Saturday, November 20, 2010

ECM: MAS 3QFY10 results preview

Malaysia Airlines
(RM2.08 MAS MK)
Target Price: RM2.08
3QFY10 results preview

· Passenger traffic growth inline with expectations in 3Q Passenger carriage in 3Q rose about 2% both y-o-y and q-o-q to 3.3m passengers. Number of domestic passengers who flew with MAS dropped by 10.7% y-o-y (-4.3% q-o-q) to 1.2m. On the contrary, international passengers increased 9.8% y-o-y (6.2% q-o-q) to 2.2m. Passenger traffic (RPK) grew by 7.0% y-o-y to 9.9bn (9.0% q-o-q) Capacity (ASK) increased to 12.6m (4.4% y-o-y, 2.6% q-o-q). Overall passenger load factor was up by 1.9 ppt y-o-y to 78.6% (4.6 ppt q-o-q). YTD RPK (27.7bn) and ASK (36.6bn) are in line with our expectations.

· Slowdown in cargo
Although MasKargo posted y-o-y growth, the cargo business weakened qo- q, possibly due to the apparent slowdown in freight activities in September. The load tonne kilometre (LTK) rose 6.2% y-o-y to 824.9m tonne-km, but declined 6.8% q-o-q. Meanwhile capacity tonne kilometer increased by 12.5% to 592.7m tonne-km (-1.3% q-o-q).

· Expect further losses in 3Q
We project MAS to post 3Q operating loss of RM265.5m largely on lower contribution from its cargo business and high operating expenses. YTD, operating loss is expected at RM261.6m, 39% higher than our full-year estimated loss of RM158.6m. Based on our rudimentary calculation, we expect the group to incur fuel hedging loss of RM155m for the quarter. Our assumptions include improved 3Q revenue yield of 25.4 sen/RPK (+6.5% q-o-q) backed by higher fares and surcharges, resulting from MAS continuous effort to increase its yields. We have factored in unit revenue of 20 sen/ASK, up 13.1% q-o-q. Correspondingly, unit cost is also expected to be lower at 26.2 sen/ASK (-4.4% q-o-q) due to savings from the stronger Ringgit. As a result, we expect breakeven load factor to substantially reduce to 103% from 119% in 2Q.

· Maintain HOLD
We look to revise our FY10-11 estimates upon release of MAS’ 3QFY10 results on 25 November. We remain conservative on our numbers, as we anticipate MAS to report other provisions. Maintain our Hold call, and TP RM2.08 (6x EV/EBITDAR).

Friday, November 19, 2010

OCBC: Suntec REIT Initial yield on MBFC tight but consider strategic merits

Suntec REIT
Maintain BUY
Previous Rating: BUY
Current Price: S$1.45
Fair Value: S$1.63

Initial yield on MBFC tight but consider strategic merits.
EGM convened for MBFC acquisition. As announced previously, Suntec REIT will acquire a one-third stake in Marina Bay Financial Centre (MBFC) Phase 1 from Cheung Kong Holdings Ltd and Hutchinson Whampoa Ltd. MBFC Phase 1 constitutes Towers 1 and 2, and also Marina Bay Link Mall.

The stake will be acquired based on an agreed property value of S$1,495.8m, which includes rental support of S$113.9m over a 60-month period from the completion date of the acquisition. The S$2400 per square foot price (ex-rental support) is equivalent to what K-REIT [NOT RATED] is paying for its one-third stake. The transaction is subject to unitholder approval, with an EGM being called for Friday, 26 Nov at 10 AM.

Financing details released. Suntec REIT recently released more financing details for the proposed acquisition. In the unitholders' circular, Suntec said it plans to fund the total acquisition cost through S$1105.0 in debt (72%) and S$428.2m in equity (28%). Suntec has arranged debt financing via a 3.5 year term loan (S$773.5m) and a 4.5 year term loan (S$331.5m). It disclosed that this facility was secured at a very competitive all-in cost of debt of 3.12%. As for the equity portion, Suntec plans to raise the S$428.2m through a private placement (with timing and issue price dependent on market conditions).

Initial yield tight but consider strategic merits. In the unitholders' circular, Suntec estimates MBFC's FY11 net property income at S$60.6m. We understand that tenants are only moving in progressively through the year (occupancy assumptions were not disclosed), and this NPI figure is heavily supported by S$37.2m in rental support, or 32.7% of the total rental support amount. This translates to a fairly tight initial yield of 4% on the acquisition. Nevertheless, we believe this is a sound acquisition for Suntec from a long-term, strategic perspective - both from the perspective of a Grade A office landlord and specifically with Suntec's core focus on the Marina Bay area.

Maintain BUY. We have revised our earnings estimates to incorporate the proposed acquisition, which we assume is completed on 01 Jan 2011. We have revised our issue price assumption down from S$1.50 per unit to S$1.30 per unit, but our fair value estimate slips only marginally from S$1.64 to S$1.63 due to the lower-than-expected cost of debt. Suntec is one of the best proxies, in our view, to the office market / revitalization of the Marina Bay area today in terms of both exposure and valuations. With an estimated total return of 19.1%, maintain BUY.

Mercury: Trying to stay close to 1,500 level

Market had on 18/11/2010 come under selling pressure to go under the immediate low of 1,488.06 (12/11/2010) after 2 days of trading within the range bar on 12/11/2010. It was not much of a surprise to see stock index making a lower low yesterday, because the sell-offs on 11/11/2010 and 12/11/2010 continued to linger in traders’ mind.

Why did we see a down close day on 18/11/2010 ? Well, traders may have reached first point of time to make a guess estimate about the market weak strength in making a strong comeback after witnessing the way this market carried itself on 15/11/2010 and 16/11/2010. And, the downward stretch made by stock index on 18/11/2010 could be the initial attempt on the part of market to pull away.

A check on how this market carried itself in the past 6 days (10/11/2010 – 18/11/2010) suggested the reluctance on the part of traders to be aggressively committed on buying side in area of 1,531 level, and the violation of 1,503 support level on 12/11/2010 would continue to cast a negative picture unless we could see a convincing reverse up move above 1,503 level on close basis (FYI : CI settled at 1,503.54 on 16/11/2010 on last minute buying of selective blue chip).

And, the closure of the upside gap left behind on 8/11/2010 at 1,513 level again did not create an immediate market rebound from thereon, this showed that certain strong hands may want to take further advantage of the looming uneasy feelings by exerting more selling pressures to push the stock index lower in an attempt to flush out weak hands. On this note, buying interest with a close above 1,503 level must be convincing, and trading sentiment was believed to have remained not-so-friendly at this juncture.

We would not be likely to see a return of “good” renewed buying interest unless market makes its test of low in the vicinity of 1,475 level.

What were the strong hands doing ..…..
A check of internal market strength on 18/11/2010 showed that buying strength weakened with strong hand(s) seen disposing a portion of buying positions, and the net number of stock positions liquidated on 11/11/2010 and 18/11/2010 was about 480% more than what was acquired between 8/11/2010 and 10/11/2010 compared to 409% in the preceding day.

Conclusion :
Market outlook remained friendly as KLCI was still trading above 50-day MA with key market support level pegged at 1,475.
The analysis of overall daily market action(s) on 18/11/2010 revealed that buying power(s) was weaker compared to selling pressure(s), FBM KLCI would thus likely to trade below 1,487.21

Mercury: Salcon Buy on breakout.

Salcon Bhd (8567-Main Market-Trad/Services) – RM0.86.
A speculation play at the moment, Salcon is currently hesitating after the long white candle formation. News-flow concerning its wastewater treatment concession have been mixed.

At the moment, the support is at RM0.83 followed by another support point at RM0.80.

The share price must be able to stay above RM0.83 for the trend to remain positive. So far, the buying support had kept the share price buoyant, but a breakout must occur soon to prevent it from falling into consolidation. Hence, it is a buy on breakout.

CIMB: 19.11.10 Chart View

The STI gapped down but managed to closed it at day’s end. This rebound off the low probably suggests that the index may have found a short term low near the 30-day SMA. This rebound is likely to prices back up to 3,240-3,268 levels in the coming days. Nevertheless, the short term trend is that the index is still in consolidation as both its indicators are still in correction mode. It has yet to work off the bearish divergence on its RSI. So, expect sideways to lower prices once this rebound ends. The key support at 3,151, where the channel support currently is, must not be breached to the downside. Otherwise, the index could test 3,000 next.

Thursday, November 18, 2010

OCBC: FCOT High quality assets, Strong sponsor;

Frasers Commercial Trust
Initiating Coverage BUY
Current Price: S$0.16
Fair Value: S$0.17

High quality assets, Strong sponsor; Initiate with BUY rating
High quality assets. Frasers Commercial Trust (FCOT) owns 10 properties across three countries with retail and office components. FCOT derives some 52% of its gross revenue from Singapore, which comprises China Square Central, 55 Market Street and Alexandra Technopark. These assets are either high-quality commercial property located near the heart of the financial district or high-tech business space development at the fringe area of the central-region of Singapore. FCOT also owned four commercial properties in Tokyo & Osaka. Other asset includes Central Park (Perth) which is a premium grade office tower and the tallest building in Perth.

Strong sponsor. Sponsor, Frasers Centrepoint Limited (FCL), a wholly-owned subsidiary of Fraser and Neave, Limited (F&N), is a leading Singapore-based property company with a strong global foothold in property development, property investment, serviced residences and investment funds. Apart from financial support, having a developer sponsor also allows FCOT to be granted rights of first refusal to a possibly rich pipeline of sponsor-owned assets for future acquisition. In the near to middle term, StarHub Centre, Alexandra Point and Valley Point are possibly slated asset injection targets for FCOT, if they prove yield-accretive to unitholders.

Stable income. FCOT enjoys a number of blue-chip longtenure leases (such as Commonwealth of Australia, BHP Billiton Petroleum etc.) and master leases that provide longterm income stability to the REIT along with potential for rental upside. Approximately 65% of FCOT's revenue is derived from such leases. 25% of its gross rental income also has built-in annual rent step-ups. In line with our OVERWEIGHT rating for Office-REITs, we believe that FCOT will likewise be able to ride on the recovery cycle & benefit from positive rental reversions in FY11-FY12. We also see potential to grow income through asset enhancement initiatives and acquisitions.

Valuation. FCOT is trading at a 59% discount-to-book compared to the broader Office-REITs which are trading at 30% discount-to-book. We believe this significant discount is unwarranted, considering FCOT's high-quality assets, strong sponsor and sound financials. At S$0.16 per unit, FCOT has recently proposed the unit consolidation of five existing units, which it opined will improve market perception and attractiveness of its units. We concur with the manager's strategy and apply a 40% discount to our RNAV instead, deriving a fair value of S$0.17. This translates to an estimated total return of 12.6% (Price Upside: 6.3%; Distribution Yield: 6.3%). We initiate coverage of FCOT with a BUY rating.

CIMB: Sunway City Best of both worlds

• Initiate with OUTPERFORM. This unique property company offers the best of both worlds by excelling in both property development and investment. It also owns 37%
of the largest REIT in Malaysia, Sunway REIT, which gives it a vehicle to unlock value and free up capital to pursue opportunities, both domestically and internationally. Valuations are not demanding at 10x FY12 FD P/E, 32% discount to its FD RNAV of RM5.86 and 23% discount to NTA of RM5.21. We initiate coverage on SunCity with an OUTPERFORM call and RM5.27 target price based on 10% discount to RNAV. Potential re-rating catalysts include 1) robust sales due to continued strong demand for properties, 2) the successful launch of new projects in China and India, and 3) steady pipeline of investment properties to inject into Sunway REIT.

• Best of both worlds. The group has over 1,700 acres of landbank, 85% of which are in Malaysia and the remainder in China, India and Australia. SunCity is one of Malaysia’s most successful developers, having built up a strong brand name through the development of townships and niche projects. It is equally adept at property investment, owning a huge portfolio of highly successful assets in the retail, commercial, hotel and theme park space. The group is on an aggressive drive to replicate its domestic property development and investment successes overseas to drive longer-term earnings growth.

Valuation and recommendation
In view of SunCity’s decent market cap of almost RM2bn, well-balanced earnings and respectable prospects, we initiate coverage on the stock with a target price of RM5.27, based on a 10% discount to its fully diluted RNAV of RM5.86. We have applied a narrower discount than the smaller companies such as E&O, Hunza Prop and UM Land due to SunCity’s larger size and greater investability. However, we have applied a discount rather than a premium as per SP Setia due to the latter’s much larger market cap, liquidity and status as industry proxy. There could be upside to our target if SunCity improves its liquidity considerably or if its overseas ventures do well. Even at RM5.27, the target is not overly aggressive as the stock would be trading near its NTA of RM5.21. Property companies that can utilise its assets better tend to trade at premiums over NTA whereas those with significant landbank but low asset turnover ratios tend to trade at the largest discounts.

SunCity is trading at a CY12 P/E of 10x, below the sector average of 12x. At our target price of RM5.27, CY12 P/E would be 13.5x, still lower than our target KLCI P/E of 13.8x. CY11 dividend yield of 2.5% is not particularly attractive and below the sector average of around 4%. Although SunCity does not have an official dividend policy, the group aims to pay out more than 20% of its net profits annually. SunCity is retaining a larger portion of its earnings for investment in landbank and new property investment buildings. However, as the group can inject assets into Sunway REIT, there could be occasions when the dividend yield is boosted by surplus cash. SunCity is trading at a 30% discount to fully diluted RNAV, slightly better than the sector average. We believe the wide discount is unjustified as the group has the means to unlock the value of its property investmentss.

We initiate coverage on SunCity with an OUTPERFORM recommendation. The group may not yet be as big as SP Setia in terms of profits and market cap or as big as KLCC Prop in terms of assets owned but it has the potential to surpass both given its ability to excel in both development and investment. SunCity is on an aggressive expansion path to build up development contribution from overseas projects and investment property assets from new domestic projects. If it executes successfully, there is a good chance that the group could eventually become the new market proxy for the property sector as a whole, encompassing both development and investment.

FundSupermart: FBM KLCI Reached 1,526.67!! What's Next?

With the second round of quantitative easing announced by US Federal Reserve as well as the two by-election victories by Barisan Nasional, the FBM KLCI is poised to trend higher. The FBM KLCI has risen up to 1526.67 points in intraday trading on 9 Nov 2010, breaking its all-time high of 1,524 points.

Key Points:
• QE2 and by-election victories have provided near-term catalyst for FBM KLCI.
• Major sectors that drove up the FBM KLCI index were the plantation, financial and telecommunication sectors.
• In the short-term, investors’ sentiment could remain bullish with the presence of merger and acquisition (M&A) activities as well as large initial public offerings by Petronas subsidiaries.
• The 13th general election is one of the key factors maintaining investors’ bullish sentiment.
• Extra liquidity from QE 2 will lead to more foreign capital inflow into Malaysia due to the higher yields in both equity and bond markets.
• Over the long-term, the ETP will be the main driver for the uptrend in FBM KLCI.
• Corporate earnings are expected to reach record high in 2011 and 2012.
• However, the FBM KLCI is yet to price in these future earnings growth.
• The FBM KLCI will easily zoom past its all-time high of 1,524.

We have held a press conference on 28 Sep 2010 entitled Record High Earnings To Propel Record High Stock Market Levels. In the press conference, we highlighted that the strong recovery in earnings will drive stock markets in Asia, including Malaysia, to new highs within the next two years. We expect the FBM KLCI to hit 1,640 points and 1,800 points by 2011 and 2012. Now, FBM KLCI is only 8% and 18% shy from our target levels.

FBM KLCI traded at 1526.67 points!
The Quantitative Easing 2 (QE2) announced by the US Federal Reserve and the Barisan Nasional victories in Batu Sapi and Galas by-elections have provided near-term catalysts for the FBM KLCI to test its all-time high of 1,524 points. On 9 Nov 2010, the FBM KLCI climbed to 1526.67 points in intraday trading, up by 14.93 points from the 1511.74 on 4 Nov 2010. The major sectors that drove up the FBM KLCI index were the plantation, financial and telecommunication sectors. Investors were bullish on the plantation sector due to the current strong CPO prices. The CPO prices surged from RM3,087/tonne on 3 Nov 2010 to RM3,273/tonne on 8 Nov 2010, which could be partly due to extra liquidity from QE2 finding its way into commodities. Extra liquidity on the global front is also finding its ways into various emerging countries equity market, and Malaysia is no exception. We believe foreign fund has been accumulating blue chip stocks in FBM KCLI, which tends to be the banking, plantation and telecommunication sectors as they are the major heavyweight components of the index.

Easing, Election and ETP to propel FBM KLCI
The FBM KLCI will continue to gain momentum due to factors on both the local and external fronts. In the short-term, investors’ sentiment will remain bullish with the presence of various potential merger and acquisition (M&A) activities as well as large initial public offerings by Petronas subsidiaries. Besides that, it is also being speculated that the Sarawak state election and the 13th general election is going to be held sooner, possibly in the 1H 2011. Hence, the present government is likely to do something to keep the current feel good factor going before the general election is being held. These could include kick-starting the various large development projects under the Economic Transformation Programme (ETP). Historically, there was usually a run up in the equity market a few months before the general election is held.

On the external front, the extra liquidity that is going to be injected by the US Federal Reserve (as much as USD600 billion under QE2) will definitely flow out of the US and cause another round of capital inflows into countries such as China, Brazil and other emerging economies. The current level of 10-year US Treasury yield is only around 2.6% and is likely to go down further. Hence, we believe a lot of liquidity and capital will then flow out of the US capital market and go into emerging market with higher yield investment opportunities. Malaysia capital markets are likely to be one of the destinations. The current 10-year Malaysia Government Bond is yielding 3.9%, while the current equity market earnings yield is at 6.1%, both of which are much more attractive than the US Treasury yield.

In the medium term, corporate earnings of FBM KLCI is expected to revisit its highest level in 2007 by the end of 2010, and reach new record earnings level in 2011 and 2012 (refer to Chart 1). The record earnings level in 2011 and 2012 will be mainly driven by the growth in the banking and plantation sectors. Banks’ earnings are mainly supported by the robustness of Malaysia economy growth going forward coupled with strong financial footing of the banking system. For plantation sector, earnings are expected to grow as global demand for vegetable oil, particularly from huge population nation like China and India, will remain strong in the foreseeable future, hence benefiting Malaysian oil palm plantation companies. Most Malaysian plantation companies are also set to reap the benefit from their ventures into Indonesia in order to get more plantation landbanks.

Over the long-term, we expect the ETP to be the main driver for the uptrend in FBM KLCI, with corporate earnings from the key sectors such as construction, oil & gas, plantation, and banking growing along with the unfolding of the ETP.

The good news for investors is the FBM KLCI is yet to price in these future earnings growth. On this basis, we expect the FBM KLCI to exceed its all-time high of 1,524 points, potentially reaching 1,640 points in 2011 and 1,800 points in 2012. Our FBM KLCI target is based on 16X PE to 2011 and 2012 corporate earnings, in line with its historical fair PE.


DBSV: Singapore's 3Q GDP

Singapore's 3Q GDP fell 18.7% qoq, vs earlier estimate of 19.8% contraction. On a yoy basis, the economy expanded 10.6%, vs 10.3% estimated earlier. The data is in line with our economist’s expectation (DBSf:-18% QoQ saar, 10.8% YoY; Consensus: -17% QoQ saar, 11% YoY).The government projected that the economy will grow around 15% for the full year, and is not expecting a technical recession in 2010. For the rest of 2010, growth will be supported by a number of industry specific factors. The biomedical manufacturing sector is expected to recover with higher production and the financial sector should also continue to recover. For next year, the economy is expected to grow between 4.0% and 6.0%.

HLG: KLCI A choppy ride ahead

 We reiterate our mid to long term positive view on Bursa Malaysia despite its near term volatility. We advocate accumulate on weakness, with prevailing uptrend still intact, on the back of a strong ringgit (vs US$), speculation of general election next year, new listings of mega IPOs, acceleration of various projects under the Economic Transformation Plan, more M&As etc.

 Taking cues from the wild swings in global markets and the weak technical readings, the FBM KLCI could experience more choppiness ahead. To recapture a short term bullish market and revisiting all time high of 1532 pts, the index must defend its position at above the 1500 level and the 10- d SMA. Failing so will witness the FBM KLCI to retest downside support levels at 1489 (40-d SMA) and 1482 (50-d SMA). Crucial support is situated at UTL of 1454 pts

CIMB: REIT Still interesting but could grow more risky

NEUTRAL Downgraded
Still interesting but could grow more risky

• Downgrade to Neutral from Overweight. The SREIT sector met our Overweight expectations since our upgrade in May. While valuations are not demanding and sustained low interest rates remain favourable for REITs, we downgrade the sector on increased risks expected from non-accretive potential acquisitions and possible cash calls as well as limited upside for the large caps. No changes to our earnings estimates or individual stock ratings. Our top pick is still Cache Logistics for its attractive 8.3% yields and undemanding valuations at book value. Among large-cap REITs, CCT as the cheapest is our preferred liquid REIT, provided it is able to make accretive acquisitions. Our top short is CMT, which has limited growth catalysts for the next two years in our view, significant capex needs and possibly increased interest costs if holders of its convertible bonds exercise their put options next year.

• REIT sector trading at book levels. The REIT sector has made a good recovery since its trough and now trades at book levels, above the last two years’ average P/BV of 0.8x. The largest-cap REITs, CMT and AREIT, trade at about 30% premiums to the sector, which is their historical mean premium. A review of the debt profiles of the 14 large- and mid-cap REITs shows healthy asset leverage at 31.6%, and interest cover ratio at 5x.

• Sponsor injections likely to take centre stage in 2011. We anticipate more sponsor injections in 2011 which could include Ion Orchard Shopping Mall (into CMT), Ocean Financial Centre (into KREIT), and Pantai Hospitals in Malaysia (into PLife REIT).

• We expect risk levels to increase as: 1) asset prices rise under intensifying competition from funds and other investors; 2) assets with limited operational histories are unlikely to be accretive in the short term without income support from vendors; 3) a lack of accretive assets locally could drive REITs to acquire more overseas assets, increasing forex uncertainties and tax leakages; 4) the possibility of more cash calls particularly for mega-acquisitions as most REIT managers are unlikely to go for long-term gearing ratios beyond 45%; and 5) an increasing preference for private placements over rights issuances in recent equity fundraising points to a less equitable position for minority REIT investors.

PT.Berlian Laju 3QF10 Result

Wednesday, November 17, 2010

Courage Marine 3QF10 Result

Looking Forward
The global economy is gradually recovering from the financial crisis. The Asian economies, particularly China, has remained robust. Dry bulk shipping is a highly leveraged play on Chinese property construction, as China makes up almost 50% of global steel production, over 50% of which is used in construction.

Freight rates have been volatile in the past few months. The BDI dropped from 4,200 in May to
2,000 in 3Q2010 and is currently around 2,500. We continue to see BDI experiencing high levels of volatility within its trading range. This is primarily driven by the perishable nature of commodities.

The Group took delivery of 2 vessels, a Panamax size and a Capesize, in the first half of 2010 and disposed of its oldest vessel MV Jeannie III, in the 3Q of 2010. The updated tonnage of the fleet is around 580,000 dwt. With the increase in capacity, the Group expects to have higher turnover as the economy recovers.

“In recent years, Chinese shipyards business has been going strong and generated lots of vessel supply in the market. On the other hand, higher iron ore prices create more domestic supply and lower demand for seaborne iron ore into China. As a result, the dry bulk freight rate has gone sideways to down. According to a forecast from Barclay Capital, they expect the BDI to average around the 2,900 level in 2010.”

“The Group’s financial performance for FY2010 will continue to be adversely affected by the current challenging economic conditions and uncertain outlook. However, the Group will maintain its cost-effective structure and focus on keeping its fleet welldeployed and running efficiently.”

Mr. Hsu Chih Chien, Chairman
Courage Marine Group Limited

The Group remains cautious on the outlook for FY2010.

Saizen REIT 1Q FY2011 Result

Outlook and prospects
YK Shintoku loan
In Saizen REIT’s full-year results announcement on 26 August 2010, it was mentioned that discussions with a financial institution on the terms and timing of a loan, which will potentially enable the loan of YK Shintoku to be refinanced, have commenced. Efforts are currently being made to form a syndication. Potential syndicate partners have been approached and are conducting their internal reviews and assessment. Announcements will be made, when appropriate, to provide Unitholders with further information should there be any material developments on this matter.

To-date, YK Shintoku has divested a total of 16 properties (5 properties in FY2010, 5 properties in 1Q FY2011 and 6 properties in October and November 2010) as part a deleveraging plan implemented to reduce the absolute amount of the loan of YK Shintoku and the leverage of the corresponding property portfolio, so as to facilitate refinancing efforts. The loan of YK Shintoku has been reduced from JPY 7.1 billion (S$111.6 million1) as at 30 June 2010 to about JPY 5.6 billion (S$88.1 million) as at the date hereof. Taking into account applicable cash reserves of JPY 0.6 billion (S$9.4 million) maintained by YK Shintoku under the loan agreement, the net outstanding loan of YK Shintoku amounts to approximately JPY 5.0 billion (S$78.6 million). Several divestments of YK Shintoku’s properties are expected in the coming months to reduce the loan amount further.

The amount of S$14.9 million, or approximately JPY 0.9 billion, of warrant proceeds received as at 9 November 2010, have yet to be deployed. Saizen REIT has 328,082,705 warrants which are outstanding and could potentially result in S$29.5 million, or approximately JPY 1.9 billion, of further warrant proceeds being raised1. These warrant proceeds may be applied towards the refinancing of the loan of YK Shintoku (if such refinancing is possible).

Saizen REIT also has an aggregate of approximately JPY 12.0 billion (S$188.7 million) of unencumbered properties which can be used as collateral for new loans. The Asset Manager will continue to work closely with the loan servicer of YK Shintoku’s loan pending any successful refinancing efforts and there is currently no indication of foreclosure actions.

Property operations and distributions
Property operations are expected to remain stable, generating steady cash flow to enable Saizen REIT to continue paying out semi-annual distributions. The next distribution payment is expected to take place in March 2011 in respect of distributable cash accumulated in the six months financial period ending 31 December 2010.





AMP Capital Investors Ltd.策略師NaderNaeimi說:“市場再度擔心中國恐再次收緊政策。對中國收緊政策的疑慮太超過了,他們憂慮這會對區域經濟造成影響,給了投資人獲利了結的藉口。”



Source/转贴/Extract/: youtube
Publish date:17/11/10

Tuesday, November 16, 2010

國民大會:物價飆漲通膨起 20101116

國民大會:物價飆漲通膨起(1/4) 20101116

國民大會:物價飆漲通膨起(2/4) 20101116

國民大會:物價飆漲通膨起(3/4) 20101116

國民大會:物價飆漲通膨起(4/4) 20101116

Source/转贴/Extract/: youtube
Publish date:16/11/2010

Phillip: STI Technical view

From the weekly chart, we can see that the STI has formed a shooting star off 3300. The shooting star is not particularly large, as we would prefer it to be. However, it does coincide with the 3300 round number and the rest of the inter-market picture which is going risk-off as well.

Given the relatively small shooting star, we are likely to see price stall in the region of 3220 to 3200. Will have to reassess the technical landscape for the STI when we get there.

Yesterday’s session has confirmed the weekly shooting star by trading below last week’s low (3249). Support very likely to kick in around 3220 to 3200. Not much visibility beyond this level in the short term, but if risk-off continues, there is a high chance of the STI making lower highs intra-day and continuing lower.

DXN Insider Purchase 16.11.2010

CIMB: Investment themes for Singapore

Investment themes for Singapore. As the world changes, our previous themes of west-to-east migration, Asian wealth, Asian consumption and companies with operating leverage are still valid, but require a fresh perspective. Also, the Singapore tourism re-rating theme is stale by now. Although we still view Asian gaming as a structural Asian consumption theme and Genting Singapore as a key proxy for an enlarged gaming market when Singapore finally allows junkets, new themes are necessary. Heading into 2011, we see the following themes as viable for Singapore:

1. Industries where suppliers of products have growing bargaining power.

2. Beneficiaries of increased M&A activities.

3. Commodities as beneficiaries of liquidity and a weak dollar

4. Very safe yield stocks as alternatives to bond investments

Theme #1: heightened bargaining power of suppliers. 2009 and 1H10 had been a period when whole industries were too scared to invest in new capacity. By 2H10, for some industries, orders had come back with a vengeance. Chinese shipbuilders received an influx of bulk ship orders while Singapore rig-builders are finally seeing the first signs of dawn. In the container shipping space, NOL is ordering newbuilds as well. Our picks are offshore & marine stocks such as SembMarine and Ezra (laggard). Reviewing the Chinese shipbuilders’ (Yangzijiang and Cosco) huge outperformances this year, we believe the clear sector to focus on is offshore & marine. The Singapore

office segment is a variation on the same theme. With supply known and demand potentially growing rapidly, we remain strongly convicted that rents will rise in 2011.

Our preferred exposures are Keppel Land and OUE. Among transport operators, although container shipping newbuilds have been muted, slow-steaming remains a feature and we just cannot see how container shipping companies can flex their increased pricing power into 2011, especially as freight rates ease significantly in the current seasonal lull. We would prefer to take our bets with SIA, assuming that Qantas problems will enhance SIA’s pricing power in the near term.

Theme #2: beneficiaries of M&A activities. With corporates generally quite cashed up, the next group of stocks we like are potential beneficiaries of M&A activities. M&As are already happening with acquisitions by Olam, Noble, a stake in F&N sold to Kirin and a proposed ASX-SGX merger. REITs have also started to acquire properties. With interest rates staying low, we believe M&A deals can only rise. Rather than speculating on likely targets, we propose exposure to this theme is through investment-banking fees and capital markets-related fees i.e. through DBS.

Theme #3: commodities. This is the consensus overweight and rightly so, especially against a backdrop of rising wages in China and a crumbling dollar. In this space, agrilogistics players are less obvious beneficiaries than upstream commodity companies. Despite a big run in palm-oil prices, planters are still bullish on CPO in view of weather uncertainties. Our key pick is Golden Agri.

Theme #4: very safe yield stocks as bond alternatives. Globally, bond prices are at all-time high, yields are utterly compressed. As yield-seeking investors switch from bonds to equities, equities with high-yield, bond-like cash-flows can potentially benefit from the switching of asset classes. Safety and predictability are paramount here. Our choices for alternatives to bonds are Cache Logistics and M1.

CIMB: SREIT downgraded from Overweight to Neutral

SREIT downgraded from Overweight to Neutral; top pick Cache Logistics, top short CMT. With continued compression in REIT yields, sustained low interest rates and strong financials (from a number of REITs), acquisitions and development projects will be the future growth drivers, in our view. Although these would underpin investor interest in this sector, we downgrade the sector to Neutral (from Overweight), on the back of limited upside for large-cap REITs. Also, upcoming IPOs such as Sabana REIT and Mapletree Commercial Trust could divert attention away from existing REITs. Our top pick is Cache Logistics for its undemanding valuations (trading at book value) and likely near-term debt-funded acquisition catalysts. Among the large-cap REITs, CCT, currently the cheapest large cap, is our preferred liquid REIT, provided it is able to make an accretive acquisition. Our top short is CMT, which has limited growth catalysts for the next two years, significant capex needs and possibly increased interest costs if holders of CMT convertible bonds exercise their put options next year.

CIMB: Singapore market upgraded to Overweight ; end-CY11 index target raised to 3,560

Singapore Strategy
3,236.8 @15/11/10
3Q10: playing with bubbles Target Index: 3,560

• Singapore market upgraded to Overweight (from Neutral); end-CY11 index target raised to 3,560 (from 3,416, bottom-up). Our new target is based on 1.9x CY11 P/BV (slightly above mean) and 14.4x CY12 P/E (below mean). We believe such valuations are conservative. With the US Fed valiantly attempting to create bubbles to deal with yesteryear’s problems, the risk is on the upside. Also, the FSSTI has underperformed regional markets for the bulk of 2010 and valuations now look relatively attractive. We deem catalysts for the FSSTI to be: 1) rising capital-markets-related fee for the banks, as corporate M&A deals are reignited; 2) the return of orders for the conglomerate sector; 3) narrowing of discounts for property stocks as emerging market assets and Singapore office assets get bid up.

• 3Q10 results review. The 3Q10 results season was the first time since the crisis that positive surprises roughly equalled negative surprises. In the past, there were more positive surprises. Although earnings no longer beat our estimates, analysts still raised their forward EPS expectations by 3.6-4.1%. Sectors that beat expectations were banks, offshore & marine, container shipping and agri-logistics. Sectors that fell short were plantations, telcos and transport. In the property/REIT space, the defining event was the divestment of MBFC Phase 1 at barely accretive prices to the REITs.

• New themes. In a bipolar world, where deflationary forces are gnawing on the US consumer and inflationary pressures are building up in Asia, we highlight four new themes worth exploring. First, we deem industries with little infrastructure investment in the past two years as ideal for a re-rating. Companies will have pricing power as orders come back. Second, we see Singapore banks as beneficiaries of increased M&A activities. Third, commodities are a beneficiary of the wall of money and weakening dollar; this is a consensus call but we find it hard to think otherwise. Lastly, we see high-yield stocks with bond-like cash flows as potential candidates for bond investors to considering swapping into.

• Our top picks are Cache Logistics, DBS, Ezra, Golden Agri, Genting Singapore, Keppel Land, M1, OUE, SIA and Sembcorp Marine.

CIMB: STI reverses

STI reverses. STI reversed its uptrend late last week after failing to overcome its resistance trend line. But the index remains in the uptrend channel since end-May. The support trend line at 3,145 is key. The 50-day SMA support is also close to the support trend line at 3,147. These support levels should not break. If they did, it would attract strong sellers in the market.

CIMB: Wedge formation ends for KLCI?

Wedge formation ends for KLCI? The KLCI could have completed its wedge formation last week. If so, the target for this correction is at the start of the wedge, which is at 1,450pts. The index is facing some resistance at the 21-day SMA (1,502). Support now is at the 50-day SMA (1,480) and the next support is at 1,450pts. The daily technical indicators have turned negative.

CIMB: China Taisan On the growth track

China Taisan Group Holdings
On the growth track
BUY; TP:S$0.30
Price @12/11/10: S$0.20
52-week range (SGD): 0.165– 0.245
Market cap – S$221.9m

3Q10 results in line

• In line. 3Q10 net profit of Rmb60.7m (+757.3% yoy) was in line with our estimates, forming 28% of our FY10 forecast. The sharp jump was attributed to higher sales and improved gross margins. On a cumulative basis, 9M10 net profit of Rmb170.1m (+281.8%) formed 79% of our full year estimates.

• Commendable revenue growth. 3Q10 revenue of Rmb322.2m (+117% yoy) was in line with our expectations, forming 27% of our FY10 forecast. The spike in revenue was mainly attributed to 1) an increase in the overall sales quantity as a result of improved demand from customers; 2) higher ASPs for products and services following the trend of higher raw material prices amid strong market demand; and 3) the launch of new products which led to higher sales quantity and greater selling prices.

• Stellar margins. 3Q10 gross profit came in at Rmb84.3m (+501.7% yoy) as a result of the launch of new products that yield margins above 30% that resulted in a higher margin sales mix. In addition, a higher capacity utilization rate also resulted in a lower unit cost of production which boosted margins. 3Q10 gross margin came in at 26.2% which is about 17 % pts higher than during the same period last year. On a cumulative basis, 9M10 gross margin was 25.6% as compared to 14.8% in 9M09.

• Maintain Buy. We continue to peg China Taisan at its CY11 sector average P/E of HK-listed peers of 6.3x. This gives us a target price of S$0.30, which is way below that of its Taiwan listed peer, Far Eastern New Century which is trading at CY11 P/E of 16.7x and that of its end customers and HK-listed sports apparel companies (Taisan’s end customers) which are trading at an average CY11 P/E of 14.6x. The target price translates to 50% upside.


• Healthy cash position. The company is in a strong net cash position of Rmb473.4m, which translates to about 9 Scts a share or 44% of market capitalization. Free cash flow is also positive coming in at Rmb61.9m (+133.7%) as management ensured consistent collection from customers and paced the payment to suppliers in accordance

with the credit terms, all of which boosted operating cash flow.


• Likely beneficiary of the 16th Asian Games. The 16th Asian Games will commence on 12 Nov 2010 in Guangzhou, China. The group expects the event to boost the consumption of sports and casual apparel made from performance fabrics in China, which in turn would spur the demand for China Taisan’s performance fabrics – a positive for the company.

DBS:Expect a period of market lull until post Christmas before STI heads for 3428 in 1Q11

A lull period in trading before picking up again end-December The year-end holiday season is typically a lull period for the stock market. Trading activity during the Nov-Jan period over the past decade has revealed December to be the quietest month 90% of the time. What’s more, the value of shares traded in December has been below the annual average in 8 out of the last10 years. November, however, whilst below the average for half of that time, has seldom ended up as the quietest trading month. The good news is that interest picks up markedly in January.

We see no exception this year. STI’s rally from 2950 since early September came in anticipation of QE2 as well as the 3Q results season. With the USD600bil QE2 program announced and an end to the 3Q reporting season, we expect market activity to decline upon a general lack of news flow in the weeks ahead. With little leads, attention could turn to the capital control measures that Asian central banks may have to put up to curb hot money inflows.

Monday, November 15, 2010



HLG: More mild corrections but 1450 is a strong support

KLCI Outlook
More mild corrections but 1450 is a strong support
We reiterate our positive view of FBM KLCI to reach 1600 zone next year despite near term wild swings in the global markets. In our view, the pullbacks over the last two days are interpreted as healthy process and was not unexpected, particularly when the index hit an all time high last week and recorded superb gains since 2H.

We advocate accumulate on weakness, with prevailing uptrend still intact, on the back of a strong ringgit, speculation of general election next year, new listings of mega IPO, acceleration of various projects under the Economic Transformation Plan, more M&As and etc.

As short term support of 10-d SMA was broken coupled with weakening technical indicators, we see more downside to FBM KLCI in the immediate term. Immediate support levels are 1488 (40-d SMA) and 1479 (50-d SMA). More solid support is situated around 1453 pts (UTL). Resistance is at the all time high of 1532 and followed by 1550.

Apex: KLCI Technical view

Closing: 1499.81
Support: (S1) 1495 / (S2) 1480 / (S3) 1450
Resistance: (R1) 1500 / (R2) 1530 / (R3) 1570

Comments: The FBM KLCI plunged further by 13.89 points or 0.92% to close at 1499.81, slightly below the critical support level of 1500. Technical indicators are more bearish now with the MACD value crossing below the 9 days EMA line. A surge in the –DMI value indicates that the “bear” is gaining momentum. In contrast, we take note that the index is still holding within the middle-uptrend channel. This hints that the market would resume its uptrend development in the near future if the index is able to hold above the immediate support of 1495. From now, the market outlook is mixed. The immediate support level is pegged at 1495 followed by 1480.

DBS: technical view for the STI to head to 3438 by 1Q11

We maintain our view that trading activity should taper down post 3Q reporting season and heading into the year-end holiday lull period. We see interest returning only after the Christmas holiday and maintain a technical view for the STI to head to 3438 by 1Q11. We peg short-term resistance for the STI at 3285 and support at 3200 and 3130.

Despite much anticipation in recent months, there appears to be little positive catalyst after QE2 was announcement earlier this month other than the usual chant of hot-money inflows into Asia. Asia governments are reacting by putting up capital controls. Policy risks such as rate hikes and measures to curb rise in asset prices could resurface. There is also the spectre of currency wars and finally, concerns about rising commodity prices and inflation. All these uncertainties are likely to cap short-term enthusiasm heading into the quiet month of

CIMB: 15.11.2010 STI Technical Review

We expect to see an increase in volatility in the coming days if not weeks given the bearish divergence on its RSI. Closing back below the support at 3,245 would likely signal that a deeper correction towards 3,139 is taking place. 3,142, the 50-day SMA could give the bulls some support. However, if this gives way, prices could retest 3,000 levels.
Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)

乔治·索罗斯(George Soros)



高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo

There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock