SG Market: Wall Street's modest gains overnight may help underpin Spore shares & keep the STI above the 3200 level. Resistance is likely at 3230 while the 50-day MA at 3180 is expected to provide support on any downside. The STI may continue to inch higher but there is not much in corporate news to excite the market.
Investors are anticipating an interest rate hike in China this wkend but if that does not materialize due to lower-than-expected Nov CPI figure, we may be on course for a rally next wk. Pac Andes may be in focus as the frozen fish supplier expands its seafood business by acquiring a 19.8% stake in ASX-listed salmon fish farmer Tassal Group for $67m.
#Stock ratings changes:
*IndoAgri target price raised to $3.05 from $2.77 at Daiwa; Cimb downgrade to Neutral from Trading Buy but raise TP to $3.24 from $3.17
*Wee Hur upgraded to Buy from Hold at Phillips Sec, TP raised to $0.62 from $0.56
*Tiger Airways initiated as Sell at Phillips Sec with TP of $1.65
Thursday, December 9, 2010
Wednesday, December 8, 2010
Straits Asia Resources
Straits Asia Resources: -0.4% at $2.54, extending the 7.3% decline over the last 2 days, after last week's run-up to the $2.80 52-wk high. Recent weakness triggered partly by concerns the Indonesia-based coal miner may again face delays in getting regulatory approval to work on a new area in its Sebuku mine…
DMG has a Neutral call with $2.49 target. Still expecting Northern Leases permits to come in by the end of 2010, but notes ramp-up in Sebuku production in FY11 likely to be delayed due to general weather problems.
UBS, which has a Buy call and $3.15 target, remains hopeful however; says Straits Asia should be a primary beneficiary of further strengthening in coal price in the near term as winter descends on the northern hemisphere…
Technicals looking weak, with RSI, Stochastics hooking down sharply from overbought levels, and MACD showing a negative cross. May test support at $2.40 in near term.
DMG has a Neutral call with $2.49 target. Still expecting Northern Leases permits to come in by the end of 2010, but notes ramp-up in Sebuku production in FY11 likely to be delayed due to general weather problems.
UBS, which has a Buy call and $3.15 target, remains hopeful however; says Straits Asia should be a primary beneficiary of further strengthening in coal price in the near term as winter descends on the northern hemisphere…
Technicals looking weak, with RSI, Stochastics hooking down sharply from overbought levels, and MACD showing a negative cross. May test support at $2.40 in near term.
Olam
Olam: GS initiates at Neutral with TP $3.20. Notes that ROE peaked at 30% in FY08 and since de-rated to 17% in FY09-10. While co is investing in upstream businesses to boost margins and restore ROE, it will take time to mature. Upstream earnings to be subject to agriculture prices. Highlights that co tends to contract forwards on a long duration which shld reduce correlation with short-term spot prices.
Noble Group
Noble Group: Goldman Sachs initiates a Buy with a $2.60 target price, implying 15.3x FY11 P/E. Highlights commodity player could benefit from a strong 2011 macro outlook as pro-cyclical commodities like coal, oil & metals are expected to account for 60% of next year's earnings. Expects oil & gas volumes to get a boost from recent acqn of Semfuel & Northville oil storage & distribution assets. Tips recently-acquired US-based Sempra Energy could also start contributing from 2011.
Adds valuations are attractive with the stock trading at 12.8x FY11 P/E, lowest among its Spore peers.
Adds valuations are attractive with the stock trading at 12.8x FY11 P/E, lowest among its Spore peers.
Strategy
Strategy: CIMB has Strategy report for 2011, with end-CY11 FSSTI target of 3,560, and implying a 1.9x CY11 P/BV (slightly above mean). Note that such valuations are not aggressive and reflect markets that are still conscious of the risks in a world of bipolar growth. Expect a pensive market at the turn of the year to explode suddenly before end-1H11, once perceptions of risk fade…
Among social trends, expect a widening income divide to add on to existing west-to-east migration. Among corporate trends, expect M&A and share buybacks to accelerate by mid-year….
For stock picks, tip that key themes of Asia consumption and commodities are well-known and still valid trends. Remain Overweight on Plantations/Commodities, Offshore & Marine and Financials. Underweight Property and Telcos. Top picks are Cache Logistics, DBS, Golden Agri, Genting Singapore, Keppel Corp, Keppel Land, OUE, SIA, Venture and Yangzijiang.
Among social trends, expect a widening income divide to add on to existing west-to-east migration. Among corporate trends, expect M&A and share buybacks to accelerate by mid-year….
For stock picks, tip that key themes of Asia consumption and commodities are well-known and still valid trends. Remain Overweight on Plantations/Commodities, Offshore & Marine and Financials. Underweight Property and Telcos. Top picks are Cache Logistics, DBS, Golden Agri, Genting Singapore, Keppel Corp, Keppel Land, OUE, SIA, Venture and Yangzijiang.
Genting SP
Genting SP: UOBK technical analysis points toward GENS trading higher, following a short-term consolidation during late Nov. Says the stock is now gaining momentum on the upside after it closed above the 12-day, 26-day moving avgs. The moving avgs are on the verge of a positive cross over, while the MACD line has already crossed over the signal line, providing a Buy indication.
Next resistance is the previous peak of $2.35 with support at $1.92.
Next resistance is the previous peak of $2.35 with support at $1.92.
MapletreeLog
MapletreeLog has divested its property at 9 Tampines Str 92 to Trans-cab Services for $12.5m. Property valued at $12m as of 1 Dec and was previously leased to Elchemi Assets but currently unoccupied. Original cost at $11.2m, MLT expects to realise net gain of $1.2m and to complete sale by 1Q 2011…
It consists of a 2 storey industrial warehouse and an office block, with total gfa of 11k sqm. Pending further announcements, the $1.2m gain will increase DPU from 4 to 5 cents as for 9M 2010 if distributed. Est DPU for year was at 6.1 cents before divestment.
It consists of a 2 storey industrial warehouse and an office block, with total gfa of 11k sqm. Pending further announcements, the $1.2m gain will increase DPU from 4 to 5 cents as for 9M 2010 if distributed. Est DPU for year was at 6.1 cents before divestment.
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