Warrants Highlight

Keppel Corp expresses resilience

Macquarie is listing new long-dated warrants over Keppel Corp and Genting this morning.

Profit of S$346 million for 3Q2012
Last Thursday, Keppel Corp announced their third quarter earnings which showed that the company made net profits of S$346 million this quarter. For the first three quarters, the company made a total of S$1,618 million which is 47% higher compared to the same period last financial year. However, comparing 3Q2012 results with the 3Q2011, net profits fell 15%.

CEO says, “creditable performance”
Chief Executive Officer, Mr Choo Chiau Beng is pleased with although third quarter was lacklustre. He said, “emerging economies have managed to navigate through the global shocks thus far but they are not immune to spillover effects from Europe and the US.” However, Kep Corp has managed to post a “creditable performance”. He added that the group’s balance sheet will stay healthy so that it can pursue the right opportunities to grow its business.

He then went on to give the outlook of the 4 main divisions in the group.

1. In its Offshore & Marine business (O&M), Keppel O&M increased its order book by clinching S$7.3 billion in new orders, thereby bringing the total book to S$13.1 billion as at end of September. The business is “resolved in executing its backlog of projects well, while sharpening its technology edge at the same time”. Going forward, the business will do more research and development in order to sustain growth and create value for shareholders.

2. The group is optimistic about the prospects of its infrastructure division since Keppel Energy is well positioned to meet challenges going forward. The business is expecting the Waste-to-Energy market to grow to US$29.2 billion globally due to “higher population growth, urbanisation and standards of living in the emerging markets”.

3. In regards to Investments, the business has holdings in 2 main companies (k1 Ventures and M1 Limited) through Keppel Telecommunications & Transportation (T&T). Currently, the division concentrates on selected areas in China because of the Chinese demand for “high-quality, reliable logistics and distribution services”.

4. Keppel Corp’s property arm, Keppel Land is uncertain about the outlook for the Singapore residential property market going forward given the introduction of cooling measures. The business is less pessimistic about China though, stating that the rebound of new home prices and sales reflects “sustained demand from genuine homebuyers”.

Analysts left disappointed over Keppel Corp
Given that analysts’ were estimating a net profit of S$388 million, Keppel Corp missed expectations by 10.8%. After results were announced, its share price fell 1.8% as compared to last Thursday’s close.

Investors who are concerned about the sell-off in the near future but remain bullish on the company’s fundamentals for the longer term, could look to leveraging their views with Macquarie’s long-dated call warrant over Keppel Corp.

Singapore Market Wrap

Singapore's inflation increased

Singapore's Department of Statistics said on Tuesday that the consumer price index (CPI) rose 4.7% from a year earlier, exceeding economists' estimate of a 4.3% increase. Core September inflation was 2.4%. The Hong Kong market was closed yesterday, with the STI having a lackluster session, rising slightly higher 0.17% to close at 3050.93 day-on-day.

Call STI 3100MBeCW130131 (PA7W) exercise level 3,100.*
Put STI 2800MBePW130131 (PA8W) exercise level 2,800.*

Olam's full cash takeover offer
Olam has despatched Offer documents to shareholders of NZ Farming Systems Uruguay Limited ("NZFSU") with regards to it's 2th October 2012 full cash takeover offer. Olam is offering at a price of 75 cents per share for shares it doesn't own. It is currently NZFSU's largest shareholder with a 85.9% shareholding. Olam closed 0.75% down to $1.985 for the trading day.

Call OLAM MB eCW130201 (Q4MW) exercise price $2.00.*
Call Olam MB eCW130103 (Q0KW) exercise price $2.20.*

GLP signed new leases
Global Logistic Properties has announced the signing of 2 new leases in Xi'an, Northwest China, for a total of about 55,000 square metres. The lease agreements were signed by a leading global e-commerce retailer as well as one of China's largest logistics service providers. High demand had led to GLP's first development, the GLP Park Xi'an Hi-tech, to being fully leased upon completion. GLP rose 0.39% to $2.55 for Tuesday's trading session.

Call GLP MB eCW130603 (Q8UW) exercise price $2.90.*

Overnight Market Wrap

S&P lowest in the month of Oct

The S&P fell 1.4% day on day yesterday to close at 1413.11 after companies reported earnings and Spain's economy fell for the fifth quarter raised concerns that the economy is weakening.

Dupoint's (-9.1%) profits missed estimates and it mentioned that the company is looking to reduce headcount by 1500. 3M (-4.1%) lowered its forecast going forward amid lower growth in Asia and Europe. Facebook was a bright spot yesterday, with sales and earnings beating analysts' estimates. The counter rallied 6% in extended trading.

Apple introduced the iPad mini last night so as to compete in the 7-inch tablet space. This seems to contradict Steve Jobs intentions before he passed away last year. He said that customers would not like it. According to Bloomberg, Apple stock fell 3.3% last night as investors felt that the lower price point is still not compelling for consumers to switch from competitors like Amazon's Kindle and Barnes & Noble's Nook.

Overnight Markets

Indices	Last	Change
STI	3050.93	0.2%
HSI	21697.60	0.7%
DJIA	13102.50	-1.8%
S&P 500	1413.11	-1.4%
Nasdaq	2990.46	-0.9%
China A50	7331.80	-1.2%

Corporate News

Corporate Announcements

Earnings release dates:
Tues 24 Oct: Hutchison Port Holdings Trust (3Q12)
Thu 25 Oct: NOL (3Q12)
Thu 25 Oct: CapitaCommercial Trust (3Q12)
Thu 25 Oct: CapitaMalls Asia (3Q12)
Thu 25 Oct: Suntec REIT (3Q12)
Tues 30 Oct: Capitaland (3Q12)
Wed 31 Oct: IndoFood Argi (3Q12)
Thurs 1 Nov: DBS (3Q12)
Fri 2 Nov: SIA (2Q12)
Fri 2 Nov: Starhub (3Q12)
Fri 2 Nov: Cosco (3Q12)
Mon 5 Nov: SembCorp Marine (3Q12)
Tues 6 Nov: Ezion (3Q12)
Tues 6 Nov: SATS (2Q13)
Wed 7 Nov: UOB (3Q12)
Wed 7 Nov: Biosensors (2Q13)
Thurs 8 Nov: Noble (3Q12)
Fri 9 Nov: SembCorp Industries (3Q12)
Fri 9 Nov: OCBC (3Q12)
Fri 9 Nov: Wilmar (3Q12)
Wed 14 Nov: GLP (2Q13)
Wed 14 Nov: City Dev (3Q12)
Wed 14 Nov: STX OSV (3Q12)

Ex-dividend dates:
Wed 24 Oct: SGX ($0.04)
Tue 6 Nov: Olam ($0.05)
Fri 7 Dec: SPH ($0.17)