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STOCKS NEWS SINGAPORE-Macquarie downgrades NOL to underperform
August 21, 2012 / 8:32 AM / 5 years ago

STOCKS NEWS SINGAPORE-Macquarie downgrades NOL to underperform

Macquarie downgraded Singapore container shipping firm Neptune Orient Lines (NOL) to ‘underperform’ from ‘neutral’ and lowered its target price to S$0.95 from S$1.08, as it saw persistent oversupply of capacity in 2013.

NOL shares were down 1.3 percent at S$1.17 on Tuesday. The stock has risen 4 percent so far this year, underperforming the 16 percent gain in the Straits Times Index.

“We believe there are more downside risks to freight rates, and the market is placing too much faith in carriers’ ability to hold down supply,” Macquarie said, adding that supply growth will accelerate to 7.8 percent in 2013 from 7.3 percent in 2012.

Macquarie said it saw no reason to own NOL stock at a 2012 fiscal year price-to-book of 1.0 time, but advised investors to revisit NOL in the second half of 2013 as it gets more evidence of the company’s success in cutting costs and improved supply-demand balance in 2014.

1612 (0812 GMT) (Reporting by Eveline Danubrata in Singapore;


14:51 STOCKS NEWS SINGAPORE-DMG says more downgrades after Q2 earnings

DMG & Partners Securities said while the second-quarter corporate earnings were mostly in line with expectation, there were more earnings and recommendation downgrades than upgrades, reflecting the managements’ guidance of weaker growth ahead.

DMG said it has a 12-month target of 3,168 points for the Straits Times Index, though it sees greater volatility before this target is reached. On Tuesday, the STI was up 0.1 percent at 3,065.68 points.

Sectors that are likely to outperform are commodity plays, consumer, offshore and marine, as well as real estate investment trusts, DMG said.

Its stock picks include commodities firm Noble Group , as its earnings are likely to be driven by agriculture recovery, and massage chair maker OSIM International due to new stores and products driving growth.

The broker said it also likes Keppel Corp, the world’s largest rig builder, because of strong revenue visibility from record order book, and CapitaCommercial Trust on the back of high occupancy and low gearing.

1446 (0646 GMT)

(Reporting by Eveline Danubrata in Singapore;


12:52 STOCKS NEWS SINGAPORE-SingTel leads gain in shares at midday

Singapore shares edged higher on Tuesday, led by Singapore Telecommunications and in line with other Asian bourses, buoyed by hopes that the European Central Bank will be able to cut borrowing costs.

SingTel shares, which have fallen 8 percent this month, rose 2.7 percent to S$3.38 by midday, supported by demand for dividend stocks.

The benchmark Straits Times Index was up 0.2 percent at 3,066.65 points, while the MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6 percent.

Asia Pacific Breweries Ltd was the top-traded stock by value on the Singapore exchange, and rose 4.8 percent to S$53 after Heineken raised its offer for control of the Singapore brewer to $6.35 billion.

1240 (0440 GMT)

(Reporting by Charmian Kok in Singapore;


12:23 STOCKS NEWS SINGAPORE-Ascendas Hospitality seen falling after price stabilisation ends

Units in Ascendas Hospitality Trust, which have been supported by its stabilising manager, may fall after the manager stops buying its units from the market, traders said.

Nomura Securities Singapore Pte Ltd has bought around 10 million Ascendas’ stapled securities from the open market at a range of S$0.86 to S$0.88 since the trust’s listing on July 27.

Ascendas was trading at S$0.875, slightly below its initial public offering price of S$0.88.

The over-allotment option is set to expire 30 days fom Ascendas’ listing date or when the stabilising manager has bought 73.4 million units, representing 16.8 percent of the total number of stapled securities in the offering.

“There’s always a geographic bias. Usually for REITs, if they have primarily Singapore assets, people might be more familiar with them. In Ascendas’s case, they have no assets in Singapore,” said Ong Kian Lin, an analyst at Maybank Kim Eng.

Ascendas has 10 properties in Australia, China and Japan.

Some traders however said the downside could be limited due to the trust’s relatively attractive yield. At S$0.88 per unit, the trust would offer a yield of about 7.9 percent in the year ended March 2013, Ascendas said.

“If the price falls, it might be limited because their projected yield is about 8 percent, which is fairly high,” said a trader.

The weakness in Ascendas comes after a strong showing by Far Far East Hospitality Trust, which priced its initial public offering at the top end of an indicative range.

1210 (0410 GMT)

(Reporting by Eveline Danubrata in Singapore;


11:57 STOCKS NEWS SINGAPORE-OCBC prefers office to retail REITs

With Singapore real-estate investment trusts (REIT) outperforming the broader market this year, OCBC Investment Research said investors should switch to office REITs instead of domestic retail ones.

The FT ST Real Estate Investment Trust Index has gained 23.4 percent so far this year, compared to the Straits Times Index’s 15 percent gain.

OCBC upgraded office REITs to ‘overweight’ as they are likely to benefit from limited new supply in the pipeline and better-than-expected demand in the second quarter. The brokerage prefers CapitaCommercial Trust, on which it has a ‘buy’ rating and a target price of S$1.53.

However, OCBC downgraded local retail REITs to ‘neutral’, citing rich valuations as most positives have been priced it. It has a ‘hold’ on CapitaMall Trust and a target price of S$2.04.

OCBC also likes industrial REITs, due to firm growth drivers and financial positions, and Cache Logistics Trust is its top pick with a ‘buy’ rating and target price of S$1.18.

With forward distribution per unit yields at 7.7 percent, the sector offers one of the highest yields amongst REITs, the brokerage said.

1150 (0350 GMT)

(Reporting by Charmian Kok in Singapore;


10:53 STOCKS NEWS SINGAPORE-CIMB cuts F&N target price

CIMB Research cut its target price for Singapore conglomerate Fraser and Neave to S$9.85 from S$10, and kept its ‘outperform’ rating, after taking into account a 15 percent discount to its property assets.

By 0242 GMT, F&N shares were down 0.2 percent at S$8.38, but have gained 35 percent so far this year, compared to the Straits Times Index’s 15.9 percent gain.

F&N’s board last week approved a sweetened $6.35 billion offer from Dutch brewer Heineken for Asia Pacific Breweries Ltd , the maker of Tiger Beer.

If the sale of F&N’s beer affiliate APB is successful, property will account for more than 80 percent of F&N, CIMB estimated, thus it is now applying a 15 percent discount to F&N’s property restated net asset value.

“This deal looks set to go through if Thai Bev and Kirin play ball. The potential for special dividends, reinvestment upside and more corporate actions are the expected catalysts for the stock,” said CIMB in a note.

To read a related story, click

1045 (0245 GMT) (Reporting by Charmian Kok in Singapore;

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