We are initiating coverage on Overseas Education with Buy recommendation and target price of S$1.03, which implies 36% potential upside. OEL, a top international school in Singapore, presents a highly cash generative business with operating cashflow growing at 48% CAGR over 2010-2013. The stock also pays 4% dividend yield, backed by strong cashflow generation. We expect fee hikes of about 6% to 10% to support near term earnings while the new campus, ready in 2016, to accelerate growth.

Global Logistic Properties has leased 17,000 sqm to Sankyu Logistics, an international third party logistics provider. Sankyu Logistics is expanding its distribution centers in Foshan (Southern China), Tianjin (Northern China) and Suzhou (Eastern China) to meet growing demand. The customer now leases 77,000 sqm (829,000 sq ft) across three locations with GLP in China.

Otto Marine has signed a Memorandum of Understanding (MOU) for the newbuilding of 5 cement carriers ranging from 7,500dwt to 15,000 dwt. Apart from the firm orders, there is also potential for the Group to secure contracts for the conversion of 2 additional bulk carriers into cement carriers, and a further order for a 3,500bhp Ocean Towing Tug from the same Indonesian customer.

Moody's Investors Service has downgraded the subordinated debt (sub-debt) ratings of the three Singapore banks in a regionwide exercise to reflect the increasing global trend of bail-in risks that all banks face. The banks now have a sub-debt rating of Aa3, down a notch from Aa2. The banks' senior obligation ratings and standalone baseline credit assessments were unaffected. Across the Asia-Pacific, other banks which faced similar downgrades were in Australia, Hong Kong, the Philippines, India, South Korea and Thailand.

In property news, developers have been trimming launch prices for new private residential projects to adjust to the new market reality in the aftermath of the Total Debt Servicing Ratio (TDSR) framework's rollout in late June. A case in point is the 445-unit Thomson Three condo in Bright Hill Drive, being developed by UOL Group and Singapore Land. Without TDSR, the price range is about $1,500 psf on average, or even higher, but now, the developers are pricing it at a more realistic level, at $1,350-1,400 psf. Downward adjustment of developers' earlier pricing expectations is also set to surface for two condo projects where sales begin today - The Skywoods in the Dairy Farm area and The Glades in Tanah Merah. All three projects are 99-year leasehold.

A mixed-use commercial and residential plot at Yishun Central 1 drew a top bid from units linked to Frasers Centrepoint Ltd (FCL) that far surpassed that of the second-highest bidder and consultants' expectations, though the number of bidders were at the tail end of predictions. North Gem Development and FC North Gem Trustee put in a top bid of $1.4 bn, or $1,077 psf ppr, for the 99-year leasehold site. This is 47% higher than the second-highest bid, and way above the top bid of $750 and $850 psf ppr that consultants had expected. In total, five bids were placed, with consultants earlier expecting between five and 15 bids.

SGX is stepping up its efforts to pursue mineral, oil and gas (MOG) listings as it announced new mainboard admission rules for such firms. With effect from Sept 27, even if MOG firms are not yet in production and hence unable to meet current listing rules for profit, operating revenue and positive cashflows, they can list if they have market capitalisation of not less than $300m, and disclose its plans, milestones and capital expenditure for progressing to production stage. However, they have to satisfy all other listing requirements. Additionally, all MOG firms, whether they are still in exploration stage or already in production, will need to have achieved "indicated resources" for minerals or "contingent resources" for oil and gas. They should have sufficient working capital for 18 months from listing, and have at least one independent director with appropriate industry experience and expertise. They also have to include in their offer documents a valuation report on its reserves, and provide an independent qualified person's report on significant resources or reserves.

US stocks continued to surge higher for a third consecutive day. In a prelude to the August jobs report tonight, the jobs numbers released by payroll processing firm ADP showed hiring continuing at a modest pace. The Labor Department's initial jobless claims figures also pointed to a steady recovery in the job market, with fewer people filing for unemployment. The 10-year Treasury yields, however, continued to move up. The yield is nearing 3%, a level it hasn't hit since July 2011.

Source: DBSV