Warrants Highlight

Singtel's associate wins bankruptcy appeal

Macquarie is listing a new warrant over SingTel this morning.

Macquarie’s Singtel warrants

SingTel’s associate overturns bankruptcy
SingTel announced on SGX that its associate, Telkomsel had won its bankruptcy appeal in the Indonesian Supreme Court last week. On 21st September, the Indonesian cellular carrier filed an appeal after it was declared bankrupt by an Indonesian court.

Telkomsel had formerly owed Prima Jaya 5.3 billion Rupiah (S$675,000) as well as 40 billion rupiah to Extent Media and according to the Indonesian law, firms that are late in repaying debts to more than two firms concurrently can be considered bankrupt. However, Telkomsel attributed the delay of settling debts to a “disagreement between the two sides”.

In June 2011, Prima Jaya agreed to resell 10 million of mobile phone SIM cards to consumers but the company had only managed to sell 524,000 which led to Telkomsel terminating their contract.

Telkomsel has more assets than liabilities
In response to the bankruptcy order, SingTel said that the net assets of Telkomsel far surpass its debts. Looking at its 2011 annual report, Telkomsel has 58.7 trillion rupiah in total assets and a net profit of 12.82 trillion for the year.

Lead analyst at Moody’s Investors Service, Nidhi Dhruv said that if Telkomsel were to declare bankrupt, there will be a downward pressure on the company’s ratings and it “could have resulted in the company having to accelerate repayment of some of its bank loans, which could trigger a cross-default”.

With Telkomsel winning the appeal now, “Moody’s expects Telkomsel’s strong financial metrics and liquidity to provide it financial flexibility to continue meeting its capex and debt obligations” said Mr Nidhi Dhruv. In addition, Telkomsel can now bid for the 3G spectrum with the bankruptcy lifted. (Bloomberg)

Singtel owns 35% of Telkomsel while the rest of the 65% belongs to state-owned Indonesian firm Telkom.

M1 potentially faces record fines due to service disruption
In other news, Singtel’s competitor M1 could be fined close to $1 million for the 48-hour outage that started last Tuesday. This could be the worst mobile network failure in Singapore. Previously, Singtel had a 22-hour disruption in September 2011 and was fined $400,000 – then the heftiest fine on record for a telco. (The Business Times)

Singapore Market Wrap

The STI began the week on positive note

The STI ended Monday in positive territory as it edged 0.3% up to 3,221.3, despite a poll by Reuters from economists expecting a median estimate of a 4.2% contraction in December year-on-year. It rebounded near its previous close early in the session and had managed to stay in the green throughout the day.

Call STI 3250MBeCW130430 (R5XW) exercise level 3,250.*
Put STI 3100MBePW130430 (R5WW) exercise level 3,100.*

GLP to invest US$82 million in rooftop solar panels
GLP is looking into expanding it's revenue stream by investing in rooftop solar panels in Japan. It will be installed on 22 properties and the electricity generated would be sold to utility companies. This US$82 million will generate a levered IRR of roughly 17%. GLP stayed flat at $2.75 for the session.

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

Ezra continued it's descend
Since reporting a 49% decline in net profit last Monday for the three months ended November, the stock has plunged 6.8% to date, with a drop of 2.9% to $1.165 day-on-day. Profits were hurt by higher expenses and lower contributions from associated companies. Ezra had reached a high of $1.36 in 2013 before the surprising news on declining net profit was announced.

Call Ezra MBeCW130603 (Q8EW) exercise price $1.172.*

Overnight Market Wrap

Eurozone ministers meet for the first time this year

The Euro finance ministers met for the first time this year to discuss the debt crisis yesterday. Meanwhile, the Europe stocks rallied while the US markets were closed for a public holiday.

The Stoxx Europe 600 added 0.3% on volumes 34% below the thirty-day moving average.

Finance ministers met in Brussels to discuss how to channel funds directly to banks, bypassing the government. French finance minister, Pierre Moscovici told reports from Bloomberg that he places a lot of emphasis on this because "it's via this channel that we can progress in safeguarding the banking system".

Overnight Markets

Indices	Last	Change
STI	3221.32	0.3%
HSI	23590.90	-0.1%
DJIA	13649.70	0.4%
S&P 500	1485.98	0.3%
Nasdaq	3050.39	-
China A50	8539.09	1.0%

Corporate News

Corporate Announcements

GLP is investing US$82 million in rooftop solar panels in Japan. This will expand it's revenue stream and generate a levered IRR of approximately 17%.

Earnings release dates:
Tue 22 Jan: MapleTree Industrial Trust (3Q13)
Tue 22 Jan: SGX (2Q13)
Tue 22 Jan: Suntec REIT (FY12)
Wed 23 Jan: Keppel Land (FY12)
Wed 23 Jan: CapitaCommercial Trust (FY12)
Thurs 24 Jan: Keppel Corp (FY12)
Wed 30 Jan: SATS (3Q13)
Fri 1 Feb: HPHT (4Q12)
Wed 6 Feb: DBS (FY12)
Wed 6 Feb: GLP (3Q13)
Wed 6 Feb: Far East Hospitality Trust (FY12)
Thurs 7 Feb: Biosensors (3Q13)
Thurs 7 Feb: SIA (3Q13)
Thurs 7 Feb: Olam (2Q13)
Fri 15 Feb: OCBC (FY12)
Thurs 21 Feb: Genting (4Q12)
Fri 22 Feb: Wilmar (FY12)
Wed 27 Feb: UOB (FY12)
Thurs 28 Feb: Noble (FY12)

Ex-dividend dates:
Mon 21 Jan: AREIT ($0.0362)
Thurs 24 Jan: CapitaMall Trust ($0.0081)