DBS Equity Research: Wired Daily 22 Sep 2015

kiasutrader

Publish date: Tue, 22 Sep 2015, 04:30 PM

Technicals - Rebound in S&P500 unsustainable, downside to 1912

Sembcorp Industries - Unlocking value in SembSita. Potential upside to DPS by 6-7 Scts; lifting dividend yield from 4% to 6%. Reiterate BUY; TP S$4.00

US stocks rose but ended off session highs following comments by some FED officials that the US economy is strong enough to withstand rate hike. Still, we think action speaks louder than words. The bottom line is that the FED has delayed the rate hike at last week's FOMC meeting, citing low inflation and growth uncertainties in China and emerging markets economies. Technicals suggest that last night's rebound in the S&P500 Index should not sustain. The index remained below the 1989 resistance. There is downside bias to 1912. Below this, the next level is 1870.

Sembcorp Industriesproposed to divest 40% stake in SembSita to its JV partner. We expect net disposal gain of S$350m by end of 4Q15. Assuming similar 30-35% payout ratio, there could be an incremental 6-7 Scts DPS (from current expectation of 14 Scts for FY15), raising dividend yield from 4% to 6%. Reiterate BUY; TP S$4.00.

Soilbuild Construction Group has been awarded the tender for the lease of land at Airport Road (Defu 1) by the Building and Construction Authority. The land area is approximately 20,400 sqm and the lease term is 30 years. The overall consideration for the lease is approximately S$26m. The Group estimates that it will further invest about S$50m over the next two years for the development of an integrated construction and precast hub on the land and the procurement of highly automated precast equipment. Construction of the development, comprise factory premises for the integrated precast and prefabrication plant, an administrative office and a workers dormitory with approximately 1,000 beds, is expected to commence in November 2015. Completion is targeted in the third quarter of 2017, while the integrated precast and prefabrication plant is scheduled to commence operations in the fourth quarter of 2017.

KS Energy has entered into an agreement to issue S$7.5m in principal amount of 6% new convertible bonds at an issue price of 100%. The initial conversion price of S$0.28 for each conversion share represents a premium of 2.8% to the last volume weighted average price. Yield-to-maturity is about 11% per annum.

NauticAWT has entered into a binding heads of agreement (HOA) with Enra Group Berhad. The HOA is in connection with a collaboration to undertake well, platform and field abandonment and decommissioning projects with any direct or indirect subsidiaries of Petronas or oil and gas operators in Malaysia.

The Competition Commission of Singapore (CCS) has approved a strategic alliance agreement between Tiger Airways and Cebu Pacific, which will allow the two budget carriers to work more closely together for the Singapore and Philippine markets. Among the benefits that travellers can look forward to is better connectivity across both carriers' networks.

Two new majority investors have launched a bid to buy out the remaining shares in Jasper Investment after taking a controlling stake of over 80% in the vessel management and operations outfit through a S$1.25m share purchase deal. Triton and Polaris are extending a mandatory offer to purchase the interests held by the minority shareholders of Jasper at the same price of S$0.004 per share.

Source: DBS

Sembcorp Ind (U96)Soilbuild Const (S7P)KS Energy (578)NauticAWT (42D)Jasper Inv (FQ7)

Related Stocks

Market Buzz

Discussions

Be the first to like this. Showing 0 of 0 comments

Featured Posts

MQ Chat

New Update. Discover investment communities that resonate with your ideas

VCPlus

Trade Confidently & Analyze Charts Conveniently - Download VCPlus IOS & Android App Now!

Latest Videos