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Saturday, December 29, 2012

Temasek boosts Olam stake to 19%, says attractive long term


Temasek Holdings Pte, Singapore’s state-owned investment company, boosted its stake in Olam International by another percentage point in the past week after saying the commodity trader is an attractive long-term investment.

Two units controlled by Temasek bought around 24 million shares between Dec 20 and today, lifting its deemed interest to 19% from 18%, according to an Olam filing. One purchase of 100,000 shares was made on the market today, the filing said.
Temasek, Olam’s second-biggest shareholder, last week raised its stake from 16% to 18%, saying that it’s “pleased” to have the opportunity to add to its holdings. Olam “represents a reasonably attractive investment over the long term,” it said. Temasek earlier this month backed Olam’s proposed bond offering, agreeing to buy any rights not taken up by other investors.

Temasek referred to its earlier comments on Olam in an e- mailed response to queries today.

Jim Rogers, chairman of Rogers Holdings, plans to take part in the offering, according to a report today in The Straits Times newspaper. Rogers’ stake in Olam is “quite small”, the report said. Rogers didn’t respond to an e-mail seeking comment.

Shares in Olam rose as much as 2.6% before trading 1.3% higher at $1.545 as of 1:27 p.m. in Singapore. They have slumped 11% since Nov. 19, the day short-seller Carson Block questioned the company’s liquidity and accounting practices at a London conference.

Kewlram Singapore, which owns 20% of Olam as its biggest shareholder, also said it will support the offering of US$750 million ($917 million) in bonds and as much as US$500 million in warrants.

OSK: Smaller firms trading at cheap valuations will draw interest


PETALING JAYA: Smaller oil and gas companies that are trading at cheap valuations of less than 10 times forward earnings would make good takeover targets in view of the rising contract flows next year, said OSK Research.
“We particularly like Perdana Petroleum Bhd as we believe its major shareholder, Dayang Enterprise Holdings Bhd, may increase its stake in the company if the latter manages to secure jobs in the Pan Malaysia cluster of fields to ensure the jobs are executed immediately as new vessels take time to build,” OSK Research oil and gas analyst Danny Chan wrote in a note to clients.
Some RM8bil to RM10bil worth of hook-up and commissioning projects were due to be given out “very soon” for the so-called Pan Malaysia cluster, besides contracts for marginal oilfields and the replacement of expiring brownfields, he said, underscoring OSK Research's “overweight” call on the sector.
The brokerage added that it liked Alam Maritim Resources Bhd as the “worst is over” for the company amid a recovery in charter rates from a low of US$1 per brake horse power (bhp) to US$1.80US$2.20 per bhp now.
OSK Research highlighted SapuraKencana Petroleum BhdDialog Group Bhd and Dayang as the top picks in its oil and gas universe, citing their track records and orderbooks that would stay resilient even if contract awards were to slacken.
It also contended that with Petroliam Nasional Bhd's crude production year-to-date falling 58% due to a stop-order in Sudan, the national oil company is likely to step up exploration and production efforts next year to ensure long-term sustainable growth.
“With 21 successful discoveries year-to-date (seven in the third quarter in Bidara, Gambir RDR, Kurma Manis-1, Berangan-1, Tembakau-1, Kuang North-2 and Tukau Timur Deep-1), we see offshore oil and gas activities heightening in 2013.
“This will benefit vessel players like Perdana Petroleum and Alam Maritim,” it said.
On the prospects for upcoming marginal oilfield and enhanced oil recovery jobs, it said the slower pace of awards this year would likely result in more deals being inked in 2013, with Bumi Armada Bhd and Dayang seen as strong candidates for the Tembikai and Cenang marginal fields off Peninsular Malaysia as well as SapuraKencana for the next enhanced oil recovery contract.
“That said, we do not discount the possibility of SapuraKencana and Dialog being awarded another marginal oilfield contract as their balance sheet can support it,” it said.
Only one marginal oilfield was tendered out this year in July to a consortium comprising Coastal Energy and Petra Energy Bhd and one enhanced oil recovery job to Dialog and Haliburton.

Yinson’s 49%-owned PTSC raises RM918mil loans to convert FPSO


KUALA LUMPUR: Yinson Holdings Bhd's 49%-owned PTSC Asia Pacific Pte Ltd has raised up to US$300mil (RM918mil) to fund the conversion of its floating production storage and offloading system (FPSO).
Yinson said PTSC, in which PetroVietnam Technical Services Corpowns the other 51%, had on Friday completed the signing of a senior secured loan facility with Singapore's Oversea-Chinese Banking Corporation Ltd and United Overseas Bank Ltd.
The conversion of the FPSO was necessary under its engineering, procurement, construction and installation contract and a bareboat charter contract, valued at US$733mil (RM2.21bil).
Yinson said that upon delivery of the FPSO, the vessel would be chartered to Lam Son Joint Operating Co.
Lam Son is jointly owned by PetroVietnam Exploration Production andPetronas Carigali Overseas Sdn Bhd.

Friday, December 28, 2012

Nam Cheong announced that it has sold three vessels

Nam Cheong announced that it has sold three vessels – a 5,000dwt PSV and two 5,150bhp AHTS – for a total value of US$56.4m. This brings the total number of vessels sold this year to a record 21, with a record gross order book of RM1.45b. We maintain our Buy call with a TP of $0.30.
But no more 5,150bhp AHTS available for 2013?Astute investors would notice that Nam Cheong just pulled off a small miracle – selling the two AHTS vessels for 1Q13 delivery when all the small AHTS for 2013 have already been sold since November this year. 

Management clarified that the original buyers agreed to take vessels for delivery in 2014 and to give up their current 2013 orders to Icon Offshore. (See shaded lines in Figure 1.)
However, lower FY12F PATMI due to delay of 12,000bhp AHTS sale. With these three vessels sold, the only ship left in this year’s shipbuilding programme is the 12,000bhp AHTS whose possible non-sale we flagged out in our Sep-12 report. We understand that there are some variations on the construction, pushing delivery out to 2013. Because of this, our FY12F PATMI falls to RM133m from RM147m, but this still represents a 43% EPS growth from FY11.
Fast-moving inventory. Nam Cheong has already sold 9 out of the 19 vessels scheduled for delivery in FY13F, and with these sales four out of our forecast 20 vessels for FY14F have already been sold. Nam Cheong is keeping up a very strong order momentum.
Valuation – Maintain BUY with a TP of S$0.300. With the year essentially closed, we roll our valuations over to 8.5x FY13F EPS for a TP of $0.300, which is a very conservative multiple for a company growing at a 28% CAGR for the next three years.
Nam Cheong's just launched Armada Tuah, Malaysia's first diesel-electric multi-purpose platform supply vessel. Photo: Lee Yue Jer

今年13IPO 新加坡10 新股超发售价


这些在主板上市的新股,市值达到181亿元(454亿令吉),市值最高的三只新股是综合保健控股(IHH Healthcare)、印尼棕油生产商布米达马(Bumitama Agri)和远东机构旗下的远东酒店信托(Far East Hospitality Trust),而瑞丰(Swee Hong)则是今年上市新股中市值最小的,仅有1亿100万元(2亿5351万令吉)。
康盛人生集团(Cordlife Group)是新交所在年内迎来的首只上市新股,在3月底挂牌上市,而近期上市的新股则是艺林控股(Gaylin Holdings),在10月底上市。

YTL Power shares surge on privatisation talk


KUALA LUMPUR: YTL Power International Bhd shares closed four per cent higher yesterday, its highest single-day gain in seven months, as market speculates that the utility company could be ripe for a privatisation move by its parent YTL Corp Bhd.

The stock rose six sen to RM1.57 with more than 16.6 million shares traded. Trading of its shares were the most active since May 15 this year.

YTL Corp, via its direct 45 per cent stake and an indirect 6.35 per cent stake, is the controlling shareholder of YTL Power with a combined 51.35 per cent stake.

Although there was no announcement on the privatisation deal at press time, analysts, when contacted, agreed that YTL Power is a prime candidate to be taken private as it is cash rich and is a major contributor to its parent's earnings.

Besides operating power and water assets, the company also runs YTL Communications, which owns and operates the Yes wireless broadband network.

So far this year, the company's shares have depreciated by almost 12 per cent. It was traded as high as RM1.90 early this year.

For the first quarter ended September 30, 2012, the company posted a 2.7 per cent gain in net profit at RM252.81 million, versus RM246.2 million in the same quarter last year. The results were within analysts' expectations.

"We expect margin pressure to continue at Wessex Water. PowerSeraya, on the other hand, may benefit from the recent softening in commodity prices, in our view.

"Yes 4G remains a wild card. Management is tightlipped on the subscribers' base now but news flows indicates the 500,000 year-end target remains intact.

"First quarter (ended September 30, 2012) revenue from this segment amounted to RM101.7 million, versus RM71.6 million (quarter ended June 30, 2012) and RM12.9 million (same quarter last year), indicating growing subscribers' base as well as potentially, revenue accretion from synergistic activities," TA Securities noted in a report.

TA has a "buy" call on the stock, with a target price of RM1.97.

There are six other research houses that recommended a "buy" on the utility company, with target price of as high as RM2.65.

There are seven research houses that placed a "hold" call and two research houses had "sell" recommendations.

Meanwhile, filings showed that the Employees Provident Fund has sold over nine million YTL Power shares this month.

The EPF now has 666.16 million shares, versus 675.3 million early this month.
Read more: YTL Power shares surge on privatisation talk

Yinson posts higher Q3 earnings


PETALING JAYA: Yinson Holdings Bhd posted an after-tax profit of RM9.33mil in the third quarter ended Oct 31, from RM8.03mil in the previous corresponding period.
The higher performance in the quarter under review, which translates into earnings of 4.34 sen per share, was achieved on revenue of RM192.5mil, a decline from RM194mil previously.
In a note to Bursa Malaysia yesterday, the company said it recorded a net profit of RM29mil on total revenue of RM692mil for the nine- months, representing a 40% and 26% increase, respectively, compared with the previous corresponding period.
Research houses, namely, Maybank and Kenanga Research, are forecasting Yinson to deliver aftertax profit of RM32mil and RM31mil, respectively.
With the cumulative earnings of RM29mil year to date, the company is confident of achieving these forecasts.

Guan Chong sales set to rise

Trading Buy
Target Price: RM2.00
GUAN Chong posted a first nine-month of 2012 net profit of RM94.3mil, which was below our expectations and the consensus estimate, making up only 66.4% and 70.3% of the two numbers respectively.
The third quarter net profit improved 5.7% year-on-year to RM27.4mil due to lower costs.
Meanwhile, the overall nine-month net profit registered a lower growth of 3.9% year-on-year. This was mainly due to the lower average selling price of cocoa despite a 12.5% increase in the sales volume.
However, the impact was cushioned by lower input costs, resulting in a year-on-year improved EBITDA margin of 13.5%, compared with 12% a year earlier.
A 2 sen net dividend per share was declared in the third quarter, bringing the total year-to-date dividend to 6.7 sen (adjusted).
Since our first report on Sept 11, the share price of Guan Chong has fallen by 23.2%. We believe this was partly due to the news that it would not proceed with its secondary listing on the Singapore Exchange Securities Trading Ltd as well as the depressed cocoa prices, which dampened the industry's outlook.
Nevertheless, we believe the sales of cocoa butter will gradually pick up to help fill the new additional total capacity of 200,000 tonnes a year next year.
With the double-digit sales volume growth registered to date and the additional capacity after the recent expansion, we believe the sales volume will rise to mitigate the impact of unfavourable cocoa prices and tap into a growing demand for cocoa-based food and beverage (F&B) products in the emerging markets when its traditional markets slow down.
Although the nine-month results usually make up 55% to 73% of the full-year results in the past years, we still prefer a conservative stance on the company due to the sluggish cocoa prices. Thus, we are cutting our earnings estimates for financial year 2012 estimated (FY12E) by 10.3% to RM127.4mil while generally maintaining our FY13E estimate at RM144.3mil on the back of a better outlook for next year.
The stock is currently trading at 6 times financial year 2011 price-earnings ratio (PER), 6 times FY12E PER and 5.3 times FY13E PER, which are undemanding compared with its five-year average PER of 6.9 times and the small cap F&B consumer stocks' trailling at current 12-month PER of 10.3 times.
In line with our earnings estimates adjustments, we have downgraded our target price on Guan Chong to RM2 from RM2.40 previously based on a conservative Fwd PER of 6.9 times (8 times PER previously) over FY13E earnings per share.

Second plant for Perodua costing RM790mil



KUALA LUMPUR: Perusahaan Otomobil Kedua Sdn Bhd (Perodua) is investing RM790mil to set up a new company with state-of-the-art manufacturing facilities next to its Rawang plant.
Perodua managing director Datuk Aminar Rashid Salleh said the new facility was part of the carmaker's five-year roadmap to remain competitive in light of looming liberalisation.
“In preparation for liberalisation post-2016, Perodua has plans to embark on a structural transformation across its group,” he said at a briefing yesterday. “We need to kick-start immediately. If we don't do anything, our sales will be severely hit.”
Aminar pointed out that with Malaysia gearing up to be an energy-efficient vehicle hub under one of the measures of the revised National Automotive Policy, new potential players coming into the market would mean increased competition for Perodua.
He said the new company would have a paid-up capital of RM200mil and a staff of about 1,200, adding that the yet-to-be-named company would be 51:49 owned by Perodua subsidiary Perodua Auto Corp and Perodua.
Daihatsu Motor Co Ltd has a 20% stake in Perodua.
The new plant would have improved systems, new technology, more automation and be environmental-friendly, he added.
“The Perodua board of directors recently approved this investment and the process of obtaining approval from the respective shareholders is still ongoing,” Aminar said.
He said the new plant would be able to produce 100,000 vehicles a year on a one-shift cycle. The existing plant can produce 200,000 units yearly on two shifts.
“The new plant is expected to start production in 2014,” he said, adding that with the increased production capacity, Perodua hoped to increase its sales in tandem with the yearly total industry volume (TIV) growth.
“We are at 28% market share domestically and it's something we want to protect. We would like to increase our sales in tandem (with TIV growth) and continue to protect our market share,” Aminar said.
He also said that with the new plant in place Perodua was looking to ramp up its export business.
“We are targeting to export 10,000 units this year, with plans to double this to 20,000 units by 2015,” he said.

Saturday, December 22, 2012

DBSV reinstates Jaya Holdings at Buy, $0.85 target


FRIDAY, 21 DECEMBER 2012 14:57

DBS Vickers reinstates Jaya Holdings (J10.SG) at Buy with a $0.85 target.

“With a clearer focus and less volatile earnings, we believe Jaya now offers a more attractive investment opportunity. We see a potential re-rating of the stock towards its book value on a strong 86% recovery in FY13 earnings.”
It notes Jaya repositioned as a service-provider for the offshore energy sector, with a focus on chartering ensuring higher recurring income and a move away from speculative shipbuilding reducing earnings volatility.

It views Jaya’s strategic alliance with IHC Merwede as a potential game-changer as the two could collaborate to build IHC’s high-specification offshore vessels at Jaya’s yards, which would propel Jaya up the value chain, leapfrogging regional competitors.

The house expects FY12-14 EPS CAGR of 54%, primarily on the offshore-support division on a larger fleet, improved day rates and better margins. “We see positive catalysts from potential high-value newbuild orders and possible resumption of dividend payments.” It views current valuations as undemanding at 0.7x FY12 P/BV vs its 1.1x five-year historical average. The stock is up 3.4% at $0.605.

Friday, December 21, 2012



該公司的19萬4千公噸產能中,每年4萬4公噸來自長城塑膠,對其拉伸膜(Stretch Film)產能注入29%的產能增長,坐上亞洲最大產能交椅。另2萬8千公噸來自長城塑膠的塑膠吹膜產品,主要服務森德綜合少涉足的飲食業包裝。

估值吸引净回酬6% 产托首季再受追捧


这是因为办公楼市场如今面临严重的供过于求局面,特别是敦拉萨国际贸易中心(TRX)、独立摩天楼(Warisan Merdeka)和八打灵再也中环区等新发展,加剧市场的不利情势。
继怡保花园产托激励今年产托市场后,明年城中城产业(KLCCP,5089,主板产业股)推出的马首创“合订型”产托(stapled reit),料也将掀起热潮。

Wednesday, December 19, 2012

大选和内需是转捩点 明年股市先衰后盛


建筑领域 庞大捷运订单带动
博彩领域 高股息避风港
油气领域 新合约提振
电力领域 新股上市激励
房产领域 3利好因素支撑
手套领域 管理策略缓冲风险

Chip Eng Seng’s Aussie unit gets official go-ahead to develop Tower Melbourne


TUESDAY, 18 DECEMBER 2012 18:40

CEL Australia, a wholly-owned subsidiary of Chip Eng Seng Corporation, said it has received the Australian’s government approval for its A$170 million ($218 million) residential development located on the prominent corner of Bourke and Queen Streets in Melbourne’s CBD.

Designed by renowned Australian architects Elenberg Fraser, the 71-storey building is named Tower Melbourne.
Tower Melbourne will have 581 residential units, comprising a mix of one to three bedroom apartments, town homes and penthouses. It will boast a high-end retail and dining area of 770 sq m on Level 1. The exclusive development will also have a Health Club on Level 14 featuring a 25m pool, spa, sauna, steam room, day beds and a gym with yoga and group fitness areas. The Tower Club on Level 43 will feature a garden terrace, communal lounge and dining areas, a kitchenette and a reading room.

Tower Melbourne is CES’ second residential development project in Melbourne. Its first, the 388-unit 33M, located on Mackenzie Street, was completed in October 2012.

Tuesday, December 18, 2012

Affin Research maintains Buy on KLCC Property


KUALA LUMPUR: Affin Investment Research is maintaining a Buy recommendation on KLCC Property Holdings Bhd (KLCCP) with a revised target price of RM7 from RM7.10.
It said on Tuesday it was changing its valuation methodology for KLCCP to a two-stage DDM model (from implied yield target), to be in line with the valuations of other MREITs under its coverage.
“Assuming a cost of equity of 8.2%, 5.5% dividend growth rate for the next five years and a terminal growth rate of 3.5%, we now value KLCCP at RM7.00 (from RM7.10),” it said.
Affin Research said its prior target price, upgraded on Nov 28, had already taken into account the restructuring exercise.
“At our target price of RM7, KLCCP would be valued at 19.9 times CY13 EPS and 4.5% dividend yield, which is approximately 10%-15% premium to our fair value of IGB REIT and Pavilion REIT.
“The premium, in our view, is justifiable given the above-mentioned qualities. Maintain BUY. Further re-rating catalysts are completion and listing of KLCCP Stapled Group and better-than-expected earnings/ dividend payout,” said the research house.

DMG downgrades Hi-P to ‘sell’ from ‘neutral’


MONDAY, 17 DECEMBER 2012 12:34

DMG & Partners downgraded electronics contract manufacturer Hi-P International to ‘sell’ from ‘neutral’ and cut its target price to $0.59 from $0.74, citing a negative impact from weaker-than-expected demand for Apple's iPhone 5.

By 9:55 a.m., Hi-P shares were down 3% at $0.80, but have gained 32% since the start of the year, compared with a 26.7% rise in the FTSE ST Industrials Index.
DMG slashed its 2012 and 2013 earnings estimates for Hi-P by 51% and 48.6% respectively, as it expects demand for Apple's iPhone 5 may fall "drastically" next year due to rising competition from Android and Windows phones.

“Thought to be a proxy to Apple’s iPhone 5, we believed that Hi-P now has been overwhelmed by how fast things have changed in the technology industry," said DMG in a note.

Hi-P also invested $300 million in a Chinese plant, of which a large part of the production capacity was dedicated to Apple. However, Hi-P may be hurt as Apple shifts more production back to the U.S., DMG noted.

Maybank-KE starts United Engineers at ‘buy’; $4.18 target


Maybank-Kim Eng starts United Engineers (U04.SG) at Buy with a $4.18 target; “with an investment property portfolio worth $1.7 billion, United Engineers, a long undervalued company, is on the brink of a major transformation to unlock value.”
The house notes major shareholder OCBC, which holds a 24.5% stake, could be the catalyst for change after the bank’s steps on divesting its holdings in F&N (F99.SG), APB and Straits Trading (S20.SG); “all eyes are now on UEL, the last remaining piece of the OCBC jigsaw.”

The URA’s review of its master plan for Singapore could mean a plot ratio increase, offering UEL a unique opportunity to redevelop key commercial asset UE Square, located near an upcoming Downtown MRT line station, it says.

“In addition, with potential buyers in acquisitive mode, we do not rule out a sale of its hospitality assets - at the right price.” The house estimates UEL’s RNAV at $5.30/share. The stock is up 6.2% at $3.09 in strong volume.

CIMB tips upside to Asean-Four markets in 2013


CIMB tips up to 18% upside for Asean-four markets in 2013, calling the Fed’s latest asset-purchase plan a positive. “Its timing is good with global macros on the mend, diminished risks of a hard landing in China and risk indicators trekking down significantly.”

It expects cyclical sectors to benefit most, including offshore & marine, property and commodities, while it likes construction-linked stocks in Indonesia and Thailand for structural improvements and remains selectively positive on consumer and financials.
CIMB stays Overweight on Singapore and Indonesia, Neutral on Thailand and Underweight on Malaysia.

Its top picks for Singapore are DBS (D05.SG), CapitaLand (C31.SG), ST Engineering(S63.SG), Thai Beverage (Y92.SG), Ezion (5ME.SG), Cache Logistics Trust (K2LU.SG) and Tat Hong (T03.SG). CIMB also screens for high-dividend-yield stocks with above-market average forward and historical yields among its Outperform-rated coverage, turning up Venture (V03.SG), SPH (T39.SG), Ascendas REIT (A17U.SG), ST Engineering (S63.SG), SIA Engineering (S59.SG), StarHub (CC3.SG), Frasers Centrepoint Trust (J69U.SG), DBS, Keppel (BN4.SG) and Sembcorp Industries(U96.SG).

Its Singapore-listed contrarian Underperform calls include CapitaMall Trust (C38U.SG) and CapitaCommercial Trust (C61U.SG).

Friday, December 14, 2012

Olam likely muted until bond yields retrace: UOB Kay Hian


THURSDAY, 13 DECEMBER 2012 11:08

Olam’s stock price will likely remain muted until its bonds recover, UOB KayHian says.

“If bond yields continue to rise, the group is likely to adopt lower net gearing levels and as a result, ROE could be capped. Hurdle rates for new investment initiatives may also be harder to cross with a higher weighted average cost of capital.”

It cuts its target to $1.98 from $2.32 after switching methodology to a dividend-discount model from the previous 13.5x P/E valuation.
“While we believe growth prospects remain reasonable over the next three years, growth could slow post-FY16 as earnings from its current initiatives come on stream.”

It lowers its FY13 net profit forecast by 5% to $396 million, mainly on higher finance costs due to the rights issue of bonds with attached warrants and higher refinancing rates. It also prices in the expected dilution from the warrants’ exercise in three years. But it keeps a Buy call.

“Olam is currently trading at an all-time low of 1.1x 2013F P/B.” The stock is up 0.4% at $1.445.

Thursday, December 13, 2012

Property buyers' shift to affordability in 2013


KUALA LUMPUR (Dec 13) : The trend of property buying in the country will
shift towards affordability in 2013, which will see buyers gravitating
towards products with lower absolute pricing, according to Hong Leong
Investment Bank analyst Sean Lim.

He said property developers should respond to the shift in preference,
by cutting back scale of property launches, reduce absolute selling
price by selling smaller units and transit from selling high rise to
landed units.

"Going into 2013, we expect the challenges to intensify as both property
developers and buyers undergo a transition phase, with buyer preference
undergoing a dramatic shift towards affordability," said Lim.

He added launches and sales is expected to moderate in 2013 compared
with 2012, dismissing talk that the property market will see a hard
landing next year.

"We still do not believe that a hard landing scenario is likely to
transpire in 2013. Asset quality for loans continued to improve with NPL
(non-performing loans) ratio at all-time low of 1.9% for residential
property loans," said Lim.

However, a major risk of rising NPL ratios among banks due to Malaysian
losing holding power of their PROPERTIES [] still lingers, according to

Property developers also face the risk of margin erosion in 2013 if
material prices spike or pressure from lower selling price of
properties, slow down in sales or cut back in launches.

Major catalysts for the industry in 2013 include the RM46 billion worth
of investments announced to be implemented in Iskandar Malaysia starting
next year, and also the completion of the second Penang bridge.

"The RM46 billion of developments announced in last week’s WIEF (World
Islamic Economic Forum) should help sustain interest

"Penang mainland is also set to benefit from the opening of Penang
Second Bridge in Sept 2013. Within our coverage, Mah Sing looks set to
be the biggest beneficiary, as its Southbay City integrated development
has balance GDV of RM2.1 billion," he said.

As the responsible financing guideline started to take effect on
property transactions, the operating environment of the property sector
is expected to get more competitive next year.

Some property analysts are of the opinion that property developers with
strong branding and big land bank are the ones who can remain positive
above the rest.

Among the property developers with large land bank and strong brand in
Malaysia include SIME DARBY BHD [], UEM Land Holdings Bhd, IJM Land Bhd,
S P Setia Bhd and WCT BHD [].

S P Setia targets an ambitious FY2013 property sales of RM5.5 billion,
after managed to surpass its target RM4 billion of sales this year. The
group's achieved record new property sales of RM4.2 billion in FY2012,
an increase of 28.6% year-on-year.

However, there are other views saying that gearing level and valuations
are more important for property developers next year, citing the lower
expected growth rate.

Affin Investment Bank's analyst Isaac Chow, whose property stock top
pick include UOA Development Bhd and KLCC Property Holdings Bhd said it
is more important for investors to choose property stocks with appealing
valuation and strong brand equity.

In a report on UOA Development, Chow stated that the group remains Affin
IB's top pick among the property development stocks because of its
undemanding valuation, high dividend yield, strong cash position, strong
track record and management experience.

"UOA Development remains our top pick for exposure to the property
sector and we continue to like the company for its undemanding valuation
at 6.5 times CY13 core EPS, 1.1 times NTA and high dividend yield of
over 5%,

"Strong cash position of RM274.7 million, strong branding, strong
execution track record, and experienced management team who are highly
adaptable to changes in market dynamic," stated Chow.

Affin IB has a target price of RM2.40 on UOA Development, based on 25%
discount on its revalued net asset value (RNAV) of RM3.17.

UOA Development share stood at RM1.70 per share as at 11.48 am this
morning, up 1 sen or 0.59% from yesterday's close of RM1.69.







BToto may offer dividend, director hints at over 40 sen per share after SGX listing



KUALA LUMPUR: Berjaya Sports Toto Bhd's (BToto) shareholders will likely get a special dividend of more than 40 sen per share from the proposed listing of Sports Toto Malaysia (STM) business trust on the Singaporean bourse, said its executive director Freddie Pang.
He said although the board has not made the decision yet, the special dividend of over 40 sen per share is what shareholders can expect.
The number forecast operator revealed its plan to spin off its wholly-owned, cash-generating subsidiary Sports Toto Malaysia Sdn Bhd into a business trust that would be listed in Singapore early this year.
On Tuesday, BToto announced to Bursa Malaysia that it received a conditional eligibility-to-list letter from Singapore Exchange Securities Trading Ltd (SGX-ST) for the listing of the STM-Trust on the latter's main board.
According to Pang, the listing would likely take place by the end of next month.
“The proposed exercise is still pending approval from the Monetary Authority of Singapore,” Pang told reporters at a briefing after the company's EGM here yesterday.
In a circular distributed to its shareholders last month, BToto revealed that the listing was expected to raise S$270mil (RM667.39mil), out of which S$234.95mil (RM602.99mil) would be allocated as special dividend to shareholders or an estimated RM45 for every 100 Btoto shares held.
Besides the allocation for special dividend payment, Pang said part of the proceeds from the listing would also be used to service Sports Toto Malaysia's existing loans.
He revealed that Sports Toto Malaysia has a medium-term notes programme valued at about RM550mil, which needed to be paid off by 2017.
“If we had not done this exercise (the listing of STM business trust to raise funds), dividend payouts for the next four years would be negatively affected by the repayments of the loans,” Pang explained.
The response among institutional investors to the listing had so far been “encouraging”, Pang said.
He said the group had been actively engaging potential foreign investors to educate them and address any concern that they might have on investing in the company's business.
Pang reiterated that BToto's plan to have a secondary listing for STM business trust on Bursa Malaysia was still in place, and had been targeted for the second half of next year. This, however, would hinge on the release of the official framework for the listing of such instrument in Malaysia by the end of this year as widely expected.
The purpose of a secondary listing, Pang emphasised, was not to raise finances, but to enable the group to further reward its shareholders through the distribution of as many units as possible.
BToto yesterday fell six sen to close RM4.49 on volume of 928,600 shares.

Economists cut Singapore 2012, 2013 growth forecasts



Economists have cut their economic forecasts and raised their inflation outlook for Singapore, a central bank survey released on Wednesday showed, in a further sign that the country is likely to face another year of sub-par growth and elevated inflation in 2013.

Singapore, whose trade is three times gross domestic product (GDP), has been hurt by the downturn in Western economies that has crimped demand for its exports.
The wealthy city-state of 5.3 million people has also underperformed neighbours such as Malaysia and Indonesia, which can rely on their much larger populations to prop up growth.

“The key thing is Singapore’s small domestic market. Regional economies, especially in the rural household sector, have benefitted from still strong resource prices so there is the domestic consumption story," said CIMB regional economist Song Seng Wun.

Economists now expect the Southeast Asian city-state’s GDP to grow 1.5% this year, down almost a full%age point from the median estimate of 2.4% in the previous poll, according to the Monetary Authority of Singapore’s (MAS) latest quarterly Survey of Professional Forecasters.

In contrast, Indonesia’s central bank said Tuesday it expects full-year growth of 6.3% in 2012, while most economists expect Malaysia’s economy will expand by more than 5% this year.

However, Singapore may avoid a technical recession based on the median estimate of 1.8% year-on-year growth in the fourth quarter, which works out to an annualised quarter-on-quarter and seasonally adjusted expansion of around 3%.

The city-state’s economy contracted an annualised and seasonally adjusted 5.9% in the third quarter from the second quarter.

MAS conducts its survey every quarter after the release of economic data for the preceding three-month period. The median forecasts in the latest report were based on the estimates of 21 economists.   

For 2013, the Singapore economy is now seen growing by just 2.7%, down from 3.9% in the previous survey but in line with the government’s latest forecast for an expansion of 1-3% next year.

Singapore’s inflation for 2012 will likely come in at 4.7% this year before slowing to 3.8% next year, the latest survey showed, with the latest estimates coming well above the September survey’s median forecasts.

While rising rents and soaring car prices have been the main contributors to inflation in Singapore over the past two years, government measures to make it harder for firms to employ low-cost foreign workers have also contributed by pushing up the prices of services such as healthcare.

Inflation had averaged around 2% prior to this period.
Most economists expect Singapore will face several years of slow growth and relatively high inflation as the government reins in immigration amid a backlash from locals unhappy about crowded trains and competition for jobs that has depressed wages at the lower end.

To help keep inflation in check, MAS is likely to persist with its policy of letting the Singapore dollar rise against the currencies of its main trading partners.

According to the MAS survey, the Singapore dollar (SGD=) is likely to end the year at 1.225 to the greenback before strengthening further to 1.200 by end-2013.

The Singapore currency, which is currently trading around 1.2210, has gained 6.2% so far this year, the third best performer among Asian currencies tracked by Thomson Reuters.

“The government has made it very clear that previous high growth rates boosted by the surge in foreign population is pretty much unsustainable," Mark Tan, a senior economist at Goldman Sachs in Singapore, said at a briefing on Tuesday.

“The new way going forward really is to boost domestic productivity and the government has said we are in a period of lower growth as the economy transitions. In that transition phase, you are going to deal with higher wage cost, high inflation and slower growth," he added.

Singapore’s economy grew by 4.9% in 2011 following a blistering 14.8% expansion in 2010.

Wednesday, December 12, 2012

Analysts bullish about Mah Sing’s RM400mil cash call


They say it is confident of securing new landbank in some key markets next year
<B>Crowd puller:</B> Mah Sing Group getting good response at a recent property fair.Crowd puller: Mah Sing Group getting good response at a recent property fair.
PETALING JAYA: Property developer Mah Sing Group Bhd's proposed fund-raising exercise which is expected to raise some RM400mil will relieve the group from overstretching its balance sheet when it aggressively expands its landbank.
Analysts are generally bullish about the cash call and that Mah Sing is confident of securing new landbank in some of its key markets like Penang and Johor Baru in the first half of next year.
This would enable it to at least match its “achievement” this year of RM5.88bil in gross development value (GDV) replenishment,AmResearch Sdn Bhd said in a note to clients.
“Except for the concerns about the potential dilution, this rights issue comes with a sweetener, in the form of warrants and bonus issue.
“The bigger share base would improve its liquidity in the market which should attract more funds,” it added.
The research outfit said that with the cash call, Mah Sing's net gearing would at least be kept at its target level of 50% (current net gearing is 30%).
Meanwhile, the market appeared to be neutral on the cash call with the stock ending flat at RM2.23 after trading at an intra-day high of RM2.28. A total of 1.2 million shares changed hands.
On Monday, Mah Sing proposed a renounceable rights issue of new shares with free warrants to its shareholders to raise gross proceeds of RM400mil to finance its operations and business expansion.
The entitlement basis, date and issue price have yet to be determined.
According to a filing with Bursa Malaysia, the proposed rights issue with warrants would enable the group to raise funds “to part finance its property development expenditure, future land acquisitions and for its general working capital requirements which are expected to contribute positively to the future profitability of Mah Sing Group.”
CIMB Research said the rights issue provided investors an opportunity to increase their holdings as Mah Sing shares were relatively illiquid at times.
“Any negative knee-jerk reaction to the cash call could provide investors the opportunity to accumulate Mah Sing shares at a lower price before the land-banking acquisitions are eventually announced,” said the research house in its morning note.