SG Market (11 Mar 13)

SG Market: S’pore shares may face a tug-of-war situation as the Dow’s record shattering streak on Wall Street may be tempered by inflationary concerns in China and property worries on the local front as the govt attempts to bring down the price of new HDB flats, thereby cooling the demand for private properties via the substitution effect. The STI may struggle to break past the 3000 psychological resistance with near term support remains now at the 20-dma of 3280. Stocks to watch out for: *Property: Govt highlights it will re-look at public housing policies to try and bring down prices of BTO flats as singles awaiting eligibility criteria for new HDB flats, which may dampen resale demand, putting downward pressure on prices that have currently reached a peak. *Jardine Matheson: FY12 net profit -51% but core earnings -1% to US$1.48b; revenue +5% to US$60.5b. Record Astra earnings was mitigated by INR weakness, HK Land and JLT performed well, motor earnings was affected by difficult trading conditions in China and Dairy Farm incurred a one-off charge. Book NAV +8% to US$48.54, while DPS +8% to US$1.35 from US$1.25. *Jardine Strategic: FY12 net profit -53% but core earnings flat at US$1.6b; revenue +5% to US$60.5b. Record Astra earnings was mitigated by INR weakness, HK Land performed well, JM affected by difficult motor trading conditions in China and Dairy Farm incurred a one-off charge. Book NAV +25% to US$60.65, while DPS +7% to US$0.24 from US$0.225. *SPH: Reviewing its property assets for a planned Reit listing on SGX. SPH has 3 property assets: Paragon on Orchard Rd, The Clementi Mall and The Seletar Mall in Sengkang (completion next year) with gross development value of $3.5b. *Raffles Edu: Establishes Raffles University in Sri Lanka with an investment cost of $5m, adding to its 4 university-level institutions in Australia, China, India and Malaysia. *Asiatic Group: Proposed placement of 50m new shares at $0.065 to investor Bobby Lim Chye Huat (MD of Tai Sin Electric). Proceeds of $3.2m will be used to fund the group’s energy projects.