DBS Equity Research: Wired Daily 8 Dec 2015

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Publish date: Thu, 10 Dec 2015, 10:53 AM

France's CMA CGM announced takeover offer for NOL at S$1.30 per share

The world's third-largest shipping container firm CMA CGM is offering S$1.30 a piece for all of NOL shares in a preconditional voluntary general offer. The S$3.4 bn cash buyout will allow Temasek Holdings-controlled NOL, which has been bleeding red ink for four straight years, significant girth to scale up and compete with its bigger rivals. The offer price is 6% higher than last close and 0.94 times over its last reported book value of S$1.38 per share.

SGX will reorganise its business to emphasise product lines from Jan 1 in a sweeping reorganisation that marks the first major move by new chief executive Loh Boon Chye. Certain functions that are currently run by the sales and clients unit, which will no longer exist, and by the listings division will now be split and subsumed under the newly created equities and fixed income division, to be headed by current sales and clients head Chew Sutat; and under the enlarged derivatives unit, which will continue to be led by Michael Syn. Both the equities and fixed income and derivatives businesses will report directly to Mr Loh. The securities unit, which is led by Jenny Chiam, will become part of Mr Chew's unit, instead of reporting to SGX president Muthukrishnan Ramaswami. Current chief operations and technology officer Tim Utama will be leaving after the transition.

mm2 Asia will raise approximately S$5m in net proceeds from a 6.4m new share placement to three investors, namely Hesheng Media, Apex Capital and Maxi-Harvest Group at a proposed issue price of S$0.7872 per placement share, which represents a premium of approximately 0.33% to the average weighted price on 4 Dec. Hesheng Media is a Chinese media company that aims to be the integrated marketing strategic partner for growing businesses by providing solutions in market positioning, media market research, advertising, and media buying. Hesheng Media is mm2 Asia's pre-IPO shareholder and the increase of its stake in the company will allow for closer working ties between the two companies. Both Maxi-Harvest and Apex Capital are private investment entities. The net proceeds of the proposed placement will be used entirely for general working capital purposes.

Rowsley and Thomson Medical signed a Memorandum of Understanding (MOU) for Thomson Medical to be Rowsley's strategic partner in the RM5 bn Vantage Bay Healthcare City project in Iskandar in southern Malaysia. Rowsley announced in September this year that it was re-positioning Vantage Bay into a healthcare city with the goal of turning it into a leading healthcare destination in Asia. Rowsley intends to fund the investment through a diverse mix of financing including equity funding from investors.

AsiaMedic is proposing the placement of 51.5m new shares at S$0.055 per share, a discount of approximately 9.8% to the last weighted average price. The Group is raising funds to strengthen the equity position of the Company and allow the Group to be better positioned to capitalise on business opportunities as and when they arise.

The outlook for Singapore's gaming sector is stable even amid muted economic growth and flagging tourist arrivals, according to Fitch Ratings. After sliding 10% to US$4.8 bn this year, Singapore's gross gaming revenue will plateau next year, the ratings agency reckons. The earlier slowdown was attributed to the clampdown on corruption in China, the depreciation of certain regional currencies as well as weaker economic growth in the region. In addition, there is rising competition from integrated resorts in the Philippines and South Korea.

Oil prices, already close to six-year lows, are deemed to stay low till at least late next year after Organization of the Petroleum Exporting Countries (Opec) not only decided to keep to current production levels but also abandoned any official production target. Opec retained its one-year-old policy of not constraining output despite an oversupplied market. Opec's decision to do so in its meeting a year ago had shocked the market, sending oil prices tumbling 60% from a peak in June last year.

Source: DBS

SGX (S68)Thomson Medical (A50)AsiaMedic (505)

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