Our analyst visited Midas' production facilities in Luoyang, Nanjing and Jilin, China recently. He thinks that Midas is poised for a turnaround. The Group's production capabilities and capacity has expanded during this lull period. Winning more orders from wider sources should help boost the Group's profitability. Midas is currently trading at 0.7x FY13 P/B, which we see as attractive for a turnaround story. Maintain BUY with TP S$0.50 (1x FY13 P/B). We believe the stock should re-rate as contracts start to flow in once again.

Mapletree Logistics Trust is proposing to acquire Wuxi International Logisitcs Park (WILP) from its sponsor Mapletree Investments Pte Ltd. The purchase price of RMB116m (S$22.8m) implies an initial yield of 8.0%, higher than the implied yield of 6.0% for its China properties. We note that MLT has the financial and funding capacity to fund these acquisitions, and gearing is expected to stay relatively stable at 37.3% (assuming 100% debt funding). While accretive, impact on DPU is estimated to be minimal at <1%. Completion of this deal is expected in Mar'13, and will grow MLT's portfolio to 111 properties with a total appraised value of S$4.2bn. BUY maintained, TP S$1.22. No change to our earnings estimates as we have previously forecasted close to S$200m worth of acquisitions in our numbers. Yields of close to 6.5% remain attractive in our view for its large cap, quality sponsor status.

According to a Bloomberg article, Carson Block from Muddy Waters at the Ira Sohn Investment Conference in London was reported to have made following commentary about Olam :-

1. Olam was heavily indebted

2. It was aggressive in how it reports biological gains

Our analyst notes the following :-

1. While Olam's headline net debt/equity excluding minority interest (MI) stood at 212% as at 30Sep12, a large proportion of Olam's balance sheet is composed of readily marketable securities (RMI) and secured debtors which is easily converted to cash. Olam's adjusted net debt/equity excluding MI, RMI and secured debtors stood at 60% at end of 1QFY13.

2. We strip our Olam's biological gains to arrive at Olam's core net profit and do not include biological gains in our valuation.

Our HOLD call and TP of S$1.90 are maintained for now while we await a formal response from Olam. Olam is currently in a trading halt.

PEC has secured a 2-yr maintenance contract to carry out mechanical and piping works at the refinery of a large scale integrated refining and petrochemical complex in Fujian, China. This contract will add to the group's recurrent income stream.

Chasen Holdings has clinched a local engineering project worth about S$4.8m from a repeat customer. The contract shall be executed over six months from November 2012 to April 2013.

The Northstar Group has agreed to buy a controlling 50.05% stake in Nera Telecommunications. As a result of the deal, Northstar is launching a mandatory general offer for all the shares it does not own at S$0.49 a share. The offer price of S$0.49 values the whole of NeraTel at about S$177.3m and represents a discount of 5.8% from the last closing price.

Northstar manages US$1.2 bn in committed equity capital dedicated to Southeast Asia. It has a solid track record of actively growing the businesses of its investee companies.

In US, Dow surged more than 200pts as investors started the holiday-shortened week optimistic that fiscal cliff negotiations are progressing. On the economic front, existing home sales rose 2.1% to an annual rate of 4.79m in October, despite the impact of Superstorm Sandy, better than market estimate of 4.7m. And the National Association of Home Builders' sentiment index rose for a seventh straight month to 46, its highest level since May 2006.

Source: DBSV