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Singapore Daily Bulletin – 12/12/11
Daily Bulletin | 12 December 2011
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US$ Trade Finance New Boon For Local Banks
The private banking business is proving to be more valuable to local banks in the midst of today’s tight liquidity environment. As European banks retreat from the trade finance arena, local banks such as DBS, UOB and OCBC have stepped in to fill the gap. With the US$ still being the global currency of choice, both DBS and OCBC have seen their US$ loan to deposit ratio surge to 166-171% (as at the end of the third quarter) as demand for US$ trade finance loans piled in. A DBS spokesperson said that while US$ liquidity “is tight globally, at DBS, our non-SGD liquidity is very healthy and coming in strongly”. Keeping its eye on the ball, DBS had announced previously in September that it would be investing $250 million over the next five years to beef up its private banking operations. UOB meanwhile, reported that their private banking clients are generally keeping their deposits in US$ and waiting for the right moment to re-invest in riskier asset classes.

Significance: The local banking industry has generally been deemed cautious and safe as opposed to their European and American counterparts. As such, they have the credit ratings that are among the highest in Asia, making them beneficiaries of the flight to quality in these uncertain times.

Global Investments To Book US$2.65m In Gains From Boeing Aircraft Sale
In announcements made on the morning of 12 December, mutual fund company, Global Investments, said that it would be selling two Boeing 757-200 aircraft to Federal Express Corporation (FEDEX) in the United States. Both aircraft are currently leased to Thomson Airways which is scheduled to expire in 30 April 2013. The sale is expected to complete on or about 30 April 2013. The firm will be taking into account the expected net proceeds of approximately US$2.65 million from the redelivery of the aircraft by Thomson Airways and the sale of the two aircraft to FEDEX in its financial year ending 31 December 2013. The sale is expected to add earnings and net asset value per share of $0.006 on the present issued share capital of 550.2 million shares.

Significance: The sale of the aircraft underlines Global Investments’ view that the global aviation industry is experiencing a general slowdown amid weakened macroeconomic conditions. In its 9M11 financial report, it remarked that liquidity concerns will continue to plague the industry as banks especially in Europe, face significant challenges.

Yangzijiang In JV With Qatar Government
Yangzijiang Shipbuilding Holding (Yangzijiang) announced on 12 December, that it would be investing a total of US$205 million into two separate joint venture (JV) companies with the Qatar Investment Corporation. Under the agreement, Yangzijiang will subscribe to a 50% stake in YZJ Offshore Engineering (YOEPL) at an initial stage, with the Qatar Investment Corporation subscribing to the remaining of YOEPL’s US$ 110 million share capital. Within 3 months of YOEPL’s incorporation, Yangzijiang and YOEPL will invest a further US$150 million and US$100 million respectively in YZJ Offshore Engineering (China) Co (YOECCL). YOECCL will then carry on the business of turnkey construction, fabrication/repair of offshore oil and gas marine vessels and platforms.

Significance: Yanzijiang was of the view that the investment would enhance its shipbuilding capabilities in design and construction of offshore platforms and vessels.

DBS Group Hldgs  24.700 -- --   
Business: [FY18 Total Income] Institutional banking (43.7%), consumer banking/wealth management (42.9%), treasury markets and others (13.4%).

Insight: Apr-19, 1Q19 net profit rose 9% to a record $1.7b.... Read More
Oversea-Chinese Banking Corp  10.630 -0.07 -0.65%   
Business: [FY18 Turnover] Global corporate/investment banking (35%), global consumer/private banking (34.8%), OCBC Wing Hang (11.5%), insurance (11%), global treasury & mkts (7.7%).

Insight: May-19, 1Q19 total income rose 14.7% driven by str... Read More
United Overseas Bank  25.040 -0.11 -0.44%   
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
Global Investments  0.138 -- --   
Business: An open ended balanced mutual fund. [FY18 Asset Class] Bank contingent convertibles (35.8%), bonds (31.7%), listed equities (14.7%), cash & others (11.9%), loan portfolio & securitisation assets (5.9%).

Insight: May-19, 1Q19 reported total income of $14m instead... Read More
Yangzijiang Shipbuilding (Hldgs)  0.990 +0.130 +15.12%   
Business: Co is one of the largest non-state owned shipbuilders in China. [FY18 Turnover] Shipbuilding (58.1%), trading (32.8%), investments (6.7%), others (2.4%).

Insight: Apr-19, 1Q19 revenue jumped 26.8% to Rmb6.3b due t... Read More

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