DBS Equity Research: Wired Daily 5 Apr 2016

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Publish date: Tue, 05 Apr 2016, 05:01 PM

OSIM - Founder raised offer price to buy over remaining stake to S$1.39 per share

OSIM International'sChairman and Chief Executive Officer, Ron Sim, has revised his offer to buy over the remaining 30.75% stake in the company that he and his family do not own to S$1.39 a share, instead of S$1.32 a share. The final offer price represents a premium of about 38.8% and 40.6% to the volume-weighted average price (VWAP) a share for the corresponding one-month and three-month periods up to and including February 29, 2016, respectively. The offer will now close on April 25, 2016, unless otherwise extended.

2Q16 DPU for SPH REIT was flat at 1.40 Scts, in line with our expectations. This brings 1H16 DPU to 2.73 Scts which represents 49% of our FY16F DPU forecast of 5.53 Scts. Asset enhancement project for Paragon is on schedule. We believe Paragon will continue to deliver higher margins and outperform the rest of properties along Orchard Road, due to its prime location and prestigious tenant mix. We maintain our HOLD call and TP of S$0.99.

Otto Marine has signed a Memorandum of Agreement (MOA) to sell a Work Maintenance Vessel to an outside party. The sale of the vessel will reduce its inventory on hand and is part of the ordinary course of business of the shipyard business.

Global Logistic Properties(GLP) has successfully completed its planned syndication of a 65.66% stake in the portfolio of US industrial assets that it acquired last year. These assets were sold for US$1.3 bn in cash. With this, the assets will no longer be the firm's subsidiaries, and will instead become associated companies.

Frasers Property Australia has sold a fully occupied office building in Church Street, Richmond for A$45.5m to BlackRock Asset Management. The 8,000-square-metre property is fully leased with a weighted average lease expiry of 3.1 years.

Singapore's manufacturing activity remained in contraction in March for the ninth straight month, although the performance was better compared with February. March's Purchasing Managers' Index (PMI) reading came in at 49.4, a 0.9 point increase from the reading of 48.5 in February. New orders and new export orders improved in March while factory output, manufacturing employment and input prices did better. Readings for imports, inventory, and stocks of finished goods also continued to record expansion, although the rate of supplier deliveries slowed. Manufacturing activity in the electronics sector also saw an improved PMI reading of 49.0, up 0.8 of a point from February, although this was also the ninth straight month of contraction for the sector. There were improvements in both new orders and factory output in the sector.

US stocks ended weaker as losses in commodity-related and industrial shares offset gains in healthcare. Dow closed down 55.75 points, or 0.31%, to 17,737. Investors now await fresh news on the interest rate outlook following last week's encouraging data and Federal Reserve Chair Janet Yellen's cautious tone on raising rates. While the Fed's projections point to two rate hikes this year, traders expect only one, according to the CME Group's FedWatch program.

Source: DBS

SPHREIT (SK6U)

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