Fraser & Neave proposes to split stock 1-5

Fraser & Neave, one of Singapore's largest conglomerate active in Food & Beverage, Property Developments and Publishing have submitted a plan to split its stock into 5 so as to allow higher liquidity and spur more retail investors to participate in the stock. The company's stock last traded at S$19.700.

Fraser & Neave is the parent company of Asia Pacific Breweries which owns the Tiger Beer brand and has a variety of businesses in Singapore and Malaysia. The stock price of the company has moved up since the increase in property prices as well as successful developments by its Centrepoint Properties division. The company also operates and manages a chain of serviced residences across Asia Pacific through its Fraser Suites brandname. F&N, however still reaps the majority of its profits from its beverage business with the F&N brands in Singapore and Malaysia and its listed brewery unit.

Starhub to gain from World Cup and rising incomes

StarHub is expected to record gain in revenues and profits for the year 2006 as it announced a hike in prices for subscribers to the Sports channels of Singapore's only Cable TV service for the 2006 German World Cup. In addition, the company has announced plans for an upcoming cable modem service with capability of offering download speeds of up to 100Mbps which is 3 times of present home offerings. Similar offerings have been priced at around $50/month in Hong Kong and South Korea, compared to Starhub's high tariffs of up to S$121.80/month for its 30Mbps service.

The high tariffs is still expected to hinder growth and penetration of subscribers. However with rising incomes, record low unemployment in Singapore, there is expected to be an increase in the number of subscribers for this year. With the relatively good dividend yield for this company and the fact that it has the widest services offered, StarHub looks set to bring cheer to investors.

StockNews - Genting showcases S$5 billion bid for Singapore's Casino Resort

As the deadline passed for the submission of bids to build Singapore's first ever Integrated Resort lapses yesterday, Genting announced its cards in the bid through a press release stating its intention to invest up to S$5 billion in the resort to build a uniquely Singapore destination codenamed S.E.E.D which stands for Singapore Entertainment & Events Destination. Genting have said that once its planned design becomes completed in 2010, it would become Asia's must-visit destination for entertainment, exchange and experience. Genting's bid is designed by award-winning Polshek Partnership Architects and Singapore's very own DP Architects who designed the Esplanade.

Genting further goes on to say that S.E.E.D. will offer quality exhibition space, convention halls and meetings rooms, including one of the world's largest Plenary Halls with a seating capacity of 5,500 and a Grand Ballroom that will accommodate 6,000 people. In addition, the hotel complex will be equipped with more than 5,000 rooms, to be Singapore's largest and increasing Singapore's hotel room inventory by 15 percent.

WiseVest - SPH starts its overseas acquisitions

Singapore's leading integrated publishing and media company, Singapore Press Holdings announced its purchase of the public advertising unit of TOM Group, a Hong Kong listed company controlled by Li Ka-Shing. In the deal, SPH is set to take a 35% stake in TOM Outdoor Media Group by investing US$26 million. TOM Group will still hold the other 65% within the company. The Outdoor Media Group of TOM operates billboard advertising area of around 300,000 sq.m across 60 cities in China. The deal marks SPH's foray into regional advertising and with its existing customer base, it will also be able to gain synergies in this initial acquisition.

With its divestment of the free to air television network last year, SPH is hard pressed to look for new avenues of growth to expand its business and it has marked the move towards outdoor advertising through its 80% stake in SPH MediaBoxOffice. On top of that, with the expected increase in job advertising, SPH also launched its new job search website last weekend. The recent moves made by the company seems to be in the right direction, warranting interest in this stock.

StockNews - CAO to be relisted on 29th Mar 2006

China Aviation Oil, which in 2004 announced a S$500 million loss due to trading in oil derivatives, leading to one of Singapore's largest financial scandals and landing its CEO in 4 years of jail term will resume trading tomorrow with institutional investors like BP and Temasek taking up increased stakes in the company at S$0.51 per share. Thus the share is likely to resume trading in a similar price range compared to its highs of S$2.00 in early 2004 and last traded price of S$0.965. The successful re-listing of CAO will most probably bring good sentiments in the market.

The guide to trading in this company now is to look at it from a wholly fresh perspective. Treat it as a new IPO company and consider it the potential of the company. Most probably in the short term, the company would still bring in the profits associated with the sale of aviation fuel to China's passenger planes. However, whether CAO remains as the sole provider of such services would depends on the Chinese government as they might consider granting another such licence in the light of the CAO scandal which could disrupt supply of aviation fuel.

StockNews - Temasek buys Standard Chartered stake

In a private deal yesterday, Singapore government-backed private investment holding company Temasek Holdings purchased 11.55% of Standard Chartered (Stanchart) from the estate of late Singaporean tycoon Khoo Teck Puat. The stake is estimated to be worth up to S$6.5 billion in value based on the last traded price of Stanchart. Temasek Holdings which manages around US$50 billion in assets and investments, sees this latest acquisition as a strategic investment due to Stanchart's huge Pan-Asian network as well as its branches in emerging economies of China and India. On top of that, Temasek presently has huge stakes in the Asian banking industry with the company holding around a third of DBS Bank, and large stakes in Korean and Indonesian banks.

The acquisition will also dispel rumours of a possible takeover of Stanchart by foreign multinational players like Barclays, Morgan Stanley, and Citigroup which was known to be keen in purchasing the stakes held by the late Khoo Teck Puat as well.

WiseVest - Sunshine Holdings: Should be a Buy

UOB Asia is the lead manager for this upcoming IPO - Sunshine Holdings. As the first China-based property developer to list on the mainboard of the SGX, this company seems to be riding on the wave of good sentiments amongst China counters. The company develops residential and commercial properties in Henan province and they have a focus on the 2nd tier cities of China, targeting mainly the urban middle class.

Sunshine Holdings is issuing a total of 249.6 million shares, of which 237.12 million are via placement, and 12.48 million for public subscription. The offer price stands at S$0.275 per share, which represents 4.8 times PER based on FY2004 earnings. Total NTA per share stands at S$0.290, which is usually used by analysts to judge the valuation of property companies. The company reported a revenue of RMB422 million (S$85 million) in FY2004, up from RMB112 million in FY2003. Net profit for FY2004 sands at RMB173 million (S$35 million).

FuturesNews - China to expand Nuclear Energy

This was in the news today - China's State Council has approved the energy blueprint for 2005-2020 with nuclear to play an "integral role". "According to the blueprint, nuclear power is a strategic energy source and should be actively developed to meet the country's growing demand," China Daily reported.

"Nuclear power stations will be integral to the country's energy strategy and will play a significant role in enhancing national strength and technology."

By 2020, the country's nuclear power generation capacity is expected to reach 40,000 Megawatts, or four percent of China's total power output, the report said, citing government think-tank China Atomic Information Network. Currently, China has a nuclear generating capacity of 8,700 megawatts, which represents about two percent of total energy output. To attain 40,000 Megawatts, China has to build at least one nuclear power station with a capacity of 1,800 megawatts annually, states the network.

China already has 11 nuclear reactors in operation and had previously announced plans to build dozens more. This has definitely attracted the focus of several countries including neighbouring Russia which just announced its plan to build mega gas pipelines to China. Russia has shown its intention to compete with French and US companies to build up to 4 reactors in China. In addition, Australia have offered to sell uranium to China, which would put it in direct competition with Canada.

StockNews - Temasek sells off stake in Olam and LMA

Temasek today announced more sale of its stake in Singapore-listed companies. This announcement comes after Temasek's high profile sale of its shares in Singtel. Temasek will pare down its stake in medical device manufacturer, LMA International and sell off all its stake in commodities trading company, Olam International. Previously, it has sold off its stake in companies like China Sun. This latest sale could either indicate a profit-taking session for Temasek or that it is looking to fund other better acquisitions overseas.

Better as in providing better returns, which could mean to indicate that Singapore's STI index is nearing its peak and most stocks in Singapore has reached an 'overbought' state. On the other hand, we should still note that many Singapore listed companies still have a low P/E ratio which should still provide some upside for investors.

StockNews - OCBC to buy 10% stake in Vietnam Bank

Singapore's smallest bank, OCBC have made inroads into Vietnam through its purchase of 10% of VP bank. OCBC would be able to raise its stake in the bank up to 20% and this latest acquisition comes after its purchase of Indonesian Bank NISP last year. The purchase price of VP Bank comes up to 4.2 times of book value, but at this price it allows OCBC to gain access into the heavily regulated banking industry in Vietnam. With Vietnam's economic growth increasing at a steady pace, OCBC looks to open more branches in Vietnam and increase its association with VP Bank.

Banks in the region have made acquisition declarations starting with Public Bank taking over a small family-owned bank in Hong Kong, and the takeover of Southern Bank by Bumiputra-Commerce. Overall, there seems to be more consolidation to be seen within the Asian banking industry and on top of that we could also expect the larger banks like DBS to make acquisition offers like its intention to buy Korean Exchange Bank. However one trend of observed is the high prices being offered for this takeover. DBS takeover of Dao Heng have resulted in the accounting charge which resulted in DBS announcing the lowest profit figures for FY 2005. Similarly, a high price paid for banks now due could potentially be disastrous in the event of an economic slowdown.

WiseVest - Another aviation play: Inter Roller Engineering

Dividends are coming in soon for this engineering company - Inter Roller. With the final dividend at 0.05 representing a 3.125% yield according to last done price of S$1.60, this company should be worth around S$2.00 at 19.2x FY2005 earnings. Total dividend for the year 2005 stands at 7.5 cents which should translate to around 4.6% yield.

The company reported a 45% increase in turnover from 2004 to 2005 and a 69% jump in net profit after tax. With a record order book and the expected increasing investment by country government in aviation and infrastructure, it should be expected to gain more contracts especially in China and India. The company's financial statement looks good and future developments for the company should be beneficial for its share price since it has shown to be able to curb increase in costs even while doing more projects.

WiseVest - Upgrades on Capitaland

UBS and Citigroup have both placed an upgrade on Capitaland with both raising their target price to S$5.00 and S$5.08 respectively. With the impending delisting of Raffles Holdings after its sale of the Raffles City stake to CapitaCommercial Trust (CCT) and CapitaMall Trust (CMT), Capitaland is expected to receive up to S$900 million. This would increase Capitaland's cash hoard to around S$2 billion which Capitaland could utilize in regional projects and the Singapore Integrated Resort (IR). A report announced that Capitaland's tie-up with MGM Mirage should have the largest war-chest for the bid in SIngapore's IR and financial strength is a 10% consideration for the winning bid.

On top of that, the company has many strategic ventures with regional companies like Sun Hung Kai Properties (SHKP), one of Hong Kong's largest property developers, and Wal Mart in China. Analysts are even citing the possibility of Capitaland having another tie-up with MGM Mirage in Macau should their tie-up succeeds in Singapore. Increasing consolidation within Capitaland's assets which includes Ascott should also benefit it strongly. With all these points considered, Capitaland seems to be a good buy to keep for the long run.

StockNews - Ascott divests Liang Court for S$175 million

The Ascott Group has signed an agreement with Asia Retail Mall Fund (ARMF) 2 to divest its remaining non-core asset in Singapore, Liang Court Shopping Centre for S$175m. This divestment is part of Ascott’s strategy to focus on its core business in the serviced residence industry. The company is expected to net a gain of S$36 million from this divestment for FY06. The sale price is inclusive of the property, plant and equipment as well as the assignment of existing tenants in Liang Cout Shopping centre to ARMF 2.

Ascott's strategy of divesting non-core assets and concentrating its resources into branding should start paying off in the long run as it's brand names which includes Ascott, Somerset and Citadines have gained management contracts in some countries with high growth of serviced residences.

StockNews - SembCorp Industries invests in lead recycling in China

SembCorp Industries (SCI) one of Singapore's largest industry conglomerate will make one of its largest investment in China through its subsidiary SembCorp Environmental Management (SembEnviro). In this joint venture with China's largest lead recycler, Jiangsu Chunxing Alloy Group, SembEnviro will provide up to 400 million Yuan (about S$80 million) for a 50% stake in a new JV company, Jiangsu SembCorp Chunxing Alloy which will operate recycling plants in 7 Chinese cities.

SembCorp has been looking for new avenues for growth, and has counted its utilities and enviromental management arm to provide growth to its business and to offset the slowdown in its Engineering & Construction arm.

WiseVest - OCBC to divest its share in Robinsons

Under the guidelines by the Singapore government, the 3 major banks namely UOB, OCBC and DBS are expected to divest their share in non-core assets to below 10% by mid-2006. OCBC is thus expected to sell up to 36% of its shareholdings in Singapore's oldest listed retailer Robinsons Co. Ltd. Four bidders have emerged to acquire this stake, with Indonesian Lippo Group being the front-runner for the bid. Other companies deemed to be interested in the stake includes Tecity Pte. Ltd., an investment holding company controlled by the late Tan Chin Tuan, the retail unit of Indonesian conglomerate Gajah Tunggal, and a party from the United Arab Emirates.

Amongst these 4 contenders, Lippo has emerged as the most convincing contender due to its control of Indonesia's and possibly the region's largest retailer, Matahari. Should Lippo successfully acquire OCBC's stake in Robinsons, it would most probably purchase slightly more than 29% of Robinsons shares, just shy of the 30% threshold for mandatory take-over offer in Singapore. Lippo is expected to purchase the shares at a price of S$7.00 each, a 6% premium over its last traded price of S$6.60. A takeover scenario could also occur whereby the puchaser of the shares offer to buy all existing shares in the market and delist the unit. Most probably in such a scenario, the offer price would carry a premium over the share price. The sale of OCBC's stake in Robinsons would also be seen to benefit shareholders of OCBC as a bonus dividend could be declared from the sale. On top of that, OCBC would also book a net profit and gain from the sale of this stake.

StockNews - Statement by UTAC indicates that its sales growth may exceed expectations

Singapore's 2nd largest independent chip-tester, United Test & Assembly Center Ltd (UTAC) said it may beat its projection for first-quarter sales growth, as a result of demand for chips used in consumer electronics and cars. In January 25 this year, it states that the company expects sales in 1Q 2006 ending March to increase by as much as 8 percent, up from $100.5 million in 4Q 2005. Increased demand for chips used in popular consumer products like Apple's iPod MP3 players and Motorola's Razr mobile phones have benefited sales for chip packagers like UTAC. This news have been positive on UTAC's stock as it adds 2.5 cents after this news was announced.

On top of that most analysts covering the stock have put a 'buy' or 'overweight' rating on the stock as worldwide demand for chips is likely to increase this year on the back of increasing employment and better economic conditions.

StockNews - MGM-Capitaland signs up Cirque du Soleil as Entertainment Partner

MGM Mirage announced that it will rope in Cirque du Soleil to stage a permanent show in its Integrated Resort (IR) in Singapore. It is currently bidding for the Marina IR plot with Singapore-listed Capitaland. The MGM-Capitaland JV is currently the favourites to win the IR bid, leading 3 other bidders which includes Harrah-Keppel and Genting-Star Cruises.

MGM-Capitaland has upped the ante once again after clinching several major partners and with the latest addition, it looks nearly set to clinch the bid since the Singapore government announced that tourism appeal will be the most important consideration in the whole tender process. MGM-Mirage has a long history of putting up shows by Cirque du Soleil, with the latter putting up 3 shows in MGM's Las Vegas resorts. Cirque du Soleil's acts in Singapore have also been very well received by its residents and such a tie-up will also be a first permanent show in Asia for Cirque du Soleil.

StockNews - Asia Pacific Breweries to sell Tiger Beer in the United States

Singapore's most recognized beer - Tiger Beer will be officially distributed across the United States by Anheuser-Busch Wholesaler Network. Tiger Beer will join the expanding American brewer's portfolio in the growing U.S. import category. The agreement, announced today by both breweries, gives Tiger Beer access to Anheuser-Busch's broad marketing and sales expertise and to its wide-reaching U.S. distribution network. The deal follows the recent announcement of a similar partnership with the Dutch brewer, Grolsch , continuing an aggressive push by Anheuser-Busch into the high-end beer category.

By accessing Anheusr-Busch's network of around 600 independent retailers in the United States, which is considered one of the best in the industry, Tiger Beer will penetrate more into the fastest growing segment of imported beers in the United States Beer market. Last year, imported beers sold in the US take up 12.4% of the total market, with a volume of 25.6 million barrels. Past growth in the imported beer market in the US have grown at an average of 5 percent for the past 5 years.

WiseVest - Labroy to compete with the big shipyards?

Labroy Marine announced yesterday that it has won its first contract ever to build jack-ups. This latest contract is worth US$292 million and would add on to its bulging contract book, which would be over S$1 billion. The stock is currently trading at S$1.40 per share which equals to a P/E ratio of 21.2x for FY05 earnings, and 17.3x for future FY06 earnings. Comparing this to SembCorp Marine's high P/E ratio of 34.7x of FY05 earnings and 20.2x for future FY06 earnings, Labroy seems to be a good buy and especially so if it would be able to gain more clients in this lucrative and booming jack-up contracts.

However, as SembCorp Marine and Keppel Corp. has already won several such contracts since the beginning of this year, it would be seen that Labroy would be competing with such companies.

WiseVest - YHI International

YHI International announced on Friday its purchase of 19.9% of OZ S.p.A., an internationally reknowned brand of alloy wheels designer. YHI also has a further option to purchase a further 15.6% in OZ should it want to. The acquisition of 19,9% of OZ S.p.A will cost YHI S$3.5 million.

YHI initially started off as an Asian-based manufacturer of alloy wheels, and its recent moves have shown its aim to be one of the world's leading players in alloy wheels and tyres manufacturing, distribution and design. It acquired US-based Pan Mar Corporation in 2005 and with the latest acquisition, it would enlarge its footprint into Europe. This was after its moves into Australia/New Zealand and Japan in 2003 and 2004 respectively. It is thus seen from here on the commitment made by the company for growth.

On top of that, the company's 2 new manufacturing plants was recently completed in end 2005, and they are located in Suzhou, China and Sepang, Malaysia. China is the world's fastest growing automobile market in the world, and it is forecasted to surpass Germany as the world's 2nd largest automobile market by 2008. On the other hand Malaysia is currently South-East Asia's largest automobile market. By having manufacturing facilities in these 2 large markets, YHI would be able to ensure the highest market penetration, allowing them to pursue more growth in this sector.

StockNews - Star Pharmaceuticals announce record profits

Group revenue for Star Pharmaceutical increased 26.3% to RMB116.5m in FY05
that was due to strong contributions from its new products. At the same time, net profit increased by 21.2% to a record of RMB48.3m in FY05.

With the rapidly expanding pharmaceutical market in the PRC, the group is confident of achieving targets for the year 2006. This is because the company has up to 13 new products under development. On top of that, the ageing population, improvement in standard of living, as well as government promotion of the healthcare industry in the PRC are likely to drive higher demand and spending on pharmaceutical drugs in the PRC. The company's new launches in the 2nd half of FY05 would also be expected to contribute to higher revenues and profits in the coming year.

StockNews - China Hongxing to sponsor Erke Cup

China Hongxing has signed a RMB45 million sponsorship of the Erke Cup that is to be organized by the China Tennis Association & International Federation. The company would be the main sponsor for the Women's Tennis Association (WTA) Tour in 8 cities across China. With the whole event named as the Erke Cup, it will be held in Beijing, Tianjing, Chongqing, Chengdu, Changsa, Nanjing, Shanghai and Guangzhou between May to October. As the tournaments are held in China's largest and most cosmopolitan cities, it would bring added value and brand recognition for Erke in China.

On top of that, tennis is one of the sport that is growing in popularity especially amongst urban residents. China Hongxing’s tennis shoes have been voted as“The Favourite Tennis Shoes in 2004” by the China Tennis Public Appraisal in April 2005, and this upcoming Erke Cup should strengthen its leading position in the tennis shoe category.

StockNews - Bio Treat Technology wins turnkey project

Bio-Treat Technology, a water management company with projects mainly in China announced its 2 more new projects in Fu Ning City and Xiang Shui City, both in Jiangsu province, China. The 2 projects are turnkey-based projects on building a new wastewater treatment plant and a set of drainage pipes for each of the 2 cities. Both contracts have a combined value of RMB189 million and the project will commence on March 2006 over a period of 14 months, meaning an end date of somewhere in May 2007.

FuturesNews - Uranium for the future?

Ever heard of this company called Cameco? Maybe not now, but got a rumour recently about the company. Today, I went to do a search on images of uranium, and obtained this graph from Cameco's website. The company is the world's laregst, low-cost uranium producer, accounting for 20% of the world's uranium production. Yes, that's it the future of energy could well perhaps belong to uranium. Looking at the chart from Cameco's website, Canada and Australia are 2 really huge uranium producing countries and yesterday, there was news of Australia hoping to sell uranium to India. Now this is where things start to get interesting... With increasing oil prices and the fact that both China and India have increasing power consumption - will they switch to more nuclear power? Take note again how little uranium there is being produced in Asia. This could well be the 'hottest' commodity to come.

Remember the game Civilization II? Uranium became a really huge and profitable trade after the advent of nuclear power. Will we see it in our generation? My hunch is perhaps yes!

WiseVest - DMX Technologies as digital infrastructure builder

DMX Technologies is one interesting China play in Asia. Its main services includes helping clients build up digital infrastructure, digital cable TV and digital mobile communications. It counts China's telecommunications giant, China Mobile, China Netcom and China Telecom as its major customers.

Today, the company announced it has clinched 2 more contracts in China from China Construction Bank and Huaxia Bank worth US$2.1 million and US$1.5 million respectively. Though both contracts are smaller contracts, these 2 contracts could add up as a vote of confidence. With the increasing trend of modernization of banking services in China, DMX can look forward to more of such contracts on building digital infrastructure including online security and customer network management for the numerous Chinese banks.

Furthermore, investments in 3G networks, cable and digital TV, mobile communications lines are set to increase in momentum. All these would combine to make DMX a good buy. This stock is currently covered by DBS Vickers which has a one year target price of S$1.00 by Oct 2005, and by Merrill Lynch to have a target price of S$1.30

StockNews - SembCorp to sell its stake in Logistics arm

SembCorp Industries, which holds a 60.01% stake in SembLog, its logistics arm in Asia looks set to sell its shareholdings to Australia's laregst land transport group, Toll Holdings. In the offer for the shares, Toll Holdings have agreed to pay up to S$1.70 per share, working up to S$749 million for SembCorp's total share in SembLog. On top of that, should Toll Holdings gets more that 90% acceptance for its offer (whereby it can then delist the company), it would up the purchase price to S$1.80 per share equivalent to a total of S$1.4 billion. Currently, SembLog's share price is trading between S$1.76-1.77 per share, after it announced a poor set of results for the year 2005. The large drop in profits of SembLog is due to the sale of European associate KNI in early 2005.

StockNews - Keppel Corp clinches project (again)

Singapore based government linked company, Keppel Corporation has for the past few days gained contracts worth up to US$447 million. These new contracts for deepwater projects brings Keppel's order book to around S$9.3 billion. As of today, Keppel's new contracts in 2006 has been worth a remarkable S$2.1 billion while for the whole 2005, contracts gained by Keppel are worth a total of S$6.0 billion. The latest projects come from Olsen Energy and Global Santa Fe. The stock has moved up 10 cents from S$13.00 closing price yesterday, but with so much good news coming in from Keppel, prices are expected to move up further.

Keppel have also made a general offer to purchase 70.5% of the total common shares of Keppel Philippines Marine Inc (KPMI), listed in the Philippines stock exchange. It will pay 1.00 peso per share and the cost to Keppel will be around S$26 million, which should be a small sum for Keppel. Its offer will allow it to gain control if it passes through and possibility delisting the company from the Philippine stock exchange. KPMI owns 3 shipyards in the Philippines which mainly functions in ship repair.

WiseVest - Restructuring Haw Par

Haw Par is one of the key companies within the Wee family's stable. With a substantial stake in UOB that is worth around S$600 million at least, the company has seen Wee Cho Yaw accumulating his stake in the past year. The company is famous for the Tiger Balm which it sells internationally. The brand 'Tiger Balm' has also been given the top honours by IE Singapore for its international success. On top of the stake of UOB at hand, Haw Par also holds a large cash hoard of up to S$500 million. This would value current assets and assets that could be easily liquefied at around S$1 billion, putting it in a net cash surplus position that it could return to shareholders.

As of yesterday, the charts of Haw Par have showed a break away point from its level of around S$5.00 to close at S$5.70. Some stockbrokers have suggested that S$7.00 could be a fair value for this company. Another UOB linked stock, UOL have appreciated over the last 3 months on the back of asset revaluation and note that the Wee family have also accumulated stock on UOL. However with the increase in shareholding by the Wees, there is a possibility that it is for the sake of better control over UOB.