DBS Equity Research: Wired Daily 26 May 2016

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Publish date: Thu, 26 May 2016, 05:00 PM

SGX enters into exclusive discussions with The Baltic Exchange
mm2 announces collaboration on China TV drama series
Singapore industrial output likely to stay weak
Non-oil domestic exports now tipped to fall 3-5% in 2016

News

SGX enters into exclusive discussions with The Baltic Exchange SGX has entered into an exclusive discussion for the cash acquisition of 100% stake in The Baltic Exchange. This follows SGX's announcement in February that it had submitted a non-binding bid for the acquisition of the Baltic Exchange. The period of exclusivity will commence on 25 May 2016 and expire on 30 June 2016. According to newswires, the offer price is likely to be about US$100m to US$120m for Baltic Exchange. The Baltic Exchange, a 272 year old entity, is the world's only independent source of maritime market information for the trading and settlement of physical and derivative contracts. Headquartered in London, with regional offices in Singapore, Shanghai and Athens, it has over 600 international members. A successful acquisition would enhance SGX's products and services, thus help to boost earnings going forward. Both SGX and the Baltic Exchange would benefit from new growth opportunities, including potential new shipping benchmarks and clearing solutions that meet the market's evolving needs for data and trading.

mm2 announces collaboration on China TV drama series mm2 Asia has signed an agreement to collaborate with a China-based production company, Shanghai Man Man Er Culture and Broadcast Co.on a 35-episode television series in China. The TV series has an estimated production budget of RMB70m with funding raised from stakeholders in China. This licensing agreement with Man Man Er will enhance mm2 Asia's exposure in China and help to build up its library of content.

Singapore industrial output likely to stay weak Our Singapore economist believes that Industrial output growth (Apr16) is likely to remain weak. The headline number due today will likely post a benign expansion of 0.6% YoY. The manufacturing sector is not out of the woods yet. External headwinds remain strong and demand has been weak. The decline in recent NODX sales has been broad-based. Except for Europe and Hong Kong, export growth to all key markets was in the red. Furthermore, the better-than-expected industrial showing in Mar16 was bumped up from a surge in the biomedical cluster. The overall manufacturing declined by just 0.5% YoY in Mar16. But if we exclude the biomedical cluster, output would have contracted by 5.5%.

Non-oil domestic exports now tipped to fall 3-5% in 2016 Officials at International Enterprise (IE) Singapore now see the performance of both Singapore's trade and non-oil domestic exports (NODX) for this year to be worse than they had expected. This year's key NODX is tipped to fall by 3.0 to 5.0% from a year ago; the earlier forecast had been for between 0 and 2 per cent growth.

Source: DBS

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