DBS Equity Research: Wired Daily 20 Nov 2014

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Publish date: Thu, 20 Nov 2014, 10:29 AM

Yoma and partners to operate Myanmar's Mandalay airport

Yoma Strategic Holdings said its subsidiary has signed an agreement together with Japanese partners for the concession to operate Mandalay International Airport for 30 years. The wholly-owned subsidiary, Yoma Development Group, will hold a small minority stake. Operations are scheduled to start in March 2015, based on the agreement with Myanmar's Department of Civil Aviation. A special purpose company, MCJalux Airport Services (MJAS), will be used. Partners Jalux Inc and Mitsubishi Corporation each hold 45.5%. Yoma holds the remaining 9%.

Olam has secured revolving credit and term loan facilities aggregating US$2,475m. The Facilities consist of three equal tranches of US$825m each, a 364-day revolving credit facility, a 2-year revolving credit facility and a 3-year term loan. Proceeds from the Facilities will be applied towards refinancing of existing debt and meeting working capital and general corporate funding requirements of the Company.

Standard & Poor's Ratings Services had revised its outlook on Yanlord Land Group to negative from stable. At the same time, Standard & Poor's affirmed its 'BB-' long-term corporate credit rating on Yanlord and its 'BB-' long-term issue rating on the company's outstanding senior unsecured notes. The outlook revision is because Yanlord's high-end product positioning casts uncertainty over the company's recovery prospects in 2015, and Standard & Poor's believe this could weaken its cash flow adequacy and leverage.

Neo Group has introduced another three new brands and concepts to capture a wider market segment and further enhance its brand name. LJJ Café soft opens with nostalgic, traditional and local favourite delights. Choz will add delicious cakes and traditional confectionery to delight those with sweet palates while Fu Yuan introduces assorted nonya kuehs and traditional hand-made snacks.

Singapore recorded Asia-Pacific's highest growth in prime office rentals of 19% over the 12 months to end-September 2014. This was boosted by tenants' demand for goodquality space, which remains in limited supply as vacancy tightens. The cities of Taipei, Wellington and Auckland were ranked next, recording annual growth rates of between 8 and 10%, according to a property digest released by JLL. Quarter-on-quarter, Singapore's average central business district (CBD) rents rose 3.1% to S$10.30 per square foot (psf) per month in the third quarter, a slight slowdown from the previous quarter. Overall CBD net take-up stayed positive, with about 10,800 sq m of space taken up in Q3; vacancy fell from 4.4% to 2.5%. Across the Asia-Pacific, the leasing market in Q3 had the strongest showing in two years, with an average annual rental growth of 2.9% across Tier 1 office markets.

US stock fell modestly after the Federal Reserve minutes showed some policy makers were concerned prices in the U.S. economy aren't rising fast enough. Minutes of the Fed's October review showed members saw a need to remain attentive to signs of a drop in inflation expectations and that only a few wanted to excise a reference to interest rates remaining low for a "considerable time." The rates timeline will depend on progress towards the twin goals of maximum employment and 2% price growth, policy makers said. Brent crude oil dipped 0.5% to US$78.1pbl while WTI oil was little changed at US$74.58pbl ahead of the OPEC meeting on November 27.

Source: DBS

Yoma Strategic (Z59)Olam Intl (O32)Yanlord Land (Z25)

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