SG Banks

SG Banks: Nomura remains Bullish on SG Banks. Note that loans and advances accelerated in Mar, +19.9% YoY vs Feb at 17.3%. Credit demand continues to broaden, with general commerce +39.8% YoY vs Feb +35.3% and building & construction accelerating at 14.4% YoY. Add that peak loan utilisation and broad-based loan dd are supportive of banks’ top-line growth, with rising credit vol mitigating margin pressure from low SIBOR and competition…..

Sustained regional GDP expansion stoking credit demand and indications that margin pressure is bottoming would be key catalysts for sector. House recommends holding OCBC for its strong ASEAN presence and broad, integrated product platform. DBS shows traction in better leveraging its core franchise strengths, particularly S$ CASA deposit base, but the biggest kicker remains interest rate direction.

SG REITS

SG REITS: UBS has REITs report. Note that SG REITs currently trading at 6.4% FY11E yield (399bps above 10Y bonds) with 2010-2014E DPU growth at 1.9%, with CDL H-Trust posting the highest growth at 7.5%. S-REIT picks are CDL H-Trust for upside in hotel room rates, CMT and FCT for retail exposure, and CCT as a beneficiary of the recovery in office rental.

Oceanus

Oceanus: Lifts trading halt. Co says no definite agreements have been made and discussions are preliminary in nature. Co does not confirm KKR as counterparty. It is unusual for co to lift the halt while talks are progressing and potential acq is likely to be very preliminary, unlikely to be at the due diligence stage as of yet. At last done price $0.275, co’s mkt cap is $554.6m vs rumoured acq price of $612.5m, which represents a potential 10.4% upside if the deal goes through...

Trading of its TDRs in Taiwan was not halted Friday, and the TDRs -2% to NT$7.23 (~S$0.31).

RafflesEdu

RafflesEdu: Proposing to establish a $78m 10 yr financing facility with IFC, member of World Bank Group. The funding will be used to construct co's universities in India and Iskandar. The loan will comprise of a $60m loan and an $18m convertible loan which can be converted to ordinary shares. In most recent 2Q results in Feb, co posted a loss.

Noble

Noble: Korea's sovereign wealth fund, Korea Invt Corp has acquired 59.3m shares of Noble Group from a co associated with Noble founder and Chairman Richard Elman. No price was mentioned. The shares acquired are approx 0.9% of share capital…
ben_oh: …News is likely to be read positively both on strategic front and show of interest despite Glencore’s upcoming IPO. RBS maintains Buy with TP$3.00 on news with possibility of investment in supply chain infrastructure in Korea or other countries. Co trades at fwd P/E of 15.3x.

SingPost

SingPost: Reported FY11 & 4Q11 results which were broadly in-line with expectations. 4Q11 Rev at $141.5m, +5.7% YoY and -4.7% QoQ, while net profit at $37m, -9.6% YoY and -15.6% QoQ. Result brings FY11 rev to $565.8m, +7.7% YoY and Net Profit to $161m, -2.4% YoY. Excluding one-off items, FY11 core net profit was $149.6mn, +1.2% YoY…..

Overall, Mail rev formed 65% of total grp’s rev and +7.1% YoY driven largely by increased domestic mail traffic vol, the bulk of which stemmed from direct mail services, +15.7% YoY, while rental income increased 2.8% YoY on higher occupancy at 99.8% vs 97% in FY10. Margins however eroded on back of Logistics operating profit which fell 5.1% YoY despite strong top line growth, +14% YoY, as the lower margin transshipment featured more prominently …..

Grp has declared a final div of 2.5c/share, bringing FY11 div to 6.25c/share and translating to a 5.4% yield, flat from FY10. Going forward, grp will continue to stand firm on its core Mail business and recent increase of stake in GD Express Carrier to 27%, from 5% underscores commitment to regional expansion and business diversification…..

We note that grp’s balance sheet remains strong, with a cash position of $339m and low gearing of 50%, offering room for expansion/acquisition growth. At current price, grp appears fairly valued, at 14x FY12E P/E vs historical average of 14.3x, with a 5.4% div yield. Goldman Sachs maintains neutral call with $1.10 TP, while CS maintains neutral with $1.17 TP.

SG Market

SG Market: Spore shares to remain range-bound with downward bias following softer close in Wall Street. Support for STI lies at 3165 with resistance at 3230.

Stocks in focus:
*SMRT 4QFY11 net profit +50% yoy to $34m, revenue +8.6% to $244.5m. Full year FY11 profits -1.1% to $161.1m, revenue +8.3% to$969.7m, slightly below estimates due to higher electricity/diesel costs & operating expenses. DPS stays at 8.5¢ (final 6.75¢) but new capex is a concern.
*SingPost 4QFY11 net profit -9.6% yoy to $37m, revenue +5.7% to $141.5m. DPS 6.25¢ (final 2.5¢).
*Oceanus reveals it is in preliminary talks about possible stake sale but nothing firm. Trading halt to be lifted today.
*Noble: South Korean sovereign wealth fund buys 0.9% stake in the commodity trader.