 1, 2009. The gauge has fallen 21 percent since reaching an 18-month high on April 5, a drop that signifies a bear market to some analysts. Vietnam’s VN Index tumbled 3 percent, taking its drop since May 6 to 21 percent.
The decline in U.S. futures indicated the S&P 500 may drop for a fourth day. Purchases of previously owned U.S. homes plunged 13.4 percent from June to a 4.65 million annual rate, a third decline in a row, according to the median of 74 forecasts in a Bloomberg News survey. The report from the National Association of Realtors is due at 10 a.m. in Washington.
The yield spread between Irish and German 10-year government debt widened two basis points to 307 basis points, near the level set before the European Union and the International Monetary Fund set up a 750 billion euro ($947 billion) fund to protect the single currency on May 8. The Greek-German spread gained five basis points to 867 basis points, and the Portuguese-German spread increased nine basis points to 306 basis points.
Treasuries, Bunds
Treasuries and German government bonds rose, with the yield on 10- and 30-year bunds falling to record lows. U.S. 10-year yields fell five basis points to 2.55 percent, within one basis point of the least since March 2009. German 10-year yields fell four basis points to 2.24 percent, while 30-year yields also dropped four basis points, to 2.87 percent. U.S. two-year note yields were within one basis point of a record low before the sale $37 billion of the securities.
Europe is at risk of going into a so-called “double-dip” recession, as governments cut spending to narrow their fiscal deficits, Nobel Prize-winning economist Joseph Stiglitz said in an interview with Dublin-based RTE Radio today.
The pound fell to its weakest level in almost a month against the dollar after Bank of England policy maker Martin Weale said the U.K. economy may slip back into a recession. The British currency depreciated 0.6 percent to $1.5412 and weakened 0.5 percent to 82 pence per euro.
Yen, Dollar
The yen appreciated 0.8 percent to 84.45 per dollar, the strongest since July 1995. It jumped 1.6 percent against the Korean won. The dollar climbed against all its major peers except the yen, while the euro fell 0.2 percent to its lowest against the U.S. currency since July 13.
Industrial metals declined for a fifth day, led by a 2 percent drop in nickel prices on the London Metal Exchange. Inventories of nickel, copper, lead and zinc all increased in warehouses monitored by the LME, signaling slowing demand for the metals. Oil declined 0.9 percent to $72.43 a barrel in New York as analysts estimated that U.S. inventories of crude rose last week.
Raw-materials stocks led a 1 percent drop in the MSCI Emerging Markets Index, the biggest decline in nine days. The Philippine Stock Exchange Index sank 2.3 percent, the most in 11 weeks, and the peso fell 1 percent against the dollar after at least eight tourists from Hong Kong were killed by gunfire yesterday in a bus siege in Manila.
Hungary’s forint dropped to a three-week low against the euro after the central bank raised its inflation forecast and lowered its growth estimates for the next two years. South Africa’s rand slumped 0.7 percent versus the dollar before a report today that may show economic growth slowed in the second quarter.
To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net
The Stoxx Europe 600 Index declined 1.3 percent at 10:25 a.m. in London, while Japan’s Nikkei 225 Stock Average entered a bear market. Standard & Poor’s 500 Index futures sank 0.8 percent. The yen appreciated against all of its 16 major peers. German 10-year bonds jumped, widening the yield difference with Irish debt to within nine basis points of its euro-era record. Oil and copper retreated for a fifth day.
Sales of existing U.S. homes probably tumbled in July to the lowest level since March 2009, according to a Bloomberg survey. CRH Plc, the world’s second-largest maker of building materials, forecast lower earnings, citing concern about the U.S. outlook. Slower Asian economic growth will have a “serious negative impact,” Olli Rehn, the European Union’s economic chief, said yesterday in a Bloomberg Television interview.
“Yields down, yen up, risk off,” a team led by Kit Juckes, head of foreign-exchange research at Societe Generale SA in London, wrote today in a report. “Today’s key economic data will come in the form of U.S. existing home sales, and the only straw anyone could snatch at is that no-one has any hope of good news. Equities are vulnerable today.”
CRH, Vedanta, Cairn
The MSCI World Index of stocks in 24 developed nations fell 0.6 percent. Construction and materials companies led declines by all 19 industries on Europe’s Stoxx 600, while more than 16 shares dropped for every one that gained. CRH slumped 15 percent, the biggest intraday drop since 2002. Vedanta Resources Plc tumbled 5.7 percent to a 10-month low. Cairn Energy Plc sank 1.4 percent after its first well off Greenland found natural gas rather than crude oil. WPP Plc, the world’s largest advertising company, lost 3 percent after profit missed estimates.
Rio Tinto Group slipped 2.8 percent after the Globe and Mail reported that the world’s third-largest mining company may be considering a bid for Potash Corp. of Saskatchewan Inc. together with a Chinese partner to rival a $40 billion proposal by BHP Billiton Ltd. Dell Inc. fell 1.1 percent in Germany as a person close to the matter said the company may raise its bid for 3Par Inc. after Hewlett-Packard Co. offered to buy the maker of data-center equipment for about $1.6 billion, 33 percent higher than Dell’s offer.
Bear Markets
The MSCI Asia Pacific Index sank 0.8 percent as Japan’s Nikkei 225 fell to its lowest close since May 1, 2009. The gauge has fallen 21 percent since reaching an 18-month high on April 5, a drop that signifies a bear market to some analysts. Vietnam’s VN Index tumbled 3 percent, taking its drop since May 6 to 21 percent.
The decline in U.S. futures indicated the S&P 500 may drop for a fourth day. Purchases of previously owned U.S. homes plunged 13.4 percent from June to a 4.65 million annual rate, a third decline in a row, according to the median of 74 forecasts in a Bloomberg News survey. The report from the National Association of Realtors is due at 10 a.m. in Washington.
The yield spread between Irish and German 10-year government debt widened two basis points to 307 basis points, near the level set before the European Union and the International Monetary Fund set up a 750 billion euro ($947 billion) fund to protect the single currency on May 8. The Greek-German spread gained five basis points to 867 basis points, and the Portuguese-German spread increased nine basis points to 306 basis points.
Treasuries, Bunds
Treasuries and German government bonds rose, with the yield on 10- and 30-year bunds falling to record lows. U.S. 10-year yields fell five basis points to 2.55 percent, within one basis point of the least since March 2009. German 10-year yields fell four basis points to 2.24 percent, while 30-year yields also dropped four basis points, to 2.87 percent. U.S. two-year note yields were within one basis point of a record low before the sale $37 billion of the securities.
Europe is at risk of going into a so-called “double-dip” recession, as governments cut spending to narrow their fiscal deficits, Nobel Prize-winning economist Joseph Stiglitz said in an interview with Dublin-based RTE Radio today.
The pound fell to its weakest level in almost a month against the dollar after Bank of England policy maker Martin Weale said the U.K. economy may slip back into a recession. The British currency depreciated 0.6 percent to $1.5412 and weakened 0.5 percent to 82 pence per euro.
Yen, Dollar
The yen appreciated 0.8 percent to 84.45 per dollar, the strongest since July 1995. It jumped 1.6 percent against the Korean won. The dollar climbed against all its major peers except the yen, while the euro fell 0.2 percent to its lowest against the U.S. currency since July 13.
Industrial metals declined for a fifth day, led by a 2 percent drop in nickel prices on the London Metal Exchange. Inventories of nickel, copper, lead and zinc all increased in warehouses monitored by the LME, signaling slowing demand for the metals. Oil declined 0.9 percent to $72.43 a barrel in New York as analysts estimated that U.S. inventories of crude rose last week.
Raw-materials stocks led a 1 percent drop in the MSCI Emerging Markets Index, the biggest decline in nine days. The Philippine Stock Exchange Index sank 2.3 percent, the most in 11 weeks, and the peso fell 1 percent against the dollar after at least eight tourists from Hong Kong were killed by gunfire yesterday in a bus siege in Manila.
Hungary’s forint dropped to a three-week low against the euro after the central bank raised its inflation forecast and lowered its growth estimates for the next two years. South Africa’s rand slumped 0.7 percent versus the dollar before a report today that may show economic growth slowed in the second quarter.
To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net
Asia Slowdown to Have `Serious Negative Impact' on Europe, EU's Rehn Says
By Sara Eisen and Meera Louis - Aug 24, 2010 3:12 PM GMT+0800
Business ExchangeTwitterDeliciousDiggFacebookLinkedInNewsvinePropellerYahoo! BuzzPrint Slower economic growth in China, India or other Asian economies would have a “serious negative impact” on Europe’s growth, the European Union’s economic chief said.
Olli Rehn, the EU commissioner for economic and monetary affairs, said yesterday in a Bloomberg Television interview that a slowdown in the U.S. recovery and turmoil in the sovereign debt markets also could cause concern in Europe.
Strengthening global growth helped Europe’s economy show the fastest expansion in four years in the second quarter after the Greek budget crisis earlier damped confidence in the euro currency and forced governments to step up deficit-cutting measures. Euro-area growth is likely to decelerate in the second half of the year as signs of a slowdown in the U.S. and China dim export prospects.
In the U.S., the world’s biggest economy, the Commerce Department may revise lower its second-quarter growth rate to the slowest since the recovery began, according to the median forecast of economists in a Bloomberg News survey. China’s expansion eased to 10.3 percent in the second quarter and industrial production cooled more than forecast in June, data showed last month, signaling a deeper second-half slowdown.
“Any slowdown in Asia, in the emerging economies of Asia, China, India and others, would have a serious negative impact on economic growth in Europe,” Rehn said in the interview in New York.
Growth Prospects
Asian stocks dropped today and European shares opened lower on concern the global recovery is faltering. The MSCI Asia Pacific Index fell 0.7 percent as of 3 p.m. in Tokyo, and the Dow Jones Stoxx 600 Index declined 1 percent at 8:05 a.m. in London.
John Lipsky, the International Monetary Fund’s first deputy managing director, said on July 27 that the global recovery is likely to be “moderate” as renewed strains in financial markets pose risks to growth prospects.
While economic recovery is “under way” in Europe, Rehn said “it is essential that countries like Greece, Portugal and also Spain address their problems of competitiveness.” Even as gross domestic product in Germany jumped 2.2 percent in the second quarter, Spain’s economy grew just 0.2 percent and Greece, which was forced to seek an EU-led bailout in May, experienced a 1.5 percent contraction.
Greece
The EU said last week that Greece is ahead of schedule in meeting its deficit-cutting commitments under the 110 billion- euro ($139 billion) rescue package, putting the country on track to secure the next loan installment. Greek Prime Minister George Papandreou has cut wages and pensions and increased taxes to qualify for the loans, granted to stave off a default.
Greece’s budget cuts will convince investors that concerns about a debt restructuring are “unfounded,” Rehn wrote in an article published today in the Wall Street Journal.
“We are seeing signs of a gradual stabilization in market sentiment toward Greece,” Rehn wrote. “I am confident that risk perceptions will ease as the adjustment moves forward, which should lay the ground for an eventual orderly return to market access.”
To contact the reporters on this story: Sara Eisen in New York at seisen@bloomberg.net; Meera Louis in Brussels at mlouis1@bloomberg.net.
Business ExchangeTwitterDeliciousDiggFacebookLinkedInNewsvinePropellerYahoo! BuzzPrint Slower economic growth in China, India or other Asian economies would have a “serious negative impact” on Europe’s growth, the European Union’s economic chief said.
Olli Rehn, the EU commissioner for economic and monetary affairs, said yesterday in a Bloomberg Television interview that a slowdown in the U.S. recovery and turmoil in the sovereign debt markets also could cause concern in Europe.
Strengthening global growth helped Europe’s economy show the fastest expansion in four years in the second quarter after the Greek budget crisis earlier damped confidence in the euro currency and forced governments to step up deficit-cutting measures. Euro-area growth is likely to decelerate in the second half of the year as signs of a slowdown in the U.S. and China dim export prospects.
In the U.S., the world’s biggest economy, the Commerce Department may revise lower its second-quarter growth rate to the slowest since the recovery began, according to the median forecast of economists in a Bloomberg News survey. China’s expansion eased to 10.3 percent in the second quarter and industrial production cooled more than forecast in June, data showed last month, signaling a deeper second-half slowdown.
“Any slowdown in Asia, in the emerging economies of Asia, China, India and others, would have a serious negative impact on economic growth in Europe,” Rehn said in the interview in New York.
Growth Prospects
Asian stocks dropped today and European shares opened lower on concern the global recovery is faltering. The MSCI Asia Pacific Index fell 0.7 percent as of 3 p.m. in Tokyo, and the Dow Jones Stoxx 600 Index declined 1 percent at 8:05 a.m. in London.
John Lipsky, the International Monetary Fund’s first deputy managing director, said on July 27 that the global recovery is likely to be “moderate” as renewed strains in financial markets pose risks to growth prospects.
While economic recovery is “under way” in Europe, Rehn said “it is essential that countries like Greece, Portugal and also Spain address their problems of competitiveness.” Even as gross domestic product in Germany jumped 2.2 percent in the second quarter, Spain’s economy grew just 0.2 percent and Greece, which was forced to seek an EU-led bailout in May, experienced a 1.5 percent contraction.
Greece
The EU said last week that Greece is ahead of schedule in meeting its deficit-cutting commitments under the 110 billion- euro ($139 billion) rescue package, putting the country on track to secure the next loan installment. Greek Prime Minister George Papandreou has cut wages and pensions and increased taxes to qualify for the loans, granted to stave off a default.
Greece’s budget cuts will convince investors that concerns about a debt restructuring are “unfounded,” Rehn wrote in an article published today in the Wall Street Journal.
“We are seeing signs of a gradual stabilization in market sentiment toward Greece,” Rehn wrote. “I am confident that risk perceptions will ease as the adjustment moves forward, which should lay the ground for an eventual orderly return to market access.”
To contact the reporters on this story: Sara Eisen in New York at seisen@bloomberg.net; Meera Louis in Brussels at mlouis1@bloomberg.net.
Franklin Templeton says M&A cycle has just begun
Written by Thomson Reuters
Tuesday, 24 August 2010 16:22
Franklin Templeton expects mergers and acquisitions at US companies, especially in the technology sector, to accelerate, as large firms are seeking fast growth, are bulging with cash and valuations are still cheap.
“We are in that early stages of what we see is an M&A cycle,” Grant Bowers, vice president and portfolio manager, who helps manage the US$932 million ($1.3 billion) Franklin US Opportunities fund, told Reuters in an interview.
Tuesday, 24 August 2010 16:22
Franklin Templeton expects mergers and acquisitions at US companies, especially in the technology sector, to accelerate, as large firms are seeking fast growth, are bulging with cash and valuations are still cheap.
“We are in that early stages of what we see is an M&A cycle,” Grant Bowers, vice president and portfolio manager, who helps manage the US$932 million ($1.3 billion) Franklin US Opportunities fund, told Reuters in an interview.
Olam increases offer for NZ farming systems by 27%
Written by Bloomberg
Tuesday, 24 August 2010 10:06
Olam International, a Singapore-based commodity producer, raised its takeover offer 27% after NZ Farming Systems Uruguaysaid the first bid was too low. Shares rose 13%.
Olam increased its bid to 70 New Zealand cents a share from 55 cents, valuing NZ Farming at NZ$171 million ($164.2 million), according to a filing with the New Zealand stock exchange. The new offer beats a 60 cents-a-share bid plan announced last week by Union Agriculture Corp., a Uruguayan landowner.
Tuesday, 24 August 2010 10:06
Olam International, a Singapore-based commodity producer, raised its takeover offer 27% after NZ Farming Systems Uruguaysaid the first bid was too low. Shares rose 13%.
Olam increased its bid to 70 New Zealand cents a share from 55 cents, valuing NZ Farming at NZ$171 million ($164.2 million), according to a filing with the New Zealand stock exchange. The new offer beats a 60 cents-a-share bid plan announced last week by Union Agriculture Corp., a Uruguayan landowner.
Stocks Fluctuate as Economy Concerns Offset Takeover Optimism - Bloomberg
Stocks fluctuated, erasing earlier gains, as speculation the economy may slip into another recession offset investor optimism amid more than $1 trillion in takeovers this year. The yen rose to a seven-week high against the euro.
Traders edgy over economy - The Business Times
Published August 23, 2010
WALL STREET INSIGHT
Traders edgy over economy
Mega mergers fail to inspire as jobs, manufacturing data sway wary market
By ANDREW MARKS
NEW YORK CORRESPONDENT
THE summer doldrums are firmly in place with what feels like half of Wall Street away on vacation but there is no mistaking the nervous tension pervading the stock market's psychology as August draws to a close.
Three straight days of advances early in the week produced hopes for a summer rally that might provide investors with some positive momentum, and a breakthrough of the range-bound trading.
But those hopes sagged in the face of another round of discouraging news on the employment front, and the nascent rally quickly gave way to a sell-off that has traders bracing themselves for a stressful week.
'It's hard to believe that there's going to be much meaningful action this time of year, when so many people are away and market volume is so low, but I've got the feeling from the jumpy way the market reacted to the weekly jobless claims data on Thursday that the market is pushing to the edge of a significant negative move,' said Mike Kennedy a money manager at Case Asset Advisers after last Friday's closing bell.
WALL STREET INSIGHT
Traders edgy over economy
Mega mergers fail to inspire as jobs, manufacturing data sway wary market
By ANDREW MARKS
NEW YORK CORRESPONDENT
THE summer doldrums are firmly in place with what feels like half of Wall Street away on vacation but there is no mistaking the nervous tension pervading the stock market's psychology as August draws to a close.
Three straight days of advances early in the week produced hopes for a summer rally that might provide investors with some positive momentum, and a breakthrough of the range-bound trading.
But those hopes sagged in the face of another round of discouraging news on the employment front, and the nascent rally quickly gave way to a sell-off that has traders bracing themselves for a stressful week.
'It's hard to believe that there's going to be much meaningful action this time of year, when so many people are away and market volume is so low, but I've got the feeling from the jumpy way the market reacted to the weekly jobless claims data on Thursday that the market is pushing to the edge of a significant negative move,' said Mike Kennedy a money manager at Case Asset Advisers after last Friday's closing bell.
Commodities still buoyant - The Business Times
Executive Money
Published August 18, 2010
Commodities still buoyant
Thanks to rising demand and growth in the emerging markets, reports GENEVIEVE CUA
COMMODITY investments hit a record US$300 billion in assets under management in July, but will the party continue?
Barclays Capital, in its August issue of The Commodity Investor, believes that strong medium term demand still underpins the asset class, thanks to growth in the emerging markets.
It says, however, that growing uncertainty over the economic outlook has made the choice of investment strategy 'a much more complicated task' than a few months ago. 'A deterioration in growth prospects is perhaps reducing some of the upside in oil and industrial metal markets. However, there would need to be the prospect of some very large shifts in the economic landscape before we could be persuaded that downside risks to prices are very large in all but a few markets,' it said.
Barclays says big swings in sentiment have obscured a steady improvement in demand for most commodities. 'So far this year, global demand has surprised to the upside across regions for both oil and other commodities, and that process has further to run, in our view.'
Recently Goldman Sachs reiterated its 'overweight' call on commodities, even though it pared its 12-month forecast for the GSCI Enhanced Total Return Index to 19 per cent from 21 per cent. Commodities have suffered yet another bout of volatility, no thanks to renewed concerns over whether a double-dip recession was imminent.
Goldman is expecting prices to be choppy, but it also believes that rising demand in the emerging markets is likely to keep the supply balance tight.
Barclays' paper addresses two top investor concerns - the sustainability of demand and the close correlation between commodities and other risk assets. The latter has intensified debate over whether commodities qualify as an asset class.
Barclays is forecasting an 'all-time high' in global demand this year, in markets ranging from crude oil, aluminium, copper, corn and soybean. 'The strength of emerging market demand was a key factor in the much-quicker-than-expected V-shaped recovery in demand experienced in many commodity markets and suggests that this component of global consumption has now reached critical mass.'
While demand slumped in mature economies throughy 2009, demand in emerging markets 'barely missed a beat through the credit crisis', it said. Non-OECD oil demand was negative for only one quarter in 2009. Chinese copper demand turned negative in 2008 and early 2009, but has since recovered to hit a high last year, and is now running past that high.
Barclays expects the key drivers of commodity demand to be China, India, the Middle East and Brazil.
On commodities' role in a portfolio, Barclays believes it is premature to draw conclusions on permanent changes in asset class behaviour based on the last couple of years. It points out that commodities did provide diversification benefits in the early stages of the credit crisis.
Between Q4 2007when banks began to reveal the scale of their subprime mortgage exposures, and the second half of 2008, commodity returns based on the DJ-UBS index were 33 per cent, compared with the S&P500's minus 15 per cent. Commodities began to cave in the third quarter of 2008 along with other asset classes, as markets began to price in massive dislocations.
'The strong link between commodities and other asset classes is neither surprising nor new,' it said, citing other crises such as the Gulf war and dot com bubble. 'In each of the cases, commodities went through a period where they were strongly linked with trends in other markets, but subsequently reasserted their independence.'
Published August 18, 2010
Commodities still buoyant
Thanks to rising demand and growth in the emerging markets, reports GENEVIEVE CUA
COMMODITY investments hit a record US$300 billion in assets under management in July, but will the party continue?
Barclays Capital, in its August issue of The Commodity Investor, believes that strong medium term demand still underpins the asset class, thanks to growth in the emerging markets.
It says, however, that growing uncertainty over the economic outlook has made the choice of investment strategy 'a much more complicated task' than a few months ago. 'A deterioration in growth prospects is perhaps reducing some of the upside in oil and industrial metal markets. However, there would need to be the prospect of some very large shifts in the economic landscape before we could be persuaded that downside risks to prices are very large in all but a few markets,' it said.
Barclays says big swings in sentiment have obscured a steady improvement in demand for most commodities. 'So far this year, global demand has surprised to the upside across regions for both oil and other commodities, and that process has further to run, in our view.'
Recently Goldman Sachs reiterated its 'overweight' call on commodities, even though it pared its 12-month forecast for the GSCI Enhanced Total Return Index to 19 per cent from 21 per cent. Commodities have suffered yet another bout of volatility, no thanks to renewed concerns over whether a double-dip recession was imminent.
Goldman is expecting prices to be choppy, but it also believes that rising demand in the emerging markets is likely to keep the supply balance tight.
Barclays' paper addresses two top investor concerns - the sustainability of demand and the close correlation between commodities and other risk assets. The latter has intensified debate over whether commodities qualify as an asset class.
Barclays is forecasting an 'all-time high' in global demand this year, in markets ranging from crude oil, aluminium, copper, corn and soybean. 'The strength of emerging market demand was a key factor in the much-quicker-than-expected V-shaped recovery in demand experienced in many commodity markets and suggests that this component of global consumption has now reached critical mass.'
While demand slumped in mature economies throughy 2009, demand in emerging markets 'barely missed a beat through the credit crisis', it said. Non-OECD oil demand was negative for only one quarter in 2009. Chinese copper demand turned negative in 2008 and early 2009, but has since recovered to hit a high last year, and is now running past that high.
Barclays expects the key drivers of commodity demand to be China, India, the Middle East and Brazil.
On commodities' role in a portfolio, Barclays believes it is premature to draw conclusions on permanent changes in asset class behaviour based on the last couple of years. It points out that commodities did provide diversification benefits in the early stages of the credit crisis.
Between Q4 2007when banks began to reveal the scale of their subprime mortgage exposures, and the second half of 2008, commodity returns based on the DJ-UBS index were 33 per cent, compared with the S&P500's minus 15 per cent. Commodities began to cave in the third quarter of 2008 along with other asset classes, as markets began to price in massive dislocations.
'The strong link between commodities and other asset classes is neither surprising nor new,' it said, citing other crises such as the Gulf war and dot com bubble. 'In each of the cases, commodities went through a period where they were strongly linked with trends in other markets, but subsequently reasserted their independence.'
S'poreans ill equipped for retirement, survey shows
Mon, Aug 23, 2010, my paper, By Reico Wong
SINGAPOREANS are not savvy enough when it comes to planning their long-term finances and are, thus, generally unprepared for retirement, a study by HSBC has revealed.
The HSBC Future of Retirement (FoR) survey, which polled 15,000 respondents across 15 markets and about 1,000 Singaporeans aged 30-70, found that a staggering 91 per cent of locals do not have any idea what their retirement income will look like.
HSBC said that this feeling of unpreparedness among Singaporeans was in part due to a tendency to focus more strongly on the short term.
They had limited understanding about their funds for the long haul, as reflected in the 23 per cent who indicated that they are confident about their long-term finances.
This is despite 26 per cent viewing retirement as a strong motivation to save. About 40 per cent of the locals aged 30 to 50 years said they were willing to save between $500 and $800 each month for retirement.
"This shows that Singaporeans are aware of the need for retirement planning but may not have taken action to prepare for it, perhaps because they don't know where to start," said Mr Walter de Oude, chief executive of HSBC Insurance.
He added that Singaporeans should be proactive in seeking the aid of financial advisers, even if they are saving regularly.
"They'll be able to better identify gaps in retirement planning and ensure that they are on track to achieve the retirement lifestyle they want," he said.
On the back of the FoR survey, HSBC will announce the launch of its new retirement plan, SecureIncome, today.
Targeted at individuals aged 40 to 65 years old, the plan is designed to provide a monthly income or lump-sum savings for one's future needs.
Customers are required to save at least $200 per month, and can choose to accumulate their savings over 10 years, or to age 55. One to 1.5 per cent yield is guaranteed per annum.
The policy can be extended on expiry, and customers can either leave the funds with the insurer to earn interest once again, or receive a monthly income for the next 10 years, together with a non-guaranteed monthly dividend.
If they choose the latter, they also have the option of leaving the income payments with the insurer. They will then receive additional non-guaranteed monthly dividends and interest.
Commenting on the new product, Mr de Oude said: "SecureIncome will make retirement planning less daunting, given its simple design and flexibility."
The policy allows for the deferment of premiums for a year, in the event of unemployment.
It also has a terminal-illness benefit that pays the death benefit in advance.
HSBC has, in recent years, increasingly boosted its suite of retirement solutions.
Past products from the group include Growth Manager, an investment- linked plan that facilitates regular investment and asset accumulation; and GoalSaver, which targets those younger and healthier but want slightly higher insurance coverage.
SINGAPOREANS are not savvy enough when it comes to planning their long-term finances and are, thus, generally unprepared for retirement, a study by HSBC has revealed.
The HSBC Future of Retirement (FoR) survey, which polled 15,000 respondents across 15 markets and about 1,000 Singaporeans aged 30-70, found that a staggering 91 per cent of locals do not have any idea what their retirement income will look like.
HSBC said that this feeling of unpreparedness among Singaporeans was in part due to a tendency to focus more strongly on the short term.
They had limited understanding about their funds for the long haul, as reflected in the 23 per cent who indicated that they are confident about their long-term finances.
This is despite 26 per cent viewing retirement as a strong motivation to save. About 40 per cent of the locals aged 30 to 50 years said they were willing to save between $500 and $800 each month for retirement.
"This shows that Singaporeans are aware of the need for retirement planning but may not have taken action to prepare for it, perhaps because they don't know where to start," said Mr Walter de Oude, chief executive of HSBC Insurance.
He added that Singaporeans should be proactive in seeking the aid of financial advisers, even if they are saving regularly.
"They'll be able to better identify gaps in retirement planning and ensure that they are on track to achieve the retirement lifestyle they want," he said.
On the back of the FoR survey, HSBC will announce the launch of its new retirement plan, SecureIncome, today.
Targeted at individuals aged 40 to 65 years old, the plan is designed to provide a monthly income or lump-sum savings for one's future needs.
Customers are required to save at least $200 per month, and can choose to accumulate their savings over 10 years, or to age 55. One to 1.5 per cent yield is guaranteed per annum.
The policy can be extended on expiry, and customers can either leave the funds with the insurer to earn interest once again, or receive a monthly income for the next 10 years, together with a non-guaranteed monthly dividend.
If they choose the latter, they also have the option of leaving the income payments with the insurer. They will then receive additional non-guaranteed monthly dividends and interest.
Commenting on the new product, Mr de Oude said: "SecureIncome will make retirement planning less daunting, given its simple design and flexibility."
The policy allows for the deferment of premiums for a year, in the event of unemployment.
It also has a terminal-illness benefit that pays the death benefit in advance.
HSBC has, in recent years, increasingly boosted its suite of retirement solutions.
Past products from the group include Growth Manager, an investment- linked plan that facilitates regular investment and asset accumulation; and GoalSaver, which targets those younger and healthier but want slightly higher insurance coverage.
Golden Agri cut to Neutral by OSK; $0.50 target
OSK has downgraded Golden Agri-Resources (E5H.SG) to Neutral from Trading Buy, citing uncertainty stemming from Greenpeace’s allegations of plantation group engaging in environmentally harmful practices, giving false information to investors, says Dow Jones.
OSK cuts target price to $0.50 from $0.68, based on 11x FY11 earnings vs 15x previously: “The company’s chairman has previously admitted that in an organization as large as this, there are bound to be certain areas of weaknesses, which led to the company strengthening its standard operating procedures. Still, the uncertainty created by the possibility of being investigated by the authorities could weaken the stock price considerably.”
Stock off 1.8% at $0.545.
OSK cuts target price to $0.50 from $0.68, based on 11x FY11 earnings vs 15x previously: “The company’s chairman has previously admitted that in an organization as large as this, there are bound to be certain areas of weaknesses, which led to the company strengthening its standard operating procedures. Still, the uncertainty created by the possibility of being investigated by the authorities could weaken the stock price considerably.”
Stock off 1.8% at $0.545.
Funds may offload more: AmFraser
Initial interest in Singapore shares dissipates by midday as investors opt to cash out, await better entry levels, according to Dow Jones.
Market breadth negative at just over 1.5 decliners for every gainer vs slight positive bias in early trade. STI off 0.5% 2,921.84, with support still at 2,900.
AmFraser Securities strategist Najeeb Jarhom expects more downside in near term: “With no bullish impetus foreseen in coming weeks till the next reporting season in late October to November, fund managers may either leave their portfolios untouched or more likely lighten in anticipation of unforeseen events.”
Notable decliners among STI components include Golden Agri-Resources (E5H.SG), off 1.8% at $0.545, Jardine C&C (C07.SG), off 1.9% at $32.36, Noble Group (N21.SG), off 1.8% at $1.60, Singapore Airlines (C6L.SG), off 1.2% at $15.42. Overall market volume thin at 628.3 million shares worth $544.7 million.
Market breadth negative at just over 1.5 decliners for every gainer vs slight positive bias in early trade. STI off 0.5% 2,921.84, with support still at 2,900.
AmFraser Securities strategist Najeeb Jarhom expects more downside in near term: “With no bullish impetus foreseen in coming weeks till the next reporting season in late October to November, fund managers may either leave their portfolios untouched or more likely lighten in anticipation of unforeseen events.”
Notable decliners among STI components include Golden Agri-Resources (E5H.SG), off 1.8% at $0.545, Jardine C&C (C07.SG), off 1.9% at $32.36, Noble Group (N21.SG), off 1.8% at $1.60, Singapore Airlines (C6L.SG), off 1.2% at $15.42. Overall market volume thin at 628.3 million shares worth $544.7 million.
SingTel appoints Hui as CEO of International Business
Written by Bloomberg
Monday, 23 August 2010 19:32
Singapore Telecommunications, Southeast Asia’s largest phone operator, appointed Hui Weng Cheong as chief executive officer of international operations to replace Lim Chuan Poh, who is retiring.
Monday, 23 August 2010 19:32
Singapore Telecommunications, Southeast Asia’s largest phone operator, appointed Hui Weng Cheong as chief executive officer of international operations to replace Lim Chuan Poh, who is retiring.
Monday, August 23, 2010
Wilmar buys more sugar assets in Indonesia, S'pore
On Monday 23 August 2010, 8:43 SGT
SINGAPORE, Aug 23 (Reuters) - Wilmar International , the world's No.1 listed palm oil firm, said on Monday it will buy an Indonesian sugar refinery and a Singapore sugar trading firm to complement the development of plantations in Papua.
The company said in a statement that it has agreed to buy Indonesian sugar refiner PT Jawamanis Rafinasi and Singapore-based sugar trading company Windsor & Brook Trading. It did not provide financial details of the acquisitions. [ID:nSNZ7f6x0l] [ID:nSNZ2JnF1N]
Wilamr, Singapore's second largest listed company, said Jawamanis has a daily refining capacity of 1,000 tonnes and is licenced for a throughput of up to 1,600 tonnes per day.
Wilmar, which plans to develop a 200,000 hectare sugar plantation in Indonesia's Papua, said the deals are not expected to have material impact on the company's financial position and is expected to be completed by the fourth quarter of 2010.
In July, Wilmar acquired Australia's Sucrogen, the world's No.5 sugar refiner, from Australian conglomerate CSR for $1.5 billion, the largest deal so far this year in the global sugar industry. [ID:nSGE66302K]
For DEALTALK on Wilmar's sugar expansion, click [ID:nSGE66R00F] (Reporting by Harry Suhartono, editing by Dhara Ranasinghe)
SINGAPORE, Aug 23 (Reuters) - Wilmar International , the world's No.1 listed palm oil firm, said on Monday it will buy an Indonesian sugar refinery and a Singapore sugar trading firm to complement the development of plantations in Papua.
The company said in a statement that it has agreed to buy Indonesian sugar refiner PT Jawamanis Rafinasi and Singapore-based sugar trading company Windsor & Brook Trading. It did not provide financial details of the acquisitions. [ID:nSNZ7f6x0l] [ID:nSNZ2JnF1N]
Wilamr, Singapore's second largest listed company, said Jawamanis has a daily refining capacity of 1,000 tonnes and is licenced for a throughput of up to 1,600 tonnes per day.
Wilmar, which plans to develop a 200,000 hectare sugar plantation in Indonesia's Papua, said the deals are not expected to have material impact on the company's financial position and is expected to be completed by the fourth quarter of 2010.
In July, Wilmar acquired Australia's Sucrogen, the world's No.5 sugar refiner, from Australian conglomerate CSR for $1.5 billion, the largest deal so far this year in the global sugar industry. [ID:nSGE66302K]
For DEALTALK on Wilmar's sugar expansion, click [ID:nSGE66R00F] (Reporting by Harry Suhartono, editing by Dhara Ranasinghe)
KIM ENG'S STOCK TAKE - Money Mind
KIM ENG'S STOCK TAKE: Based on MasterCard’s survey, this year’s Great Singapore Sale drew a total spend of $1.2b, up 28% from last year. Consumer spending is likely to be resilient for the rest of the year, which bodes well for the retail industry. With sponsor CMA looking to acquire between $800m and $1b of assets in 2H10, we reckon CMT may selectively chip in with an equity stake.BUY with target price of $2.23.
DTZ Fast Fact - Money Mind
DTZ Fast Fact: Mainland Chinese are closing in on Indonesians as the 2nd highest non-Singaporean purchasers group for Singapore properties. Malaysians are top.
Mainland Chinese made up 17%, Indonesians 18%, of non-Singaporean buyers in Q2 2010. For non-landed properties, mainland Chinese buyers prefer Districts 15, 16 and 23. For lan...ded, the Chinese buyers showed clear preference for homes in Sentosa Cove.
Mainland Chinese made up 17%, Indonesians 18%, of non-Singaporean buyers in Q2 2010. For non-landed properties, mainland Chinese buyers prefer Districts 15, 16 and 23. For lan...ded, the Chinese buyers showed clear preference for homes in Sentosa Cove.
Friday, August 20, 2010
Fraser and Neave - Nomura
3QFY10 results luncheon - key takeaways
Kirin likely to be invited to the board. F&N believes that Kirin can add value to the group and will be looking to invite the company to its board. F&N respects Kirin’s strong product development capability and its array of products from beer to soft drinks/dairy products across Asia. F&N has already been associated with Kirin distributing its beer and dairy products in South East Asia. Areas that F&N can work with Kirin include Asian teas and coffee.
Plugging the gap from loss of Coke franchise. Management indicated that Coke products form about RM 500m or about 30% of the softdrinks revenues of F&N Holdings Bhd, its Malaysian subsidiary. F&N is confident about replacing the lost sales with the new Red Bull distribution contract (sales of at least RM 120m annually), market share gains in the Singapore market once the territory reverts back to F&N, and export sales. In addition, the group is introducing more product ranges to further segment the market and capture market share. On operating performance of the softdrinks division, F&N commented that the current quarter will likely be strong as Ramadan occurred in this quarter. Although sugar prices have increased with the recent reduction of subsidies in Malaysia, the company did not experience the full impact.
Tapping growth in Indonesia with 100 plus. F&N is excited about the growth potential in Indonesia and has announced that it will launch its Isotonic Drink 100 plus in Indonesia. Although this market segment is still small, it is growing and therefore the opportunity is promising. The group believes that in the longer term, 100 plus can be as successful in Indonesia as in Malaysia where it is the number one soft drink. In the meantime, management believes that 100 plus can replicate its Malaysian success in Singapore sooner.
Dairies seeing higher costs but likely to be passed. The last quarter saw margins from its dairies division impacted by higher milk powder costs. Management believes that the costs increases will inevitably have to be passed on.
Beer is performing well, especially with Indonesian acquisition. The 3Q results show continued strength of its business across Asia with strong growth in Indochina and new contribution from Indonesia. On whether Asia Pacific Breweries (APB SP) would be keen on Fosters, much would depend on valuation. F&N does not believe in paying a premium valuation for mature growth.
Landbanking opportunistically in Singapore. F&N explained that the group has been bidding for land at prices that it is comfortable with. It believes that there is sufficient land supply available and it should therefore not bid too aggressively. It looks to have an inventory of between 1,500 to 2,000 units to keep a healthy pipeline of launches. On its Starhub Centre acquisition, management explained that the redevelopment will comprise 80% residential and 20% commercial. It is looking at ways to integrate the development with Centrepoint Mall so as to provide an “Orchard Road” access to residents. It will take at least 12 months before it is able finalise its plans.
Launching Central Park soon. F&N is looking launch phase 1 of the Central Park project in Sydney soon. About 3,500 people have registered interest in the 623 units put for sale at about A$900 to A$100psf. F&N is working with parties to develop the commercial components.
On restructuring. The group intends to sell Times Publishing but has not initiated any sale process as yet. It is looking to deploy the proceeds from the sale of its glass container business in Malaysia. Otherwise management conceded that M&A in the F&B space is difficult to execute due to valuations and lack of sellers. The group is happy to maintain its conglomerate
Nomura 1 19 August 2010
structure at this stage until such a time the F&B and property units become sizeable enough to require new capital to grow.
Valuation Methodology and Investment Risks: We value F&N on a SOTP valuation methodology - market prices for its listed stakes, Nomura NAV estimates for its property assets, 5x FY10 EV/EBITDA for Times publishing and FNN Foods. Our price target of S$6.55/share is derived after applying a 5% conglomerate discount to our NAV. Risks to price target: Changes to equity market risk premiums, as well as any unexpected improvement/deterioration in the outlook for the economy and physical real estate markets could see the stock trade above or below our SOTP NAV estimate.
Note: Ratings and Price Targets are as of the date of the most recently published report (http://www.nomura.com/research) rather than the date of this email.
Kirin likely to be invited to the board. F&N believes that Kirin can add value to the group and will be looking to invite the company to its board. F&N respects Kirin’s strong product development capability and its array of products from beer to soft drinks/dairy products across Asia. F&N has already been associated with Kirin distributing its beer and dairy products in South East Asia. Areas that F&N can work with Kirin include Asian teas and coffee.
Plugging the gap from loss of Coke franchise. Management indicated that Coke products form about RM 500m or about 30% of the softdrinks revenues of F&N Holdings Bhd, its Malaysian subsidiary. F&N is confident about replacing the lost sales with the new Red Bull distribution contract (sales of at least RM 120m annually), market share gains in the Singapore market once the territory reverts back to F&N, and export sales. In addition, the group is introducing more product ranges to further segment the market and capture market share. On operating performance of the softdrinks division, F&N commented that the current quarter will likely be strong as Ramadan occurred in this quarter. Although sugar prices have increased with the recent reduction of subsidies in Malaysia, the company did not experience the full impact.
Tapping growth in Indonesia with 100 plus. F&N is excited about the growth potential in Indonesia and has announced that it will launch its Isotonic Drink 100 plus in Indonesia. Although this market segment is still small, it is growing and therefore the opportunity is promising. The group believes that in the longer term, 100 plus can be as successful in Indonesia as in Malaysia where it is the number one soft drink. In the meantime, management believes that 100 plus can replicate its Malaysian success in Singapore sooner.
Dairies seeing higher costs but likely to be passed. The last quarter saw margins from its dairies division impacted by higher milk powder costs. Management believes that the costs increases will inevitably have to be passed on.
Beer is performing well, especially with Indonesian acquisition. The 3Q results show continued strength of its business across Asia with strong growth in Indochina and new contribution from Indonesia. On whether Asia Pacific Breweries (APB SP) would be keen on Fosters, much would depend on valuation. F&N does not believe in paying a premium valuation for mature growth.
Landbanking opportunistically in Singapore. F&N explained that the group has been bidding for land at prices that it is comfortable with. It believes that there is sufficient land supply available and it should therefore not bid too aggressively. It looks to have an inventory of between 1,500 to 2,000 units to keep a healthy pipeline of launches. On its Starhub Centre acquisition, management explained that the redevelopment will comprise 80% residential and 20% commercial. It is looking at ways to integrate the development with Centrepoint Mall so as to provide an “Orchard Road” access to residents. It will take at least 12 months before it is able finalise its plans.
Launching Central Park soon. F&N is looking launch phase 1 of the Central Park project in Sydney soon. About 3,500 people have registered interest in the 623 units put for sale at about A$900 to A$100psf. F&N is working with parties to develop the commercial components.
On restructuring. The group intends to sell Times Publishing but has not initiated any sale process as yet. It is looking to deploy the proceeds from the sale of its glass container business in Malaysia. Otherwise management conceded that M&A in the F&B space is difficult to execute due to valuations and lack of sellers. The group is happy to maintain its conglomerate
Nomura 1 19 August 2010
structure at this stage until such a time the F&B and property units become sizeable enough to require new capital to grow.
Valuation Methodology and Investment Risks: We value F&N on a SOTP valuation methodology - market prices for its listed stakes, Nomura NAV estimates for its property assets, 5x FY10 EV/EBITDA for Times publishing and FNN Foods. Our price target of S$6.55/share is derived after applying a 5% conglomerate discount to our NAV. Risks to price target: Changes to equity market risk premiums, as well as any unexpected improvement/deterioration in the outlook for the economy and physical real estate markets could see the stock trade above or below our SOTP NAV estimate.
Note: Ratings and Price Targets are as of the date of the most recently published report (http://www.nomura.com/research) rather than the date of this email.
CapitaLand Ltd - Deutsche Bank
Ascott Residence Trust (ART SP) will acquire 28 assets in Europe (17 in France) and 1 each in SG & Vietnam. The Ascott (100% owned by Capl) will concurrently purchase ART's stake in Ascott Beijing for S$214m and reposition it for future strata sale. The acquisition will be funded by a fully underwritten issuance of 487.5m new units by ART (proceeds of S$561m), additional debt & divestment proceeds subject to unitholders approval.
Developer-sponsor model at work - Macquarie
Event
CapitaLand announced the proposed divestment of 28 serviced residence properties, mainly in Europe, to its 47.7%-owned listed associate Ascott Residence Trust (ART SP, S$1.23, Neutral, TP: S$1.20) for S$970m. This is consistent with its strategy to divest stabilised assets to its listed REIT
vehicles. Net cash proceeds of S$332m will be used to capture new investment opportunities. Outperform maintained.impact
Transaction highlights. The EBITDA yield of the assets to be divested is circa 5.7% vs ART’s current EBITDA yield of 5.5%. ART will fund via a combination of equity and debt and expects DPU accretion in FY11 of 3.0% to 6.6%, depending on the price of the equity to be raised. CapitaLand will subscribe to ART’s fund-raising to maintain its 47.7% stake.
Acquiring Ascott Beijing from ART. CapitaLand will pay S$214m for this asset with GFA of 64,155 sqm at Rmb23,000/sqm. The group intends toenhance and re-position the asset for future strata-title sale as residential units. Selling prices for new projects in the Chaoyang district are in excess of Rmb40,000/sqm, although the selling price for CapitaLand will have to be adjusted for shorter length of lease left and taxes.
Small net gain at group level but lowers gearing at The Ascott Limited (TAL). CapitaLand will realise a gain of S$52m on completion of the divestment expected by year-end. More importantly, the transaction will lower TAL’s gearing from 60% to 27%, providing this SBU with financial capacity to help reach its target of growing its portfolio from 26,546 units currently to 40,000 units by 2015.
Earnings and target price revision
No change to EPS forecasts and no change to target price.
Price catalyst
12-month price target: S$4.80 based on a Sum of Parts methodology.
Catalyst: Further investments in the retail, residential and serviced apartment sectors over the next six months. Action and recommendation
We believe CapitaLand’s businesses are firing on all cylinders. With a low gearing of 28%, we expect new investments in its key retail, residential and serviced apartment SBUs to help drive RNAV expansion. The shares are trading at a 24% discount to our RNAV of S$5.34. Outperform with potential upside in excess of 20%.
CapitaLand announced the proposed divestment of 28 serviced residence properties, mainly in Europe, to its 47.7%-owned listed associate Ascott Residence Trust (ART SP, S$1.23, Neutral, TP: S$1.20) for S$970m. This is consistent with its strategy to divest stabilised assets to its listed REIT
vehicles. Net cash proceeds of S$332m will be used to capture new investment opportunities. Outperform maintained.impact
Transaction highlights. The EBITDA yield of the assets to be divested is circa 5.7% vs ART’s current EBITDA yield of 5.5%. ART will fund via a combination of equity and debt and expects DPU accretion in FY11 of 3.0% to 6.6%, depending on the price of the equity to be raised. CapitaLand will subscribe to ART’s fund-raising to maintain its 47.7% stake.
Acquiring Ascott Beijing from ART. CapitaLand will pay S$214m for this asset with GFA of 64,155 sqm at Rmb23,000/sqm. The group intends toenhance and re-position the asset for future strata-title sale as residential units. Selling prices for new projects in the Chaoyang district are in excess of Rmb40,000/sqm, although the selling price for CapitaLand will have to be adjusted for shorter length of lease left and taxes.
Small net gain at group level but lowers gearing at The Ascott Limited (TAL). CapitaLand will realise a gain of S$52m on completion of the divestment expected by year-end. More importantly, the transaction will lower TAL’s gearing from 60% to 27%, providing this SBU with financial capacity to help reach its target of growing its portfolio from 26,546 units currently to 40,000 units by 2015.
Earnings and target price revision
No change to EPS forecasts and no change to target price.
Price catalyst
12-month price target: S$4.80 based on a Sum of Parts methodology.
Catalyst: Further investments in the retail, residential and serviced apartment sectors over the next six months. Action and recommendation
We believe CapitaLand’s businesses are firing on all cylinders. With a low gearing of 28%, we expect new investments in its key retail, residential and serviced apartment SBUs to help drive RNAV expansion. The shares are trading at a 24% discount to our RNAV of S$5.34. Outperform with potential upside in excess of 20%.
Banks and conglomerates - Nomura
Stocks for action Banks and conglomerates are reasonably valued and offer EPS growth along with high dividend yields. We include stocks that could rerate on stock-specific drivers over the next two quarters.
Stock Rating Price Price target
OCBC (OCBC SP) BUY 8.65 11.80
Fraser & Neave (FNN SP) BUY 5.59 6.55
Keppel Corp (KEP SP) BUY 8.76 11.00
ST Engineering (STE SP) BUY 3.19 3.90
SATS (SATS SP) BUY 2.77 3.40
Noble Group (NOBL SP) BUY 1.66 2.10
Keppel Land (KPLD SP) BUY 3.84 4.68
Biosensors (BIG SP) BUY 0.80 1.20
Venture Corp (VMS SP) BUY 8.85 11.50
Pricing as of 17 August, 2010; local currency
Stock Rating Price Price target
OCBC (OCBC SP) BUY 8.65 11.80
Fraser & Neave (FNN SP) BUY 5.59 6.55
Keppel Corp (KEP SP) BUY 8.76 11.00
ST Engineering (STE SP) BUY 3.19 3.90
SATS (SATS SP) BUY 2.77 3.40
Noble Group (NOBL SP) BUY 1.66 2.10
Keppel Land (KPLD SP) BUY 3.84 4.68
Biosensors (BIG SP) BUY 0.80 1.20
Venture Corp (VMS SP) BUY 8.85 11.50
Pricing as of 17 August, 2010; local currency
CITIGROUP'S QUICK COMMENT ON CHINA STOCKS - Money Mind
40% beat consensus — 37 Chinese companies have reported 1H10 resultS. 14 beat consensus, spread among financials (PICC, China Minsheng Banking), consumer (ANTA Sports), healthcare (United Lab. Int'l) and internet (Alibaba & Tencent). 17 companies announced results that were in-line with market...
DEUTSCHE BANK'S STOCK COMMENT - Money Mind
Singapore-listed companies delivered firm earnings growth in 2QCY10 but this was largely in line with our expectations. Out of our coverage universe, 36% of the companies delivered better-than-expected results, 38% were in line and 26% below forecasts. This compares to a 50:30:20 split in the previous tw...o quarters.Aggregate earnings were 8% above forecast.
Thursday, August 19, 2010
Singapore's Casinos Just Opened But They're Already Set To Knock-Out Las Vegas
It's been barely five years since Singapore announced that it would develop integrated casino resorts, yet already the island nation has become a serious rival to Las Vegas, with just two major casinos.
Second quarter 2010 winnings put Singapore on track to have a $4 billion casino market on an annualized basis according to the Wall Street Journal. That's just 20% shy of what Las Vegas is expected to do this year, and even Las Vegas is impressed:
WSJ:
"It's just proof that if you build it they will come and in Singapore they built two products that are worthy of that title," says Andy Nazarechuk, Dean of University of Nevada Las Vegas' Singapore campus.
"Las Vegas will continue to attract (Asian visitors) but instead of the player making two or three trips to Las Vegas in the year they may make only one trip and the other two trips may be more closer regionally."
Even the bears expect a substantial market size for Singapore:
Las Vegas-based gambling consultancy Galaviz & Company has relatively conservative forecasts for actual earnings in Singapore of $3.5 billion in 2011 and projects the Las Vegas strip will earn $5.8 billion, a modest improvement on the $5.1 billion expected in 2010.
And the bulls think Singapore could torpedo Las Vegas's market position within just the next few years:
However, some among the investment community believe the Singapore market will approach the sorts of numbers Galaviz expects for the Las Vegas strip, which accounts for about half of the state of Nevada's gaming revenue, by 2012.
Aaron Fischer of CLSA has some of the more bullish forecasts, expecting the combined gaming revenues of both Singapore resorts to generate $5.1 billion in 2011, up from his previous estimate of $3.9 billion. Goldman Sachs also expects the sector could bring in $5 billion in 2011.
Combined with the development of Macau, it seems like Las Vegas's leadership position could be toast over the next decade, even should the U.S. economy rebound well past its past peak. Las Vegas probably needs to roll out some heavy branding initiatives in Asia.
Note however that Steve Wynn, the founder of Wynn Casinos (WYNN), isn't waiting for any magic from the Nevada government. He's planting himself in Asia quite often, even if he's backed off from plans to move his HQ to Asia, realizing that Wynn's long-term success revolves around being a global company, like Hilton. It's not about being stuck in Las Vegas alone.
Thus it's not the U.S. casinos that need to be worried about the rise of Asian casino hubs per se, but more Nevada state. Nevada better move fast, given the ambition and well organized government efforts in Singapore and Macau. Heck, I've never been to Vegas, but I'm already dying to jump into Singapore's new infinity pool...
Now see jaw-dropping pictures of Singapore's casino-skyscraper infinity pool >
Second quarter 2010 winnings put Singapore on track to have a $4 billion casino market on an annualized basis according to the Wall Street Journal. That's just 20% shy of what Las Vegas is expected to do this year, and even Las Vegas is impressed:
WSJ:
"It's just proof that if you build it they will come and in Singapore they built two products that are worthy of that title," says Andy Nazarechuk, Dean of University of Nevada Las Vegas' Singapore campus.
"Las Vegas will continue to attract (Asian visitors) but instead of the player making two or three trips to Las Vegas in the year they may make only one trip and the other two trips may be more closer regionally."
Even the bears expect a substantial market size for Singapore:
Las Vegas-based gambling consultancy Galaviz & Company has relatively conservative forecasts for actual earnings in Singapore of $3.5 billion in 2011 and projects the Las Vegas strip will earn $5.8 billion, a modest improvement on the $5.1 billion expected in 2010.
And the bulls think Singapore could torpedo Las Vegas's market position within just the next few years:
However, some among the investment community believe the Singapore market will approach the sorts of numbers Galaviz expects for the Las Vegas strip, which accounts for about half of the state of Nevada's gaming revenue, by 2012.
Aaron Fischer of CLSA has some of the more bullish forecasts, expecting the combined gaming revenues of both Singapore resorts to generate $5.1 billion in 2011, up from his previous estimate of $3.9 billion. Goldman Sachs also expects the sector could bring in $5 billion in 2011.
Combined with the development of Macau, it seems like Las Vegas's leadership position could be toast over the next decade, even should the U.S. economy rebound well past its past peak. Las Vegas probably needs to roll out some heavy branding initiatives in Asia.
Note however that Steve Wynn, the founder of Wynn Casinos (WYNN), isn't waiting for any magic from the Nevada government. He's planting himself in Asia quite often, even if he's backed off from plans to move his HQ to Asia, realizing that Wynn's long-term success revolves around being a global company, like Hilton. It's not about being stuck in Las Vegas alone.
Thus it's not the U.S. casinos that need to be worried about the rise of Asian casino hubs per se, but more Nevada state. Nevada better move fast, given the ambition and well organized government efforts in Singapore and Macau. Heck, I've never been to Vegas, but I'm already dying to jump into Singapore's new infinity pool...
Now see jaw-dropping pictures of Singapore's casino-skyscraper infinity pool >
SCHRODER'S QUICK COMMENT - Money Mind
SCHRODER'S QUICK COMMENT: in June China became the world's second largest economy with economic output at US$1.337 trillion in the second quarter, compared to US$1.288 trillion for Japan. China's annualised growth in the second quarter was 10.3%, a rate of growth which - if sustained - would make China the world's largest economy, overtaking the US, at some point in the mid-2020s.
Temasek appoints Gregory Curl as president
Temasek Holdings said Gregory Curl will join the Singapore state-owned investment company as president.
CapitaMall Trust said to sell $300m of 4, 7-year notes
Written by Bloomberg
Thursday, 19 August 2010 16:42
CapitaMall Trust sold $300 million of four-year and seven-year bonds, according to a person familiar with the matter.
The $150 million of four-year bonds were priced to yield 2.85% while the $150 million of seven-year bonds were priced to yield 3.55%, the person said, asking not to be identified as details are private.
DBS Group Holdings managed the sale, the person said.
Thursday, 19 August 2010 16:42
CapitaMall Trust sold $300 million of four-year and seven-year bonds, according to a person familiar with the matter.
The $150 million of four-year bonds were priced to yield 2.85% while the $150 million of seven-year bonds were priced to yield 3.55%, the person said, asking not to be identified as details are private.
DBS Group Holdings managed the sale, the person said.
2H10 challenging for Singapore banks: DBS Vickers
Written by The Edge
Thursday, 19 August 2010 12:08
The second-half of the financial year will be a challenging one for Singapore banks with net interest margin still under pressure, loan growth moderating, says DBS Vickers, according to Dow Jones.
With provisions almost at all-time lows, non-interest income will be key factor determining earnings performance. Expects fee income to remain robust in 2H10 given strong capital markets.
Thursday, 19 August 2010 12:08
The second-half of the financial year will be a challenging one for Singapore banks with net interest margin still under pressure, loan growth moderating, says DBS Vickers, according to Dow Jones.
With provisions almost at all-time lows, non-interest income will be key factor determining earnings performance. Expects fee income to remain robust in 2H10 given strong capital markets.
CapitaMall Trust said to plan sale of $300m bonds
Written by Bloomberg
Thursday, 19 August 2010 11:03
CapitaMall Trust plans to sell $300 million of four-year and seven-year bonds, according to a person familiar with the matter.
The $150 million of four-year bonds may price to yield about 2.85%while the $150 million of seven-year bonds may price to yield about 3.55%, the person said, asking not to be identified as details are private.
DBS Group Holdings is managing the sale, the person said.
Thursday, 19 August 2010 11:03
CapitaMall Trust plans to sell $300 million of four-year and seven-year bonds, according to a person familiar with the matter.
The $150 million of four-year bonds may price to yield about 2.85%while the $150 million of seven-year bonds may price to yield about 3.55%, the person said, asking not to be identified as details are private.
DBS Group Holdings is managing the sale, the person said.
Singapore retains Fitch’s top credit rating on stable outlook
Written by Bloomberg
Wednesday, 18 August 2010 17:16
Singapore retained its top credit ranking of AAA at Fitch Ratings, which cited the country’s “exceptionally strong external financial and fiscal positions.”
“The exposure to external shocks and greater volatility associated with a small and very open economy is more than offset by the strength of Singapore’s external and fiscal buffers, as well as the credibility of its economic policy framework,” the company said in a statement today.
Wednesday, 18 August 2010 17:16
Singapore retained its top credit ranking of AAA at Fitch Ratings, which cited the country’s “exceptionally strong external financial and fiscal positions.”
“The exposure to external shocks and greater volatility associated with a small and very open economy is more than offset by the strength of Singapore’s external and fiscal buffers, as well as the credibility of its economic policy framework,” the company said in a statement today.
Singapore gaming may rival Las Vegas by 2012
Written by The Edge
Wednesday, 18 August 2010 16:24
Singapore’s very young gaming sector revenues could rival those from Las Vegas strip in next two years, according to some estimates, according to Dow Jones.
CLSA expects sector to generate US$5.1 billion ($19 billion) in 2011, which compares with Galaviz & Co.’s 2011 estimate of US$5.8 billion for Las Vegas strip for 2011.
Reflects weakness in gaming revenues in traditional US gambling Mecca of Las Vegas, especially as Asian players look closer to home at venues in Macau and now increasingly Singapore following opening of Las Vegas Sands’ (LVS) Marina Bay Sands and Genting Singapore’s (G13.SG) Resorts World Sentosa earlier this year.
“The appetite for gambling in Asia is significantly higher than it is outside of Asia,” CLSA analyst Aaron Fischer says.
Wednesday, 18 August 2010 16:24
Singapore’s very young gaming sector revenues could rival those from Las Vegas strip in next two years, according to some estimates, according to Dow Jones.
CLSA expects sector to generate US$5.1 billion ($19 billion) in 2011, which compares with Galaviz & Co.’s 2011 estimate of US$5.8 billion for Las Vegas strip for 2011.
Reflects weakness in gaming revenues in traditional US gambling Mecca of Las Vegas, especially as Asian players look closer to home at venues in Macau and now increasingly Singapore following opening of Las Vegas Sands’ (LVS) Marina Bay Sands and Genting Singapore’s (G13.SG) Resorts World Sentosa earlier this year.
“The appetite for gambling in Asia is significantly higher than it is outside of Asia,” CLSA analyst Aaron Fischer says.
SM Goh re-appointed MAS chairman
Written by The Edge
Wednesday, 18 August 2010 12:39
Senior Minister Goh Chok Tong has been re-appointed as Chairman, the Monetary Authority of Singapore (MAS) said today. His appointment is for a further period of two years with effect from August 20, 2010.
Wednesday, 18 August 2010 12:39
Senior Minister Goh Chok Tong has been re-appointed as Chairman, the Monetary Authority of Singapore (MAS) said today. His appointment is for a further period of two years with effect from August 20, 2010.
Wednesday, August 18, 2010
DBS Group cut to $11.50 by RBS; Keeps Sell
Written by The Edge
Wednesday, 18 August 2010 09:30
RBS lowers DBS Group (D05.SG) target price to $11.50 from $12.00, keeps Sell rating on expected continued pressure on its net interest income, says Dow Jones.
RBS notes bank has “embarked on an admirable restructuring of its operations” in Singapore, HK, Southeast Asia, with management changes at HK operations. But low Sibor, increasing costs likely to weigh on earnings growth.
Cuts 2011, 2012 earnings forecasts by 5.6%, 1.3% respectively, based on 20bp and 5bp cuts in Sibor assumptions over both years. Adds gross loan growth also expected to moderate to “more sustainable” rates.
Share price up 0.1% at $14.12.
Wednesday, 18 August 2010 09:30
RBS lowers DBS Group (D05.SG) target price to $11.50 from $12.00, keeps Sell rating on expected continued pressure on its net interest income, says Dow Jones.
RBS notes bank has “embarked on an admirable restructuring of its operations” in Singapore, HK, Southeast Asia, with management changes at HK operations. But low Sibor, increasing costs likely to weigh on earnings growth.
Cuts 2011, 2012 earnings forecasts by 5.6%, 1.3% respectively, based on 20bp and 5bp cuts in Sibor assumptions over both years. Adds gross loan growth also expected to moderate to “more sustainable” rates.
Share price up 0.1% at $14.12.
Singapore three-month interbank U.S. dollar rate drops 22nd day
Written by Bloomberg
Wednesday, 18 August 2010 12:08
Singapore’s three-month interbank loan rate for U.S. dollars fell for a 22nd day, the longest stretch of declines since November 2008.
Sibor, which banks charge each other to borrow in U.S. dollars, fell 1.8 basis points to 0.358%, the biggest decline in three months, when the rate was fixed at 11 a.m. local time. The rate is the lowest since May 5.
Wednesday, 18 August 2010 12:08
Singapore’s three-month interbank loan rate for U.S. dollars fell for a 22nd day, the longest stretch of declines since November 2008.
Sibor, which banks charge each other to borrow in U.S. dollars, fell 1.8 basis points to 0.358%, the biggest decline in three months, when the rate was fixed at 11 a.m. local time. The rate is the lowest since May 5.
Wilmar up 2.4% after MSCI upgrade
Written by Thomson Reuters
Wednesday, 18 August 2010 12:19
Shares of the world’s largest listed palm oil plantation firm, Wilmar International, rose as much as 2.4% on Wednesday after Morgan Stanley Capital International (MSCI) raised its weighting on the company.
UBS said in a report Wilmar now accounts for 5.3% of MSCI Singapore index from 3.6%, ahead of the broker’s expectation of 5.1%.
Wednesday, 18 August 2010 12:19
Shares of the world’s largest listed palm oil plantation firm, Wilmar International
UBS said in a report Wilmar now accounts for 5.3% of MSCI Singapore index from 3.6%, ahead of the broker’s expectation of 5.1%.
SingTel down 0.3%; Likely rangebound near-term: Deutsche
Written by The Edge
Wednesday, 18 August 2010 12:25
SingTel (Z74.SG) unable to build on initial gains, down 0.3% at $2.93 vs +0.7% at $2.96 earlier, says Dow Jones.
Stock has been slipping since reaching $3.17 high earlier this month, with bland June-quarter results, cautious guidance reported last week further sapping interest.
Having drifted in $2.90-$3.20 band for more than a year, “we see little reason for SingTel to break out of this range on a sustained basis either to the upside or downside,” says Deutsche Bank, which has Hold call with $3.26 target.
Macquarie, which has Neutral call with $3.16 target, says telco’s associates will continue to be key overhang on stock given rising competitive pressure, while Singapore’s upcoming high-speed national broadband network could erode SingTel’s market share in corporate data space.
Wednesday, 18 August 2010 12:25
SingTel (Z74.SG) unable to build on initial gains, down 0.3% at $2.93 vs +0.7% at $2.96 earlier, says Dow Jones.
Stock has been slipping since reaching $3.17 high earlier this month, with bland June-quarter results, cautious guidance reported last week further sapping interest.
Having drifted in $2.90-$3.20 band for more than a year, “we see little reason for SingTel to break out of this range on a sustained basis either to the upside or downside,” says Deutsche Bank, which has Hold call with $3.26 target.
Macquarie, which has Neutral call with $3.16 target, says telco’s associates will continue to be key overhang on stock given rising competitive pressure, while Singapore’s upcoming high-speed national broadband network could erode SingTel’s market share in corporate data space.
DBS tips Singapore telco competition to stay tame
Written by The Edge
Wednesday, 18 August 2010 15:57
Contrary to popular opinion, competition in Singapore’s telecom sector may not heat up in 2H10, says DBS Vickers, according to Dow Jones.
DBS Vickers doesn’t expect SingTel (Z74.SG) to pursue market share in Singapore mobile segment to offset potential weakness in its associates.
“SingTel is likely to focus on FY11 Singapore earnings by not over-engaging in handset subsidies,” says the broker.
Wednesday, 18 August 2010 15:57
Contrary to popular opinion, competition in Singapore’s telecom sector may not heat up in 2H10, says DBS Vickers, according to Dow Jones.
DBS Vickers doesn’t expect SingTel (Z74.SG) to pursue market share in Singapore mobile segment to offset potential weakness in its associates.
“SingTel is likely to focus on FY11 Singapore earnings by not over-engaging in handset subsidies,” says the broker.
Keppel Shipyard secures $50m contract to modify FPSO OSX-1
Written by The Edge
Wednesday, 18 August 2010 19:33
Keppel Shipyard says it has secured a $50 million contract for the modification of the Floating Production Storage and Offloading (FPSO) vessel OSX-1.
The FPSO OSX-1 is owned by OSX 1 Leasing B.V., a subsidiary of OSX Brasil S/A.
Commencing in the third quarter of 2010, Keppel Shipyard’s scope of work includes procurement, detailed engineering and the modification of the topside process modules.
Wednesday, 18 August 2010 19:33
Keppel Shipyard says it has secured a $50 million contract for the modification of the Floating Production Storage and Offloading (FPSO) vessel OSX-1.
The FPSO OSX-1 is owned by OSX 1 Leasing B.V., a subsidiary of OSX Brasil S/A.
Commencing in the third quarter of 2010, Keppel Shipyard’s scope of work includes procurement, detailed engineering and the modification of the topside process modules.
Semicon Sector, Olam and SAR (18 Aug 2010), Market Pulse
By Carey Wong
Wed, 18 Aug 2010, 08:32:55 SGT
Market Pulse: Semicon Sector, Olam and SAR (18 Aug 2010)
FOCUS
Semiconductor Industry: Upbeat outlook continues to hold
Summary: Micro-Mechanics (MMH) and Avi-Tech Electronics are due to release their 4QFY11 (Apr-Jun quarter) results in the coming week. We expect both companies to post a healthy YoY recovery in revenue over the quarter, driven by continued strong demand from a broad range of end markets. We note that market research firm iSuppli has again raised its 2010 global semiconductor revenue forecast last week, where it now expects the market to grow by 35.1% as opposed to 30.9% projected in May. In Singapore, outlook for the semiconductor industry also appears to be equally buoyant, in our view. As highlighted by the Economic Development Board (EDB), the electronics sector experienced a swift and sharp rebound on the back of an Asia-led global demand recovery. With such strong performances from both manufacturing and service segments of the sector, EDB is optimistic that it will continue to see strong growth in 2010 and beyond. We view this positively, as semiconductor companies such as MMH and Avi-Tech are likely to benefit from the market uptrend. We reiterate our OVERWEIGHT view on the semiconductor industry. (Kevin Tan)
Olam International: Invests US$43.5m in cocoa processing facility
Summary: Olam International (Olam) has announced its plans to invest US$43.5m to set up a new cocoa processing facility as well as a primary processing and warehousing facility in Cote d’Iviore. The investment, which is small relative to its recent acquisitions (for instance, its recent Gilroy acquisition cost US$250m), will be funded internally. This is a sensible investment, in our view, as it allows Olam to capture additional value from midstream processing activities where margins are higher. Management envisions synergies with its existing beans business and believes that this investment will elevate its positioning as an integrated supply chain manager of traceable cocoa beans and cocoa products (namely cocoa liquor, butter and cake). The investment will not have immediate financial impact as the plant is expected to be commissioned only by 1Q12, and be value accretive from FY14, where Olam forecasts annual revenues of US$175m coupled with an EBITDA margin of 10-12%. Our projections and S$3.61 fair value estimate remain intact pending the release of Olam’s FY10 results on 26 Aug. Maintain BUY. (Lee Wen Ching)
Straits Asia Resources: Improving outlook
Summary: Straits Asia Resources (SAR) hosted its 2Q10 earnings call last evening. As a recap, the group posted a 9.1% YoY improvement in revenue to US$191.5m thanks to higher sales volumes. Gross profit, however slumped 42.5% YoY to US$46.5m due to lower thermal coal prices, while core net profit declined 35.1% YoY to US$23.2m. While YoY performance was uninspiring, the group’s sequential performance was encouraging with revenue growing 24.8%, gross profit improving 54.2%, and net profit doubling QoQ. SAR’s sequential recovery bolsters confidence over its 2H10 outlook, which we expect will improve on higher sales volumes and further cost reductions. While SAR’s outlook is improving for 2H10 and beyond, lingering risks including wet weather as well as potential delays in obtaining the Sebuku permits remain. We have trimmed our FY10 earnings estimate by 22% to US$79.8m, but raise our DCF-derived fair value estimate to S$2.08 (from S$1.85) on higher ASP assumptions from FY11 onwards. Maintain HOLD. An interim dividend of 1.83 US cents has been declared. (Lee Wen Ching)
For more information on the above, visit www.ocbcresearch.com for the detailed report.
NEWS HEADLINES
- Singapore experienced a decline in export performance in July, with the key NODX index down a seasonally adjusted 3.9% MoM.
- Link Crest, Pine Agritech’s major shareholder, has garnered 41.0% control of the company and has launched a mandatory general offer at S$0.20/share to take the company private.
- CapitaLand sold S$350m worth of 10-year, Singapore-dollar bonds more cheaply than expected, in a debt issue that was heavily oversubscribed.
- Khazanah is evaluating the listing status of Parkway Holdings after acquiring a 95% stake.
- Novo Group expects to report a lower profit for 1Q11 due to the economic recovery slowdown.
- FM Holdings, which has been forced to delist by SGX, is in preliminary talks with its two controlling shareholders on an exit option, but no firm offer has been made.
- C2O Holdings has been given the clearance for the proposed acquisition of Swissco International, which is expected to end trading of its shares on 25 Aug.
- Singapore refining margins have started increasing again, probably due to refiners here benefiting from product shortages caused by the regional hiccups, rather than a market uptrend.
Wed, 18 Aug 2010, 08:32:55 SGT
Market Pulse: Semicon Sector, Olam and SAR (18 Aug 2010)
FOCUS
Semiconductor Industry: Upbeat outlook continues to hold
Summary: Micro-Mechanics (MMH) and Avi-Tech Electronics are due to release their 4QFY11 (Apr-Jun quarter) results in the coming week. We expect both companies to post a healthy YoY recovery in revenue over the quarter, driven by continued strong demand from a broad range of end markets. We note that market research firm iSuppli has again raised its 2010 global semiconductor revenue forecast last week, where it now expects the market to grow by 35.1% as opposed to 30.9% projected in May. In Singapore, outlook for the semiconductor industry also appears to be equally buoyant, in our view. As highlighted by the Economic Development Board (EDB), the electronics sector experienced a swift and sharp rebound on the back of an Asia-led global demand recovery. With such strong performances from both manufacturing and service segments of the sector, EDB is optimistic that it will continue to see strong growth in 2010 and beyond. We view this positively, as semiconductor companies such as MMH and Avi-Tech are likely to benefit from the market uptrend. We reiterate our OVERWEIGHT view on the semiconductor industry. (Kevin Tan)
Olam International: Invests US$43.5m in cocoa processing facility
Summary: Olam International (Olam) has announced its plans to invest US$43.5m to set up a new cocoa processing facility as well as a primary processing and warehousing facility in Cote d’Iviore. The investment, which is small relative to its recent acquisitions (for instance, its recent Gilroy acquisition cost US$250m), will be funded internally. This is a sensible investment, in our view, as it allows Olam to capture additional value from midstream processing activities where margins are higher. Management envisions synergies with its existing beans business and believes that this investment will elevate its positioning as an integrated supply chain manager of traceable cocoa beans and cocoa products (namely cocoa liquor, butter and cake). The investment will not have immediate financial impact as the plant is expected to be commissioned only by 1Q12, and be value accretive from FY14, where Olam forecasts annual revenues of US$175m coupled with an EBITDA margin of 10-12%. Our projections and S$3.61 fair value estimate remain intact pending the release of Olam’s FY10 results on 26 Aug. Maintain BUY. (Lee Wen Ching)
Straits Asia Resources: Improving outlook
Summary: Straits Asia Resources (SAR) hosted its 2Q10 earnings call last evening. As a recap, the group posted a 9.1% YoY improvement in revenue to US$191.5m thanks to higher sales volumes. Gross profit, however slumped 42.5% YoY to US$46.5m due to lower thermal coal prices, while core net profit declined 35.1% YoY to US$23.2m. While YoY performance was uninspiring, the group’s sequential performance was encouraging with revenue growing 24.8%, gross profit improving 54.2%, and net profit doubling QoQ. SAR’s sequential recovery bolsters confidence over its 2H10 outlook, which we expect will improve on higher sales volumes and further cost reductions. While SAR’s outlook is improving for 2H10 and beyond, lingering risks including wet weather as well as potential delays in obtaining the Sebuku permits remain. We have trimmed our FY10 earnings estimate by 22% to US$79.8m, but raise our DCF-derived fair value estimate to S$2.08 (from S$1.85) on higher ASP assumptions from FY11 onwards. Maintain HOLD. An interim dividend of 1.83 US cents has been declared. (Lee Wen Ching)
For more information on the above, visit www.ocbcresearch.com for the detailed report.
NEWS HEADLINES
- Singapore experienced a decline in export performance in July, with the key NODX index down a seasonally adjusted 3.9% MoM.
- Link Crest, Pine Agritech’s major shareholder, has garnered 41.0% control of the company and has launched a mandatory general offer at S$0.20/share to take the company private.
- CapitaLand sold S$350m worth of 10-year, Singapore-dollar bonds more cheaply than expected, in a debt issue that was heavily oversubscribed.
- Khazanah is evaluating the listing status of Parkway Holdings after acquiring a 95% stake.
- Novo Group expects to report a lower profit for 1Q11 due to the economic recovery slowdown.
- FM Holdings, which has been forced to delist by SGX, is in preliminary talks with its two controlling shareholders on an exit option, but no firm offer has been made.
- C2O Holdings has been given the clearance for the proposed acquisition of Swissco International, which is expected to end trading of its shares on 25 Aug.
- Singapore refining margins have started increasing again, probably due to refiners here benefiting from product shortages caused by the regional hiccups, rather than a market uptrend.
This Sunday on Money Mind
This Sunday on Money Mind.. Asia's newest exchange SMX is set to go "live"! A broker's promise of 15% returns over the STI! And the hits and misses for Oceanus on the rocky road to success! 9.30pm(SIN/HK) Aug 22 on CNA.
Singapore Merchantile Exchange - Money Mind
Singapore Merchantile Exchange, Asia's newest exchange, goes "live" in Singapore on August 31st . If you are a trader - how will you benefit?
Tuesday, August 17, 2010
Citi raises Wilmar target price, keeps 'sell'
SINGAPORE - Citi has raised its target price for Wilmar International, the world's largest listed palm oil firm, to $6.33 (US$4.64) from $6.16 but kept its 'sell' rating.
Citi has raised its target price for Wilmar to reflect higher contributions from its associates and lower effective tax rate for 2010.
'Refining margin has been improving but crushing margin is under pressure worldwide,' Citi said in a report.
The bank noted Wilmar expects the firm's China margins to fall although this will be offset by a rise in sales volume.
Wilmar shares rose 0.98 per cent to $6.17 at 0137 GMT but have fallen 4 per cent so far this year. -- REUTERS
Citi has raised its target price for Wilmar to reflect higher contributions from its associates and lower effective tax rate for 2010.
'Refining margin has been improving but crushing margin is under pressure worldwide,' Citi said in a report.
The bank noted Wilmar expects the firm's China margins to fall although this will be offset by a rise in sales volume.
Wilmar shares rose 0.98 per cent to $6.17 at 0137 GMT but have fallen 4 per cent so far this year. -- REUTERS
Singapore new home sales likely muted rest of year
Written by The Edge
Tuesday, 17 August 2010 09:22
Spike in new private home sales in Singapore last month unlikely to be repeated in coming months, analysts told Dow Jones.
According to new government data, developers sold 1,544 new homes in July vs 847 in June, launched 1,335 units vs June’s 1,010.
“We believe this was driven by developers who pushed out projects to catch the demand prior to the typical slowdown experienced during the Lunar Hungry Ghost Month, when buyers are less keen to purchase large-ticket items,” says Morgan Stanley. BNP Paribas expects sales this month to be muted, tips monthly sales to hover around 1,000 homes from September.
Tuesday, 17 August 2010 09:22
Spike in new private home sales in Singapore last month unlikely to be repeated in coming months, analysts told Dow Jones.
According to new government data, developers sold 1,544 new homes in July vs 847 in June, launched 1,335 units vs June’s 1,010.
“We believe this was driven by developers who pushed out projects to catch the demand prior to the typical slowdown experienced during the Lunar Hungry Ghost Month, when buyers are less keen to purchase large-ticket items,” says Morgan Stanley. BNP Paribas expects sales this month to be muted, tips monthly sales to hover around 1,000 homes from September.
NOL orders 2 ships from Daewoo Shipbuilding for $313m
Written by Bloomberg
Tuesday, 17 August 2010 08:49
Daewoo Shipbuilding & Marine Engineering Co. said it firmed a contract to build two ships worth about US$230 million ($313 million) from Neptune Orient Lines of Singapore. The vessels, which can each carry as many as 10,700 20-foot containers, will be delivered by the fourth quarter of 2012, the Seoul-based company said in an e-mailed statement today.
Tuesday, 17 August 2010 08:49
Daewoo Shipbuilding & Marine Engineering Co. said it firmed a contract to build two ships worth about US$230 million ($313 million) from Neptune Orient Lines of Singapore. The vessels, which can each carry as many as 10,700 20-foot containers, will be delivered by the fourth quarter of 2012, the Seoul-based company said in an e-mailed statement today.
NOL off 0.5% at 10:58 a.m.; Freight rates may fall: Nomura
Written by The Edge
Tuesday, 17 August 2010 11:21
Neptune Orient Lines (N03.SG) off 0.5% at $1.97 at 10:58 a.m. as caution in broad market, underlying concerns over potentially softer freight rates weigh, says Dow Jones.
Shares in steady decline since NOL reported return to profitability in 2Q10 with US$99.7 million ($135.5 million) earnings, as investors unload on prior strength, mull prospect of slower global trade, lower freight rates given uncertain global economic prospects.
Tuesday, 17 August 2010 11:21
Neptune Orient Lines (N03.SG) off 0.5% at $1.97 at 10:58 a.m. as caution in broad market, underlying concerns over potentially softer freight rates weigh, says Dow Jones.
Shares in steady decline since NOL reported return to profitability in 2Q10 with US$99.7 million ($135.5 million) earnings, as investors unload on prior strength, mull prospect of slower global trade, lower freight rates given uncertain global economic prospects.
Singapore exports likely subdued In 2H: StanChart
Written by The Edge
Tuesday, 17 August 2010 14:31
Singapore non-oil domestic exports likely to moderate in 2H 2010 on concerns about sustainability of global economic recovery, Standard Chartered Bank economist Alvin Liew says after island nation reports July exports +18.2% on year vs +20% consensus, +28.5% June, according to Dow Jones.
“We could yet see more significant moderation in exports growth in 2H this year. Indeed, it is likely the export recovery may have reached a plateau in 1H-2010, and going forward the recovery momentum will slow and even look anemic for some months” because of concerns about the sustainability global recovery, high unemployment in US, EU, Liew says.
Also, lingering Europe sovereign debt concerns could negatively impact trade flows. Adds, pharmaceutical exports remains wildcard for Singapore, magnifying peaks, troughs of export performance.
Tuesday, 17 August 2010 14:31
Singapore non-oil domestic exports likely to moderate in 2H 2010 on concerns about sustainability of global economic recovery, Standard Chartered Bank economist Alvin Liew says after island nation reports July exports +18.2% on year vs +20% consensus, +28.5% June, according to Dow Jones.
“We could yet see more significant moderation in exports growth in 2H this year. Indeed, it is likely the export recovery may have reached a plateau in 1H-2010, and going forward the recovery momentum will slow and even look anemic for some months” because of concerns about the sustainability global recovery, high unemployment in US, EU, Liew says.
Also, lingering Europe sovereign debt concerns could negatively impact trade flows. Adds, pharmaceutical exports remains wildcard for Singapore, magnifying peaks, troughs of export performance.
SMX to launch oil, gold, contracts on Aug 31
Written by Dow Jones & Co, Inc
Tuesday, 17 August 2010 14:46
Singapore Mercantile Exchange said Tuesday that it will commence trading of gold futures, West Texas Intermediate crude oil, Brent crude oil and eurodollar futures contracts on Aug 31 and implied there could be additional contracts launched at the same time, but didn’t specify which these might be.
“The first phase of product launches will be followed by multiple product launches to be introduced in the market after consultation with industry participants,” it said in a statement.
The launch of the SMX reflects increasing competition for Asian commodities business with major global exchanges like CME Group Inc. (CME) and the London Metal Exchange, both of which are expanding operations in Asia.
Tuesday, 17 August 2010 14:46
Singapore Mercantile Exchange said Tuesday that it will commence trading of gold futures, West Texas Intermediate crude oil, Brent crude oil and eurodollar futures contracts on Aug 31 and implied there could be additional contracts launched at the same time, but didn’t specify which these might be.
“The first phase of product launches will be followed by multiple product launches to be introduced in the market after consultation with industry participants,” it said in a statement.
The launch of the SMX reflects increasing competition for Asian commodities business with major global exchanges like CME Group Inc. (CME) and the London Metal Exchange, both of which are expanding operations in Asia.
Singapore dollar may drop 2.7% versus baht: technical analysis
Written by Bloomberg
Tuesday, 17 August 2010 14:58
Singapore’s dollar may weaken 2.7% against the Thai baht over the next month after a short- term moving average on a technical chart crossed a longer-term line, according to Tokyo-based Okasan Securities Co.
Singapore’s currency may fall to 23.1798 versus the baht in a week, 23.0134 in two to three weeks and 22.7445 in a month, Tsutomu Soma, a bond and foreign-exchange dealer at Okasan, said in an interview. He cited 10- and 20-day averages and a series of numbers known as the Fibonacci sequence for his forecast.
Tuesday, 17 August 2010 14:58
Singapore’s dollar may weaken 2.7% against the Thai baht over the next month after a short- term moving average on a technical chart crossed a longer-term line, according to Tokyo-based Okasan Securities Co.
Singapore’s currency may fall to 23.1798 versus the baht in a week, 23.0134 in two to three weeks and 22.7445 in a month, Tsutomu Soma, a bond and foreign-exchange dealer at Okasan, said in an interview. He cited 10- and 20-day averages and a series of numbers known as the Fibonacci sequence for his forecast.
SMRT off 1.9% on revenue, competition concerns
Written by The Edge
Tuesday, 17 August 2010 15:09
SMRT (S53.SG) off 1.4% at $2.07 on concerns over increased revenue pressure, says Dow Jones.
According to Singapore transport ministry, public transport operators stand to lose $88 million in annual revenue following implementation of distance-based fares from July.
Tuesday, 17 August 2010 15:09
SMRT (S53.SG) off 1.4% at $2.07 on concerns over increased revenue pressure, says Dow Jones.
According to Singapore transport ministry, public transport operators stand to lose $88 million in annual revenue following implementation of distance-based fares from July.
Golden Agri eyes Liberia palm oil expansion
SINGAPORE - Singapore's second-largest listed palm oil plantation firm Golden Agri-Resources said on Tuesday it was looking at investing in a firm that will control 220,000 hectares of land in Liberia.
The company, which is part of Indonesia's Sinar Mas Group, said it was planning to invest in private equity fund Verdant that is the sole shareholder of a Liberia-based firm in the process of being granted a government concession to develop 220,000 hectares for 20 years.
Golden Agri did not give financial details of the possible transaction for the land, which is three times the size of Singapore, but said the initial development will commence with 15,000 hectares.
The move comes after Indonesia announced plans to impose a two-year moratorium on new permits to clear forest for oil palm cultivation from 2011. -- REUTERS
The company, which is part of Indonesia's Sinar Mas Group, said it was planning to invest in private equity fund Verdant that is the sole shareholder of a Liberia-based firm in the process of being granted a government concession to develop 220,000 hectares for 20 years.
Golden Agri did not give financial details of the possible transaction for the land, which is three times the size of Singapore, but said the initial development will commence with 15,000 hectares.
The move comes after Indonesia announced plans to impose a two-year moratorium on new permits to clear forest for oil palm cultivation from 2011. -- REUTERS
Olam to invest US$43.5 mln in Africa cocoa plant
SINGAPORE - Singapore commodities firm Olam International said on Tuesday that it will invest US$43.5 million in Cote d'Ivoire to set up a greenfield cocoa processing facility in Abidjan. -- REUTERS
Property: Pre-sales momentum bounces back in Jul
By Meenal Kumar
Tue, 17 Aug 2010, 09:09:44 SGT
After a quiet Jun, developers seemed to have stepped up activity ahead of the traditionally slower month-long Hungry Ghost festival period (10 Aug to 07 Sep). Launches of non-landed property units rose to 1322 units (+33.4% MoM) for Jul 2010, the highest since Apr. The launches were well-received, with Jul pre-sales increasing a whopping 88.7% MoM to 1517 units. The monthly take-up rate of 114.8% was not only the highest for the year but also beat Nov and Dec 2009 levels. Looking to Aug, launch activity is likely to be comparatively more muted during the Hungry Ghost period. Sep could be another activity-heavy month, though, with projects including City Developments’ 642-unit NV Residences slated for a 3Q10 launch. While property developers have recently reported strong 2Q CY2010 earnings and offered sanguine outlooks for 2H10; we note that anecdotally buying sentiment seems more cautious – but still very active. With a change in analyst coverage, our ratings for the property companies under our coverage are under review. Maintain NEUTRAL on the broader property sector.
Tue, 17 Aug 2010, 09:09:44 SGT
After a quiet Jun, developers seemed to have stepped up activity ahead of the traditionally slower month-long Hungry Ghost festival period (10 Aug to 07 Sep). Launches of non-landed property units rose to 1322 units (+33.4% MoM) for Jul 2010, the highest since Apr. The launches were well-received, with Jul pre-sales increasing a whopping 88.7% MoM to 1517 units. The monthly take-up rate of 114.8% was not only the highest for the year but also beat Nov and Dec 2009 levels. Looking to Aug, launch activity is likely to be comparatively more muted during the Hungry Ghost period. Sep could be another activity-heavy month, though, with projects including City Developments’ 642-unit NV Residences slated for a 3Q10 launch. While property developers have recently reported strong 2Q CY2010 earnings and offered sanguine outlooks for 2H10; we note that anecdotally buying sentiment seems more cautious – but still very active. With a change in analyst coverage, our ratings for the property companies under our coverage are under review. Maintain NEUTRAL on the broader property sector.
Olam faces rival bid for NZ Farming
Uruguay firm values NZFSU at 33.6% more than Olam's valuation of the firm
By JAMIE LEE
COMMODITIES group Olam International's takeover offer for NZ Farming Systems Uruguay (NZFSU) at NZ$0.55 per share has been upstaged by the Uruguayan-based Union Agriculture Group, which threw in a bid of NZ$0.60 per share yesterday.
Union Agriculture - which holds 1.65 per cent of NZFSU - launched a competing bid to secure control in NZFSU, which has Olam as its single-largest shareholder.
Union Agriculture's chairman Juan Sartori said in a statement to Bloomberg: 'We are content to achieve ownership of 50.1 per cent.'
'Our proposal is very compelling, both from a financial viewpoint and more importantly, from a strategic perspective.'
Union Agriculture - a privately held company formed to buy and develop prime agriculture land in Uruguay - values NZFSU at NZ$147 million (S$142 million), or 33.6 per cent higher than Olam's valuation of NZFSU.
In response, shares of NZFSU - which is listed in New Zealand - rose five cents to end at NZ$0.63 in Wellington yesterday.
Olam, which launched its NZ$110 million takeover offer last month, said yesterday it 'has received acceptances that, taken with its existing holding, represent 30 per cent' of NZFSU as at Aug 13, up from 18.45 per cent at the time of the takeover announcement. Olam's takeover offer was then a 38 per cent premium over NZFSU's three-month average trading price of NZ$0.40.
The deal is subject to Olam gaining at least 50.1 per cent of the company after the offer closes and approval by the authorities.
'Olam will review NZFSU's annual results and the target company statement, including the independent appraiser's report prior to determining its future course of action,' it said.
NZFSU is expected to release its annual results and target company statement that refer to Olam's takeover offer next Monday, Olam added.
Separately, NZFSU also stressed to shareholders not to make any decisions until the company releases its assessment of the merit of both takeover offers.
'The directors again recommend that shareholders do not sell their shares before receiving and considering further information,' NZFSU said in a regulatory filing on the New Zealand Exchange.
NZFSU's second-largest shareholder, PGG Wrightson, which holds an 11.5 per cent stake, is backing Olam's offer, Olam said in its earlier statement.
Other substantial shareholders of NZFSU include Accident Compensation Corporation and Odey Asset Management, the takeover announcement by Union Agriculture showed.
Olam earlier said that it would support NZFSU's near-term working capital requirements if its offer goes through, noting that NZFSU needs significant new capital to meet its current obligations and to develop its portfolio of farms.
By 2012, NZFSU is expected to supply one-fifth of milk produced in Uruguay, Olam has also said.
Separately, Olam said that it remains in discussion with the government of the African state of Gabon to develop a special economic zone.
The clarification follows media reports, including one by the Financial Times, saying that Olam would lead the development of this economic zone.
Olam would also be the main investor in a palm oil production project, the FT reported this week.
'The company is currently in an advanced stage of negotiations and finalisation of the binding agreements with the Government of Gabon in relation to the special economic zone project,' said Olam, but added that it was not a material transaction based on Singapore's listing rules.
Olam is still conducting feasibility studies on the palm oil project, it added.
By JAMIE LEE
COMMODITIES group Olam International's takeover offer for NZ Farming Systems Uruguay (NZFSU) at NZ$0.55 per share has been upstaged by the Uruguayan-based Union Agriculture Group, which threw in a bid of NZ$0.60 per share yesterday.
Union Agriculture - which holds 1.65 per cent of NZFSU - launched a competing bid to secure control in NZFSU, which has Olam as its single-largest shareholder.
Union Agriculture's chairman Juan Sartori said in a statement to Bloomberg: 'We are content to achieve ownership of 50.1 per cent.'
'Our proposal is very compelling, both from a financial viewpoint and more importantly, from a strategic perspective.'
Union Agriculture - a privately held company formed to buy and develop prime agriculture land in Uruguay - values NZFSU at NZ$147 million (S$142 million), or 33.6 per cent higher than Olam's valuation of NZFSU.
In response, shares of NZFSU - which is listed in New Zealand - rose five cents to end at NZ$0.63 in Wellington yesterday.
Olam, which launched its NZ$110 million takeover offer last month, said yesterday it 'has received acceptances that, taken with its existing holding, represent 30 per cent' of NZFSU as at Aug 13, up from 18.45 per cent at the time of the takeover announcement. Olam's takeover offer was then a 38 per cent premium over NZFSU's three-month average trading price of NZ$0.40.
The deal is subject to Olam gaining at least 50.1 per cent of the company after the offer closes and approval by the authorities.
'Olam will review NZFSU's annual results and the target company statement, including the independent appraiser's report prior to determining its future course of action,' it said.
NZFSU is expected to release its annual results and target company statement that refer to Olam's takeover offer next Monday, Olam added.
Separately, NZFSU also stressed to shareholders not to make any decisions until the company releases its assessment of the merit of both takeover offers.
'The directors again recommend that shareholders do not sell their shares before receiving and considering further information,' NZFSU said in a regulatory filing on the New Zealand Exchange.
NZFSU's second-largest shareholder, PGG Wrightson, which holds an 11.5 per cent stake, is backing Olam's offer, Olam said in its earlier statement.
Other substantial shareholders of NZFSU include Accident Compensation Corporation and Odey Asset Management, the takeover announcement by Union Agriculture showed.
Olam earlier said that it would support NZFSU's near-term working capital requirements if its offer goes through, noting that NZFSU needs significant new capital to meet its current obligations and to develop its portfolio of farms.
By 2012, NZFSU is expected to supply one-fifth of milk produced in Uruguay, Olam has also said.
Separately, Olam said that it remains in discussion with the government of the African state of Gabon to develop a special economic zone.
The clarification follows media reports, including one by the Financial Times, saying that Olam would lead the development of this economic zone.
Olam would also be the main investor in a palm oil production project, the FT reported this week.
'The company is currently in an advanced stage of negotiations and finalisation of the binding agreements with the Government of Gabon in relation to the special economic zone project,' said Olam, but added that it was not a material transaction based on Singapore's listing rules.
Olam is still conducting feasibility studies on the palm oil project, it added.
Singapore's Exports Cooled in July as Government Predicts Slowing Demand
Singapore’s export growth rose at a less-than-expected pace in July as shipments of pharmaceuticals and electronics cooled amid a weakening global economy.
Non-oil domestic exports climbed 18.2 percent from a year earlier, after a revised 28.5 percent gain in June, the trade promotion agency said in a statement in Singapore today. The median forecast of nine economists surveyed by Bloomberg News was for an increase of 20.1 percent.
A surge in production and exports in the first half of 2010 has put Singapore in the running to be the world’s fastest- growing economy this year. Overseas demand, which has lifted export-dependent Asian economies including Singapore and China, may falter as governments in Europe embark on austerity programs to cut deficits and households in some of the world’s largest economies hold back spending.
“While the export performance of the key electronics industry has been robust in recent months, the softer external demand is expected to weigh on sales going forward,” Irvin Seah, an economist at DBS Group Holdings Ltd. in Singapore, said before the report.
Electronics shipments by companies including Venture Corp., Singapore’s biggest electronics contract manufacturer, climbed 25.7 percent in July from a year earlier to S$5.6 billion ($4.1 billion), after a 43.9 percent gain the previous month.
Pharmaceutical Sales
Non-electronics shipments, which include petrochemicals and pharmaceuticals, gained 14.1 percent. Pharmaceutical shipments fell 23.5 percent after climbing a revised 29.7 percent in June.
The performance of Singapore’s pharmaceutical industry is volatile as production swings by companies such as Sanofi- Aventis SA can cause industrial output to fluctuate from month to month. Drug companies sometimes shut plants for cleaning before making different products.
Singapore’s non-oil exports fell a seasonally adjusted 3.9 percent last month from June, when they dropped 0.1 percent, today’s report showed.
Sales to the European Union, Singapore’s biggest export market, grew at a slower pace last month, climbing 26.1 percent from a year earlier compared with a 75.1 percent surge in June.
“The implementation of fiscal austerity measures in some European economies, combined with the weakening of the euro, could further weaken EU domestic demand,” Singapore’s Trade Minister Lim Hng Kiang said yesterday. “These developments could affect Singapore’s export performance, given that the EU as a whole accounts for 12 percent of our domestic exports.”
To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net
Non-oil domestic exports climbed 18.2 percent from a year earlier, after a revised 28.5 percent gain in June, the trade promotion agency said in a statement in Singapore today. The median forecast of nine economists surveyed by Bloomberg News was for an increase of 20.1 percent.
A surge in production and exports in the first half of 2010 has put Singapore in the running to be the world’s fastest- growing economy this year. Overseas demand, which has lifted export-dependent Asian economies including Singapore and China, may falter as governments in Europe embark on austerity programs to cut deficits and households in some of the world’s largest economies hold back spending.
“While the export performance of the key electronics industry has been robust in recent months, the softer external demand is expected to weigh on sales going forward,” Irvin Seah, an economist at DBS Group Holdings Ltd. in Singapore, said before the report.
Electronics shipments by companies including Venture Corp., Singapore’s biggest electronics contract manufacturer, climbed 25.7 percent in July from a year earlier to S$5.6 billion ($4.1 billion), after a 43.9 percent gain the previous month.
Pharmaceutical Sales
Non-electronics shipments, which include petrochemicals and pharmaceuticals, gained 14.1 percent. Pharmaceutical shipments fell 23.5 percent after climbing a revised 29.7 percent in June.
The performance of Singapore’s pharmaceutical industry is volatile as production swings by companies such as Sanofi- Aventis SA can cause industrial output to fluctuate from month to month. Drug companies sometimes shut plants for cleaning before making different products.
Singapore’s non-oil exports fell a seasonally adjusted 3.9 percent last month from June, when they dropped 0.1 percent, today’s report showed.
Sales to the European Union, Singapore’s biggest export market, grew at a slower pace last month, climbing 26.1 percent from a year earlier compared with a 75.1 percent surge in June.
“The implementation of fiscal austerity measures in some European economies, combined with the weakening of the euro, could further weaken EU domestic demand,” Singapore’s Trade Minister Lim Hng Kiang said yesterday. “These developments could affect Singapore’s export performance, given that the EU as a whole accounts for 12 percent of our domestic exports.”
To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net
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