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STOCKS NEWS SINGAPORE-Shares rise as rig builders lead gains
July 2, 2012 / 5:31 AM / 5 years ago

STOCKS NEWS SINGAPORE-Shares rise as rig builders lead gains

Singapore shares rose to their highest level in seven weeks, in line with other Asian bourses after European leaders agreed to shore up their troubled banks.

Oil rig builders Keppel Corp Ltd and Sembcorp Marine Ltd saw the strongest gains on the benchmark Straits Times Index, after oil prices staged a strong rally on Friday.

Keppel shares were up 3.2 percent at S$10.61, with over 5.3 million shares traded, making it the most actively traded stock on the exchange by value. Its volume was 1.4 times its average daily volume over the last five sessions.

Smaller rival Sembcorp Marine shares were 2.7 percent higher at S$4.91 on a volume of 4.6 million shares.

Asian bourses were also broadly higher, with the MSCI’s broadest index of Asia-Pacific shares outside Japan rising 0.5 percent.

1317 (0517 GMT)

(Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com)

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11:05 STOCKS NEWS SINGAPORE-DBS cuts SingTel to hold from buy

DBS Vickers has downgraded Singapore Telecommunications Ltd to ‘hold’ from ‘buy’ and cut its target price to S$3.29 from S$3.32, on concerns of intensifying competition in India, a weak rupee and its growth in Singapore.

By 0251 GMT, SingTel shares were 1.2 percent lower at S$3.26, and have gained about 5.5 percent so far this year, underperforming the benchmark Straits Times Index’s 9 percent rise.

DBS said its checks suggest that tariffs in India have been falling rapidly since May, indicating greater competition in the country, while SingTel’s affiliate Bharti Airtel has been losing revenue share to competitors such as Vodafone.

The Indian rupee has declined 20 percent against the Singapore dollar over the last three months, which could result in significant foreign exchange losses at Bharti as it has large US dollar-denominated foreign debt, DBS said.

Singapore regulator Infocomm Development Authority’s upcoming initiative to spur adoption of fibre network, Inter Connect Offer, could dampen SingTel’s earnings in Singapore, DBS said.

1053 (0253 GMT)

(Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com)

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9:56 STOCKS NEWS SINGAPORE-DMG starts Technics with buy rating

DMG & Partners has initiated coverage of Technics Oil & Gas Ltd with a ‘buy’ rating and a target price of S$1.28, citing attractive valuations, yield and earnings growth.

By 0139 GMT, Technics shares were 1.1 percent higher at S$0.94, and have gained about 10 percent so far this year, compared to a 12.5 percent rise in the FT ST Small Cap Index .

DMG expects Technics’ net profit to grow at a compounded 12.6 percent on average a year over fiscal 2011-2014, driven by strong spending in the industry and capacity expansion in Vietnam.

Technics entered into an agreement to buy an existing private yard in Vietnam that will double its revenue capacity and will help it to secure more work in the country, DMG said.

It added that Technics’ business model requires limited capital expenditure and generates strong operating cash flow. Its management guided for a dividend payout of 8 Singapore cents for this year, translating into a yield of 8.6 percent, DMG said.

0939 (0139 GMT)

(Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com)

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9:24 STOCKS NEWS SINGAPORE-OCBC ups Cache Logistics’ target price

OCBC Investment Research raised its target price for Cache Logistics Trust to S$1.18 from S$1.11 and kept its buy rating, to reflect its acquisition of a logistics property in Singapore.

By 0108 GMT, Cache units were 0.5 percent higher at S$1.055, and have gained about 11 percent since the start of the year, outperforming the Straits Times Index’s 10 percent rise.

Cache has received approval from unitholders to acquire Pandan Logistics Hub, which OCBC expects to contribute S$5.2 million in rental income to the real estate investment trust in the first year.

This translates to an initial net property income yield of 7.6 percent and is expected to add 0.28 Singapore cents to its distribution per unit (DPU) on an annualised basis.

“We continue to like Cache for its resilient portfolio, healthy financial position and attractive fiscal 2012 DPU yield of 7.9 percent,” said OCBC in a report.

0910 (0110 GMT)

Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com

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