Saturday, October 22, 2011

PhillipCapital Market Watch 21102011 (Weekly Market Commentary)

Source/转贴/Extract/Excerpts: youtube /PhillipCapital
Publish date:21/10/11

TOP STOCK LOSERS: Things that can go wrong with a business

Written by Sim Kih
Friday, 21 October 2011 07:00

INVESTING IN small caps can be risky. Market darlings can turn into laggards by a dramatic change in the business environment.

We highlight some of the year's worst performers below to show the gamut of things that can just go wrong. This article follows on our recent article on the best-performing stocks in the year to date (see Link)

Longcheer - down 85.3% YTD

Once a market darling, Longcheer is a Chinese mobile handset design house that rode on the strong handset demand until fierce price competition ate up its profits.

It clocked Rmb 183.2 million in net profit for FY2010 (year-end Jun) but a loss of Rmb 67.7 million in FY2011 when its mobile lottery application was not found by consumers to be snazzy enough to command a premium price.

Inventory write-downs, group margin erosion due to falling average selling prices, wage increases and R&D expenses resulting from a decision to focus on smart phones instead of feature phones took their toll.

Result: the company is now rationalizing its customers, cost and product mix and scaling down its operations. The company has said that it expected to continue to suffer operating losses in the coming quarters.

The stock recently closed at 10 cents versus 68 cents at the start of the year.

Renewable Energy Asia – down 73.5% year-to-date

Alternative energy is getting much government funding and support in China but for wind energy player, REA, the going has been anything but smooth.

REA invests in wind farms, manufactures wind turbine components and systems, and provides EPC and maintenance services for wind farms.

Being in a nascent industry, repair costs on goods affected by quality issues, change requests on production specifications by customers and production bottlenecks plagued it in FY2011.

When it reported a net operating cash outflow of about 52.2 million and a net loss of Rmb 53.9 million for FY2011 (year-end Mar), its auditors voiced significant doubt on its ability to continue as a going-concern.

Executive chairman and controlling shareholder, Mr Xu Jian, then stepped in and gave the company an interest-free shareholder's loan of indefinite term amounting to US$3.6 million.

Its Singaporean CEO Woo Peng Kong resigned on 7 Oct and was replaced by a PRC national, Dr Zheng Lei.

The stock recently closed at 5.3 cents versus 20 cents at the start of the year.

Dapai – down 72.4% year-to-date

Dapai is one stock plagued by rumors that its ‘cash is not real’.

In its financial statement, it said that as at 30 Jun it had cash balances of a whopping Rmb 508.7 million. Investors asked: If that is the case, why did its bank borrowings double from Rmb 31 million as at 31 Dec 2010 to Rmb 64.9 million as at 31 Jun 2011?

The company’s rationale was that in these days of tough borrowing environment, it had to maintain an on-going strategic relationship with the banks.

The second grouse that investors had was it going ahead with the construction of its new manufacturing facility (which would eventually cost a handsome Rmb 260 million) despite falling utilization rates at its existing facilities.

The company said it wanted to rely less on sub-contractors in order to better control quality and smooth out supply disruptions.

Investors were also unhappy that it was spending so much money on the expansion of retail outlets despite falling sales. 2Q2011 revenue had fallen by 30.1% year-on-year to Rmb 397.8 million but in the same period, its selling and distribution expense tripled to Rmb 52.3 million.

The stock recently closed at 5.8 cents versus 21 cents at the start of the year.

Combine Will's molds are what makes miniatures life-like.Combine Will – down 72.8% year-to-date

China is one of the world’s largest exporters of toys, accounting for 60% of the world’s toy export market and 90% of US toy imports. However, toys made-in-China bear ill repute associated with safety issues such as unsafe levels of lead.

Combine Will says that its manufacturing molds and mold-making tools are of so high quality, they have enabled customers to produce paraphernalia, collectibles, toys, consumer products, snow shoes, stationery items, and automobile parts with a good safety track record.

Like most Chinese manufacturers, however, it faces the challenges of rising labor and raw material costs, as well as the continued appreciation of the RMB. The company’s 2Q11 net profit fell 55% year-on-year to HK$14.3 million.

The company had wanted to dual-list in South Korea for an improved market valuation and open up the Korean market for its products. When the stock market outlook turned tumultuous in recent months, it announced that it was calling off its dual listing plan.

The stock recently closed at 85 cents versus S$3.14 at the start of the year. (The trading board lot for Combine Will is 100 shares instead of 1,000.)

Ziwo – down 66.8% year-to-date

The textile industry is a fiercely competitive one. Companies always try to expand margins by vertical integration, but Ziwo was one company caught on the wrong side of the fence when it lost a major customer who decided to become its competitor.

It manufactures synthetic yarn, sandwich mesh fabric and foamed materials for manufacturers of sportswear, sports accessories and, bags and luggage.

Its 2Q2011 sales volume declined 33% as a result of the loss of the major customer.

The stock recently closed at 13.2 cents versus 40 cents at the start of the year.


Publish date: 21/10/11

First Reit's amount distributable for Q3 rises to $12.08m

Business Times - 22 Oct 2011

First Reit's amount distributable for Q3 rises to $12.08m


FIRST Real Estate Investment Trust (First Reit) saw the amount distributable for the third quarter ended Sept 30 rise to $12.08 million, up from $5.35 million in the previous corresponding quarter.

This was helped by other gain from the distribution of a portion of the total gain on divestment of the Adam Road property which was sold in Q1 this year to Fortis Global Healthcare. The distribution per unit (DPU), payable Nov 29, is 1.92 cents, compared to 1.94 cents in 3Q10.

Meanwhile, gross revenue rose 79.2 per cent to $13.67 million while net property income also rose 79.2 per cent to $13.47 million. Earnings per unit were 1.23 cents for 3QFY11, compared to 1.25 cents in 3QFY10.

Results were lifted partly by maiden contributions from its three new properties: Mochtar Riady Comprehensive Cancer Centre and Siloam Hospitals Lippo Cikarang in Indonesia, and South Korea's Sarang Hospital.

The gain on divestment from the Adam Road property is about $8.7 million, of which a portion (0.34 cent per unit) will be distributed this quarter as a special non-recurring distribution. The balance will be distributed to unitholders at Bowsprit Capital Corporation's (First Reit's manager) discretion in the future, it said in a press release.

In an update on the new five-storey extension block at The Lentor Residence, First Reit expects this to be completed by the second half of 2012.

'With a visible pipeline from our sponsor PT Lippo Karawaci Tbk, we believe we will be able to strengthen our property portfolio in Indonesia by tapping the sustained demand for quality healthcare services as well as leveraging our sponsor's long-term expansion plans to develop over 25 hospitals over the next five years,' said Bowsprit CEO Ronnie Tan. 'We have been engaging in preliminary discussions with our sponsor to acquire some of its upcoming properties to which we have a first right of refusal.'

Meanwhile, First Reit expects the demand for nursing homes and community hospitals to increase in Singapore as the government lobbies for better tertiary care. Given First Reit's debt-to-property valuation ratio of 16.4 per cent, Bowsprit said it will continue to look for valuable, yield-accretive healthcare-related assets in the region.

First Reit shares closed at 79.5 cents yesterday, up half a cent.

Publish date:22/10/11

Causeway Point helps FCT post record quarterly, full-year DPUs

Business Times - 22 Oct 2011

Causeway Point helps FCT post record quarterly, full-year DPUs

Q4 DPU rises 8.8% to 2.35 cents, taking FY11 DPU to 8.32 cents; Q4 NPI jumps 13.7%


FRASERS Centrepoint Trust (FCT) yesterday posted record quarterly and full-year distributions per unit (DPUs), helped by the strong performance upswing of Causeway Point.

For the fourth quarter ended September, FCT's DPU was 2.35 cents, an 8.8 per cent year-on-year increase from Q4 2010's 2.16 cents.

This brings the total DPU for the financial year ended September (FY 2011) to a record 8.32 cents, up 1.5 per cent from FY 2010's 8.20 cents. FCT said this represents the fifth consecutive year of DPU growth since its listing.

Distribution to unitholders for the quarter rose 10.8 per cent to $18.3 million. Net property income (NPI) climbed 13.7 per cent to $25.3 million.

Causeway Point, FCT's largest asset, posted a strong quarterly performance, following the re-opening of its revamped sections (basement and first two levels of the mall).

It posted revenue of $17.3 million, 61.7 per cent higher than the preceding quarter. Similarly, its NPI improved 95.6 per cent over Q3 2011 to $13.3 million.

As at Sept 30, 65.5 per cent of Causeway Point's refurbishment works were completed, with full completion expected end next year, said FCT. The next phase of work is shifted to higher levels, where any disruption to revenue will be more muted.

A sharp recovery in occupancy at Causeway Point - from 78.3 per cent the previous quarter to 92.0 per cent - also contributed to an overall improvement in FCT's portfolio occupancy, which as at end September stood at 95.1 per cent, up from 87.6 per cent the previous quarter.

FCT's total assets grew 17.9 per cent year on year to about $1.79 billion, on higher property valuation and the acquisition of Bedok Point. FCT recognised a revaluation surplus of $97.2 million (after adjustments), with Causeway Point contributing $59.2 million.

In the acquisition pipeline is Changi City Point and The Centrepoint, which will feed an additional 602,794 sq ft of net lettable area (NLA) into FCT's portfolio of 879,780 sq ft NLA.

Following the private placement of 48.0 million new units issued on Sept 23 to part finance the Bedok Point acquisition, pre-existing unitholders will receive an advance distribution of distributable income for the period of July 1 to Sept 22.

The books closure date for the advance distribution is Sept 22 and it will be paid on Nov 8. New units will not be entitled to this advance distribution.

The next distribution will comprise distributable income from Sept 23 to Dec 31. Quarterly distributions will resume thereafter.

FCT ended trading on the stock market yesterday at $1.47, gaining 1.5 cents

Publish date:22/10/11

CapitaLand Q3 profit dives 83% to $80m

Business Times - 22 Oct 2011

CapitaLand Q3 profit dives 83% to $80m

Earnings hit by fewer project completions in Australia, China; new accounting rule effect


CAPITALAND'S third-quarter net profit plunged 83 per cent from a year ago due to fewer project completions in China and Australia and the effect of restating last year's revenue relating to an accounting rule change.

CapitaLand, South-east Asia's largest property group, reported earnings of $80.2 million for the three months ended Sept 30, down from a restated $460.1 million. Revenue of $608.6 million was 58 per cent lower than the restated $1.45 billion a year ago.

CapitaLand restated its 2010 turnover and earnings upwards to make them comparable with the current set of results, which are based on a new accounting standard that took effect this year.

Without the restatement effect, the quarter's net profit and revenue fell 50 per cent and 11 per cent respectively.

The developer's Q3 2010 results were also boosted as revenue for units at The Seafront on Meyer and Latitude in Singapore - which were sold under the deferred payment scheme - were recognised in full. Under the new accounting rule, revenue for sales of units under such a scheme can be recognised only upon completion.

However, the decline in Q3 2011 was mitigated by revenue recognition from a development project in Vietnam, higher rental from shopping malls and higher fee-based income, CapitaLand said. Earnings per share fell to 1.9 cents in Q3 2011 from a restated 10.7 cents a year ago.

For the first nine months of the year, CapitaLand's net profit fell 30 per cent to $580.7 million from a restated $829.6 million, while revenue fell 21 per cent to $1.96 billion from $2.48 billion.

In the first nine months of this year, CapitaLand committed some $7 billion of new investments to 'broaden and deepen' its businesses in its core markets - especially in Singapore and China - said chief executive Liew Mun Leong.

And, looking ahead, the company's strategic focus will still be on its core markets, and it will continue to adopt a prudent investment approach, he said.

'With our strong balance sheet and financial flexibility, it is likely the uncertainty and cooling measures will provide opportunities for us to explore and secure investment opportunities, especially in Singapore and China,' Mr Liew said.

CapitaLand shares rose 4 cents to close at $2.45 yesterday. The stock has shed 34 per cent so far this year.

Publish date:22/10/11

FCT: Expect another high note (DBSV)

Frasers Centrepoint Trust
Expect another high note
BUY S$1.46
Price Target : S$ 1.76 (Prev S$ 1.73)

At a Glance
• FY11 DPU of 8.32 Sct was slightly above our expectation of 8.2 Sct
• Revenue to trend up supported by multipronged growth engines; gearing healthy at 31%
• Good defensive stock; maintain BUY, TP raised slightly to S$1.76

Comment on Results
FY11 DPU of 8.32cts at a record high. On a y-o-y basis, 4Q11 revenue and NPI rose 5.1% and 13.7% to S$34.1m and S$25.3m respectively on the back of strong portfolio performance and partial completion of the AEI works at Causeway Point. Portfolio occupancy strengthened from 87.6% a quarter ago to 95.1% and the group renewed 34,161sf of retail space at 7.9% higher than the preceding rents. Consequently, distribution income rose 10.8% to S$18.3m, translating to a DPU of 2.35 Scts. There was net revaluation gain of S$97.2m, largely from Causeway Point and North Point at slightly compressed cap rates (lowered by 10 to 25bps), as well as Bedok Point bringing portfolio value to S$1.7bn or book NAV of S$1.40/unit (+8.5% y-o-y).

Revenue drivers all set for next year. Going forward, we expect to see steady income growth from (1) full year contribution from Bedok Point from 1QFY12 - expected to add about S$7m p.a. at NPI level; (2) progressive completion of AEI works at Causeway Point and reopening of the refurbished sections at the basement, level 1 and 2; (3) ability to continue to drive rental reversions with 35% of its portfolio NLA up for renewal in FY12. 98% of the leases have step-up rental clauses and we expect 3-5% rental reversion in FY12; and (4) interest savings from refinancing of the S$80m revolving loan.

Yield for FY12 at 6.1%, Maintain BUY. We continue to like FCT for its pure exposure to the resilient and stable suburban market. Balance sheet remains robust with 31.3% gearing. We nudge up FY12F DPU by 1.6% after including the additional income from Bedok Mall. Maintain BUY with a slightly higher DCF-based TP of S$1.76 as we roll our numbers forward into FY12.

Source/转贴/Extract/Excerpts: DBS Vickers Research
Publish date:21/10/11

FCT: Fine end to a record year (CIMB)

Frasers Centrepoint Trust
Current S$1.46
Target S$1.65

Fine end to a record year
FY11 ended on a high note for FCT, aided by a rebound in occupancy and rental reversions from a partially-refurbished Causeway Point. We continue to like its resilient suburban retail exposure and see the refurbishment of Causeway Point as a key game-changer.

FY11 DPU was spot on for us though slightly above consensus. 4Q11 DPU forms 28% of our estimate on stronger Causeway Point contributions. We raise our DPU estimates and DDM-based target price (discount rate 8.4%) on lower interest costs. Maintain Outperform.

Positive rental reversions; strong occupancy
We expect a further pick-up in occupancy at Causeway Point and positive rental reversions. 4Q was marked by a sharp recovery in occupancy there and rental reversions (8.6% for FY11, 7.9% for 4Q11, 7.2% for FY10) for its portfolio. Occupancy at its other assets also held up above 95%.

Causeway Point a potential game-changer
Having gone through the most intensive period of AEI with good rental reversions for refurbished space, Causeway Point could change the game for FCT in FY12. Occupancy surged to 92% from a trough of 69% in 2Q and is expected to sustain above 90% in FY12. With 65.5% of the refurbishment completed, work should henceforth be less disruptive, given its progression to higher levels.

Pleasant surprise from lower costs of borrowing
Interest cost savings should continue. Management refinanced its S$260m 4.12% p.a. CMBS in July and hedged this at a low interest cost of 3.09%. This brought effective borrowing rate down to 3.0% from 3Q’s 3.8%. Refinancing of its S$75m MTN due in 2012 should generate further savings, given a high cost of 4.8%. After the drawdown for the Bedok Point acquisition and revaluation of its portfolio, asset leverage was a healthy 31%.

Source/转贴/Extract/Excerpts: CIMB-Research
Publish date: 21/10/11

曾淵滄教路: 復建居屋如抽獎 對樓市影響不大 (18/10/11)

復建居屋如抽獎 對樓市影響不大





Source/转贴/Extract/Excerpts: 東周刊 / 輯錄自 425期 Book A 【曾淵滄教路】
Publish date: 18/10/11

2011-1014-57金錢爆(10月14日佔領夢想街 來開同學會 )

Source/转贴/Extract/Excerpts: youtube
Publish date: 14/10/11

标准普尔:包括法国在内 欧元区一些国家或调降信用评级











Source/转贴/Extract/Excerpts: 联合早报
Publish date:22/10/11





Source/转贴/Extract/Excerpts: 联合早报
Publish date:22/10/11

How To Predict The Stock Market?

How To Predict The Stock Market?

Let’s see how the experts predict the markets. Chief US Equity Strategist this month says “economic prospects have slowed” and that there is “not a lot of upside”, watch the video:

Interestingly, he mentioned in December 2010, just 10 months ago that the economy is expected to “accelerate over the next 8 quarters”, and that there is “no reason for the market not to be rising”, watch the video:

If even the experts can’t predict the markets, can you? You will probably be right 50% of the time since it’s either up or down.

If you call for a rebound every day in a bear market, sooner or later you will be right – but the question is whether you are still alive by then.

Follow the trend. Do not try to catch a falling knife by catching rebounds. You might be right once or twice and get to boast about it, but one wrong move will wipe out all your gains and more. Do not keep thinking of “buy and hold” because cheap can always get cheaper. Dividends cannot make up for the capital loss when your stock price is falling everyday.

Publish date: 08/10/11

First REIT’s 3Q distributable income jumps 125.7% to S$12.1 million

Distribution yield
DPU Ex. non-recurring distribution (S$0.0034) = S$0.0158 X 4 =S$0.0632
Closing price of S$0.795 @ 21/10/11 = 7.95%

Source/转贴/Extract/Excerpts: SGX
Publish date: 21/10/11

LMIR Trust raises cash to purchase assets; pledges more expansion

LMIR Trust raises cash to purchase assets; pledges more expansion

Viven Sitiabudi, CEO of Lippo Malls Indonesia Retail Trust’s manager, spends a lot of time on aeroplanes. She works in Singapore from Tuesday to Thursday each week, then gets on a flight to Jakarta on Friday, where she spends her weekends and Mondays. “All the assets are in Indonesia,” she says, of LMIR Trust. “So, I have to spend quite a lot of time making sure the properties deliver the results, and I work alongside the property manager.”

Sitiabudi will soon have a few more properties to oversee. On Sept 30, LMIR Trust announced a one-for-one rights issue at 31 cents per share, to raise $332 million (after expenses). The rights issue, its first since its IPO in2007, is to part-finance the purchase of two malls for a total of $388 million. One of the malls, Plaza Medan Fair, is in Medan and the other, called Pluit Village, is in Jakarta

On Sept 28, just two days before announcing the rights issue, LMIR Trust also secured a term loan of up to $200 million from four banks. Of this, $125 million is being used to refinance debt, $50 million could come in handy to foot the balance of the bill for the two malls it is acquiring, and the rest will be for working capital.

After the rights issue and acquisition of the properties, LMIR Trust’s debt-to-asset gearing will remain at about 10%. If LMIR had opted to finance the acquisitions by debt alone, its gearing would have jumped to between 30%and 35%, says Alvin Cheng, chief financial officer of LMIR Trust’s manager.

Is LMIR Trust deliberately keeping its gearing low to get a good debt rating? Why isn’t it stretching its balance sheet more? “We’re still happy to be below the 35% gearing level, unless there is a compelling reason to gear to 35%, such as an acquisition,” Sitiabudi says. “But, we will not consider getting a rating — not yet. When we were considering the debt and rights issue, the ultimate objective was to grow the fund.”

LMIR Trust was originally known as Lippo-Mapletree Indonesia Retail Trust, because Mapletree Investments owned 12% of the trustand 40% of the manager. In May, Mapletree Investments sold its interests in the manager and trust to Jakarta-listed Lippo Karawaci for$197.4 million. “Mapletree wants to focus on other countries such as Japan, Vietnam and China. In order to give way to Lippo, they decided to exit. We didn’t quarrel; we are all on good terms,” says Sitiabudi, who was CEO of Lippo Karawaci until 2007, when she began running LMIR Trust.

Now, Sitiabudi says Lippo wants to expand LMIR Trust to develop a broader investor following. “We are just too small for a significant investor to look at,” she says, noting that LMIR Trust has a market capitalisation of only $494million. “People normally look at companies with a market cap of $1 billion.” Currently, only SIAS Research covers LMIR Trust. Some other local brokers, such as OCBC Securities, also used to follow LMIR Trust but gradually dropped it.

Yet, LMIR Trust is the only pure Indonesian retail mall play on the Singapore Exchange, which should make it an exciting investment, Sitiabudi says. “Investors expect us to be riding the wave, with the growth of the economy and the wealth of the middle income in Indonesia. And, Indonesia is a domestic consumer story.”

The rights issue and acquisition of the two additional properties could be just a first step towards making LMIR Trust a lot bigger. “This is the second acquisition after the IPO and the first in almost four years,” Sitiabudi says. The two malls will boost the size of its portfolio to$1.46 billion, and increase the number of malls it owns to 10. LMIR Trust was listed with seven malls in 2007, and acquired a third-party mall shortly afterwards. When the acquisition is complete, LMIR will have six malls in Jakarta, two in Bandung and two in Medan.

Cheng estimates the deal could take the market cap to $900 million. That would make it larger than Sabana Shari’ah Compliant REIT, Cache Logistics Trust, Cambridge Industrial Trust, Ascendas India Trust, and AIMS AMP Industrial REIT. But it would still be well be-hind other retail real estate investment trusts such as CapitaMall Trust, Frasers Centrepoint Trust and Starhill Global REIT, which have market caps of $5.8 billion, $1.2 billion and$1.1 billion respectively.

Deal not accretive
While the acquisition of the additional properties will boost the size of LMIR Trust, investors are evidently not impressed with the prices it is paying and the way the deal is being financed.

LMIR Trust is paying $229.7 million for Pluit Village. That will put the net property in-come (NPI) yield for the property at 10.8%,based on its income for 2010, and an annualised 7.4% on its income for 1H2011. For Medan Fair, the NPI yields are 7.4% for 2010, and an annualised 8.5% for 1H2011 based on its purchase price of $128.3 million. By comparison, the NPI yields of LMIR Trust’s existing port-folio are 7.5% for 2010 and 8.1% for 1H2011.

In other words, the addition of the two new properties is unlikely to immediately improve LMIR Trust’s NPI yield. “NPI yield will be at least neutral,” Sitiabudi concedes. She adds, however, that the NPIs on the new properties could improve over time. Notably, Pluit Village is undergoing an asset-enhancement programme that could improve its income potential.

“The two acquired malls have the same characteristics as the malls in the portfolio in that they are everyday malls” Sitiabudi says. “Location wise, Pluit has the middle- to higher-income population.”

Still, revenues from shopping malls are not a sure thing. In 2009, LMIR Trust’s NPI fell6% to $75 million. Sitiabudi says this was be-cause of a decline in “casual leasing” during the financial crisis, when demand for exhibition space dried up.

Meanwhile, with global financial markets in turmoil once again, investors were not given much of a choice in participating in the rights issue. The rights price of 31 cents was a 42%discount to the last traded price of 54 cents on Sept 29. Failing to take up their rights entitlements would result in significant dilution. Units in LMIR Trust fell sharply from 54 cents to 48 cents immediately after the announcement and as low as 44 cents.

Lippo Karawaci has given an undertaking to take up its rights entitlement, as well as all the excess units. That could increase its stake in LMIR Trust from 29% currently to as much as 69%. But, it is seeking a waiver from having to make a general offer for the trust.

Another risk with LMIR Trust is that its properties are all located oversees, which local investors tend not to like. And, while the assets generate income in Indonesia rupiah, they are essentially financed in Singapore dollars.

Sitiabudi notes that LMIR Trust hedges its currency exposure so that its distribution per unit (DPU) is protected. But, even that does not please everyone, she adds. “Our investors have two schools of thought. One is that, yes, hedge. The other side says, ‘Why hedge? We buy into you to ride on the Indonesian rupiah and growth.’ Our own view is that we do not want to speculate on the currency.”

More acquisitions
Looking ahead, Sitiabudi expects LMIR Trust to continue acquiring properties from Lippo Karawaci in the future. Already, LippoKarawaci has embarked on a mall-building scheme that will see it developing 15 malls worth about US$2 billion ($2.6 billion) in the next five years. “These 15 malls will serve as a pipeline for us,” Sitiabudi says. “That will enable us to scale up our trust into at least $4billion to $5 billion [in assets] by the end of the fifth year.”

Lippo Karawaci has only recently begun to develop malls with a view to offloading the minto a trust. It previously developed strata-titled malls that it then sold off. In fact, the properties that LMIR Trust started off with in 2007 were not acquired directly from its sponsor. “At the time of the IPO, [Lippo] acted as a consolidator of malls,” Sitiabudi explains. It pulled together a number of malls from “friendly vendors”, which it then repositioned and injected into the trust. She says, “After that, they managed the malls, and that’s how they are part of the story. But, up till Pluit Village, we didn’t have any of the sponsor’s malls.”

LMIR Trust could make its next acquisition from Lippo Karawaci as early as next year. “It is [called] Kemang Village, and it’s part of the Kemang Village development in Jakarta, one of two mixed-used developments by Lippo Karawaci,” Sitiabudi says. Three of the eight con-dominium towers in Kemang Village have al-ready been handed over to residents. By the time the mall is opened, the development should be fully occupied, Sitiabudi adds.

Another property that LMIR Trust could ac-quire soon is Pejaten Village. “It’s Lippo’s very first leased mall, and opened in December 2009,”Sitiabudi says. “It’s 80% to 90%occupied, stabilised and almost ready.” With net lettable area of about 60,000 sq m each, these two malls could easily bring the asset size of the trust to almost $2 billion, CFO Cheng reckons.

For the six months to June 30, LMIR Trust reported NPI of $22.6 million, up 4.3% y-o-y, and DPU of 1.09 cents, up 4.9% y-o-y. Its net asset value stood at 83 cents per share. According to its rights issue circular, its pro forma net asset value for FY2010, following the rights is-sue and acquisition of properties, would be56.7 cents per share.

Source/转贴/Extract/Excerpts: No493
Publish date:10/10/2011

歐盟周日峰會 歐債解危計劃難決

歐盟周日峰會 歐債解危計劃難決
傳將設1.29兆美元基金 德法喊話下周三前盼達共識

【邱柏達╱綜合外電報導】歐債問題歹戲續拖棚,德國總理莫克(Angela Merkel)與法國總統沙柯吉(Nicolas Sarkozy)最新聯合聲明指出,希望歐洲各國政府下周三前針對解決歐債危機計劃達成協議。市場對此解讀,周日歐盟領袖高峰會恐不會有具體解決方案出爐。


國際信評機構標準普爾(Standard & Poor’s,標普)昨再度警告,若經濟持續疲弱、法國恐難逃降評命運。標普表示,若經濟出現二次衰退、各國政府融資成本增加衝擊層面擴大,考慮進一步調降包括葡萄牙、西班牙、義大利與愛爾蘭信評1~2個等級。

近期法國信評議題成為市場焦點,穆迪投資人服務(Moody's Investors Service)日前已警告,如果協助本國銀行業或其他歐元區國家導致財務吃緊,考慮未來3個月內將法國債信展望從「穩定」調降至「負向」。
德國政府發言人塞伯特(Steffen Seibert)強調:「德、法兩國雙方雖未達成最後決議、但已然取得重大共識,歐洲問題需要縝密思慮。」
莫克領導的德國基督教民主黨(CDU)預算政策發言人巴塞里(Norbert Barthle)證實,莫克因歐元區金融穩定工具(European Financial Stability Facility,EFSF)擴充案磋商陷入僵局,取消原訂昨應舉行的國會演說。

歐盟執行委員會(European Commission)金融監管官員巴尼耶(Michel Barnier)也證實:「考慮授權歐洲證券與市場管理局禁止信評機構針對部分接受國際援助紓困國家發布信評報告,以防止信評機構在不適切時間發布的信用評級報告,從而對國家及全球經濟造成影響。」

Source/转贴/Extract/Excerpts: 蘋果日報
Publish date: 22/10/11

CapitaLand 3Q profit falls 83% to $89.2m on accounting change

CapitaLand 3Q profit falls 83% to $89.2m on accounting change

CapitaLand, Southeast Asia’s biggest developer, said third-quarter profit dropped 83% after lower contributions from China and Australia, and an accounting rule change restated last year’s revenue, reported Bloomberg.

Net income dropped to $80.2 million in the quarter ended Sept. 30, from a restated $460.1 million a year earlier. Revenue fell 58% to $608.6 million from $1.45 billion. Sales would have declined 3% without the accounting change effective Jan. 1, based on figures provided by the company.

The Singapore-based developer is planning to sell more apartments in both its home market and China, tapping on opportunities as measures by both governments to curb housing prices hurt weaker competitors. CapitaLand invested $7 billion in new projects this year, more than its target of $5 billion to $6 billion of investments, focusing on the two nations.

Publish date: 21/10/11

Thai floods may benefit some sectors in Malaysia

The Star Online > Business
Saturday October 22, 2011

Thai floods may benefit some sectors in Malaysia

PETALING JAYA: The severe floods in Thailand, that have inflicted untold damages, may inadvertently benefit some sectors and companies in Malaysia.

OSK Research said in its latest note that companies involved in tourism and healthcare in Malaysia could benefit from traffic diverted from Thailand, a trend which would continue even after the flood waters receded.

“Consumer companies may get a short-term lift from increased exports to Thailand, while the technology and automotive sectors may eventually draw more investments from foreigners which are leery of natural disasters,” said the research unit. The worst flood in 50 years in Thailand had so far struck 62 of the country’s 76 provinces in the north, northeast and central region.

“As the situation prolongs in Bangkok, tourists and medical tourists may cancel travel plans and instead seek alternative destinations, such as Malaysia, which has many comparable offerings in terms of tourist attractions and medical facilities,” it said.

Some tourists are expected to divert to other South-East Asian destinations, although the impact will be minimal.

OSK Research said Malaysian consumer companies would also get a short-term lift, as they would be asked to take up the slack in food and beverage production, as Thai factories would take some time to resume production.

“The production disruption at factories in Thailand may result in local factories ramping up production of food products that can be exported to make up for the shortfall in Thailand,” it said.

On technology and automotive sectors, given the extensive damage to the Thai facilities, with total reconstruction efforts estimated at RM10.1bil to RM17.2bil, investors may even consider alternative locations for future investments.

As such, companies offering services to set up technology-based manufacturing plants may reap the benefits over the longer term.

Source/转贴/Extract/Excerpts: The Star Online
Publish date: 22/10/11

Main Market-bound Pavilion REIT aims to raise RM695.2mil

The Star Online > Business
Saturday October 22, 2011

Main Market-bound Pavilion REIT aims to raise RM695.2mil

PETALING JAYA: Pavilion real estate investment trust (REIT), which is en route to a listing on the Main Market, is offering 790 million units under its initial public offering (IPO) to retail and institutional investors.

According to its prospectus exposure on the Securities Commission website, Pavilion REIT’s retail offering includes 31 million units for application by the public that would represent 1.03% of the trust’s total three billion units.

Under the retail offering, four million units, representing 0.13%, will be allocated to eligible tenants of Pavilion REIT’s initial portfolio, the directors of Pavilion Reit Management Sdn Bhd and eligible employees of Pavilion Reit Management Sdn Bhd, Urusharta Cemerlang Sdn Bhd, Capital Flagship Sdn Bhd and Kuala Lumpur Pavilion Sdn Bhd.

The institutional offering, consisting of 755 million units (representing 25.17% of the total issued units) would be for application by Malaysian and foreign institutional investors and selected investors.

According to the prospectus exposure, the retail offering would be offered at 88 sen per unit while the price for the institutional offering would be determined by way of a bookbuilding process.

“Based on an illustrative average offering price of 80 sen per offer unit, the offering is expected to raise gross proceeds of RM695.2mil arising from the issuance of 790 million offer units,” it said. The initial portfolio comprises the Pavilion Kuala Lumpur Mall and Pavilion Tower, which have a total net lettable area of 1.3 million sq ft and 167,407 sq ft respectively.

On its outlook, Pavilion REIT, which is partly-owned by the Qatar Investment Authority, said its operations depended to a large extent on the performance of the Malaysian economy and conditions of the local real estate market. “A decline in Malaysia’s economy could adversely affect Pavilion REIT’s results of operations and future growth.”

The performance of Pavilion REIT may also be adversely affected by a number of local real estate market conditions, such as the competitiveness of competing retail and office properties or the supply and demand of retail and office properties.

Source/转贴/Extract/Excerpts: The Star Online
Publish date: 22/10/11

MAS lines up mid-management

The Star Online > Business
Saturday October 22, 2011

MAS lines up mid-management


PETALING JAYA: Malaysia Airlines (MAS) has released its organisational chart to its employees revealing the lines of reporting for its middle-level management but it has yet to name a candidate to head sales and marketing since the departure of Datuk Bernard Francis.

Datuk Eddy Leong would continue to head Firefly as CEO and he is also the chief operating officer of the short haul operations, sources said.

The chart showed that the airline had consolidated the over 10 units to seven, sharpening its focus and made the reporting lines clearer, they added.

The seven are commercial, customer experience, operations, group finance, corporate finance, human capital and CEO’s office.

The three subsidiaries – MAS Wings, MAS Aerospace and Engineering and MAS Kargo – are also parked under the CEO’s office.

“As customer is the key focus, MAS has created a new unit, customer experience, which is headed by Datuk Mohd Salleh to look at all the touch points of customer needs, from planning, booking, check-in, baggage handling to customer care.

“This is essential since the airline wants to get back to offering full premium services or it would always be known as a second-tier premium carrier,” said a source.

Customer experience management will be handled by S. Pushpalatha while Rahimah Farjan Ali would oversee service quality assurance and enforcement.

While some view the new chart as providing clarity to the lines of reporting, others felt it was “confusing, and it appears to be top heavy again.”

The immediate focus of the new team should be to return the airline to profitability and make its mark in the premium segment where competition is stiff.

MAS reported RM769mil in net loss in first half of 2011 when its rivals in the region reported profits.

It has undergone a shake-up with the share swap with AirAsia Bhd in August and this resulted in a board revamp and the entry of the new MD/CEO and deputy CEO.

It is the new team that released the new chart to the employees.

At the end of September the new team came up with a organisation for the top management team whereby there was a clear separation of duties for the MD/CEO Ahmad Jauhari Yahya and deputy CEO Mohamed Rashdan. Alhough Jauhari oversees the airline, he is also head of long haul operations and Rashdan, the short haul.

The commercial unit is also headed by Rashdan until a new candidate is found. All aspects of sales and marketing, revenue management, network and fleet planning, charters, corporate marketing and loyalty programme (Enrich), Golden Holidays falls under the purview of the commercial unit.

The head of the commercial office is Datuk Merina Tahir, head of commercial strategy is Datuk Dr Amin Khan, corporate marketing and loyalty programmes remains with Raja Datuk Nordiana Zainal Shah. Revenue management is under the purview of Sharifah Salwa.

All the aspects of operations, be it flight operations, the control centre, crew and pilots fall under this unit and it is headed by Capt Mohamed Azharuddin and flight operations under Capt Izham Ismail.

The corporate finance unit looks into mergers and acquisitions, fleet management, aircraft financing and leasing and it is headed by Abdul Aziz.

MAS made it clear that Firefly would continue to focus on operating the turboprops from its base in Subang and Penang and its jets would be taken over by MAS. The jets would be re-deployed for the short haul operations by Dec 4 as the airline is currently undertaking a route and fleet management evaluation.

Separately, Airbus said MAS’ first A380 took off from Toulouse for its maiden flight on Thursday after completion of the final assembly and system tests.

Source/转贴/Extract/Excerpts: The Star Online
Publish date: 22/10/11

Malaysia Airlines' first A380 makes maiden flight

The Star Online > Business
Updated: Friday October 21, 2011 MYT 4:47:56 PM

Malaysia Airlines' first A380 makes maiden flight

KUALA LUMPUR: The first A380 for Malaysia Airlines (MAS) took off on its maiden flight yesterday upon completion of the final assembly and system tests in Toulouse, France.

In a statement here, Airbus said that after a successful flight of five hours, the aircraft returned to Toulouse to be prepared for its next journey to the Airbus facilities in Hamburg, Germany, for cabin installation and painting.

Powered by four Rolls-Royce Trent 900 engines, the aircraft is the first of six A380s ordered by MAS, scheduled for delivery in the second quarter of 2012, it said.

MAS will be the 8th airline to operate the A380. - BERNAMA

Source/转贴/Extract/Excerpts: The Star Online
Publish date: 22/10/11

Still time to get defensive

Still time to get defensive

Analysts highlight resilience of blue-chips, telcos amid uncertainty

Asian equities rallied towards the end of last week, following a rebound in US and European stock markets, on signs that the sovereign debt crisis in Europe could be starting to come under control. European leaders, led by German Chancellor Angela Merkel, are said to be working on plans to boost banks’ capital, although Merkel has stressed that a rescue fund will be used only as a last resort. At the same time, markets were buoyed by better-than-expected economic data out of the US showing employment growth.

On Thursday, the Straits Times Index opened higher, with gains led by the three big local banks, and finished the day 2.9% higher at 2,603.12. AmFraser points out that, on a three-year basis, the Singapore benchmark has out-performed the Standard & Poor’s 500 index, and is still some 13% higher than it was in October 2008.

Some analysts have cautioned a rebound is likely to be short-lived, however, and many have adjusted their earnings estimates and recommendations across sectors in the wake of the sell down. There also seems to be some consensus in building up a defensive portfolio with blue chips, telcos and banks.

UBS strategist Tan Min Lan writes in an Oct 3 report that, in past sell downs, a sustained rebound happened only near the trough of the GDP cycle, which UBS estimates to be in 1Q2012. Tan says investors should remain in capital-preservation mode for the rest of this year, given the uncertain global outlook. “We see tactical opportunities in selected blue chips, but think a sustained bounce in Singapore equities is unlikely until the growth cycle bottoms; that is, no earlier than end-1Q2012.”

Meanwhile, CLSA analysts Ashwin Sanketh and Lu Chuanyao say in an Oct 5 report that there are significant downside risks to earnings and the market, given the relationship between GDP growth, earnings growth and the STI. As such, it is “still not too late to get defensive”, and they note that telcos, with strong balance sheets, have proved more resilient than real estate investment trusts in these times.

UBS is also positive about defensive stocks because they have strongly outperformed more cyclical stocks so far. “Although, if the 2008 experience is repeated, we think the relative outperformance can continue for another 20% to 30% from here,” UBS’s Tan says

Tan also notes that, while forward price-to-earnings ratios are now at recession levels, based on the MSCI Singapore’s forward PER of 11.4 times, it is still some 30% above the trough in 2009. “We think value per se is un-likely to move markets higher, and that a sufficient progression in EPS downgrades is needed before value can be unlocked.

”UBS is “overweight” on telcos and banks, “neutral” on transport and consumer stocks and “underweight” on industrials and real estate companies. The brokerage firm’s top picks include Singapore Telecommunications, DBSGroup, Keppel Corp and ST Engineering, with “buy” calls and price targets of $3.47, $15.90, $11.15 and $3.36 respectively.

“As growth prospects deteriorate, telcos should still outperform in 4Q2011 given defensive cash flows,” Tan writes, adding that SingTel has a relatively strong balance sheet of 0.8 times net-debt-to-Ebitda ratio, and has upside potential in its associate Bharti Airtel, the largest private telco in India that is set to benefit from better pricing power in the mobile sector. SingTel has an estimated 2012 dividend yield of 5.5%, compared with M1’s 7.9% and Starhub’s 7%.

Meanwhile, of the telcos, CLSA prefers SingTel and StarHub, and adds Singapore Press Holdings and Singapore Post to the most attractive defensive options. Its analysts note that, at current levels, SPH is pricing in a 50% discount to Paragon’s appraised value, despite the mall’s strong occupancy rate even during the financial crisis. Meanwhile, SingPost has been buying back its own stock at $1.02 per share, “effectively putting a floor” on its share price. SPH’s yield is 5.6%, and SingPost share-holders could enjoy a 6.2% yield.

For the banks, Citigroup notes that it was only recently that the lenders reported near-record 1H2011 earnings, and that they tend to outperform the broader STI during the first two-thirds of a down cycle. But, analyst Robert Kong cautions about a further narrowing of net interest margins, with loan yields hurt by falling interbank lending rates and rising funding costs as liquidity tightens. Furthermore, loan growth could slow once banks become more selective about credit risk, and a recession would lead to lower demand for consumer and investment loans.

Kong notes that, while the banks have significantly scaled back their EU exposure over the past year, the first signs of asset-quality issues would likely come from small and medium-size enterprises and manufacturing companies, which have already come under pressure from the strong Singapore dollar and rising wage costs.

While Citigroup has pared earnings estimates and price targets, it remains positive about the sector and has OCBC as its top buy, with a price target of $9.30. “The bank’s superior asset-quality record will make it a more defensive play, should further economic downside risks emerge,” it says.

As for DBS, the largest banking group in Southeast Asia, analysts point out that it is undervalued, trading at estimated 2011 book value, which UBS says “is too pessimistic, as its Tier 1 ratio of 14%, together with the lack of toxic assets, suggests that [the possibility of a] threat to its book value is remote”.

Meanwhile, UOB analyst Jonathan Koh says the bank’s asset quality remains resilient, with unchanged levels of non-performing loans, and expects it to post a healthy net profit of $715 million for 3Q2011, due to be reported at the end of this month. Koh is maintaining his “buy” call, with a slightly lower price target of $17.18

Source/转贴/Extract/Excerpts: No493
Publish date:10/10/2011

Are ‘informal lenders’ putting China banks at risk?

Are ‘informal lenders’ putting China banks at risk?

A string of corporate failures in Wenzhou, China has provided much fodder for newspapers recently. According to the Hexun financial information website on Sept 27, owners of bankrupt businesses have absconded and defaulted on their debts. The East Daily had an even more lurid tale on Oct 3 of an owner of a medium-sizeds hoemaker leaping to his death after being unable to repay RMB400 million ($81.7 million) in debts.

By many accounts, these business failures are the result of small and medium-sized enterprises (SMEs)turning to “informal lenders” for credit at usurious interest rates of 20% to 180% per annum, owing to a liquidity crunch in the banking sector. Now, the market is becoming fearful of corporate bankruptcies running out of control and adversely affecting the asset quality of China’s major banks.

May Yan, head of China banks research, Barclays Capital, puts the problem in perspective:

Are recent news reports of SME failures in Wenzhou and the growth of ‘loan-shark private financing’ particular to Wenzhou?
The answer is, not really — while Wenzhou’s SMEs and private-financing sources have their unique features, private financing has always been widespread in Wenzhou and has also increased in recent years in other parts of China. Based on data sourced from regulators, we estimate lending in the informal sector in Chinaat RMB4 trillion ($816.8 billion), or 8% of total loans in the banking system, and shadow-banking-system financing at RMB10 trillion.

We believe the recent acceleration in corporate failures reflects the tight liquidity situation that SMEs are facing. With companies facing rising cost pressures and the prospect of an economic slowdown in the coming years, the corporate-default picture is likely to get worse before it gets better.

Will there be a contagion effect and an increased risk of corporate failures in Wenzhou?

The answer is, yes, inevitably. We don’t expect such contagion effects to be limited to Wenzhou. However, statistics on non-performing loans (NPLs) over the past few years have been healthy, in our opinion.

Given the large proportion of private lending in Wenzhou, we note that defaults on private borrowing could trigger a negative chain effect throughout the lending system, in which a small number of defaults in the first instance could have a contagion effect, impacting the liabilities of a larger number of corporations. Some of these companies may be large in size and have bank loans, but because they are guarantors to certain companies that defaulted, banks could become very cautious in extending or renewing loans to them.

Is this bad news for China’s banks?
Increasing corporate failures are bad for banks, but the rise in private financing is actually not all bad news for China’s banks.

The People’s Bank of China has long wanted economic risks to be diversified out of the banking system, and this seems to have been achieved through the rapid growth in the shadow-banking system and informal lending in recent years. Under the 2010/11loan quota, bank loans are already on track to meet the loan growth target during the pre-stimulus period, assuming 15% growth per annum is a reasonable growth rate. But other types of financing have overtaken bank loans. The tightening adjustment will be a painful process, resulting in a liquidity crunch and increasing corporate defaults, although we note that the existence of private financing may actually help to offload a substantial number of companies with weak credit ratings that the banks choose to stop lending to under lending quotas

In this process of shifting bank loans to private financing, banks are no longer dealing with the borrowers directly and are less exposed to their corporate failures. Thus, amid growing corporate failures and bad lending in aggregate, banks’ share of NPL exposure is actually reduced — not all bad news for banks, although certainly a painful process for these borrowers and for the possibly more uninformed private providers of capital jumping into lending in pursuit of high interest income.

In the end, how banks will be impacted by increasing bankruptcies in the corporate sector funded by shadow banking and informal lending largely depends on whether they will be required by the central government to support the failed corporates. We believe there is a low likelihood of this happening, at this point. Thus, we believe the market has currently priced in too much risk of bank NPLs increasing.

Source/转贴/Extract/Excerpts: No493
Publish date:10/10/2011

Frasers Centrepoint Trust posts record DPU in Q4

Frasers Centrepoint Trust posts record DPU in Q4
by Millet Enriquez
04:46 AM Oct 22, 2011

Frasers Centrepoint Trust (FCT) yesterday announced a fourth-quarter distribution per unit (DPU) of 2.35 Singapore cents, up 8.8 per cent from the corresponding period a year ago.

The Singapore property firm said the DPU for the three months ending September is the highest it has paid out for any quarter. The DPU for its financial year ending September is 8.32 cents.

Full-year gross revenue rose 2.7 per cent on-year to S$117.9 million and net property income increased 3.2 per cent to S$82.6 million, lifted by the strong contribution from its largest asset, Causeway Point mall, in the fourth quarter.

FCT said it registered a revaluation surplus of $97.2 million (after adjustments) on its portfolio for the fiscal year, an increase of 128.9 per cent. Causeway Point contributed the largest proportion of the revaluation surplus at S$59.2 million.

Causeway Point posted a 61.7 per cent on-quarter rise in revenue to S$17.3 million in the fourth quarter after it re-opened certain refurbished sections. Its net property income for the quarter improved 95.6 per cent on-quarter to S$13.3 million.

Source/转贴/Extract/Excerpts: TODAYonline
Publish date: 22/10/11

World stocks up as Europe debt crisis lumbers on

World stocks up as Europe debt crisis lumbers on
by PAMELA SAMPSON AP Business Writer Updated 05:06 PM Oct 21, 2011

BANGKOK (AP) - World stock markets rose Friday, putting aside concerns that European leaders might not come up with a comprehensive plan to deal with the region's chronic debt crisis in time for a weekend summit.

Oil prices hovered above $86 per barrel and the dollar was higher against the euro but dipped against the yen.

European shares were higher in early trading. Britain's FTSE 100 rose 0.5 percent to 5,411.82. Germany's DAX was 0.6 percent higher at 5,802.16 and France's CAC-40 added 1 percent to 3,115.71. Wall Street was set to open higher, with Dow Jones industrial futures up 0.1 percent at 11,482 and S&P 500 futures 0.1 percent higher at 1,211.50.

Asian gains were muted after a sluggish start of the trading day.

Japan's Nikkei 225 index closed little changed at 8,678.89. Hong Kong's Hang Seng added 0.2 percent to 18,025.72. South Korea's Kospi gained 1.8 percent to 1,838.38 and benchmarks in Singapore and Taiwan also rose.

Thailand's SET index was up 0.5 percent to 914.08, clawing back some of Thursday's losses even as the country's capital Bangkok braced for the possibility that floodwaters will defeat a network of barriers and inundate the city.

Mainland Chinese shares lost ground, with the benchmark Shanghai Composite Index falling 0.6 percent to 2,317.28, its lowest close in 31 months. The Shenzhen Composite Index lost 1.6 percent to 959.12. Shares in financials led gains while shares in glass and nonferrous metals weakened.

Worries that Europe's troubles could get worse have kept markets on edge for weeks, and analysts said the volatility could continue for the near future.

"What you see now is one day of gains and one day of losses," said Tom Kaan of Louis Capital Markets in Hong Kong. "With what has been happening in the world, there is still no confidence and I think this will continue to the end of the year."

The Greek government is widely expected to go through some kind of default or restructuring of its debt, which could deliver a severe blow to an already weak European economy.

Signs of a modest economic uptick in the U.S. helped boost shares of Japanese exporters that count on American consumers for sales. Yamaha Motor Corp. rose 2.7 percent and Panasonic Corp. was 1.6 percent higher.

Heavy equipment shares also rose. Japan's Hitachi Construction Machinery Co. gained 1.2 percent and South Korea's Hyundai Heavy Industries Co. added 2.2 percent.

But shares of Japanese automotive giants Honda Motor Corp. and Toyoto Motor Corp. slipped after severe flooding forced a halt to their assembly lines in Thailand. Honda fell 0.4 percent and Toyota, 0.2 percent.

Samsung Electronics Co. rose 1.4 percent after the company announced it had surpassed Apple Inc. in smartphone sales in the July-September quarter. Yonhap news agency cited Shin Jong-kyun, president of Samsung's mobile division, as estimating that the company had shipped more than 20 million smartphones in the third quarter.

Wall Street trading was choppy as talks in Europe appeared to falter because of differences between Germany and France over how to protect European banks from the consequences of a default.

A messy default by Greece could lead to deep losses for European banks that hold Greek debt. If that causes them to pull back on lending to each other, it could cause another freeze in global credit markets like the one in late 2008 after Lehman Brothers collapsed.

Wall Street rose slightly Thursday on news that a second summit meeting would take place next week after it became clear that France and Germany would not be able to bridge their difference in time for Sunday's meeting.

The Dow Jones industrial average ended up 0.3 percent to close at 11,541.78. The Standard & Poor's 500 index rose 0.5 percent to 1,215.39. The Nasdaq composite lost 0.2 percent to 2,598.62.

But analysts cautioned investors to rein in expectations of a solution to Europe's debt crisis.

"Whether this Sunday's EU Summit can live up to investor expectations remains to be seen ... the precedent set by previous summits already bodes ill for detailing of any new policy initiatives," Credit Agricole CIB wrote in a research note.

Sunday's summit was supposed to deliver a comprehensive plan to finally get a grip on the currency union's debt troubles. But French President Nicolas Sarkozy and German Chancellor Angela Merkel said Thursday they needed more time after it became clear that the two countries disagreed on some key points of the plan.

Benchmark crude for December delivery was up 16 cents at $86.23 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 22 cents to settle at $86.07 in New York on Thursday.

In currencies, the euro fell to $1.3721 from $1.3777 late Thursday in New York. The dollar fell to 76.70 yen from 76.85 yen.


AP researcher Fu Ting contributed from Shanghai.

Source/转贴/Extract/Excerpts: TODAYonline
Publish date: 22/10/11

EU to weigh S$1.65 trillion fund amid French-German discord

EU to weigh S$1.65 trillion fund amid French-German discord
04:46 AM Oct 22, 2011
BRUSSELS - European governments may unleash as much as €940 billion (S$1.65 trillion) in aid funds to fight the region's debt crisis, seeking to break a deadlock between Germany and France that is forcing leaders to hold two summits in four days.

Negotiations on combining the European Union's temporary and planned permanent rescue funds - known as the European Financial Stability Facility (EFSF) and European Stability Mechanism (ESM), respectively - are taking place after efforts to leverage the EFSF ran into European Central Bank (ECB) opposition and provoked the French-German clash, two people familiar with the discussions said yesterday.

The news helped lift stocks and the euro ahead of the weekend. Late in Europe yesterday, London's FTSE rose 1.7 per cent, Germany's DAX gained 3 per cent, while France's CAC was up 2.2 per cent. Greece's Athex soared 5 per cent. The euro rose 0.6 per cent to US$1.3859.

Across the Atlantic, the Dow Jones Industrial Average was up 1.8 per cent in early trade, helped also by strong corporate results. Japan's yen strengthened to a post-World War II high against the US dollar, hitting 75.82 in New York trading. Earlier in Asia, the key stock markets closed mixed.

The €440 billion-EFSF has already spent or committed about €160 billion, including loans to Greece that will run for up to 30 years. Instead of replacing it with the ESM, which will hold €500 billion, in 2013 as originally intended, a consensus is emerging on merging the two, the sources said.

The option may be one way out of the impasse between Europe's two biggest economies as United States President Barack Obama and Chinese Premier Wen Jiabao pressed them to find a solution. China, which holds an estimated quarter of its US$3.2 trillion (S$4.1 trillion) of foreign exchange reserves in euro assets, yesterday warned that fundamental reforms were needed to staunch the euro zone's troubles.

Euro zone finance ministers met yesterday, and they will be followed by finance ministers from all 27 European Union countries today, before EU heads gather tomorrow. Another EU summit will be held on Wednesday.

Europe's international image is "disastrous," Luxembourg Prime Minister Jean-Claude Juncker said. "We're not really giving a great example of a high standing of state governance."

Mr Juncker said yesterday's meeting would sign off on the payout of an €8 billion loan to Greece, the sixth instalment of a €110 billion package awarded last May. Greek lawmakers clinched that payment by passing fresh austerity measures on Thursday, as hooded protesters threw rocks and battled riot police outside the parliament in Athens.

The EU is considering five scenarios for Greece, ranging from sticking with July's voluntary swap to a so-called hard restructuring, where investors could be forced to exchange Greek bonds for new ones at 50 per cent of their value, the sources said. AGENCIES

Source/转贴/Extract/Excerpts: TODAYonline
Publish date: 22/10/11

CapitaLand Q3 profit falls 83%

CapitaLand Q3 profit falls 83%
by AGENCIES 04:46 AM Oct 22, 2011
SINGAPORE - CapitaLand, South-east Asia's largest listed developer, said yesterday third-quarter profit dropped 83 per cent after lower contributions from China and Australia, and an accounting rule change that restated last year's revenue.

CapitaLand, about 40 per cent owned by Singapore investment firm Temasek, said net income dropped to S$80.2 million in the quarter ending September, from a restated S$460.1 million a year earlier. It had originally reported a third-quarter 2010 net profit of S$159.6 million.

CapitaLand restated its 2010 earnings downwards to make them comparable with the current set of results, which are based on a new accounting standard that took effect on Jan 1. The new accounting rule means CapitaLand's earnings from overseas development projects can only be recognised upon full completion.

Revenue fell 58 per cent to S$608.6 million from S$1.45 billion. Sales would have declined 3 per cent without the accounting change.

The Singapore-based developer plans to sell more apartments in both its home market and China, tapping on opportunities as measures by both governments to curb housing prices hurt weaker competitors. CapitaLand invested S$7 billion in new projects this year, more than its target of S$5 billion to S$6 billion, focusing on the two nations.

CapitaLand closed up 1.7 per cent at S$2.45 yesterday. The stock has lost 34 per cent this year, compared with the benchmark Straits Times Index's 15 per cent decline.

Source/转贴/Extract/Excerpts: TODAYonline
Publish date: 22/10/11

Pondering over the EU financial stability facility

Pondering over the EU financial stability facility


THE EFSF is a four-letter word. The world is sweating on what the EFSF will do over the next couple of days.

Journalists in Europe must be having a blast, torturing global financial markets on what they think the EFSF will do.

Stock markets can either shoot up or be extremely depressed on reports of what the EFSF will do.

Many among us may not have heard of the EFSF before last month.

The EFSF is the acronym for The European Financial Stability Facility that was created by the euro area member states.

The EFSF's mandate is to safeguard financial stability in Europe by providing financial assistance to member states.

It can do so by providing loans to countries in financial difficulties or even intervene in the debt primary and secondary markets.

Over the next couple of days, reports suggest that the EFSF will come out with a €2 trillion (RM6.3 trillion) recapitalisation plan.

This plan will signal to the markets that the 17-member states are prepared to put their money where their mouth is.

Such a move will restore confidence and help fuel a rally in equity markets.

However, even before the ink has dried on the plan to unveil the masterplan, the plan is being criticised because by using the EFSF route, member states will not have to go back to their respective parliaments.

Ironically, it's crucial for politicians to have a plan as 2012 is an election year in some of the larger economies such as France and the US.

The bigger question here is will the plan work?

Well, it will certainly boost equity markets, but as the US own quantitative easing plans have shown, reviving equity markets does not automatically translate to an economic revival.

Nevertheless, it is a start, and I shall leave you to ponder with a 1936 Irving Berlin classic, which for me best describes the road ahead:

Before the fiddlers have fled Before they ask us to pay the bill and while you still have the chance Let's face the music and dance Soon, we'll be without the moon Humming a different tune, and then There may be teardrops to shed

Publish date: 22/10/11

Friday, October 21, 2011

FSL Trust: Progress towards refinancing borrowings (DBSV)

First Ship Lease Trust
Progress towards refinancing borrowings
HOLD S$0.31
Price Target : S$ 0.34 (Prev S$ 0.43)

At a Glance
• 3Q11 DPU maintained at 0.95UScts, though distributable cash flow improves on sequential basis
• Progress made towards refinancing existing borrowings
• Yields look attractive but maintain HOLD pending the outcome of refinancing exercise and efforts to deploy 2 product tankers from spot market to long-term leases

Comment on Results
Spot market product tanker performance disappoints but cash flow shores up by new TORM leases. As a result of full-quarter lease revenue from the two newly acquired vessels leased to TORM, revenue was up 22% to US$28.6m. On a q-o-q basis though, revenue was flat as the product tankers on spot market performed weaker. Cash earnings were boosted 16% y-o-y and 11% q-o-q to US$15.6m due to the accretive TORM deal and lower interest expenses following the expiry of covenant waiver period in 2Q11. After loan repayments of US$7.2m, net income available for distribution was up 38% y-o-y to US$8.4m, but management decided to maintain DPU of 0.95UScts for the quarter.

Loan refinancing is the first priority. With one tranche of close to US$240m maturing in April 2012, and another tranche of US$243m maturing in March 2014, management has decided to refinance the entire outstanding amount with a partially amortising 6-year loan. Firm commitments have been secured from a group of 6 lenders (both existing and new) for 90% of the amount and management is hopeful of securing the rest by the end of FY11.

We estimate spreads for the new loans will be significantly higher than existing 125-145bps, pushing up interest costs. And with loan amortisation payments to be made every quarter, DPU growth may be limited. Pending finalization of and details of the refinancing exercise and a long-term lease solution to end the earnings volatility from the 2 product tankers trading on the spot market, we retain our HOLD call on the stock. Our TP is revised down to S$0.34 (14% target yield) as we account for the higher risk environment. Upside may be capped by recent round of equity placement at S$0.35.

Source/转贴/Extract/Excerpts: DBS Vickers Research
Publish date:21/10/11

曾渊沧博士专栏 21.10.2011

文: 曾渊沧博士 2011年10月21日 曾渊沧博士专栏






新加坡也类似,10月5日海指收市时为2,529点,10月17日升至2,779点,上升幅度也达9.8%。为什么大幅反弹? 10月4日,美股原本大跌,道指最低见 10,404点,但是最后一小时,联储局主席伯南克再一次出来说,在必要时会再推出刺激经济的措施。沽空美股的大鳄纷纷平淡仓,以防联储局真的突然大印钞票,空仓就会被挟死,赚钱变输钱,结果当天道指由低位反弹446点。





市场传出G20、欧盟、美国、中国会出手拯救欧债危机,但是至今为止,也只是传闻罢了,还没有真正行动。我们仍然得耐心地等待真正的行动,不必急。不过中国股市可能跌过头了, 中国政府终于出手救市。10月10日港股收市前约 20分钟,四大国有银行股股价纷纷由当日最低点大幅反弹,理由是中国政府直接入市购买上述四大国有银行股票(工行(1398)、农行(1288)、中行(3988)及建行(939))。








Source/转贴/Extract/Excerpts: 股市资讯
Publish date: 21/10/11

創富激發點 20111020

Source/转贴/Extract/Excerpts: youtube / HKBNnews
Publish date:20/10/11

Pavilion產托12月上市 發7.9億新單位零售價88仙


 其中7億5500萬單位將公開予大馬和國外機構投資者與特定投資者認購,首發股價格將透過書面競購(book building)定價。

 其余3500萬個單位開放予大馬公眾、符合資格的租戶、Pavilion產托管理公司董事和符合資格員工,及Capital Flagship、Urusharta Cemerlang,和吉隆坡Pavillion員工。



Source/转贴/Extract/Excerpts: 中國報
Publish date: 21/10/11

化解德法扩大规模胶着 传欧合并援助金释4兆

化解德法扩大规模胶着 传欧合并援助金释4兆
Created 10/21/2011 - 17:21











Source/转贴/Extract/Excerpts: 南洋商报
Publish date: 21/10/11

泰国水灾催化外资 5大领域化水为财

泰国水灾催化外资 5大领域化水为财
Created 10/21/2011 - 19:25














旅客改行程 马航 亚航受惠



有鉴于此,目前只有艾尤塔雅(Ayutthaya)及清迈(Chiang Mai)两个旅游景点遭冲击;普吉岛(Phuket)及甲米(Krabi),仍然开放让游客游览。


在此情况下, 马航(MAS,3786,主板贸服股)及亚洲航空(AirAsia,5099,主板贸服股)将因为旅客更改行程而受惠。





据知,曼谷Dusit Medical Services是泰国最大的私人医药集团,虽然当地医院尚未遭遇洪水侵袭,但基于未来情况不确定,一些病人已经延后诊治时间。



合成或制百事可乐瓶 粮食短缺 雀巢全利增出口








国际硬盘驱动器(HDD)制造商,因灾情升温而受负面重攻击,目前威腾电子(Western Digital)及东芝(Toshiba)皆暂停了当地的营运;希捷科技(Seagate)及立电子(Hitachi)预料在未来几周,也会面对零件短缺的问题。




由于威腾电子(Western Digital)、希捷科技(Seagate)及日立电子(Hitachi)皆在大马设有据点,因此有可能扩张本地的产能或提高大马工厂的使用率,以缓冲泰国工厂产能减少的问题。




泰国艾尤塔雅及巴吞他尼府(Pathumthani) 的水灾,已经导致当地的汽车工厂关闭,由于受影响的汽车零件商,仅占国内总产量的10%,因此对汽车领域中至长期,不会有太大的影响。


Source/转贴/Extract/Excerpts: 南洋商报
Publish date: 21/10/11

CMA: a victim of ill perceptions?

Business Times - 21 Oct 2011

CMA: a victim of ill perceptions?


CONTRARY to expectations in some quarters of a warm market reception for CapitaMalls Asia (CMA) when it made its dual-listing debut in Hong Kong this week, the mall developer received a chilly autumn welcome.

The initial cool reception comes as no surprise for a variety of reasons, chief of which is that the stock of CMA - back in its primary exchange in Singapore - has for a long spell been caught in a rut after its listing back in November 2009. This is despite its seemingly sound fundamentals. Timing could be another reason, given that CMA's Hong Kong debut came amid a fragile global market sentiment.

Some still hold firm to the belief that the stock is a diamond in the rough which takes patience for the shine to come through, while others have begun to look at it as a 'lost cause'.

So does CMA's price woes stem from ill-conceived perceptions or from the simple lack of good fundamentals? It could be a mixture of both.

Many retail investors wrongly benchmark CMA against a real estate investment trust (Reit). Consequently, when these investors compare the yield of CMA to the 5-7 per cent range of Singapore-listed retail Reits such as CapitaMall Trust and Frasers Centrepoint Trust, the stock pales in comparison and gets axed from the list of investment choices.

On the fundamental front, analysts say that, operationally, CMA's net property income (NPI) yields have improved over the past few years, albeit at a slower-than-expected pace.

CIMB property analyst Donald Chua commented that CMA's China malls portfolio is still relatively immature and has been hit by a series of start-up costs in the past few quarters. He also attributed the developer's depressed valuations to a general rise in risk premiums attached to China, which constitutes a significant proportion of the group's portfolio.

It also does not help that a major shareholder recently pared down stakes in the company, depressing prices further while adding to the already negative aura surrounding the stock.

On all those counts, it appears that CMA's lack of favour with the investing public stems more from a fundamental background as opposed to a groundless perception.

Some even see CMA's second listing in Hong Kong as a 'last-ditch' effort to gain traction from a new market after failing to do so on home ground. After all, CMA's portfolio of malls has a significant exposure to China - something many local retail investors find hard to relate to as China-based assets are 'out of sight, out of mind', whereas Hong Kong-based investors may be better equipped to appreciate the geographical make-up of CMA's portfolio, being closer to China.

The dual-listing move may also not have a real impact on the counter's liquidity - for now at least - as CMA's dual listing was done by way of introduction, which means that the company is simply transferring some existing shares from one exchange to another with no actual increase in shares.

Some analysts opine that the recent dual-listing exercise may have caused CMA's stock to be spread out too thinly and argue that traction on the Hong Kong bourse is likely to be even poorer than in Singapore.

Putting all that aside, despite all the negative talk surrounding the counter, more than 80 per cent of analysts covering CMA post bullish ratings on the counter, according to Bloomberg consensus polls.

Borrowing confidence from that, there may be a rainbow after the rain for this potential late-bloomer in the future. Only time will tell whether the naysayers or the optimists have the last laugh.

Publish date: 21/10/11

Ascott Trust posts 21% jump in Q3 DPU

Business Times - 21 Oct 2011

Ascott Trust posts 21% jump in Q3 DPU

Distributable income more than doubles, thanks to last year's acquisitions


ASCOTT Residence Trust (ART) saw a more than one-fifth jump in third-quarter distribution per unit (DPU), with the 28 serviced residence properties added to its portfolio last year acting as a booster.

DPU for the three months ended September came to 2.23 cents, 21 per cent higher than the 1.85 cents per unit it paid out a year ago. The payout is also 10 per cent higher than ART had forecast.

Lim Jit Poh, chairman of ART's manager Ascott Residence Trust Management Ltd (ARTML), said: 'This is mainly attributable to the yield-accretive acquisition of the 28 serviced residences and the divestment of Ascott Beijing.'

Overall, distributable income for the July-September period more than doubled to $25.3 million, from $12.0 million the previous year.

ART completed the acquisition of the 28 properties in Singapore, Vietnam and Europe from its sponsor, The Ascott Ltd, for $969.6 million, and divested Ascott Beijing to Ascott last year. It later completed the divestment of Country Woods Jakarta, Indonesia.

These properties helped ART achieve a 57 per cent increase in revenue to $73.0 million, from $46.5 million the previous year.

Chong Kee Hiong, ARTML's chief executive, said: 'Ascott Reit's revenue per available unit (RevPAU) achieved an 11 per cent increase this quarter as compared to 3Q2010, mainly attributable to the strong performance of the Singapore and United Kingdom serviced residences. RevPAU this quarter also outperformed the forecast by 6 per cent.'

ART added that it is evaluating the redevelopment options for Somerset Grand Cairnhill Singapore, although there is as yet no certainty of any proposed redevelopment materialising.

Mr Chong concluded: 'For 2011, we expect to achieve better operating results as compared to 2010 and to deliver the forecast 2011 distribution of 7.74 cents.'

As at Sept 30, Ascott Reit's international portfolio comprised 64 properties in 12 countries across the Asia-Pacific and Europe. ART's units closed up half a cent at $1.01 yesterday.

Publish date: 21/10/11

K-Reit's OFC deal wins nod from Moody's

Business Times - 21 Oct 2011

K-Reit's OFC deal wins nod from Moody's

S&P gives trust BBB rating, with 'stable' outlook


TWO rating agencies have issued new reports on K-Reit Asia after news this week that the office trust will acquire from parent company Keppel Land an 87.5 per cent interest in Ocean Financial Centre (OFC) - for a period of 99 years - for $1.57 billion.

Moody's Investors Service on Wednesday changed its outlook on K-Reit's 'Baa3' corporate family rating to positive from stable. And Standard & Poor's Ratings Services (S&P) yesterday initiated coverage with a 'BBB' long-term corporate credit rating and a 'stable' outlook.

K-Reit has also proposed a 17-for-20 rights issue, which is expected to raise around $976.3 million, to part-finance the purchase. New debt of around $602.6 million will cover the rest of the cost.

Moody's views the proposed acquisition as 'mildly positive' as it will result in a much strengthened property portfolio - although at the expense of somewhat higher leverage in the interim, said analyst Alvin Tan.

'By acquiring another prominent commercial asset in Singapore's central business district, K-Reit will substantially increase its total portfolio size by 52 per cent to $5.9 billion,' Mr Tan said.

He added that although the scale of the transaction is substantial, the financing plan comprising a 'balanced' combination of debt and equity issue will result in only a modest increase in total debt/deposited property value to 41 per cent from 39 per cent.

S&P credit analyst Loy Wee Khim thinks that the proposed acquisition will enhance the trust's business risk profile.

But Ms Loy added: 'We believe K-Reit's financial risk profile will weaken after it acquires OFC.'

'In our base-case scenario, we expect the trust's leverage (ratio of adjusted total debt to property portfolio value) to rise to about 42 per cent by the end of 2011. We, however, expect the ratio to decline to less than 40 per cent in the next one to two years and be in line with our expectations for the BBB rating,' said Ms Loy.

S&P's rating on K-Reit reflects the trust's good quality assets, solid market position in the Singapore commercial space, and an intermediate financial risk profile.

But the trust's limited geographic diversity - with 93.1 per cent of its assets located in Singapore - and an increased concentration of tenants from financial institutions temper these strengths, Ms Loy said.

K-Reit shares eased half a cent to close at 93.5 cents yesterday.

Publish date: 21/10/11

Investors sell down Synear shares after food scare

Business Times - 21 Oct 2011

Investors sell down Synear shares after food scare

Chief operating officer said amount of bacteria not life threatening


(SINGAPORE) Singapore- listed Synear Food Holdings has become embroiled in China's latest food safety scare after some of its products were found to be contaminated with staph bacteria.

All affected products - 350 packs of savoury dumplings - were recalled and destroyed in July, according to media reports in China.

However, news emerged about the incident only this week after China's list of 18 food products that had failed safety inspections was made public - which included a batch of Synear's savoury dumplings produced in June.

Concerns over the food safety scare sent jittery investors dumping shares of the Zhengzhou-based company here yesterday, sending the stock diving 7.9 per cent to 12.8 Singapore cents.

Minute traces of staphylococcus aureus had been found in the batch of savoury dumpling products under the 'Synear' brand during a random sampling test conducted by the Beijing Administration for Industry and Commerce in July.

This pathogen can cause serious infections such as pneumonia, colon infection and the deadly sepsis, which causes the immune system to attack the body's own organs and tissues.

BT understands that Synear has since conducted an internal investigation, including its logistics and distribution processes, and reviewed its internal quality control standards. None of its other products were affected by the recall.

The company, one of the largest quick-freeze food producers in China, declined to comment on the financial impact of this development but, historically, savoury dumpling products have accounted for about 40 per cent of group revenue.

Group chief operating officer Jia Guobiao told Beijing news outfit Caijing that the amounts of staphylococcus aureus found in its products were not life-threatening and hopes that consumers will put the incident in perspective.

Still, analysts say the incident could hurt the company's brand.

But DMG & Partners Securities analyst Tan Han-Meng pointed out that there are companies that have survived food safety scares in the past.

Taiwanese candy maker Hsu Fu Chi, for one, voluntarily recalled two rice-roll products that tested positive in Singapore for the industrial chemical melamine. It is now the subject of a S$2.1 billion takeover offer by Swiss-based Nestle.

'The damage has been done, so it's how they (Synear) follow up to make sure this will not be repeated and help consumers regain their comfort, though this will take some time,' Mr Tan said.

BT understands that most European countries and the United States authorities currently allow for the presence of minute traces of staphylococcus aureus in food products.

China's existing national regulations do not allow for the presence of staphylococcus in food products. But the authorities revised the standards last December to tolerate minute traces in quick-freeze food products, pending approval by China's Ministry of Health.

Publish date: 21/10/11

曾淵滄專欄: 賭風日盛怎教人長揸

股市繼續在豪賭,為了歐盟會議的結果而賭,有報道指,目前香港股市成交額的 40%已經屬於衍生工具的天下,這包括窩輪、牛熊證,如果再加上通過銀行出售的 ELN、 Accumulator,比例會更高,金融市場在相當程度淪為賭場,已是不爭的事實,近一段日子,我的幾隻愛股股價大幅波動,我也感到很失望。一向以來,我強調長期投資,但是,股價波動幅度這麼大,如何勸人長期投資?相信更多人想賭一賭。



過去,我做過好幾次試驗,我每次到澳門,都換了 200元去玩老虎機,而多次試驗的結果都一樣,即輸光了 200元,道理很簡單,贏了不走繼續賭,一直到輸光 200元為止。我不喜歡賭錢,但是我都持有賭場的股票,其中以銀娛( 027)最多,是長線投資。

東方海外( 316)公佈第三季業績,讓我們可以看一看目前航運業的情況,論運載量,仍然有 6.6%的上升,可見航運需求並沒有衰退,但運載能力卻大幅上升 13.9%,船多了,這使到每個標準箱的利潤減少 14%,總收入也下跌 8%,從這個角度來看,目前航運業最大的問題不是沒貨載,而是船太多,看來造船業將會有好一段時間接不到新定單。

Source/转贴/Extract/Excerpts: 隱形富豪投資王之路 /曾淵滄專欄 2011 10 21 Publish date: 21/10/11

Yangzijiang: Held-to maturity assets to decline (DB)

Yangzijiang Shipbldg
Price at 19 Oct 2011 (SGD) 0.92
Price target - 12mth (SGD) 1.40
52-week range (SGD) 2.05 - 0.77

Company visit: Held-to maturity assets to decline

Operations on track- maintain Buy; focus on held-to-maturity assets
Our recent discussions with management suggest that operations are on track, with the group expected to deliver 65 vessels in FY2011 (vs. 50 in FY10). YZJ has been recently defending the soundness of its investments in micro-financing and held-to-maturity assets, but convincing the market appears challenging in light of heightened global risks. A takeaway is that these investments should decline over time as they are redeemed for use in the shipbuilding operations.

Raising FY11E other income/gains but reducing in FY12/13E
The Rmb10bn that has been invested in held-to-maturity financial assets (as at June 2011) should decline over the next few years as funds are required in the company’s shipbuilding operations (backend-loaded contracts typically require yards to fund construction) and capex needs (Rmb4bn over the next three years for Xinfu yard). We have modeled a 30% decline each year for these investments in FY12 and FY13, leading in part to the 3-14% decline in group net income.

Leaning towards containerships; tough in dry bulk
YZJ is the first shipyard in China to win 10,000 TEU containership contracts. The group has 18 outstanding options with Seaspan for these vessels and an LOI with Peter Dohle for eight more of such ships. While customer enquiries continue for containerships, the dry bulk space is challenging, with intense competition. YTD, YZJ has secured 21 shipbuilding contracts worth US$1.2bn. Our FY11-13E new order estimates are US$1.9bn, US$1.9bn, and US$2.4bn, respectively.

Steep target price cut on lower earnings and higher COE
Our steep target price cut comes through a combination of lower earnings forecasts and a rise in COE from 9.7% (previous) to 13.1% as beta rises following heightened volatility/risk for YZJ within the sector. We base our target price on the Gordon Growth model (ROE of 23.8%, COE of 13.1%, EFR 3.1%, and ERP 5.8%). Downside risks: higher-than-expected steel price increases, fewer-than-expected new order wins and a tightening of credit markets

Our S$1.40 target price for YZJ is based on the Gordon Growth Model. Our base-case assumptions for this methodology are a COE of 13.1% (RFR of 3.1% and ERP of 5.8%, Beta 1.73 – Prev 1.04), a growth assumption of 3% and an average ROE of 23.8% for FY11-13E. The model yields a theoretical PB of 2.1x, or an estimated per share value of S$1.40, based on the FY12E book value. Our target price for YZJ is based on PB, in light of the volatile operating environment and industry risks. At our target price, YZJ would trade at 9.4x FY12E PER, which is below the group's historical average (since listing) of 10.5x, largely due to the challenging operating environment and its increased exposure to micro-financing and held-tomaturity assets.

Source/转贴/Extract/Excerpts: Deutsche Bank
Publish date:20/10/11
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,
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