Singapore Airlinesis proposing to sell its entire 49% stake in Virgin Atlantic to Delta Air Lines for US$360m (S$439m). SIA is expected to book a gain of c. S$0.27 per share as the initial investment of 600m pounds paid in 1999 has already written down. The sale would allow SIA to divest a legacy investment that has not provided SIA much in terms of operational synergy or strategic value. Maintain HOLD on SIA as we believe the outlook for its core business remains muted and for its cargo business, challenging.

There are three key areas for the Telecom sector - 4G, National Broadband Network (NBN) and Spectrum. For 4G, premium pricing is ruled out but lower data caps will drive moderate growth. An additional 1GB costs S$5-6 now (free earlier). Our analyst expects market share changes in the corporate data market as StarHub spends capex on top of NBN to extend its reach. Spectrum sale could be a burden especially for smaller telcos with higher gearing. Regulator is expected to re-farm and auction the 1800MHz, 2.3GHz and 2.5GHz spectrum bands in 1H13. Telcos may have to spend S$80m-S$100m in spectrum auction in 2013. Top pick ' StarHubfor higher dividend yield, superior growth and lower gearing than peers.

South Korean news website MoneyToday reported that STX Group may finally announce the divestment of its 50.75% stake in STX OSV to Fincantierie 'soon', raising as much as US$743m. Reuters separately reported that an STX Corp official commented that the stake sale appears imminent, without elaborating further. These latest developments follow several earlier rounds of media reports of the conclusion of the divestment, without it materialising to date. Notwithstanding, we believe that it is a matter of when, not if, that STX Group divests its stake in STX OSV so as to raise the necessary funds to strengthen its own balance sheet. With the stake sale expected to raise around S$900m, translating to around S$1.50/share for the STX Group, we believe this would provide near term valuation support. No change to our BUY call and TP of S$2.00 on STX OSV.

According to industry news publication, Upstream, Keppel Corp is poised to secure a pair of jackup orders from Mexican national oil company, Pemex. We estimate these orders could be worth around US$400m (i.e. US$200m/unit). We understand that the contract awards could be imminent, as Pemex has already secured funding, having spent the past 90 days arranging newbuild financing. Should these orders be awarded, this would bring Keppel's FY12 YTD order wins (ex-Petrobras) to S$4.7bn, vs. our assumption of S$5.0bn for the full year. Including Petrobras orders, FY12 order wins would be raised to c. S$11.0bn vs. our S$11.3bn full year assumption. No change to our numbers, S$12.65 TP and BUY call.

RH Petrogas has executed a farm-in option agreement (Seismic Option Agreement) with Rimbunan Petrogas (RPL), in which the Group was granted an option to farm-in and acquire 50% of RPL's participating interest in the Production Sharing Contract (PSC) for Block M-1 located offshore Myanmar. Under the agreement, the Group will pay for 50% of RPL's share of the cost, estimated to be US$3.6m.

Geo Energy Resourceshas entered into a mining services contract and a coal sale and purchase contract with PT Arini. Arini holds a mine concession for an area of 3,890 hectares located in East Kalimantan Province.

Sales in the private residential market could fall by more than 25% next year, as a result of local buying fatigue from the many new launches over the past years and increasing home completions, according to a report by Savills Research Singapore. This would mean that from the record breaking 20,000 units sold in the past 10 months of this year, transaction numbers are likely to hover between 16,000 and 18,000 next year. Prices, however, are expected to continue their upward trend, in line with rising land costs and demand from overseas investors. According to Savills data, the average unit price of luxury condos in Singapore posted a second quarterly rise of 2% q-o-q from $2,350 psf to $2,395 psf in the fourth quarter of 2012.

Global initial public offering (IPO) activity slipped in 2012 compared to last year, as continued macroeconomic volatility and changes in political leadership weighed on markets. Next year is looking more promising, said Ernst & Young (E&Y), as a brighter economic outlook, reduced stock market volatility and assertive action from central banks might bring companies currently in the pipeline into the market. The amount of capital raised so far this year fell 30% to US$118.5 bn. The total number of deals, at 768, pales in comparison to last year's 1,225.

In property news, 79 Anson Rd is on the verge of being sold for over $400m. The selling price is tipped to cross $1,400 psf of existing GFA. Industry watchers tipped United Engineers group as a possible buyer of the 23-storey tower. Others which had been in the running earlier are said to include Sun Venture.

A closely watched tender for a residential site at Alexandra View drew a top bid of $332.7m, or $970.18 psf. Singland Homes, which put up the top bid for the 99-year leasehold site, Alexandra View (Parcel B), beat five other bidders.

Source: DBSV