Towards Financial Freedom
DBS Equity Research: Wired Daily 2 Feb 15
Frasers Hospitality Trust - Encouraging start, expect solid delivery over remainder of FY15. Maintain BUY, TP S$0.94.
We maintain our view that further near-term upside for the STI should be capped at c.3450 that coincides with 13.8x (ave) 12-mth forward PE level. Pullback support continues to be at 3380-3390. YTD gains for the Singapore market have gone beyond the small handful of STI component stocks with interest spilling over to the mid and small caps stocks.
With the Lunar New Year holiday stretching from February 19-23, from a trading perspective, we advocate traders to be watchful of profit taking 1-2 weeks prior to the 4-day long weekend. This is especially so among the small cap stocks that performed well recently.
US stocks tumbled after data showed grew at a 2.6% annualized rate, lower than consensus forecast for a 3% advance. Consumer spending climbed 4.3%, more than projected while consumer sentiment climbed to the highest level in years. Meanwhile, energy shares gained following the 8.3% rebound in U.S. oil price.
Maiden results for Frasers Hospitality Trust in line, but DPU of 2.97 Scts was ahead of IPO forecasts by 5.3%. The outperformance from Singapore and lower-than-expected interest costs were offset by weaker KL hotel. We expect solid delivery over the remainder of FY15. Maintain BUY, TP S$0.94. The Trust offers an attractive yield of 6.9%.
Perennial Real Estate Holdings has syndicated a consortium of investors to acquire AXA Tower at a property purchase price of S$1.17 bn. Based on the property's existing total net lettable area of approximately 674,000 square feet, the acquisition price translates to about S$1,735 per square foot. The transaction is expected to be completed by April 2015.
Japfa has acquired the remaining 15% of Japfa Comfeed Myanmar (JCMA) for US$5.7m, making JCMA a wholly-owned subsidiary of the group.
Ezra Holdings announced that its Subsea Services division, EMAS AMC, has secured multiple contracts from various energy companies valued at more than US$65m (including options). The awards come from independent oil majors and contractors globally. More than US$355m worth of work were won across the Group since the beginning of 2015. Lewek Constellation is on track to turn fully operational by March 2015 with the completion of the increased loan facility.
Rex International Holding has signed a farm-in agreement with Tulip Oil Holding's 90% subsidiary, Rhein Petroleum, to acquire a participating interest in a prospect area known as Altweide, within the exploration licence area of Nördlicher Oberrhein, located in the geological province of Upper Rhine Graben, Germany.
IEV Holdings has secured a contract in India for the supply of its proprietary Marine Growth Preventer (MGP) products valued at a total of approximately US$1.3m.
Hiap Seng Engineering is expected to record a net loss for 3QFY2015 and 9MFY2015. The weaker than expected financial performance is mainly attributable to cost overruns on certain projects.
Blumont Group is expected to report net losses for 4Q2014 and FY2014.The expected losses primarily arose from the fair value readjustments of the Group's investments in transferable securities (financial assets), attributable to the recent volatility in the financial markets and global economy.
Singapore eDevelopment expects to report a loss for FY2014. The loss expected is primarily attributed to: (i) losses incurred by its legacy construction business, (ii) losses and provision made arising from claims against corporate indemnities previously issued to its legacy construction business, and (iii) non-cash fair value adjustment.
Santak Holdings is expected to report a loss before taxation for HY2015 compared to a profit before taxation for HY2014. The loss is mainly attributable to lower gross margin for its existing precision machined component products as well as the Group continuing to incur significant costs for the qualification and development process of our new precision machined component projects which encountered delays in the commencement of mass production ramp up in HY2015.
IFS Capital is expected to report a lower net loss for the Q4 2014 and FY 2014 compared to the corresponding periods of the previous year.The expected net loss is mainly due to additional impairment on loan losses.
Bank lending in December grew at 5.9% y-o-y, the slowest pace since March 2010. Compared to November, it actually stagnated amid weak business loans, which have been contracting for most of the second half of 2014. Loans through the domestic banking unit - which mainly reflect Singapore-dollar lending - stood at S$608 bn in December.
Business loans, which have shown clear weakness in the later part of last year, contracted 0.4% to S$372 bn in December compared to a month ago. This reversed from the 0.8% growth posted in November. Consumer loans edged up slightly by 0.5% from a month ago to S$236 bn in December. This mostly reflects higher housing loans, which make up three-quarter of loans to individuals. The gain compared with a 0.4% lift in November.
Restructuring pains continue to bite, with more workers laid off in 2014 than the year before. Still, labour market conditions remain tight - unemployment averaged just 2% for the whole of last year. Wage pressures persist as well, with Singapore's real median income rising by 1.4% in 2014. The pace of growth, however, was slower than 2013's "exceptionally high increase" of 4.6% (when bigger increments likely kicked in due to the Wage Credit Scheme).
Source: DBS
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
