Boustead

Boustead: CIMB initiates at Overweight with an SOTP-based TP of $1.94. Says it is positive on all four divisions of the group. In particular, the group’s plan to launch an industrial Reit will provide it a convenient vehicale to unlock its hidden value and recycle value. Meanwhile high demand for its energy-related engineering services is another positive catalyst. The division has secured $140m worth of contracts since the start of FYMar14, trumping the $111m that it secured for the whole of FY13. Its order book backlog currently stands at $171m, close to its all time high.

Cache

Cache: Key takeaways by UOBK from post results feedback session. - Positive rental reversions to the tune of 10-12% in 2015 for the IPO portfolio, and 1.5-2.0% for master leases, providing an organic growth catalyst - Asset divestments from the sponsor remain the preferred avenue for inorganic growth - Nevertheless mgt will continue to explore third-party acquisition opportunities, with Msia and China being possibilities, especially in or near the fringes of key tier-1 cities. The house maintains Buy with TP $1.31.

UEL (technical)

UEL - Charts are circiling in overbought territory, although for now the 20 day MA at $1.08 should provide some strong support for share price.

Olam (technical)

Olam: Trading Central notes a support base has formed around $1.405, which should prevent any potential downsides. Furthermore, the RSI indicator is supported by a rising trend line. As long as $1.405 is support, look for further upside to $1.575 and even $1.68 in extension.

Gold

Gold: Gold price fell in 2013 as investors reacted to Fed tapering expectations, and money flowed into equities. World Gold Council (WGC) believe prices now reflect a consensus view to monetary policy normalisation and should be less sensitive to it. In the near term, WGC view the direction of the US dollar as well as the strength of Asian demand as key indicators of gold sentiment. Further, potentially reduced mine production at lower prices should limit the downside. Longer term, WGC see growth in the gold market supported by the expansion of developing economies which are expected to be the lion’s share of global GDP before the end of the decade – regardless of any potential slowdown in the near term.

SIA

SIA: UOB Kay Hian maintains Hold with TP $11.30. The house expect 3QFY14 ex-EI net profit to fall 47% yoy to $86m. Weak pax yields along with steep losses from 40%-owned Tigerair should lead to an estimated 47% yoy decline in 3QFY14 earnings. SIA is also likely to report Exceptional Items (EI) losses of S$80.9m for the period, due to cargo price fixing settlements. Operationally, there is very little going in SIA’s favour. 4QFY14 is likely to be weaker due to capacity cuts in Thailand. Aside from weak loads, a key focus would be Scoot’s profitability. While SIA does not report Scoot’s numbers, it can be inferred from group operating profit. A qoq improvement will be viewed positively, but not sufficient to re-rate the group.

SG Market (03 Feb 14)

Market Roundup: US stocks ended the week and month with deep losses following a selloff on Fri, prompted by continuing unease over emerging markets and a number of earnings disappointments. The VIX or gauge of investor anxiety rose 6.5% to 18.41, up 34% this year. Emerging markets extended their worst start to the year since 2008 as outflows picked up pace amid Fed tapering and signs that China’s economy is slowing. Argentine bonds tumbled on concerns that government measures from devaluation to rate increases will not improve the country’s deteriorating debt position. Russia’s rouble retreated. A batch of poor earnings from Amazon (-11%), Mattel (-12%), Chevron (-4.1%) and MasterCard (-5.1%) set the downbeat tone early in the session. Investors also found little solace from consumer spending which climbed 0.4% in Dec but incomes stagnated, pushing the saving rate to its lowest level in almost a year. Consumer sentiment declined to 81.2 in Jan from 82.5 a month ago, in line with estimates. The Chicago PMI fell to 59.6 from 60.8 in Dec. S’pore market is braced for yet another day of red ink as both Tokyo (-0.5%) and Seoul (-0.6%) opened lower. Downside support is seen at the Aug ’13 low of 2,990, which also represents the 50% retracement from the 2,528 to 3,452 rally from Oct ’11 to May ’13. Stocks to watch: *Swiber: Clinched five contracts worth a combined US$235m. Three of the contracts (US$145m) were awarded to the group for works that will be executed in Latin America and SE Asia. The remaining two contract wins (US$90m) were awarded to Swiber’s associate and JV company, for services to be executed in SE Asia. The contracts will commence immediately and are expected to be completed in the next two years. *Religare Health Trust: Proposed to acquire a clinical establishment in Mohali, northwest India, for $58.2m. The 355-bed hospital, which commenced operations in Jun ’01, serves as a hub for a number of smaller, secondary hospitals in the surrounding areas. RHT intends to finance the acquisition mainly with debt. On completion of the deal, RHT’s aggregate leverage is expected to rise from 6.6% to 13%, leaving debt headroom of $375m for further acquisitions. The acquisition is expected to lift pro forma DPU from 3.55¢ to 3.75¢. *Sembcorp Industries: Signed a conditional agreement to acquire 45% of NCC Power Projects (NCCPP), which is currently building a 1,320MW coal-fired power plant in Andhra Pradesh, India, adjacent to the site of an existing power plant investment. This project will double SCI’s power generation capacity in India. Construction is ~30% completed and is expected to come onstream in early 2016. SCI’s investment stake will amount to ~$175m. *Kreuz: Filed a court application to sanction the scheme of arrangement for the takeover offer at $0.80 per share. Accordingly, the expected last day for the trading of Kreuz shares is 19 Feb ‘14. *Stratech Systems: Secured its first such contract to upgrade the iFrerret infrastructure at Changi Airport for airfield surveillance. *GRP: Proposed to issue 27.8m new shares (4.75% of enlarged share capital) at $0.10 to Teo Tong How. Net proceeds of $2.8m will be used for new market expansion, new business development plans and new projects. Teo is the Chairman and Managing Director of the Hong How Group, a real estate developer and investor. *Armarda: 3QFY14 net loss widenedy to HK$13.4m (+63% y/y), despite chalkinh in higher revenue of HK$3.8m (+60%) mainly contributed by the trading of IT equipment (75% of revenue, +40% y/y) and RFID chips (17% of revenue, nil in previous year). Bottomline was weighed down by various operating expenses, exacerbated by share of associates’ losses of HK$2.5m from HK$0.1m a year ago. NAV at Dec ’13 stood at HK$0.089. *Rex: Trading halt