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Investors’ Corner
Investors' Corner | 26 March 2010
Related stocks:
S68
E5H
BN4
By: Jasmine Toh
Articles (6) Profile

CapitaCommercial Trust
Price – $1.13 Target – $1.52
CapitaCommercial Trust (CCT) intends to issue S$225m of 2.7% unsecured five-year convertible bonds (CBs). 10-25% of the proceeds will be used as working capital and 75-90% for asset enhancement initiatives / refinancing. Bondholders will not be entitled to an early put option on this issue. CCT has no immediate refinancing risk and we view this issue as proactive balance sheet management. Estimating post CB gearing at 35%, the REIT has significant headroom to strengthen its portfolio with good Grade A office acquisitions. We think share price would perform if CCT is able to acquire well. News flow on the redevelopment of Starhub Centre would be a price catalyst. Management has sufficient financial flexibility to make accrete acquisitions. CCT’s initial property portfolio comprised Capital Tower, Six Battery Road, Robinson Point, Starhub Centre and car parks. Unchanged at BUY. – UBS Investment (18 Mar)

Singapore Exchange
Price – $8.02 Target – $9.90
SGX’s share price has underperformed over the last one to three months. With operational drivers seen bottoming and a continued market recovery, we now see a good entry point into this high-beta stock as it plays catch-up. The primary reason for the stock’s underperformance was the weak turnover velocity, which is appearing to bottom near historically low levels, aiding the stock’s outperformance in the near term. Our strategists continue to be positive on markets for the rest of 2010 – 1) positive earnings momentum set to continue, 2) liquidity conditions to remain favorable for the rest of the year. SGX now trades near historical low 20% premium to the Singapore market (50% historical average). A relatively safe 4-5% dividend yield makes it attractive. Maintain OUTPERFORM. – Credit Suisse (18 Mar)

Golden Agri-Resources
Price – $0.565 Target – $0.66
Nestle dropped Sinar Mas Agro Resources & Technology (SMART), a subsidiary of Golden Agri Resources (GAR), as its palm oil (CPO) supplier, following allegations by Greenpeace that the Indonesian palm oil giant has been destroying the country’s rainforests and peatlands through rampant deforestation. SMART has denied the allegations and stressed that it remains
committed to applying responsible land clearing and farming management in all of its plantations. While SMART did not reveal how much Nestle contributed to its sales, we understand that it is likely insignificant as GAR sells most of its CPO to customers in China and India, where demand is expected to track the rapid urbanisation in these countries. On that note, we believe that the adherence to guidelines laid out by RSPO (Roundtable for Sustainable Palm Oil) will become more important as the Nestle development suggests that businesses are paying more attention to “green practices”. Maintain BUY. – OCBC Investment (19 Mar)

Keppel Corp
Price – $9.02 Target – $9.90
Keppel Corp announced that it has entered into a joint venture (JV) with State Oil Company of Azerbaijan Republic (SOCAR) and Azerbaijan Investment Company (AIC) to develop and manage a new 52-ha shipbuilding and ship repair yard in Baku, Azerbaijan; with an investment of US$386m. Keppel will have an initial 10% stake in the JV with the option to acquire another 10% over the next 3 years. The new JV will not contribute to earnings until 2012 when the yard is fully developed in 2 to 3 years. In a place where there are few established shipyards, we believe the deal will give Keppel first mover advantage. Azerbaijan has nearly 7m barrel of oil equivalent (BoE) and production has grown from 282,000 barrels/day in 2000 to 914,000 barrels/day in 2008. We estimate the yard to achieve yearly ship repair revenue of ~S$350m when fully operational. Maintain BUY. – DMG & Partners (22 Mar)

CapitaLand Commercial Trust  2.050 -0.01 -0.49%   
Business: Co is a real estate investment trust in the office space.

Insight: Apr-19, 1Q19 gross revenue and NPI rose 3.5% and 3... Read More
Singapore Exchange  8.210 -0.05 -0.61%   
Business: [FY18 Turnover] Equities & fixed income (48.2%), derivatives (40.2%), mkt data & connectivity (11.6%).

Insight: Jan-19, 1H19 operating revenue increased 5.7% to $... Read More
Golden Agri-Resources  0.200 -0.010 -4.76%   
Business: Co is engaged in cultivating & harvesting oil palm trees, processing fresh fruit bunches (FFB) into crude palm oil (CPO) & palm kernel (PK), & refining CPO into industrial & consumer pdts.

Insight: May-19, 1Q19 revenue fell 11% due to softer crude ... Read More
Keppel Corp  5.950 -0.03 -0.50%   
Business: [FY18 Turnover] Infrastructure (44.1%), offshore & marine (O&M) (31.4%), property (22.5%), investments (2%).

Insight: Apr-19, 1Q19 revenue rose 4.1% underpinned by high... Read More


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