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Headliners
Headliners | 16 January 2009
Related stocks:
U11
By: David Lee
Articles (57) Profile

Chemoil To Supply Bunker Fuel At Indian Ports

Mainboard-listed Chemoil Energy, which already has presence in the world’s three largest ports of Singapore, Fujairah and Rotterdam, will start supplying bunker fuel at Indian ports early this year through its 50:50 joint venture with Adani Enterprises, owner of Mundra port in Gujarat, the largest private Indian port, adding another important market to its global portfolio.

The JV will supply marine fuels at the Mundra port and other ports of Kandla, Sikka, Jamnagar and Bedi in the Western Indian State. Chemoil indicated that it hopes to capture as much as 40-45% of the 8.5m tonnes of bunker fuel consumed annually by 2011/2012 in the Gujarat area.

Despite the current difficult economic climate, the company, which secured an estimated 10% of Singapore’s highly-competitive marine fuels market last year, has continued to push forward its growth plans, including expansions in Asia, the Middle East and the US. It managed to chalk up net profits of US$34.7m for January-September 2008, an increase of 118% over the same period in 2007.

Singapore Banks May Face More Earnings Downgrades

According to Citigroup analysts, the worst is not over yet for Singapore banks, which are likely to face more earnings downgrades in the coming days. The banks’ fourth-quarter results, due out next month, will probably show weaker-than-expected net interest income from their main lending activities and higher charges for bad loans, triggering further cuts in earnings forecasts.

The analysts warned that even though the banks’ shares look cheap and are now trading at close to their respective book values, which measure what their assets, less liabilities, are worth on their books, the bad news is not over yet.

They have posted a ‘sell’ rating on all three Singapore-listed banks, DBS Group, OCBC Bank and United Overseas Bank (UOB). Total net profit at the three banks is expected to fall 12% to $5.07b in 2009, after sliding an estimated 11% last year. In addition, it is predicted that earnings per share this year will slump 29% at DBS, 16% at UOB and 10% at OCBC.

Jurong Technologies Faces Winding Up Over Loan Defaults

Jurong Technologies Industrial Corp, a contract manufacturer, may have to repay OCBC Bank over $56.5m in loans by the end of the month or face winding up. According to the Business Times, the company has received a statutory demand dated Jan 9 for two sums of $21.9m and US$23.3m to be repaid within three weeks, otherwise OCBC Bank will be entitled to commence winding up proceedings.

Sources said that the company has been unable to pay interest on its loans to the bank for some time now. It is said to have at least five other creditor banks, including at least one other local bank. So far, the company said it has met with its creditor banks and negotiations are ongoing.

As per its 3Q08 financial statements ended 30 September 2008, the company had unsecured borrowings of over $318m, $282.3m of which was due in one year or less, or on demand. In its 2007 annual report, the company disclosed that it held $298m in unsecured bank loans denominated in various currencies, almost of all which was due in 2008. Reported revenue fell 45% to $108.6m for the three months to 30 September while net profit fell 95% to $714,000, from over $13.4m in the previous year.

Property Prices May Fall Lower Than Forecast

According to Citigroup, it is believed that local property prices could fall even lower than forecast so far, as the expectant ‘worst recession in Singapore’s history’ looms. It also recommends a ‘sell’ for its property stocks covered, save for one, saying that while these have recovered 30% from 2008 lows, the current rally is not sustainable. The company recommends a ‘buy’ for Allgreen, saying that it offers a relatively high yield of about 6.5%.

Echoing a similar tone, Goldman Sachs has also downgraded its property stocks covered to ‘sell’, except for CapitaLand, which Goldman believes, is more likely than its peers to generate NAV growth in the next three years, given its diversified business model and capacity to benefit from the current market environment.

United Overseas Bank  25.950 -0.17 -0.65%   
Business: [FY18 Turnover] Group retail (43.3%), group wholesale (43.2%), global markets & investment management (5.1%), others (8.4%).

Insight: May-19, 1Q19 total income rose 7.8% to $2.4b due t... Read More


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