ECB drops Greek banks
Another bombshell was dropped on Greece on the more »]]> SQ drops Athens
On Wednesday, Singapore Airlines announced that it will suspend services to Athens and Abu Dhabi due to “sustained weak performance” on both routes. The suspensions are due to the company’s policy to match capacity to prevailing market demand.

ECB drops Greek banks
Another bombshell was dropped on Greece on the same day with the European Central Bank saying that it will temporarily stop lending to some Greek banks to limit its risk, pushing the responsibility for lending onto the Greek central bank until these banks have sufficiently boosted their capital.

The announcement comes after ECB’s President Draghi acknowledged for the first time that Greece could leave the monetary union. While the ECB’s “strong preference” is that Greece stays in the 17-nation euro area, it has to preserve “the integrity of the balance sheet”.

Markets drop further
European markets dropped for a third straight day while Hong Kong and Singapore both finished marginally above key levels. The HSI closed down 0.3% at 19,200. Just last week, it was trading more than 1,000 points above yesterday’s close. Similarly, in Singapore, we were above the 2,900 just last Thursday and above the 3,000 level two Thursdays before.

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The Straits Times Index dropped as much as 1.9% to around 2,769 points, the lowest since Jan more »]]> Singapore shares fell to a four-month low early on Friday, in line with the regional trend, weighed by concerns about an escalating banking crisis in Spain, political uncertainty in Greece and sluggish economic data from the United States.

The Straits Times Index dropped as much as 1.9% to around 2,769 points, the lowest since Jan 17. MSCI’s broadest index of Asia-Pacific shares outside Japan shed 2.2%.   

The biggest drag on the index were local banks DBS Group Holdings, Oversea-Chinese Banking Corp and United Overseas Bank.     

Commodities stocks were hit hard. Wilmar International and Golden Agri-Resources fell more than 4% each, while Olam International gave up 2.3%.

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The benchmark Straits Times Index dropped 0.30% on Thursday to 2,822.61 points. Here are some stocks and factors to watch:

Sembcorp Marine, the world’s second largest more »]]> Singapore shares may fall on Friday as an escalating banking crisis in Spain and the political uncertainty in Greece fueled concerns of a euro zone break-up.

The benchmark Straits Times Index dropped 0.30% on Thursday to 2,822.61 points. Here are some stocks and factors to watch:

Sembcorp Marine, the world’s second largest oil rig builder, may be in focus after announcing it had secured three contracts worth a total of $130 million.

Healthway Medical said on Thursday it plans to place out up to 135 million new shares at $0.075 each, a 7.4% discount to the last closing price of $0.081. The proceeds of around $10.1 million will be used for business expansion in Singapore and China, loan repayment, as well as working capital and corporate purposes, it said.

United Industrial Corp. said its subsidiary had awarded the main building contract worth about $337 million for the UIC Building Redevelopment Project at 5 Shenton Way, Singapore, to Samsung C & T Corp. Construction is scheduled to start in September 2012.

IPC Corp said on Thursday it had agreed to buy a piece of land to build a 75-unit condominium project in Oiso, Japan. The project, costing a total of around 2.48 billion yen ($39.8 million), is scheduled to be completed by the third quarter of 2013.

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The project is a three-storey development expected to be completed by Q3 2013. It is the sixth condominium more »]]> IPC Corporation said it has agreed to purchase a piece of land to build a 75-unit condominium project in Oiso in Kanagawa Prefecture, Japan. The total cost of 2.48 billion yen ($39 million) to be funded internally.

The project is a three-storey development expected to be completed by Q3 2013. It is the sixth condominium project in the country for IPC.

The company has completed four condominium projects in Japan. It has a fifth under development which it expects will be completed by Q1 2013.

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Revenue increased 55.5% in the quarter to $128.13 million from a year ago as revenue recorded in 4Q11 was negatively affected by the unforeseen cessation of work more »]]> CSC Holdings reported a profit of $2.1 million for the fourth quarter ended March 31, 2012, (4QFY2012) reversing from the loss of $5.17 million incurred a year ago.

Revenue increased 55.5% in the quarter to $128.13 million from a year ago as revenue recorded in 4Q11 was negatively affected by the unforeseen cessation of work on the Changi MotorSports Hub project.

For FY2012, earnings increased 96.1% to $7.45 million from $3.8 million in FY2011 on the back of a 33.8% increase in revenue to $438.46 million from a year ago.

The full-year revenue growth was mainly due to the higher number of contracts secured and executed. It also takes into account a $16.1 million contribution from the group’s industrial property development project.

However, gross profit margin was lower in FY2012 at 9.4% compared to 12.2% in FY2011, due to pricing pressure arising from increased market competition, as well as higher construction costs.

A final dividend of 0.09 cents per share has been proposed. During the year, the group paid an interim dividend of 0.08 cents per share. This brings total dividends for FY2012 to 0.17 cents per share.

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The first contract is awarded by Sonangol Pesquisa e Produção S.A. for the repair and upgrading of FSO Palanca. Sonangol is a state-owned company and a subsidiary of Sociedade Nacional de Combustíveis de Angola, E.P.

Major work scope includes the renewal of more »]]> Sembcorp Marine’s subsidiary Sembawang Shipyard has secured three major contracts totalling $130 million.

The first contract is awarded by Sonangol Pesquisa e Produção S.A. for the repair and upgrading of FSO Palanca. Sonangol is a state-owned company and a subsidiary of Sociedade Nacional de Combustíveis de Angola, E.P.

Major work scope includes the renewal of the vessel’s cargo piping system and pumps, tank blasting and coating, and cables renewal for the entire electrical system. The existing 30-men accommodation block will be redesigned and rebuilt to accommodate 60 men. The new accommodation block will include a new helideck to meet the vessel’s operational requirements.

Besides the above FSO upgrading contract, Sembawang Shipyard was also recently awarded two LNG carriers life extension projects from North West Shelf Shipping Service Company, Australia.

NWSSSC is the shipping service provider to the vessel owner, International Gas Transportation Company (IGTC), a North West Shelf Venture company registered in Bermuda.

The 20-year-old LNG vessels Northwest Seaeagle and Northwest Sandpiper are scheduled to enter Sembawang Shipyard in June and September 2012 respectively for major repairs and upgrading which, when completed, will further extend the vessels’ trading lives for another 10 years or more.

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The number of poorer-than-expected results was one of the highest since 2009, with 38% of the results in January-March coming in below market expectations versus 31% in the previous quarter, the brokerage said, citing rising cost more »]]> Singapore companies are likely to see cuts in earnings estimates after a weak quarterly performance, UOB Kay Hian said.

The number of poorer-than-expected results was one of the highest since 2009, with 38% of the results in January-March coming in below market expectations versus 31% in the previous quarter, the brokerage said, citing rising cost pressures as a factor.

“We see potential consensus downgrades ahead as the street trims earnings to reflect weaker top-line growth and margin pressure. Hence, we see the Straits Times Index to range trade until there is more earnings clarity and when the dust settles on the external outlook,” UOB said.

Commodity firms such as Wilmar and transport companies disappointed markets, while banks reported strong results.

“Our current strategy would be to selectively buy on sharp dips and overweight high dividend yield stocks or stocks with good earnings visibility at reasonable valuations.”

UOB’s top picks are DBS, CapitaLand, Ezion, M1, Suntec REIT, Keppel Corp and OUE and its key sells include City Developments and Neptune Orient Lines.

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“All posted results that exceeded expectations, boosted by record interest income, decent fee income growth and, most of all, strong trading and insurance performance,” CIMB said.

Oversea-Chinese more »]]> CIMB Research has upgraded its rating on Singapore’s banking sector to overweight from neutral, citing better-than-expected first quarter results due to higher trading income and lower credit provisioning.

“All posted results that exceeded expectations, boosted by record interest income, decent fee income growth and, most of all, strong trading and insurance performance,” CIMB said.

Oversea-Chinese Banking Corp’s net profit beat expectations by 25%, while DBS Group Holdings exceeded expectations by 19% and UOB beat net profit forecasts by 10%, CIMB said in a report.

It added that the asset quality of banks remain sound, as provisions fell in January-March with non-performing loans as a proportion of total loans were flat.

DBS, Southeast Asia’s largest lender, remains CIMB’s top pick as it believes the bank has the highest earnings quality in the sector.

DBS posted the strongest growth in fee income in the first quarter, which is more recurring and higher in quality as compared to the more volatile trading and insurance contributions.

UOB is CIMB’s second pick in the sector, and it has an outperform rating with a target price of $20.17. CIMB also has an outperform rating on OCBC with a target price of $10.35.

DBS shares were 0.15% higher at $13.60, and have risen about 18% since the start of the year. UOB shares were 0.7% up at S$18.13, and have climbed 18.7% since the start of the year.

Shares of OCBC rose 1.2% to $8.70, and have gained 11% since the start of the year. The benchmark Straits Times index has risen about 7.5% this year.

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At 9:03 a.m., Juken shares were up 7.3% at $0.176 on volume of 678,000 shares, 1.6 times the average full-day volume traded over the past 30 days.

Frencken offered to more »]]> Shares of Juken Technology, which makes precision moulded plastic components, rose more than 7% today after Frencken Group made a pre-conditional offer for the company.

At 9:03 a.m., Juken shares were up 7.3% at $0.176 on volume of 678,000 shares, 1.6 times the average full-day volume traded over the past 30 days.

Frencken offered to pay $0.18 in cash per Juken share, or a share consideration, capped at 27.73 million new Frencken shares, at the conversion rate of 1.8 Juken shares to one new Frencken share.

Singapore Airlines, the world’s second-largest carrier with a market value of US$10 billion ($12.5 billion), will be in focus after it posted an unexpected fourth-quarter loss of $38.2 million, hit more »]]> Singapore shares may be weighed down on Thursday by weak quarterly earnings from blue chip companies including Singapore Airlines, Neptune Orient Lines and Wilmar International.

Singapore Airlines, the world’s second-largest carrier with a market value of US$10 billion ($12.5 billion), will be in focus after it posted an unexpected fourth-quarter loss of $38.2 million, hit by weak demand and high fuel prices.

Singapore’s benchmark Straits Times Index fell 1.06% on Wednesday to 2,900.91 points. Here are some other stocks and factors to watch:

NOL, the world’s seventh-largest container shipper, reported a fifth consecutive quarterly loss of US$254 million ($318 million), hit by low freight rates and soaring fuel costs, and warned of overcapacity in the sector.

SingTel reported a lower-than-expected 2.5% rise in fiscal fourth quarter net profit on Thursday as stronger contributions from its units in Indonesia and Thailand were offset by weakness in India.

UOB posted a better-than-expected 12% rise in quarterly profit on Wednesday due to higher loan margins and fees and said it will pursue growth opportunities in the region.

The property arm of Malaysia’s Sime Darby Bhd said on Wednesday it is partnering with Singapore-based CapitaMalls Asia to build a shopping mall with a development cost around 500 million ringgit ($203.6 million) in Kuala Lumpur.

Sembcorp Marine, the world’s second-largest rig builder, reported a 25% drop in first quarter net profit to $113 million on Wednesday, partly due to lower margins on the rigs it delivered compared to a year ago.

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The benchmark Straits Times Index gained 0.24% on Tuesday to 2,931.98 points. Here are some stocks and factors to watch:

Singapore Telecommunications, Southeast Asia’s largest telecoms company, may more »]]> Singapore shares may fall on Wednesday after political developments in Greece stoked fears that the debt-embattled country could reject its existing bailout and exit the euro zone.

The benchmark Straits Times Index gained 0.24% on Tuesday to 2,931.98 points. Here are some stocks and factors to watch:

Singapore Telecommunications, Southeast Asia’s largest telecoms company, may be in focus after acquiring a Silicon Valley startup in the mobile advertising sector, its second such purchase in two months. Separately, Singtel said the group’s mobile customer base reached 445 million in March, up 11% from a year earlier.

Chinese shipbuilder Cosco Corp (Singapore) posted a 25% fall in first quarter net profit on Tuesday, hurt by lower dry bulk shipping income.

Sembcorp Marine, the world’s second largest oil rig builder, said on Tuesday its PPL Shipyard unit has secured a US$208 million ($260 million) contract to build a jack-up drilling rig for a unit of Malaysia’s Perisai Petroleum Teknologi Bhd.

Property firm Overseas Union Enterprise reported on Tuesday a 42% rise in first-quarter revenue from a year ago, but net profit fell 92% to $21.7 million mainly due to the absence of fair value gain on investment properties.

Midas Holdings, which supplies aluminium components for trains, said on Tuesday it expects a significant drop in net profit for its first quarter compared to a year ago mainly due to lower revenue, higher operating expenses and finance cost, as well as share of losses from an associated company.

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The decrease was due to the lack of fair value gain on investment properties in 1Q 2012; the group recorded a fair value gain of $249.2 million on its investment properties the more »]]> Overseas Union Enterprise has posted profit after tax of $21.7 million for the first quarter of 2012, from $269.9 million the year before.

The decrease was due to the lack of fair value gain on investment properties in 1Q 2012; the group recorded a fair value gain of $249.2 million on its investment properties the previous year.

Revenue increased 42.4% to $97.2 million, boosted by stronger contributions across its hospitality and property investment divisions.

Revenue from the hospitality division rose 34% to $60.6 million, while the property investment division recorded a 47.9% growth in revenue to $33.3 million.

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Turnover slipped 28% to $58.67 million from a year ago.

Earnings per share improved to 0.68 cents compared to 0.61 cents more »]]> Koh Brothers Group said net earnings for the first quarter ended March 31, 2012, rose 9% to $3.2 million compared to the year ago period due to higher profit contributed by real estate division.

Turnover slipped 28% to $58.67 million from a year ago.

Earnings per share improved to 0.68 cents compared to 0.61 cents in the year earlier period.

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For the period, the group recorded a total revenue of $422.7 million. This was $220.9 million lower than the $643.6 million revenue recorded in more »]]> Wing Tai Holdings said its earnings for the nine months ended March 31, 2012, fell by 50% to $101.6 million from $203.8 million as a result of the lower revenue achieved.

For the period, the group recorded a total revenue of $422.7 million. This was $220.9 million lower than the $643.6 million revenue recorded in the nine months ended March 31, 2011.

Revenue from development properties for the current period was mainly attributable to the additional units sold in Helios Residences and Belle Vue Residences as well as the progressive sales recognized from Foresque Residences and L’VIV in Singapore.

The group’s operating profit decreased by 70% from $264.4 million to $80.1 million in the current period, largely due to the lower contributions from development properties. In the corresponding period, Helios Residences obtained its Temporary Occupation Permit (TOP) and the operating profit for all the units sold under the deferred payment scheme was fully recognised.

The share of profits of associated and joint venture companies increased from $33.6 million to $82.4 million in the current period. This increase is mainly due to the higher contributions from The Floridian and Ascentia Sky by Tanglin projects in Singapore and also from Wing Tai Properties in Hong Kong.

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The rig, which can operate in water depths of 400 feet and drill to depths of 30,000 feet, is scheduled for delivery in end July 2014.