Towards Financial Freedom
DBSV S'pore Wired Daily 7 January 2014
OCBC - In exclusive talks to acquire HK bank; long-term positive.
OCBC released an announcement pertaining to exclusive discussion on potential acquisition of shares in Wing Hang Bank from the latter's substantial shareholders (Fung Family and affiliates, and BNY International Financing Corporation, collectively at 45%). The exclusive arrangement (valid up to 31 Jan) will enable OCBC to finalise the terms for a possible transaction, which would, should it proceed, involve OCBC making a general offer for all the shares of Wing Hang Bank. Any possible offer would be subject to obtaining all relevant regulatory and other approvals. It was reported that OCBC may bid up to 2x BV of Wing Hang Bank, valuing the transaction at S$6.7bn (based on Wing Hang Bank's latest book value of HK20.4bn/US$2.63bn). The 2x multiple is within our expectations.
We believe that OCBC may need to resort to other capital raising options to fund this transaction should it materialise. We believe this acquisition would enhance OCBC's regional expansion to Greater China especially with its presence across China's Pearl River Delta. Wing Hang Bank has more than 70 outlets in Hong Kong, Macau and China. Greater China currently only contributes 5% of OCBC's pre-tax profits (9M13). We see this transaction long-term positive to OCBC with a caveat on pricing.
Midas' JV unit kicks off 2014 with orders worth RMB1.11bn. The first contract worth RMB520m is to supply 85 train cars for the Suzhou Rail Transit Line 2 Extension. The second contract worth RMB590m is to supply 78 additional train cars for Nanjing Metro Line 1. Slated for delivery between 2015 and 2016, both contracts are expected to contribute positively to the Group's financial performance in 2015 and 2016.
ST Engineering announced that its marine arm, ST Marine has secured new orders worth about S$446m in the fourth quarter of 2013. These orders are in addition to the recent contract worth about US$350m won by its US shipyard, VT Halter Marine, Inc for the design and construction of two units of Container Roll-on/Roll-off vessels and the bareboat charter contract for the Roll-on/Roll-off Passenger vessel to Nova Star Cruises Limited.
Global Logistic Properties has leased 106,000 sqm to Riachuelo at GLP Guarulhos in São Paulo. The customer is the largest fashion retail company in Brazil. This is GLP's largest lease agreement in Brazil GLP Guarulhos, a 435,000 sqm development to be developed in phases, is currently 100% leased.
Masirah Oil Limited & Partners, a subsidiary of Rex International's jointly-controlled entity, Lime Petroleum Plc, announced it has begun drilling an exploration well in GA -South (GAS#1) located in the Block 50 Oman concession, on 30 December 2013. This is the second well in the two-well drilling programme in the concession.
CNA Group has clinched two contracts for Singapore Changi Airport comprising a term contract for installation of a new BMS in Terminal 2 and VIP Complex, as well as the extension of contract for the operations and comprehensive maintenance of the IBMS, worth a total of over S$9m. This marks the fourth airport-related project secured in the region for 2013, which brings the total worth of airport related contracts in 2013 to S$24.6m. Airport-related business is a key growth driver for 2013 and 2014.
Cacola Furniture proposes to undertake a reorganisation of its share capital. Pursuant to the proposed capital reorganisation, the par value of the shares shall be reduced from HK$0.10 to HK$0.05 per share and thereafter, the authorised share capital of the company shall be increased from HK$100m to HK$200m.
Federal International (2000) has secured an order of US$25m for the supply of flowline control and related equipment. The total orders secured by the Group to-date totals S$70m.
Teledata is proposing to place up to 240m new shares at S$0.0102 for each Placement Share. The issue price represents a discount of approximately 7.27% to the last volume weighted average price. The estimated net proceeds S$2.3m shall be used for general working capital, payment of trade payables and for general expansion of the business.
Blumont Group intends to seek a new share issue mandate from its shareholders. The group said that this would enable it to tap equity markets this year to repay loans under a recently secured US$30m loan facility and to allow it to "capitalise on fund raising opportunities as and when they might occur".
International Healthway has secured a financing facility of RM190m with Public Bank. The Facility will solely finance IHC's integrated mixed-use project located at No. 19 & 19A, Jalan Kia Peng, in Kuala Lumpur, Malaysia.
Singapore's manufacturing sector shrank in December. December's purchasing managers' index (PMI), the first industrial indicator released this new year, fell to a reading of 49.7, bucking the market's consensus forecast of 51.1, following November's 50.8 reading. Seasonal factors and structural constraints, such as labour supply and costs, may be in play. Electronics PMI fell sharply to a reading of 50.1. This was down from November's 51.2, and under the market forecast for a reading of 51.4.
Growth in China's service sector dropped sharply. The HSBC/Markit services sector Purchasing Managers' Index fell to 50.9 in December from 52.5 in the previous month, with new business expansion the slowest in six months. The survey mirrors the official services PMI which hit a four-month low of 54.6 and comes after both of the manufacturing PMIs also dropped in December on weak external demand. The official manufacturing PMI fell to 50.1, its first dip since June.
US stocks fell following a weaker-than-expected December ISM non manufacturing index. The figure came in at 53, below consensus for 54.7 and lower than November's reading of 53.9. The ADP employment change (consensus 200k, previous 215k) for December and the FED minutes will be released tomorrow. These come ahead of Friday's official payroll numbers.
Source: DBSV
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