Keppel unit's US$780m deal to build four rigs at stake
Keppel Corp's US unit Keppel AmFels' US$780 million deal to build four jackup rigs for US contract drilling services provider Rowan Companies may be at stake as the company announced in a filing with the US Securities and Exchange Commission that it is suspending construction work on one rig and negotiating payment terms on all four. Reuters reported on Monday that Rowan will eliminate its dividend, cancel the building of a jackup rig and suspend construction of another one that its own manufacturing unit is building, as well as the last of four that is being built by Keppel AmFels. This is to counter a fall in oil services demand. It also warned of contract cancellations, blaming tight credit conditions. The company said customers have been asking to delay or terminate their obligations to purchase equipment under construction, notwithstanding firm contractual commitments. 'Keppel AmFels has no obligation to revise its contractual terms on the orders from Rowan and will only accede to requests that do not adversely impact its financial position,' said a Keppel spokesman yesterday. The contract, signed in November 2007, valued each of the rigs at US$195 million and includes the cost of equipment which will be provided by the owner.
CapitaMall Trust will pass tax rebates on to tenants
CapitaMall Trust (CMT), which has pumped around $55 million into revamping Lot One Shoppers' Mall at Choa Chu Kang, said yesterday that it will help its tenants cope with the economic slowdown through various ways. 'We want the tenants to survive so that we can survive,' president and CEO of CapitaLand Liew Mun Leong told the press. CapitaLand manages CMT through an indirect wholly owned subsidiary, CapitaMall Trust Management Limited (CMTML). With the government giving out a 40 per cent property tax rebate for industrial and commercial properties this year in the Budget, CapitaLand has said that it will pass on rebates totalling $41.5 million to tenants in retail, commercial and industrial properties. This could translate to an estimated 4 per cent drop in rents, said Mr Liew.
Source: Kim Eng
Saturday, January 31, 2009
Friday, January 30, 2009
Daily news - 30 Jan
Cosco announces second delivery reschedule
Cosco Corp (Singapore) yesterday announced another rescheduling of delivery dates for four 57,000 dwt bulk carriers, in what looks increasingly like a bizarre reversal of the way the contract wins were announced over the 18 months. Whereas the concern at the time was whether there would be sufficient capacity to fulfil surge of orders coming in, the fear now is whether the reschedulings will keep Cosco's yards busy enough. Cosco said last Friday that it has agreed to reschedule the delivery of seven ships from two sets of contracts signed in August and September 2007. And earlier this month, it announced a variation order under which two of an order for four vessels will be cancelled and the remaining two vessels will be delivered six months later than scheduled. The latest reschedulings are part of a 14-vessel contract worth US$525 million from shipowners in Turkey, Portugal, Greece and India, sealed in June 2007. These vessels were originally scheduled to be delivered between August 2008 and March 2010.
NOL container volume dives
Neptune Orient Lines (NOL) says container volume plunged 24 per cent year-on-year in its six-week Period 12 as demand fell on all major trade lanes. Container volume from Nov 15 to Dec 26, 2008 fell to 218,100 forty-foot equivalent units (FEUs) from 288,600 FEUs in the previous corresponding period. 'The decrease was a result of the rapid deterioration in demand on all major trade lanes and proactive capacity management to reduce costs,' NOL said. Average revenue per FEU, however, rose a marginal 3 per cent to US$2,921 from US$2,834. This was largely due to recovery of bunker fuel costs, NOL said. For full-year 2008, container volume rose 5 per cent to 2.46 million FEUs from 2.36 million in 2007. Average revenue per FEU for the whole year increased 11 per cent to US$3,033 from US$2,740 previously. Average revenue per FEU, however, started dropping off in the last quarter of the year, from a peak of US$3,186 in Period 10.
Source: Kim Eng
Cosco Corp (Singapore) yesterday announced another rescheduling of delivery dates for four 57,000 dwt bulk carriers, in what looks increasingly like a bizarre reversal of the way the contract wins were announced over the 18 months. Whereas the concern at the time was whether there would be sufficient capacity to fulfil surge of orders coming in, the fear now is whether the reschedulings will keep Cosco's yards busy enough. Cosco said last Friday that it has agreed to reschedule the delivery of seven ships from two sets of contracts signed in August and September 2007. And earlier this month, it announced a variation order under which two of an order for four vessels will be cancelled and the remaining two vessels will be delivered six months later than scheduled. The latest reschedulings are part of a 14-vessel contract worth US$525 million from shipowners in Turkey, Portugal, Greece and India, sealed in June 2007. These vessels were originally scheduled to be delivered between August 2008 and March 2010.
NOL container volume dives
Neptune Orient Lines (NOL) says container volume plunged 24 per cent year-on-year in its six-week Period 12 as demand fell on all major trade lanes. Container volume from Nov 15 to Dec 26, 2008 fell to 218,100 forty-foot equivalent units (FEUs) from 288,600 FEUs in the previous corresponding period. 'The decrease was a result of the rapid deterioration in demand on all major trade lanes and proactive capacity management to reduce costs,' NOL said. Average revenue per FEU, however, rose a marginal 3 per cent to US$2,921 from US$2,834. This was largely due to recovery of bunker fuel costs, NOL said. For full-year 2008, container volume rose 5 per cent to 2.46 million FEUs from 2.36 million in 2007. Average revenue per FEU for the whole year increased 11 per cent to US$3,033 from US$2,740 previously. Average revenue per FEU, however, started dropping off in the last quarter of the year, from a peak of US$3,186 in Period 10.
Source: Kim Eng
Thursday, January 29, 2009
CIMB bank time deposits
For the benefits of some fixed income lovers, I just would like to bring up a SGD time deposits promotion which was promoted by CIMB Bank quite some time back. Below is a summary of terms and conditions for the promotion.
- Minimum deposit of SGD10,000 up to a maximum of SGD1,000,000
- Promotion applies to both new and existing customers
- Rates are subject to change in line with prevailing market conditions
- Premature withdrawals are not entitled to published rates and interest payments will be calculated at the Bank’s discretion
- All Singapore and Foreign Currency deposits placed in banks licensed by MAS are guaranteed by the Singapore Government until 2010
Frankly speaking, I don’t quite understand the third term which states that rates are subjected to change. You need to check with the bank whether the rate is locked once you deposit your money inside. If the rate is not locked, that means the rate is not guaranteed!
Saturday, January 24, 2009
Highlights of Budget 2009
By now I am sure everyone must have heard of the government package as announced on the Budget 2009. With the estimated economic growth of 5% to -2% in 2009, Singapore is expected to face the worst ever recession. In preparation of that, the main priority of the government is to save jobs with measures like Job Credits to help employers survive the ongoing crisis.
The other key focus of the Budget 2009 is to stimulate lending between banks amidst the credit crunch whereby loans are hard to get approved. Small Medium Enterprises (SME) are expected to benefit from the government moves to take on additional risks from their loans withdrawn at banks.
The other government initiatives are property tax rebate and corporate tax reduction to enhance cash flow in businesses, and double GST credits and personal income tax rebate to help Singaporeans. Finally the government is also spending on building infrastructures and upgrading of our country education system.
All in all, the measures will cost S$20.5 billion of which S$4.9 billion are to be withdrawn from our country reserves. The tables below highlight the key measures in summary as compiled by OCBC Investment Research group.
The other key focus of the Budget 2009 is to stimulate lending between banks amidst the credit crunch whereby loans are hard to get approved. Small Medium Enterprises (SME) are expected to benefit from the government moves to take on additional risks from their loans withdrawn at banks.
The other government initiatives are property tax rebate and corporate tax reduction to enhance cash flow in businesses, and double GST credits and personal income tax rebate to help Singaporeans. Finally the government is also spending on building infrastructures and upgrading of our country education system.
All in all, the measures will cost S$20.5 billion of which S$4.9 billion are to be withdrawn from our country reserves. The tables below highlight the key measures in summary as compiled by OCBC Investment Research group.
Friday, January 23, 2009
Daily news - 23 Jan
CapitaMall Trust DPU dips in Q4
CapitaMall Trust (CMT), Singapore's biggest property trust, said that distributable income for the fourth quarter fell 2.1 per cent as it faced higher finance costs. Distributable income for the three months ended Dec 31, 2008, was $61 million, down from $62.3 million in 2007. Distribution per unit (DPU) fell to 3.65 cents, from 3.82 cents in 2007. The trust is a unit of Singapore's largest property group, CapitaLand. Q4 net property income rose 11.1 per cent to $85.9 million, from $77.3 million in Q4 2007. Turnover was boosted by Atrium@Orchard, which CMT bought in August 2008, as well as higher revenue from new and renewed leases and from the completion of asset enhancement works. But finance costs rose 61.4 per cent to $30 million, causing a year-on- year drop in Q4 net income. The increased finance costs were partly due to the convertible bonds CMT issued to fund the Atrium acquisition. For the full 2008 financial year, distributable income rose 12.9 per cent to $238.4 million, up from $211.2 million in 2007. DPU rose to 14.29 cents from 13.34 cents.
MapletreeLog distributable income up 44% in Q4
Mapletree Logistics Trust (MapletreeLog) yesterday reported total distributable income of $28.3 million for the fourth quarter ended Dec 31, 2008, up 43.7 per cent from last year's corresponding period. But the distribution per unit (DPU) of 1.46 cents for the quarter was 18 per cent lower than Q4 2007's DPU of 1.78 cents. MapletreeLog attributed the drop to the full quarter impact from dilution following the rights issue completed in August last year. For the full year, DPU was 7.24 cents, 10.2 per cent higher than last year's 6.57 cents. Last year, Chua Tiow Chye, CEO of Mapletree Logistics Trust Management (MLTM), the Reit's manager, had said that the rights issue would leave MapletreeLog with a 'robust balance sheet' which would help make it 'well positioned to operate in the current more uncertain times'. Net property income for Q4 2008 rose by $9.8 million to $45.1 million. This was helped by a $12.1 million rise in gross revenue to $52.4 million due mainly to contributions from 11 new properties acquired during the year. There was also a $1.4 million fall in Q4 borrowing costs despite the enlarged portfolio. As at Dec 31, 2008, the trust's portfolio comprises 81 properties valued at $2.9 billion, including a $94.1 million revaluation gain. No new acquisitions have been planned for the near term.
Source: Kim Eng
CapitaMall Trust (CMT), Singapore's biggest property trust, said that distributable income for the fourth quarter fell 2.1 per cent as it faced higher finance costs. Distributable income for the three months ended Dec 31, 2008, was $61 million, down from $62.3 million in 2007. Distribution per unit (DPU) fell to 3.65 cents, from 3.82 cents in 2007. The trust is a unit of Singapore's largest property group, CapitaLand. Q4 net property income rose 11.1 per cent to $85.9 million, from $77.3 million in Q4 2007. Turnover was boosted by Atrium@Orchard, which CMT bought in August 2008, as well as higher revenue from new and renewed leases and from the completion of asset enhancement works. But finance costs rose 61.4 per cent to $30 million, causing a year-on- year drop in Q4 net income. The increased finance costs were partly due to the convertible bonds CMT issued to fund the Atrium acquisition. For the full 2008 financial year, distributable income rose 12.9 per cent to $238.4 million, up from $211.2 million in 2007. DPU rose to 14.29 cents from 13.34 cents.
MapletreeLog distributable income up 44% in Q4
Mapletree Logistics Trust (MapletreeLog) yesterday reported total distributable income of $28.3 million for the fourth quarter ended Dec 31, 2008, up 43.7 per cent from last year's corresponding period. But the distribution per unit (DPU) of 1.46 cents for the quarter was 18 per cent lower than Q4 2007's DPU of 1.78 cents. MapletreeLog attributed the drop to the full quarter impact from dilution following the rights issue completed in August last year. For the full year, DPU was 7.24 cents, 10.2 per cent higher than last year's 6.57 cents. Last year, Chua Tiow Chye, CEO of Mapletree Logistics Trust Management (MLTM), the Reit's manager, had said that the rights issue would leave MapletreeLog with a 'robust balance sheet' which would help make it 'well positioned to operate in the current more uncertain times'. Net property income for Q4 2008 rose by $9.8 million to $45.1 million. This was helped by a $12.1 million rise in gross revenue to $52.4 million due mainly to contributions from 11 new properties acquired during the year. There was also a $1.4 million fall in Q4 borrowing costs despite the enlarged portfolio. As at Dec 31, 2008, the trust's portfolio comprises 81 properties valued at $2.9 billion, including a $94.1 million revaluation gain. No new acquisitions have been planned for the near term.
Source: Kim Eng
Thursday, January 22, 2009
Daily news - 22 Jan
Reits seek cut in payout to as low as 50%
Some Reit managers have urged the government to reduce the minimum payout ratio to Reit unitholders to as low as 50 per cent, from 90 per cent now, while still allowing the trusts to enjoy tax concessions. And they have even proposed a tax holiday on distributable income that they do not pay out. The suggestions are aimed at helping Reits conserve cash to get them through today's tight credit market conditions. Addressing concerns about a substantial loss of tax revenue, some Reit managers have suggested that the tax holiday on income that is not distributed could be limited to two years to help Reits ride out the current tough environment. Among the issues is also fairness in tax treatment in relation to other listed and non-listed entities. Some Reit unitholders may not be happy with a lower distribution payout ratio, as it will create more uncertainty about returns. This could be a bugbear, especially for corporate investors such as funds and insurance companies that have obligations to achieve target returns for their own investors and policy holders. (BT)
Analyst Comment:
The proposal to reduce minimum payout ratio to Reit unitholders and still retain tax concessions is one option that many Reit managers are exploring to gain more flexibility and build up its cash reserves under the current tough credit conditions. However, we believe that not all Reit managers would be willing or would need to substantially to adopt this measure. Firstly, some Reits had just ironed out the near term refinancing issues, such as Ascendas-Reit, which had done a placement and has obtained sufficient credit facilities to refinance its loans for the next two years; and Suntec Reit and CCT which had highlighted their strong relationship with banks. Secondly, reducing the minimum payout ratio will remove the basic premise for investing in Reits. Thirdly, reducing the payout ratio may also not help the Reits to build up its cash reserves in any big and meaningful way. In relation to the proposal to keep the tax exemptions even after cutting the payout, we believe the government will face a big hurdle as it will have to grapple with the issue of fairness to other listed and non-listed. (Anni Kum)
Gallant loses final appeal on disputed land
Gallant Venture – The Business Times has reported that Gallant Venture's subsidiaries have lost the final appeal to PT Rafflesia Matrawisatra over a land dispute. This has been an ongoing dispute for the last two years, with the Supreme Court of Indonesia in Jakarta pronouncing PT Rafflesia as the owners of the disputed lands of about 963,353 square metres. This judgment represents a sharp turnaround from previous legal proceedings, where PT Rafflesia's claims were earlier rejected by Bintan's Tanjung Pinang District Court in June 2007. The Riau High Court subsequently also affirmed the decision of the Tanjung Pinang District Court in January 2008.
To recap, in April 2006, PT Rafflesia sued Gallant's subsidiaries the ownership over 963,353 sq m of land on Bintan Resorts. Gallant , however, claims that it has land titles certifying that it owns some 863,353 sq m of the land in dispute. The outstanding 100,000 sq m was the subject of dispute between PT Rafflesia and BLR. This land is now occupied by part of the Resort. The court has ordered that the defendants relinquish their rights over the disputed lands within 14 days from the publication of the judgment and demolish any buildings on the lands. Gallant’s subsidiaries were also ordered to pay Rafflesia compensation of Rp. 33.25m for survey fee, Rp. 57.54bn (or S$7.7 million) for loss of income, and a cash charge of Rp 500,000, according to BT.
This dispute represents the sometimes murky nature of property transactions, in particular undeveloped land, which we have previously cited as a risk to Gallant’s land development plans. However, this dispute represents less than 0.5% of Gallant’s land portfolio in Bintan. While Gallant had previously said that it has no adverse financial exposure to the lawsuit because shareholder Parallax Venture Partners XXX Ltd (PVP) has agreed to indemnify in full any losses or damages as a result of this suit, the result of this lawsuit further highlights the risk of land development that Gallant faces. We will seek further clarification from the company.
Source: Kim Eng
Some Reit managers have urged the government to reduce the minimum payout ratio to Reit unitholders to as low as 50 per cent, from 90 per cent now, while still allowing the trusts to enjoy tax concessions. And they have even proposed a tax holiday on distributable income that they do not pay out. The suggestions are aimed at helping Reits conserve cash to get them through today's tight credit market conditions. Addressing concerns about a substantial loss of tax revenue, some Reit managers have suggested that the tax holiday on income that is not distributed could be limited to two years to help Reits ride out the current tough environment. Among the issues is also fairness in tax treatment in relation to other listed and non-listed entities. Some Reit unitholders may not be happy with a lower distribution payout ratio, as it will create more uncertainty about returns. This could be a bugbear, especially for corporate investors such as funds and insurance companies that have obligations to achieve target returns for their own investors and policy holders. (BT)
Analyst Comment:
The proposal to reduce minimum payout ratio to Reit unitholders and still retain tax concessions is one option that many Reit managers are exploring to gain more flexibility and build up its cash reserves under the current tough credit conditions. However, we believe that not all Reit managers would be willing or would need to substantially to adopt this measure. Firstly, some Reits had just ironed out the near term refinancing issues, such as Ascendas-Reit, which had done a placement and has obtained sufficient credit facilities to refinance its loans for the next two years; and Suntec Reit and CCT which had highlighted their strong relationship with banks. Secondly, reducing the minimum payout ratio will remove the basic premise for investing in Reits. Thirdly, reducing the payout ratio may also not help the Reits to build up its cash reserves in any big and meaningful way. In relation to the proposal to keep the tax exemptions even after cutting the payout, we believe the government will face a big hurdle as it will have to grapple with the issue of fairness to other listed and non-listed. (Anni Kum)
Gallant loses final appeal on disputed land
Gallant Venture – The Business Times has reported that Gallant Venture's subsidiaries have lost the final appeal to PT Rafflesia Matrawisatra over a land dispute. This has been an ongoing dispute for the last two years, with the Supreme Court of Indonesia in Jakarta pronouncing PT Rafflesia as the owners of the disputed lands of about 963,353 square metres. This judgment represents a sharp turnaround from previous legal proceedings, where PT Rafflesia's claims were earlier rejected by Bintan's Tanjung Pinang District Court in June 2007. The Riau High Court subsequently also affirmed the decision of the Tanjung Pinang District Court in January 2008.
To recap, in April 2006, PT Rafflesia sued Gallant's subsidiaries the ownership over 963,353 sq m of land on Bintan Resorts. Gallant , however, claims that it has land titles certifying that it owns some 863,353 sq m of the land in dispute. The outstanding 100,000 sq m was the subject of dispute between PT Rafflesia and BLR. This land is now occupied by part of the Resort. The court has ordered that the defendants relinquish their rights over the disputed lands within 14 days from the publication of the judgment and demolish any buildings on the lands. Gallant’s subsidiaries were also ordered to pay Rafflesia compensation of Rp. 33.25m for survey fee, Rp. 57.54bn (or S$7.7 million) for loss of income, and a cash charge of Rp 500,000, according to BT.
This dispute represents the sometimes murky nature of property transactions, in particular undeveloped land, which we have previously cited as a risk to Gallant’s land development plans. However, this dispute represents less than 0.5% of Gallant’s land portfolio in Bintan. While Gallant had previously said that it has no adverse financial exposure to the lawsuit because shareholder Parallax Venture Partners XXX Ltd (PVP) has agreed to indemnify in full any losses or damages as a result of this suit, the result of this lawsuit further highlights the risk of land development that Gallant faces. We will seek further clarification from the company.
Source: Kim Eng
Wednesday, January 21, 2009
Daily news - 21 Jan
SPC reports 55.4% fall in earnings to $229.7m
Singapore Petroleum Company – Despite its profit warning last month, integrated Singapore Petroleum Company yesterday said that thanks to prudent inventory hedging, it managed to chalk up net profit of $229.7 million for FY 2008 - albeit 55.4 per cent lower than 2007's all-time record of $514.7 million. This was achieved on the back of a 26.9 per cent increase in revenue to $11.1 billion from 2007's $8.8 billion. Earnings per share, however, fell by 55.3 per cent to 44.61 cents from 99.9 cents a year ago. SPC - which is in upstream oil exploration and production (E&P) and downstream refining/marketing - is paying a final ordinary dividend of eight cents per share, bringing its total dividend payout for the year to 28 cents, or a payout ratio of about 63 per cent of net profit. Its chairman Choo Chiau Beng said that '2008 had been a most challenging year. Oil prices and refining margins climbed to record highs in mid-2008 and (then) fell sharply in the second half'. 'SPC had adopted a prudent risk management policy towards hedging the group's inventory. Thus, despite writing down inventory at year-end to account for the severe drop in oil prices, the group turned in a profitable performance for 2008.' SPC's results came even as crude oil prices yesterday slipped further to US$33 a barrel amidst a global economic slowdown, or more than US$100 down from the peak of US$147-plus a barrel last July.
KTT's profit up marginally
Keppel Telecommunications & Transportation (KTT) managed to achieve a marginal rise in net profit for 2008 despite lower contributions from associates, a poor showing from its network engineering unit and impairment and foreign exchange losses. The 12 months ended Dec 31, 2008, saw a net profit of $52 million, against 2007's $51.4 million. This translated to a 1.1 per cent increase in earnings per share for the year to 9.4 cents. Turnover rose 25 per cent to $128.87 million, helped largely by a revenue boom from its logistics arm, Keppel Logistics. KTT has recommended a first and final dividend of three cents per share, half of the amount in 2007.
Full-year net profit from the company's three divisions - logistics, network engineering and investments - stood at $16.76 million, $9.09 million and $26.18 million respectively. The logistics segment saw a 41 per cent jump in sales in 2008 to $101 million due to an increase in warehousing distribution and container handling services in Singapore and Foshan, China. Contribution from TradeOneAsia, a company which KTT acquired in June 2007, also helped lift the division's full-year sales, the firm said in a regulatory filing. However, turnover for KTT's network engineering unit fell 11 per cent to $27.4 million due to poorer performances in Malaysia and Thailand. Net profit from investments fell 15 per cent to $26.1 million year-on-year due to higher taxes, as well as lower contributions from associated companies such as MobileOne. M1, which is 20 per cent owned by KTT, last week reported a 12.6 per cent drop in 2008 net income to $150.1 million due to heightened competition with the dawn of mobile number portability last year.
Mandarin Oriental sells Macau hotel stake for HK$1.6 billion
Mandarin Oriental International, a member of the Jardine Matheson Group, said yesterday that it has agreed to sell its 50 per cent interest in the 416-room Mandarin Oriental in Macau for HK$1.6 billion (S$307 million). The company will sell its stake to Sociedade de Turismo e Diversoes de Macau (STDM). Mandarin Oriental's partner in the hotel, Shun Tak Holdings, will also sell its 50 per cent stake to STDM. The carrying value of the group's 50 per cent stake in the hotel as at Dec 31, 2007 was US$15.7 million and its contribution to the group's Ebitda (earnings before interest, tax, depreciation and amortisation) in 2007 was US$10.2 million, the company said. On the sale's completion, Mandarin Oriental will receive proceeds of about US$90 million with a post-tax gain of about US$75 million, which will be recognised in 2009. The proceeds will be used for the group's general corporate purposes, it said. Completion of the sale is expected by the end of May 2009. The sale is conditional upon approval of the arrangements by Shun Tak's and STDM's respective shareholders as well as other regulatory formalities. As part of the agreement to sell, Mandarin Oriental and Shun Tak also have the right to participate equally in any increase in the hotel site's value - over and above the agreed value of HK$1.6 billion - which might arise if the property were to be redeveloped or sold to a third party in the future. The property will be rebranded by STDM. However, under a short-term management arrangement, Mandarin Oriental will continue to manage the hotel for up to two years to ensure a smooth transition.
SATS shareholders okay SFI takover
Singapore Airport Terminal Services (SATS) & Singapore Food Industries (SFI) – Minority shareholders of SATS have given their company the nod to buy a controlling stake in SFI from Temasek Holdings. Almost 70 per cent of minority votes cast at a meeting yesterday were in favour of SATS buying 359.7 million SFI ordinary shares equivalent to a 69.6 per cent stake. The offer price is 93 cents a share - a total of $334.5 million. The move will trigger a general offer for all 157.1 million SFI shares, which could lift the total bill to $509 million. SATS chief executive Clement Woon said SFI shareholders will get the offer document within two weeks. 'We only needed 50 per cent plus one vote to get this through, but what we got is overwhelming support,' he said. 'There is still a lot of work to do. We will move ahead with the general offer first, then start work on our integration plan.' SATS' controlling shareholder Singapore Airlines, with a stake of just over 80 per cent, abstained from yesterday's vote, leaving minorities to decide. SATS needs to secure at least 90 per cent of SFI's shares to de-list the food company and 100 per cent for total control.
Source: Kim Eng
Singapore Petroleum Company – Despite its profit warning last month, integrated Singapore Petroleum Company yesterday said that thanks to prudent inventory hedging, it managed to chalk up net profit of $229.7 million for FY 2008 - albeit 55.4 per cent lower than 2007's all-time record of $514.7 million. This was achieved on the back of a 26.9 per cent increase in revenue to $11.1 billion from 2007's $8.8 billion. Earnings per share, however, fell by 55.3 per cent to 44.61 cents from 99.9 cents a year ago. SPC - which is in upstream oil exploration and production (E&P) and downstream refining/marketing - is paying a final ordinary dividend of eight cents per share, bringing its total dividend payout for the year to 28 cents, or a payout ratio of about 63 per cent of net profit. Its chairman Choo Chiau Beng said that '2008 had been a most challenging year. Oil prices and refining margins climbed to record highs in mid-2008 and (then) fell sharply in the second half'. 'SPC had adopted a prudent risk management policy towards hedging the group's inventory. Thus, despite writing down inventory at year-end to account for the severe drop in oil prices, the group turned in a profitable performance for 2008.' SPC's results came even as crude oil prices yesterday slipped further to US$33 a barrel amidst a global economic slowdown, or more than US$100 down from the peak of US$147-plus a barrel last July.
KTT's profit up marginally
Keppel Telecommunications & Transportation (KTT) managed to achieve a marginal rise in net profit for 2008 despite lower contributions from associates, a poor showing from its network engineering unit and impairment and foreign exchange losses. The 12 months ended Dec 31, 2008, saw a net profit of $52 million, against 2007's $51.4 million. This translated to a 1.1 per cent increase in earnings per share for the year to 9.4 cents. Turnover rose 25 per cent to $128.87 million, helped largely by a revenue boom from its logistics arm, Keppel Logistics. KTT has recommended a first and final dividend of three cents per share, half of the amount in 2007.
Full-year net profit from the company's three divisions - logistics, network engineering and investments - stood at $16.76 million, $9.09 million and $26.18 million respectively. The logistics segment saw a 41 per cent jump in sales in 2008 to $101 million due to an increase in warehousing distribution and container handling services in Singapore and Foshan, China. Contribution from TradeOneAsia, a company which KTT acquired in June 2007, also helped lift the division's full-year sales, the firm said in a regulatory filing. However, turnover for KTT's network engineering unit fell 11 per cent to $27.4 million due to poorer performances in Malaysia and Thailand. Net profit from investments fell 15 per cent to $26.1 million year-on-year due to higher taxes, as well as lower contributions from associated companies such as MobileOne. M1, which is 20 per cent owned by KTT, last week reported a 12.6 per cent drop in 2008 net income to $150.1 million due to heightened competition with the dawn of mobile number portability last year.
Mandarin Oriental sells Macau hotel stake for HK$1.6 billion
Mandarin Oriental International, a member of the Jardine Matheson Group, said yesterday that it has agreed to sell its 50 per cent interest in the 416-room Mandarin Oriental in Macau for HK$1.6 billion (S$307 million). The company will sell its stake to Sociedade de Turismo e Diversoes de Macau (STDM). Mandarin Oriental's partner in the hotel, Shun Tak Holdings, will also sell its 50 per cent stake to STDM. The carrying value of the group's 50 per cent stake in the hotel as at Dec 31, 2007 was US$15.7 million and its contribution to the group's Ebitda (earnings before interest, tax, depreciation and amortisation) in 2007 was US$10.2 million, the company said. On the sale's completion, Mandarin Oriental will receive proceeds of about US$90 million with a post-tax gain of about US$75 million, which will be recognised in 2009. The proceeds will be used for the group's general corporate purposes, it said. Completion of the sale is expected by the end of May 2009. The sale is conditional upon approval of the arrangements by Shun Tak's and STDM's respective shareholders as well as other regulatory formalities. As part of the agreement to sell, Mandarin Oriental and Shun Tak also have the right to participate equally in any increase in the hotel site's value - over and above the agreed value of HK$1.6 billion - which might arise if the property were to be redeveloped or sold to a third party in the future. The property will be rebranded by STDM. However, under a short-term management arrangement, Mandarin Oriental will continue to manage the hotel for up to two years to ensure a smooth transition.
SATS shareholders okay SFI takover
Singapore Airport Terminal Services (SATS) & Singapore Food Industries (SFI) – Minority shareholders of SATS have given their company the nod to buy a controlling stake in SFI from Temasek Holdings. Almost 70 per cent of minority votes cast at a meeting yesterday were in favour of SATS buying 359.7 million SFI ordinary shares equivalent to a 69.6 per cent stake. The offer price is 93 cents a share - a total of $334.5 million. The move will trigger a general offer for all 157.1 million SFI shares, which could lift the total bill to $509 million. SATS chief executive Clement Woon said SFI shareholders will get the offer document within two weeks. 'We only needed 50 per cent plus one vote to get this through, but what we got is overwhelming support,' he said. 'There is still a lot of work to do. We will move ahead with the general offer first, then start work on our integration plan.' SATS' controlling shareholder Singapore Airlines, with a stake of just over 80 per cent, abstained from yesterday's vote, leaving minorities to decide. SATS needs to secure at least 90 per cent of SFI's shares to de-list the food company and 100 per cent for total control.
Source: Kim Eng
Tuesday, January 20, 2009
Daily news - 20 Jan
MAS gives REITs clarity on Leverage ratios
REIT managers here have been given more breathing space on borrowing limits by the MAS, which has clarified how downward revaluations of properties should be treated. MAS confirmed that if the aggregate leverage has gone up because of a decline in property values, it will not amount to a breach of leverage limits. MAS also pointed out that refinancing of existing debt by a REIT is not to be construed as incurring additional borrowings. MAS also said that it will permit REITs to raise debt for refinancing purposes earlier than the actual maturity of the debt to be refinanced, without having to include such funds raised in the aggregate leverage limit, provided that the funds are set aside solely for the purpose of repaying the maturing debt. This clarification would ease the pressure on these REITs to recapitalise through raising fresh equity and reduce pressure on the unit price of these REITs. However, ratings agencies will continue to be nervous about property depreciation. Any downward revaluation of the underlying property would raise the loan-to-valuation ratios as far as banks lending to REITs are concerned. In a separate development, MAS is understood to have sought feedback recently on whether the current minimum distribution payout ratio for S-REITs should be lowered, from 90 per cent of distributable income currently to, say, 75-80 per cent. This is in response to a need to conserve cash.
Source: Kim Eng
REIT managers here have been given more breathing space on borrowing limits by the MAS, which has clarified how downward revaluations of properties should be treated. MAS confirmed that if the aggregate leverage has gone up because of a decline in property values, it will not amount to a breach of leverage limits. MAS also pointed out that refinancing of existing debt by a REIT is not to be construed as incurring additional borrowings. MAS also said that it will permit REITs to raise debt for refinancing purposes earlier than the actual maturity of the debt to be refinanced, without having to include such funds raised in the aggregate leverage limit, provided that the funds are set aside solely for the purpose of repaying the maturing debt. This clarification would ease the pressure on these REITs to recapitalise through raising fresh equity and reduce pressure on the unit price of these REITs. However, ratings agencies will continue to be nervous about property depreciation. Any downward revaluation of the underlying property would raise the loan-to-valuation ratios as far as banks lending to REITs are concerned. In a separate development, MAS is understood to have sought feedback recently on whether the current minimum distribution payout ratio for S-REITs should be lowered, from 90 per cent of distributable income currently to, say, 75-80 per cent. This is in response to a need to conserve cash.
Source: Kim Eng
Monday, January 19, 2009
Daily news - 19 Jan
Capitala in financing agreement
CapitaLand's Abu Dhabi unit Capitala has entered into an agreement to provide future buyers of its maiden project in the city with up to 85 per cent financing. Under the finance agreement with Abu Dhabi Finance, buyers of homes in Capitala's US$5-6 billion Arzanah development will qualify for loans of up to 85 per cent of the property's value; with loan terms of up to 30 years, flexible repayment methods and debt service ratios of up to 55 per cent. Traditionally, homebuyers in Abu Dhabi pay for their properties upfront. Capitala is 49 per cent owned by CapitaLand, Singapore's largest property developer, while the remaining 51 per cent stake is held by Mubadala Development Company, Abu Dhabi's state-owned investment vehicle.
Source: Kim Eng
CapitaLand's Abu Dhabi unit Capitala has entered into an agreement to provide future buyers of its maiden project in the city with up to 85 per cent financing. Under the finance agreement with Abu Dhabi Finance, buyers of homes in Capitala's US$5-6 billion Arzanah development will qualify for loans of up to 85 per cent of the property's value; with loan terms of up to 30 years, flexible repayment methods and debt service ratios of up to 55 per cent. Traditionally, homebuyers in Abu Dhabi pay for their properties upfront. Capitala is 49 per cent owned by CapitaLand, Singapore's largest property developer, while the remaining 51 per cent stake is held by Mubadala Development Company, Abu Dhabi's state-owned investment vehicle.
Source: Kim Eng
Sunday, January 18, 2009
Buying an endowment plan
As much as possible I don’t usually recommend people taking up an endowment plan. In my opinion, you can achieve the same objectives if you do the saving yourself. To have an idea of the message that I am trying to relay across, I suggest you read my article on the Best endowment plan first.
Now if you are aware of the pitfalls of an endowment plan but still decided that such a forced saving plan is suitable for you, nobody can really stop you. Ultimately a lousy saving plan is still better than having no plan at all. In this article, I am going to share some of the factors that you need to look out for before deciding on a plan.
Endowment is supposed to be a saving plan. Therefore one should not rely on to it as a mean for protection. As such, I will ignore the protection portion in the rest of this article. Take the protection coverage as an added bonus but not as a requirement.
Before deciding on a regular premium endowment plan, you need to ask yourself how much you are willing to save each month. Of course it does not make sense to sign up for an expensive plan if you cannot afford it. With the amount that you are comfortable with, request an advisor to introduce you a plan and to generate you a Benefit Illustration (BI) of the plan. A typical BI will look something like the picture below.
There are two sections of a BI which are the death benefit and cash value. As I have said, I will skip the death benefit section which is too immaterial to consider. At the cash value section, there are three important columns that you should focus on. They are the age of policy, premiums paid and guaranteed amount. I think the first two columns are self explanatory. The guaranteed cash section is the most important part of a BI. It shows the minimum amount that you will receive upon termination or on maturity of your policy. Also from these three columns, you can know at what age your endowment plan can breakeven. For the above plan, the breakeven age is only after 20 years. The other sections are the non-guaranteed sections which are based on certain projections. One should ignore these sections as they are just estimates and are not guaranteed.
Finally when comparing endowment plans, one should compute the guaranteed Yield To Maturity (YTM) of the plan. YTM is the so called return on your premiums paid. Obviously the higher the guaranteed YTM for the same period, the better is the plan. Let me show two plans available in the market. Can you guess which plan is better in terms of guaranteed YTM?
Plan A
Period of premium payment: 15 years
Maturity year: 20 year
Annual premium: $2,801
Total premiums paid at end of 15 years: $42,015
Maturity value: $66,009
Components of maturity value: $65,000 (guaranteed) and $1,009 (non-guaranteed)
Plan B
Period of premium payment: 12 years
Maturity year: 21 year
Annual premium: $2,847
Total premiums paid at end of 12 years: $34,166
Maturity value: $64,558
Components of maturity value: $40,000 (guaranteed) and $24,558 (non-guaranteed)
At first glance Plan B looks better because you are paying lesser premiums and for a shorter period. But if you calculate their guaranteed YTM, Plan A has a much higher guaranteed yield than Plan B. If you can afford to pay $2800 per annum, why settle for a plan which gives you a lesser return? You can compute the YTM of both plans with MS Excel XIRR function. Take a look at my example on how to use the function.
Attached below is an illustration of calculating the YTM of those plans in MS Excel.
In conclusion, it is important that you look at the guaranteed portion of an endowment plan if you decide to take up one. Compare the YTM of other plans with similar maturing period and pick the one which gives a higher guaranteed rate. Of course you may want to compare with the yield of a risk free rate of similar maturity to see if it is worthwhile to sign up for such a plan.
Now if you are aware of the pitfalls of an endowment plan but still decided that such a forced saving plan is suitable for you, nobody can really stop you. Ultimately a lousy saving plan is still better than having no plan at all. In this article, I am going to share some of the factors that you need to look out for before deciding on a plan.
Endowment is supposed to be a saving plan. Therefore one should not rely on to it as a mean for protection. As such, I will ignore the protection portion in the rest of this article. Take the protection coverage as an added bonus but not as a requirement.
Before deciding on a regular premium endowment plan, you need to ask yourself how much you are willing to save each month. Of course it does not make sense to sign up for an expensive plan if you cannot afford it. With the amount that you are comfortable with, request an advisor to introduce you a plan and to generate you a Benefit Illustration (BI) of the plan. A typical BI will look something like the picture below.
There are two sections of a BI which are the death benefit and cash value. As I have said, I will skip the death benefit section which is too immaterial to consider. At the cash value section, there are three important columns that you should focus on. They are the age of policy, premiums paid and guaranteed amount. I think the first two columns are self explanatory. The guaranteed cash section is the most important part of a BI. It shows the minimum amount that you will receive upon termination or on maturity of your policy. Also from these three columns, you can know at what age your endowment plan can breakeven. For the above plan, the breakeven age is only after 20 years. The other sections are the non-guaranteed sections which are based on certain projections. One should ignore these sections as they are just estimates and are not guaranteed.
Finally when comparing endowment plans, one should compute the guaranteed Yield To Maturity (YTM) of the plan. YTM is the so called return on your premiums paid. Obviously the higher the guaranteed YTM for the same period, the better is the plan. Let me show two plans available in the market. Can you guess which plan is better in terms of guaranteed YTM?
Plan A
Period of premium payment: 15 years
Maturity year: 20 year
Annual premium: $2,801
Total premiums paid at end of 15 years: $42,015
Maturity value: $66,009
Components of maturity value: $65,000 (guaranteed) and $1,009 (non-guaranteed)
Plan B
Period of premium payment: 12 years
Maturity year: 21 year
Annual premium: $2,847
Total premiums paid at end of 12 years: $34,166
Maturity value: $64,558
Components of maturity value: $40,000 (guaranteed) and $24,558 (non-guaranteed)
At first glance Plan B looks better because you are paying lesser premiums and for a shorter period. But if you calculate their guaranteed YTM, Plan A has a much higher guaranteed yield than Plan B. If you can afford to pay $2800 per annum, why settle for a plan which gives you a lesser return? You can compute the YTM of both plans with MS Excel XIRR function. Take a look at my example on how to use the function.
Attached below is an illustration of calculating the YTM of those plans in MS Excel.
In conclusion, it is important that you look at the guaranteed portion of an endowment plan if you decide to take up one. Compare the YTM of other plans with similar maturing period and pick the one which gives a higher guaranteed rate. Of course you may want to compare with the yield of a risk free rate of similar maturity to see if it is worthwhile to sign up for such a plan.
Friday, January 16, 2009
Daily news - 16 Jan
Developer sales plumb new depths
Home sales hit record lows in 2008 as developers sold just 4,351 homes, representing the lowest figure in at least 10 years (previous lows were 5,156 and 5,520 units in 2003 and 1998 respectively). The figure is also significantly lower than the annual 10-year average of 8,200 units. Last month, developers recorded just 131 transactions, with only 157 units being launched. Some developers are still preparing developments for launch. UOL is expected to launch a 646-unit development at Simei Street 4, billed as a luxury condominium for upgraders in 1H09. Frasers Centrepoint is also said to be preparing to launch Caspian, a 712-unit development on Boon Lay Way. Far East Organisation is said to be readying its launch of a development in Choa Chu Kang this year.
Sembcorp looks set to win billion dollar Oman deal
SembCorp Industries looks on course to win its second multi-billion dollar power and desalination project in the Middle East, having reportedly just been named 'preferred bidder' for the US$1 billion-plus Salalah independent water and power project (IWPP) in Oman. Specialist publication MEED, or the Middle East Business Intelligence, reported this on Wednesday, following an earlier report this week by Infrastructure Journal which said that Omani officials had told Sembcorp that it would be named as the IWPP's preferred bidder 'imminently'. It suggests that Sembcorp's joint venture with Oman Investment Corporation (OIC) has been chosen from the final grouping of three contenders for the project. Sembcorp when contacted yesterday declined comment at this time. Its bid to undertake the Salalah IWPP began early last year, with the Omani government whittling down a list of eight prequalified international groups to just three in July.
Source: Kim Eng
Home sales hit record lows in 2008 as developers sold just 4,351 homes, representing the lowest figure in at least 10 years (previous lows were 5,156 and 5,520 units in 2003 and 1998 respectively). The figure is also significantly lower than the annual 10-year average of 8,200 units. Last month, developers recorded just 131 transactions, with only 157 units being launched. Some developers are still preparing developments for launch. UOL is expected to launch a 646-unit development at Simei Street 4, billed as a luxury condominium for upgraders in 1H09. Frasers Centrepoint is also said to be preparing to launch Caspian, a 712-unit development on Boon Lay Way. Far East Organisation is said to be readying its launch of a development in Choa Chu Kang this year.
Sembcorp looks set to win billion dollar Oman deal
SembCorp Industries looks on course to win its second multi-billion dollar power and desalination project in the Middle East, having reportedly just been named 'preferred bidder' for the US$1 billion-plus Salalah independent water and power project (IWPP) in Oman. Specialist publication MEED, or the Middle East Business Intelligence, reported this on Wednesday, following an earlier report this week by Infrastructure Journal which said that Omani officials had told Sembcorp that it would be named as the IWPP's preferred bidder 'imminently'. It suggests that Sembcorp's joint venture with Oman Investment Corporation (OIC) has been chosen from the final grouping of three contenders for the project. Sembcorp when contacted yesterday declined comment at this time. Its bid to undertake the Salalah IWPP began early last year, with the Omani government whittling down a list of eight prequalified international groups to just three in July.
Source: Kim Eng
Thursday, January 15, 2009
Daily news - 15 Jan
Ezra Q1 profit falls 93% on lack of one-time gain
Ezra Holdings yesterday said that net profit for its first quarter to Nov 30 fell 93 per cent to US$9.3 million from US$138.9 million in the year-ago period. Sales were up 149 per cent to US$113 million but other operating income fell to negative US$10.6 million from US$140.3 million, due to non-recurring gains of US$146.3 million in Q1 2008 from the disposal of interest in a subsidiary, the company said. It also disclosed a US$3.4 million increase in net foreign exchange loss for the reported quarter. Earnings per share was 1.60 US cents, from 23.92 US cents a year ago. Sales for the quarter rose US$67.6 million, with US$38 million coming from its new energy services division; US$19.9 million from its marine services division due to an increase in procurement and equipment supply and engineering activities in Vietnam; and US$9.7 million from the offshore support services, helped by revenue recognised from newly delivered tugs. The company held cash and cash equivalents of US$92.8 million as at end November, while net cash from operating activities was US$11.6 million. The company had secured and unsecured debt due within a year of US$121.7 million, with another US$99.7 million repayable after one year. It had net assets of US$363.9 million, down slightly quarter on quarter but up 45 per cent on the previous year.
Source: Kim Eng
Ezra Holdings yesterday said that net profit for its first quarter to Nov 30 fell 93 per cent to US$9.3 million from US$138.9 million in the year-ago period. Sales were up 149 per cent to US$113 million but other operating income fell to negative US$10.6 million from US$140.3 million, due to non-recurring gains of US$146.3 million in Q1 2008 from the disposal of interest in a subsidiary, the company said. It also disclosed a US$3.4 million increase in net foreign exchange loss for the reported quarter. Earnings per share was 1.60 US cents, from 23.92 US cents a year ago. Sales for the quarter rose US$67.6 million, with US$38 million coming from its new energy services division; US$19.9 million from its marine services division due to an increase in procurement and equipment supply and engineering activities in Vietnam; and US$9.7 million from the offshore support services, helped by revenue recognised from newly delivered tugs. The company held cash and cash equivalents of US$92.8 million as at end November, while net cash from operating activities was US$11.6 million. The company had secured and unsecured debt due within a year of US$121.7 million, with another US$99.7 million repayable after one year. It had net assets of US$363.9 million, down slightly quarter on quarter but up 45 per cent on the previous year.
Source: Kim Eng
Tuesday, January 13, 2009
Daily news - 13 Jan
DBS denies exposure to Kuwait firm
DBS Group said yesterday it has no exposure to a troubled Middle Eastern bank, contrary to media reports and market speculation that dragged its shares down as much as 3.9 per cent during the day. The counter was hit amid speculation that DBS could be exposed to Kuwait's Global Investment House, which has defaulted on most of its debt. Denying any such exposure, DBS also said in a statement issued after the market closed yesterday that it has 'maintained the strength of its balance sheet through careful management of credit, market and operational risks, and continues to vigilantly monitor credit trends in its loan portfolio'. DBS shares finished the day 3.7 per cent lower at $8.11. Global Investment, Kuwait's largest investment bank, said on Thursday last week that it has defaulted on most its loan repayments because the gridlock in global credit markets has hampered the refinancing of short-term debt. Global said that it is 'in default on the majority of its financial indebtedness' after a capital-repayment default on a syndicated facility in the second half of December 2008 and because of a 'cross-default provision'. It also said it is 'committed' to completing debt restructuring 'as soon as is practicable.'
Source: Kim Eng
DBS Group said yesterday it has no exposure to a troubled Middle Eastern bank, contrary to media reports and market speculation that dragged its shares down as much as 3.9 per cent during the day. The counter was hit amid speculation that DBS could be exposed to Kuwait's Global Investment House, which has defaulted on most of its debt. Denying any such exposure, DBS also said in a statement issued after the market closed yesterday that it has 'maintained the strength of its balance sheet through careful management of credit, market and operational risks, and continues to vigilantly monitor credit trends in its loan portfolio'. DBS shares finished the day 3.7 per cent lower at $8.11. Global Investment, Kuwait's largest investment bank, said on Thursday last week that it has defaulted on most its loan repayments because the gridlock in global credit markets has hampered the refinancing of short-term debt. Global said that it is 'in default on the majority of its financial indebtedness' after a capital-repayment default on a syndicated facility in the second half of December 2008 and because of a 'cross-default provision'. It also said it is 'committed' to completing debt restructuring 'as soon as is practicable.'
Source: Kim Eng
Monday, January 12, 2009
Daily news - 12 Jan
Training, not layoffs, is the SATS recipe
Singapore Airport Terminal Services (SATS) – The catering arm of SATS is unlikely to resort to lay-offs, choosing instead to cross-train its people and tap synergies to boost productivity in these trying times. 'We do a lot of in-house training and re-skilling of people. We are proactively cross-training people so we have a more dynamic workforce,' said executive chef John Sloane, adding that retrenchment is not on the agenda. Chefs from SATS' majority-owned subsidiary Country Foods, which manufactures and distributes frozen and chilled food products, now sometimes help out when there are manpower constraints - and vice versa. If the proposed acquisition of Singapore Food Industries (SFI) goes through, it will be another string to the bow for SATS. SATS has proposed the acquisition of a 69.62 per cent stake in SFI for $334.5 million from Temasek's wholly-owned subsidiary Ambrosia Investment.
Thailand's AIS won't be selling iPhone
Advanced Info Service, Thailand's largest mobile phone operator, said on Friday it had failed to reach agreement with Apple Inc to offer the 3G iPhone in the Thai market. 'We don't accept Apple's proposal to bring iPhone to the Thai market because we don't think it will be good for us in terms of business,' chief executive Vikrom Sriprataks told reporters over the weekend. AIS's smaller rival, True Move PCL, a unit of True Corp plans to launch the 3G iPhone in Thailand from Jan 16, making it the first operator to sell the new phone in the fast-growing market.
Source: Kim Eng
Singapore Airport Terminal Services (SATS) – The catering arm of SATS is unlikely to resort to lay-offs, choosing instead to cross-train its people and tap synergies to boost productivity in these trying times. 'We do a lot of in-house training and re-skilling of people. We are proactively cross-training people so we have a more dynamic workforce,' said executive chef John Sloane, adding that retrenchment is not on the agenda. Chefs from SATS' majority-owned subsidiary Country Foods, which manufactures and distributes frozen and chilled food products, now sometimes help out when there are manpower constraints - and vice versa. If the proposed acquisition of Singapore Food Industries (SFI) goes through, it will be another string to the bow for SATS. SATS has proposed the acquisition of a 69.62 per cent stake in SFI for $334.5 million from Temasek's wholly-owned subsidiary Ambrosia Investment.
Thailand's AIS won't be selling iPhone
Advanced Info Service, Thailand's largest mobile phone operator, said on Friday it had failed to reach agreement with Apple Inc to offer the 3G iPhone in the Thai market. 'We don't accept Apple's proposal to bring iPhone to the Thai market because we don't think it will be good for us in terms of business,' chief executive Vikrom Sriprataks told reporters over the weekend. AIS's smaller rival, True Move PCL, a unit of True Corp plans to launch the 3G iPhone in Thailand from Jan 16, making it the first operator to sell the new phone in the fast-growing market.
Source: Kim Eng
Saturday, January 10, 2009
Daily news - 9 Jan
NOL moving Americas HQ to Arizona
Neptune Orient Lines (NOL) is relocating its Americas regional headquarters to the greater Phoenix area in Arizona from its present location in Oakland, California, during the second half of the year. The move, mainly to cut costs, is expected to be completed by the third quarter. 'The headquarters shift is part of NOL's global strategy to place its cost structure on a more sustainable footing in the face of the current economic downturn, while continuing to provide the highest standards of service to its customers,' NOL said. 'We're excited to announce that Arizona will be the new home for our regional headquarters,' said NOL's regional president for the Americas, John Bowe. 'The greater Phoenix area will be a cost-effective base of operations for us and we're going to a state that is well-known for its support and encouragement of business.' The relocation is the latest in a series of cost-saving measures NOL has put in place over the past few months amid the deepening global slowdown in container trade. Other initiatives undertaken by the group include reducing capacity in its major ocean trade lanes, cutting jobs, laying up ships and restructuring its logistics business.
Source: Kim Eng
Neptune Orient Lines (NOL) is relocating its Americas regional headquarters to the greater Phoenix area in Arizona from its present location in Oakland, California, during the second half of the year. The move, mainly to cut costs, is expected to be completed by the third quarter. 'The headquarters shift is part of NOL's global strategy to place its cost structure on a more sustainable footing in the face of the current economic downturn, while continuing to provide the highest standards of service to its customers,' NOL said. 'We're excited to announce that Arizona will be the new home for our regional headquarters,' said NOL's regional president for the Americas, John Bowe. 'The greater Phoenix area will be a cost-effective base of operations for us and we're going to a state that is well-known for its support and encouragement of business.' The relocation is the latest in a series of cost-saving measures NOL has put in place over the past few months amid the deepening global slowdown in container trade. Other initiatives undertaken by the group include reducing capacity in its major ocean trade lanes, cutting jobs, laying up ships and restructuring its logistics business.
Source: Kim Eng
Friday, January 9, 2009
Singapore Treasury Bills
What are Treasury Bills?
SGS Treasury Bills (T-Bills) are short-term debt securities that are issued by the Singapore Government. The tenors for T-Bills range from 7 days to 1 year.
T-Bills are a useful and low risk investment tool that investors could take advantage of.
Why Invest in Treasury Bills?
Why leave the rest of the money in your savings deposits when you could earn higher interest investing in T-Bills? The current yield for a 3 month T-Bill is better than the local banks' savings rate.
T-Bills offer flexibility with no lock-in period; thus you will be able to liquidate your investment whenever you need the money. You can even choose to liquidate just part of it (in multiples of 1000 units).
While some fixed deposits might offer higher interest as a promotion, they usually require you to lock up your deposit for the entire tenure, and require a minimum investment of quite a significant sum. Unlike those, T-Bills only require a minimum investment of less than $1000. If you are unwilling to lock-up a huge chunk of your funds in fixed deposits, T-Bills could be suitable for you.
For equities investors, T-Bills could come in useful during occasions when you are standing on the sidelines and waiting for the next opportunity. Make your money work harder for you by parking your spare cash in T-Bills to earn some interest.
How do Treasury Bills work?
T-Bills have a fixed maturity date and have zero coupons. During the tenor, the owner of the T-Bills will not receive any interest payments. Instead, the T-Bills are sold at a discount and redeemed at par value upon maturity.
For example, if you purchase 1000 units of a 1-year T-Bill at a yield of 1% per annum, you will only need to pay $990 and you will receive $1000 upon maturity a year later.
Similarly for 1000 units of an 86-day T-Bill at a yield of 1% per annum, you will need to pay $998 and you will receive $1000 upon maturity 3 months later.
To find out more on Treasury Bills, visit our website, email dcm@phillip.com.sg or call 6531 1603.
Article extracted from Phillip Capital
SGS Treasury Bills (T-Bills) are short-term debt securities that are issued by the Singapore Government. The tenors for T-Bills range from 7 days to 1 year.
T-Bills are a useful and low risk investment tool that investors could take advantage of.
Why Invest in Treasury Bills?
Why leave the rest of the money in your savings deposits when you could earn higher interest investing in T-Bills? The current yield for a 3 month T-Bill is better than the local banks' savings rate.
T-Bills offer flexibility with no lock-in period; thus you will be able to liquidate your investment whenever you need the money. You can even choose to liquidate just part of it (in multiples of 1000 units).
While some fixed deposits might offer higher interest as a promotion, they usually require you to lock up your deposit for the entire tenure, and require a minimum investment of quite a significant sum. Unlike those, T-Bills only require a minimum investment of less than $1000. If you are unwilling to lock-up a huge chunk of your funds in fixed deposits, T-Bills could be suitable for you.
For equities investors, T-Bills could come in useful during occasions when you are standing on the sidelines and waiting for the next opportunity. Make your money work harder for you by parking your spare cash in T-Bills to earn some interest.
How do Treasury Bills work?
T-Bills have a fixed maturity date and have zero coupons. During the tenor, the owner of the T-Bills will not receive any interest payments. Instead, the T-Bills are sold at a discount and redeemed at par value upon maturity.
For example, if you purchase 1000 units of a 1-year T-Bill at a yield of 1% per annum, you will only need to pay $990 and you will receive $1000 upon maturity a year later.
Similarly for 1000 units of an 86-day T-Bill at a yield of 1% per annum, you will need to pay $998 and you will receive $1000 upon maturity 3 months later.
To find out more on Treasury Bills, visit our website, email dcm@phillip.com.sg or call 6531 1603.
Article extracted from Phillip Capital
Thursday, January 8, 2009
Daily news - 8 Jan
CapitaLand shares retreat on rights rumour
CapitaLand shares shed 8.2 per cent on market speculation that it is planning a rights issue. Responding to queries, the group issued this statement: “In response to various media and analyst queries that CapitaLand is planning a rights issue, CapitaLand wishes to state that we will not comment on such market rumour or speculation. CapitaLand regularly receives and reviews various proposals of a business, financing or other nature. It is CapitaLand's disclosure policy to make the appropriate announcements if and when required, in accordance with the SGX-ST Listing Rules.” This follows a Dow Jones news report saying that the group is considering a rights issue to raise capital, but there has been no definite decision, quoting a “person familiar with the situation”.
Delong to post full-year loss on demand slump
Delong Holdings, which put hundreds of workers on unpaid leave last October and shut several furnaces in China, yesterday said it will be reporting a loss for the full year ended Dec 31, 2008. The profit warning came as the global financial crisis hit China's steel demand in the latter half of 2008. The Singapore-listed Chinese steel company said given the slower demand, the group had moved decisively in October 2008 to scale down production at four of its smaller blast furnaces to reduce costs. The four furnances account for about 30 per cent of the group's annual production. 'However, higher raw material prices coupled with the writedown of inventory to net realisable value in 4Q2008, offset the cost savings and contributed to the group's FY2008 loss,' it said in a statement to the Singapore Exchange. Delong's board assured shareholders that despite the tighter operating environment, it has sufficient financial resources to meet its working capital requirements. 'The group has existing secured and unsecured credit facilities with various domestic and foreign financial institutions which can be called upon if any such need arises,' Delong said. As at end-September 2008, Delong's cash and cash equivalent stood at S$139.49 million, down from S$291.16 million a year earlier. Delong said yesterday that it remains confident about the long-term potential of China's steel industry.
Noble Group says shipping unit insured for oil spill claims
Noble Group Ltd, a Hong Kong-based commodity supplier whose shipping unit is being sued in California after an oil spill, says the business is insured for such claims. The suit includes claims for clean-up costs and damages to natural resources, Noble said yesterday in an e-mailed response to Bloomberg queries. The unit is insured for any civil liability arising out of the incident, the company said, without specifying an amount. The state of California on Tuesday filed a suit against unit Fleet Management, which operated the 900-foot Cosco Busan that struck a bridge support in San Francisco Bay in November 2007. Noble already faces charges in the US that it falsified documents to cover up its role in the ensuing oil spill that killed marine life, disrupted fishing and closed beaches.
Source: Kim Eng
CapitaLand shares shed 8.2 per cent on market speculation that it is planning a rights issue. Responding to queries, the group issued this statement: “In response to various media and analyst queries that CapitaLand is planning a rights issue, CapitaLand wishes to state that we will not comment on such market rumour or speculation. CapitaLand regularly receives and reviews various proposals of a business, financing or other nature. It is CapitaLand's disclosure policy to make the appropriate announcements if and when required, in accordance with the SGX-ST Listing Rules.” This follows a Dow Jones news report saying that the group is considering a rights issue to raise capital, but there has been no definite decision, quoting a “person familiar with the situation”.
Delong to post full-year loss on demand slump
Delong Holdings, which put hundreds of workers on unpaid leave last October and shut several furnaces in China, yesterday said it will be reporting a loss for the full year ended Dec 31, 2008. The profit warning came as the global financial crisis hit China's steel demand in the latter half of 2008. The Singapore-listed Chinese steel company said given the slower demand, the group had moved decisively in October 2008 to scale down production at four of its smaller blast furnaces to reduce costs. The four furnances account for about 30 per cent of the group's annual production. 'However, higher raw material prices coupled with the writedown of inventory to net realisable value in 4Q2008, offset the cost savings and contributed to the group's FY2008 loss,' it said in a statement to the Singapore Exchange. Delong's board assured shareholders that despite the tighter operating environment, it has sufficient financial resources to meet its working capital requirements. 'The group has existing secured and unsecured credit facilities with various domestic and foreign financial institutions which can be called upon if any such need arises,' Delong said. As at end-September 2008, Delong's cash and cash equivalent stood at S$139.49 million, down from S$291.16 million a year earlier. Delong said yesterday that it remains confident about the long-term potential of China's steel industry.
Noble Group says shipping unit insured for oil spill claims
Noble Group Ltd, a Hong Kong-based commodity supplier whose shipping unit is being sued in California after an oil spill, says the business is insured for such claims. The suit includes claims for clean-up costs and damages to natural resources, Noble said yesterday in an e-mailed response to Bloomberg queries. The unit is insured for any civil liability arising out of the incident, the company said, without specifying an amount. The state of California on Tuesday filed a suit against unit Fleet Management, which operated the 900-foot Cosco Busan that struck a bridge support in San Francisco Bay in November 2007. Noble already faces charges in the US that it falsified documents to cover up its role in the ensuing oil spill that killed marine life, disrupted fishing and closed beaches.
Source: Kim Eng
Selected bluechips dividend policy
I came across an article Lower dividends on the cards as earnings wither by Lynette Khoo in Buinsess Times a few days back. I see the compilation is good so I thought of sharing it here. It’s not so much about the dividend yield but it is the dividend policy of some bluechips that some investors may find the information useful to them.
Singapore market is cheap
After my last update on STI a few weeks back, Singapore market has rebounded from its bottom to a new 2-month high of 1959.5 on the 7 Jan 2009. From the valuation ratios that I have calculated, PE ratio of STI was at 6.57 and PTB ratio of STI was at 1.27.
In my opinion, our Singapore market is still cheap. Take note the earnings used by me were the trailing 12-months (TTM). How about the earnings going forward? Of course when future earnings are expected to decline, the PE ratio is not going to stay at the same low level. But you can do some extrapolation based on the TTM PE ratio.
The table below will give an idea of what STI PE ratio is going to be if earnings are to drop by so much and assuming price remains the same level. Now you can make a smart estimate of what our forward STI PE ratio is going to be.
Taking a worst case scenario of 30% decline in earnings, our PE ratio will be 9.39 which is still more than 60% discount of a 10-year average PE ratio according to Macquarie (read comments).
In my opinion, our Singapore market is still cheap. Take note the earnings used by me were the trailing 12-months (TTM). How about the earnings going forward? Of course when future earnings are expected to decline, the PE ratio is not going to stay at the same low level. But you can do some extrapolation based on the TTM PE ratio.
The table below will give an idea of what STI PE ratio is going to be if earnings are to drop by so much and assuming price remains the same level. Now you can make a smart estimate of what our forward STI PE ratio is going to be.
Taking a worst case scenario of 30% decline in earnings, our PE ratio will be 9.39 which is still more than 60% discount of a 10-year average PE ratio according to Macquarie (read comments).
| TTM PE ratio (6 Jan 2009) | Earnings drop by | PE ratio |
| 6.57 | 10.00% | 7.30 |
| 20.00% | 8.21 | |
| 30.00% | 9.39 | |
| 40.00% | 10.95 | |
| 50.00% | 13.14 | |
| 60.00% | 16.43 | |
| 70.00% | 21.90 | |
| 80.00% | 32.85 | |
| 90.00% | 65.70 |
Sample W-8BEN form
If you intend to buy stocks in the US, you will need to fill up the W-8BEN form. I got a problem filling up that form the first time. I have put up a sample form showing the important sections that you need to fill in. Just follow the sample and mail it. That is all.
Wednesday, January 7, 2009
Daily news - 7 Jan
CCT Secures Refinancing for S$580 million CMBS Due March 2009
CapitaCommercial Trust (CCT) has entered into a facility agreement with DBS, Standard Chartered Bank, UOB and The Bank of Tokyo-Mitsubishi UFJ, Ltd, for a secured three-year term loan of up to S$580 million for CCT. The term loan will be drawndown in March 2009 to refinance the borrowings under the S$580 million commercial mortgage-backed securities (CMBS). The CMBS is secured by the seven properties in the initial portfolio. However, the term loan will only be secured by Capital Tower. As a result, out of CCT’s portfolio of eleven properties, eight properties with a total asset value of S$2.8 billion will be free of any encumbrance. This will provide CCT with financial flexibility in managing its capital and balance sheet. The all-in interest cost is well within CCT's projections. In addition, CCT has decided to abort the redevelopment of Market Street Car Park into a Grade A office/commercial building. Although the Manager had stated in April 2008 that the decision on the planned redevelopment would be made only after mid-2009, the Manager after taking into consideration the uncertain market outlook, tight credit conditions, high redevelopment cost and significant size of the project, has decided to abort the project immediately. CCT's CEO Ms Lynette Leong said the move will also give assurance and security of tenure to the car park users as well as retail tenants. CCT can move on to enter into longer term leases and adopt longer term plans through repositioning the retail tenant mix and other promotional events or activities to inject vibrancy to the area.
SGX posts record derivatives trades
Singapore Exchange (SGX) – Derivative and exchange-traded funds (ETFs) on the SGX set new trading records in 2008. Total derivatives volume hit nearly 62 million contracts, up by almost 38% compared to the previous period mainly due to a more than eight-fold surge in the number of CNX Nifty Index futures contracts to 12.4 million contracts from 2007's 1.44 million contracts. Other key future contracts - the Nikkei 225, MSCI Taiwan and MSCI Singapore recorded double- digit percentage growth.SGX added that turnover in the total futures and options market for the first nine months of 2008 alone had exceeded full-year 2007 figures followed by a record month in October when 6.86m contracts were traded. Hong Kong also hit records in the derivatives market in 2008 when it registered a record 101 million in volume up to Dec 15, 2008 based on data on its website showed. As for ETFs, total trading value in 2008 more than double to S2.94bn from 2007.
Applications for Spring loans up 3-fold: DBS
DBS which is one of Spring’s participating financial institutions for the Local Enterprise Finance Scheme, Micro Loan and Bridging Loan programmes said that the applications for Spring loans was up 3-fold since enhancements kicked in on Dec 1 2008. Most applications have been to 'top up' existing loans. The maximum quantum under the Micro Loan programme, for instance, has been increased from $50,000 to $100,000. And the government's share of the default risk has increased to 80 per cent from 50 per cent. According to DBS managing director and head of enterprise banking Edwin Khoo, DBS is taking steps to ensure credit lines remain open. All cases in which credit lines are reduced or closed must be assessed by senior management including himself. And so far, there have only been a 'handful' of such cases. DBS's share of the SME market has been growing. In 2008, its loan book grew more than 25 per cent. SMEs account for 95 per cent of all enterprises, employing some 60 per cent of the nation's work force and generating about 45 per cent of the gross domestic product in Singapore.
SATS union, independent directors okay SFI buy
Singapore Airport Terminal Services (SATS) has got the nod from its independent directors (IDs) and in-house union to buy mainboard-listed Singapore Food Industries (SFI). In a circular to shareholders on Monday night, the mainboard-listed airport services specialist said that seven of its eight IDs voted in favour of the SFI takeover. The other ID, Ng Kee Choe, abstained because he is on the advisory panel of Temasek Holdings, which is selling its SFI stake to SATS. SATS also received irrevocable undertakings in support of the deal from SATS Workers' Union, directors and senior management, who together control about 1.82 per cent of the total minority shareholdings in SATS. In its circular, SATS said that buying the region's largest integrated food supplier would help it achieve sustainable growth powered by the twin engines of airport operations and food services. SFI is a stable business with Singapore government contracts such as supplying food to the armed forces and access to the national food security programme, SATS noted. Also, through SFI's presence in Europe and the UK, SATS sees potential to expand into European airline catering. SFI's UK business has been growing at 14-19 per cent per year. The enlarged SATS, with SFI under its umbrella, would enjoy stronger growth and a bigger geographic footprint and would be less exposed to the vagaries of the aviation sector.
Ex-S'pore Computer Systems chief rejoins StarHub
StarHub – Former Singapore Computer Systems (SCS) president and CEO Tan Tong Hai has rejoined StarHub after parting ways with the company for more than eight years. From Jan 15, Mr Tan will be StarHub's new chief operating officer (COO), a position that has been vacant for the past two years. He will report directly to company CEO Terry Clontz, StarHub said in a regulatory filing yesterday. The COO role was vacated by Yong Lum Sung, the former chief of Singapore Cable Vision, in December 2006. StarHub said at that time that it was not looking to replace Mr Yong. Instead, it chose to change the reporting structure for departments that used to be under the COO's charge. Mr Tan is no stranger to StarHub, having been general manger of its Internet arm from 1999 to 2000. During that time he helped launched the firm's famous 'surf-for-free' dial-up Internet package, a move that caused serious damage to rivals Pacific Internet and SingNet.
Source: Kim Eng
CapitaCommercial Trust (CCT) has entered into a facility agreement with DBS, Standard Chartered Bank, UOB and The Bank of Tokyo-Mitsubishi UFJ, Ltd, for a secured three-year term loan of up to S$580 million for CCT. The term loan will be drawndown in March 2009 to refinance the borrowings under the S$580 million commercial mortgage-backed securities (CMBS). The CMBS is secured by the seven properties in the initial portfolio. However, the term loan will only be secured by Capital Tower. As a result, out of CCT’s portfolio of eleven properties, eight properties with a total asset value of S$2.8 billion will be free of any encumbrance. This will provide CCT with financial flexibility in managing its capital and balance sheet. The all-in interest cost is well within CCT's projections. In addition, CCT has decided to abort the redevelopment of Market Street Car Park into a Grade A office/commercial building. Although the Manager had stated in April 2008 that the decision on the planned redevelopment would be made only after mid-2009, the Manager after taking into consideration the uncertain market outlook, tight credit conditions, high redevelopment cost and significant size of the project, has decided to abort the project immediately. CCT's CEO Ms Lynette Leong said the move will also give assurance and security of tenure to the car park users as well as retail tenants. CCT can move on to enter into longer term leases and adopt longer term plans through repositioning the retail tenant mix and other promotional events or activities to inject vibrancy to the area.
SGX posts record derivatives trades
Singapore Exchange (SGX) – Derivative and exchange-traded funds (ETFs) on the SGX set new trading records in 2008. Total derivatives volume hit nearly 62 million contracts, up by almost 38% compared to the previous period mainly due to a more than eight-fold surge in the number of CNX Nifty Index futures contracts to 12.4 million contracts from 2007's 1.44 million contracts. Other key future contracts - the Nikkei 225, MSCI Taiwan and MSCI Singapore recorded double- digit percentage growth.SGX added that turnover in the total futures and options market for the first nine months of 2008 alone had exceeded full-year 2007 figures followed by a record month in October when 6.86m contracts were traded. Hong Kong also hit records in the derivatives market in 2008 when it registered a record 101 million in volume up to Dec 15, 2008 based on data on its website showed. As for ETFs, total trading value in 2008 more than double to S2.94bn from 2007.
Applications for Spring loans up 3-fold: DBS
DBS which is one of Spring’s participating financial institutions for the Local Enterprise Finance Scheme, Micro Loan and Bridging Loan programmes said that the applications for Spring loans was up 3-fold since enhancements kicked in on Dec 1 2008. Most applications have been to 'top up' existing loans. The maximum quantum under the Micro Loan programme, for instance, has been increased from $50,000 to $100,000. And the government's share of the default risk has increased to 80 per cent from 50 per cent. According to DBS managing director and head of enterprise banking Edwin Khoo, DBS is taking steps to ensure credit lines remain open. All cases in which credit lines are reduced or closed must be assessed by senior management including himself. And so far, there have only been a 'handful' of such cases. DBS's share of the SME market has been growing. In 2008, its loan book grew more than 25 per cent. SMEs account for 95 per cent of all enterprises, employing some 60 per cent of the nation's work force and generating about 45 per cent of the gross domestic product in Singapore.
SATS union, independent directors okay SFI buy
Singapore Airport Terminal Services (SATS) has got the nod from its independent directors (IDs) and in-house union to buy mainboard-listed Singapore Food Industries (SFI). In a circular to shareholders on Monday night, the mainboard-listed airport services specialist said that seven of its eight IDs voted in favour of the SFI takeover. The other ID, Ng Kee Choe, abstained because he is on the advisory panel of Temasek Holdings, which is selling its SFI stake to SATS. SATS also received irrevocable undertakings in support of the deal from SATS Workers' Union, directors and senior management, who together control about 1.82 per cent of the total minority shareholdings in SATS. In its circular, SATS said that buying the region's largest integrated food supplier would help it achieve sustainable growth powered by the twin engines of airport operations and food services. SFI is a stable business with Singapore government contracts such as supplying food to the armed forces and access to the national food security programme, SATS noted. Also, through SFI's presence in Europe and the UK, SATS sees potential to expand into European airline catering. SFI's UK business has been growing at 14-19 per cent per year. The enlarged SATS, with SFI under its umbrella, would enjoy stronger growth and a bigger geographic footprint and would be less exposed to the vagaries of the aviation sector.
Ex-S'pore Computer Systems chief rejoins StarHub
StarHub – Former Singapore Computer Systems (SCS) president and CEO Tan Tong Hai has rejoined StarHub after parting ways with the company for more than eight years. From Jan 15, Mr Tan will be StarHub's new chief operating officer (COO), a position that has been vacant for the past two years. He will report directly to company CEO Terry Clontz, StarHub said in a regulatory filing yesterday. The COO role was vacated by Yong Lum Sung, the former chief of Singapore Cable Vision, in December 2006. StarHub said at that time that it was not looking to replace Mr Yong. Instead, it chose to change the reporting structure for departments that used to be under the COO's charge. Mr Tan is no stranger to StarHub, having been general manger of its Internet arm from 1999 to 2000. During that time he helped launched the firm's famous 'surf-for-free' dial-up Internet package, a move that caused serious damage to rivals Pacific Internet and SingNet.
Source: Kim Eng
Lim & Tan promotion
Introduce A Friend promotion extended till 31 March 2009
Just recently my online cash trading account with Lim & Tan was credited with $118. I am an NTUC union member and thus participated in the Lim & Tan NTUC Union promotion when I opened a trading account with them. The cash rebate is equivalent to having four free trades. In order to enjoy the cash rebate, you simply need to do four trades within six months of your account opening.
There is also an ongoing promotion called Member-Introduce-Member program (MIMP) by Lim & Tan. There are incentives for both the referral and new member upon successful opening of trading account. You can read more about this program from their website. If anyone is interested to open an account with them and wishes to have me as a referral, please do contact me. :)
Article was originally posted on 22 May 2008
Just recently my online cash trading account with Lim & Tan was credited with $118. I am an NTUC union member and thus participated in the Lim & Tan NTUC Union promotion when I opened a trading account with them. The cash rebate is equivalent to having four free trades. In order to enjoy the cash rebate, you simply need to do four trades within six months of your account opening.
There is also an ongoing promotion called Member-Introduce-Member program (MIMP) by Lim & Tan. There are incentives for both the referral and new member upon successful opening of trading account. You can read more about this program from their website. If anyone is interested to open an account with them and wishes to have me as a referral, please do contact me. :)
Article was originally posted on 22 May 2008
SATS acquisition of SFI
Yesterday I received a circular from SATS regarding its acquisition of SFI. I can see that the management is quite concerned on the outcome of the resolution as many of the minority shareholders tend to disagree with the move. As such, I see the circular is more biased into garnering more votes to agree on the resolution. Before I highlight some of the negative points of the acquisition, let me post some of the merits out of the acquisition.
I agree with the vision of the directors to make SATS not only a world class food services group targeted to the aviation sector but also a group targeted to the non-aviation sector as well. By tapping into the catering industry like what SFI is doing locally and globally will thus reduce SATS dependency on its aviation related business operations. With the acquisition, both companies can centralize production activities and eliminate duplicate food production sites. It can also eliminate the “middleman” procurement costs with stronger bargaining power due to combined purchasing volume. All these synergies can bring about more cost savings annually and thus boosting income.
On top of the merits mentioned in the circular, let me touch a little bit on the cash generation portion of these two companies. I have presented the historical Free Cash Flow (FCF) of each company in the table below. As you can see, in future SATS may look forward to benefit from the additional FCF generated by SFI amid at an unstable rate. Only with a good FCF generation, business can move forward and shareholders can be rewarded.
Those are some of the merits that were highlighted in the circular. I think the negative parts of the acquisition are not well brought up. First of all, as a result of the acquisition SATS will move into a slight net debt position from a strong net cash position. I feel at a recessionary times like now, SATS shouldn’t exhaust all of its 600 over million of cash in hands. In my opinion, t is prudent to keep at least a third of the money and use the remaining cash for any acquisition.
On top of that, the offer price of $0.93 is overpriced as discussed by some shareholders. Based on the last transacted price prior to the announcement, $0.93 is at a premium of 25%. It may seem fair based on the EV/EBITDA valuation and the comparison of take-over premium of selected companies in the past. But how does the valuation fair in terms of simple PE and PTB multiples?
If you see the table above and based on PE and PTB ratios, SFI is already trading at a premium compared to its peers.
I still have some time to decide on the resolution and I will probably do so by the end of this week. Most likely I will go against it due to the negative points that I have mentioned above together with the negative outlook of SFI operations in UK which I have not looked into yet. The price may be justifiable during good times but at times like now, companies need to exercise extra caution while spending especially when all cash in hands are at stake.
I agree with the vision of the directors to make SATS not only a world class food services group targeted to the aviation sector but also a group targeted to the non-aviation sector as well. By tapping into the catering industry like what SFI is doing locally and globally will thus reduce SATS dependency on its aviation related business operations. With the acquisition, both companies can centralize production activities and eliminate duplicate food production sites. It can also eliminate the “middleman” procurement costs with stronger bargaining power due to combined purchasing volume. All these synergies can bring about more cost savings annually and thus boosting income.
On top of the merits mentioned in the circular, let me touch a little bit on the cash generation portion of these two companies. I have presented the historical Free Cash Flow (FCF) of each company in the table below. As you can see, in future SATS may look forward to benefit from the additional FCF generated by SFI amid at an unstable rate. Only with a good FCF generation, business can move forward and shareholders can be rewarded.
Those are some of the merits that were highlighted in the circular. I think the negative parts of the acquisition are not well brought up. First of all, as a result of the acquisition SATS will move into a slight net debt position from a strong net cash position. I feel at a recessionary times like now, SATS shouldn’t exhaust all of its 600 over million of cash in hands. In my opinion, t is prudent to keep at least a third of the money and use the remaining cash for any acquisition.
On top of that, the offer price of $0.93 is overpriced as discussed by some shareholders. Based on the last transacted price prior to the announcement, $0.93 is at a premium of 25%. It may seem fair based on the EV/EBITDA valuation and the comparison of take-over premium of selected companies in the past. But how does the valuation fair in terms of simple PE and PTB multiples?
If you see the table above and based on PE and PTB ratios, SFI is already trading at a premium compared to its peers.
I still have some time to decide on the resolution and I will probably do so by the end of this week. Most likely I will go against it due to the negative points that I have mentioned above together with the negative outlook of SFI operations in UK which I have not looked into yet. The price may be justifiable during good times but at times like now, companies need to exercise extra caution while spending especially when all cash in hands are at stake.
Tuesday, January 6, 2009
8.88% rebate with CIMB-GK
After the previous promotion of $1 commission with CIMB-GK, the company has introduced a new promotion. With validity till 31 March 2009, you can receive 8.88% rebate on the gross commission of all your SGX listed trades. Take note the rebate from this promotion can only be redeemed to offset future trades. You can read more about this 8.88% rebate promotion from the official website.
If you see the above rates for SGX listed stocks, the new online rates shall be 0.25% or a minimum of $22.78 for SGD denominated stocks under this promotion. Comparing the 0.25% with other brokerages, there is nothing much to shout about actually but the minimum commission is on par with Citibank minimum of $22.
I hope CIMB-GK or the other brokerages can come out with more exciting promotions in future. As long as the promotion is attractive, the company will deserve my execution of trades. If not I will just stay with Lim & Tan for all my long term stocks purchases.
If you see the above rates for SGX listed stocks, the new online rates shall be 0.25% or a minimum of $22.78 for SGD denominated stocks under this promotion. Comparing the 0.25% with other brokerages, there is nothing much to shout about actually but the minimum commission is on par with Citibank minimum of $22.
I hope CIMB-GK or the other brokerages can come out with more exciting promotions in future. As long as the promotion is attractive, the company will deserve my execution of trades. If not I will just stay with Lim & Tan for all my long term stocks purchases.
Daily news - 6 Jan
StarHub Appoints Tan Tong Hai as Chief Operating Officer
StarHub Ltd announced the appointment of Tan Tong Hai as Chief Operating Officer (COO) for the Group from 15 January 2009. He will report directly to Terry Clontz, CEO of StarHub. Tong Hai brings with him over 20 years of experience in the regional IT, Internet and ecommerce industries. He has had broad experience at top management levels at both local start-ups and MNCs.
Parkway Holdings appoint new CFO
Parkway Holdings Limited announced the appointment of Mr Tan See Haw as the Group Chief Financial Officer, effective from 5 January 2009. As Group Chief Financial Officer, Mr Tan will head the Group’s Finance Division, including Corporate Tax, Materials Management and the Business Offices, and reports to the Managing Director. Ms Molly Foo, the Chief Financial Officer, will report to Mr Tan.
Source: Kim Eng
StarHub Ltd announced the appointment of Tan Tong Hai as Chief Operating Officer (COO) for the Group from 15 January 2009. He will report directly to Terry Clontz, CEO of StarHub. Tong Hai brings with him over 20 years of experience in the regional IT, Internet and ecommerce industries. He has had broad experience at top management levels at both local start-ups and MNCs.
Parkway Holdings appoint new CFO
Parkway Holdings Limited announced the appointment of Mr Tan See Haw as the Group Chief Financial Officer, effective from 5 January 2009. As Group Chief Financial Officer, Mr Tan will head the Group’s Finance Division, including Corporate Tax, Materials Management and the Business Offices, and reports to the Managing Director. Ms Molly Foo, the Chief Financial Officer, will report to Mr Tan.
Source: Kim Eng
Monday, January 5, 2009
Daily news - 5 Jan
CEO Neil Montefiore to step down
MobileOne Ltd (M1) announced that Mr Neil Montefiore, Chief Executive Officer of M1, has decided to step down as CEO and Director of M1, with effect from 1st February 2009. Mr Montefiore, who joined M1 in April 1996 and has served as its CEO since then, has indicated that he wishes to pursue other personal interests. As part of M1’s succession planning and grooming, M1’s Chief Financial Officer, Ms Karen Kooi Lee Wah, will be appointed Acting CEO in addition to her cu rrent duties, with effect from 1st February 2009. The appointment of Ms Kooi is subject to the IDA’s approval.
Appointment of Ms Winnifred Heap as Group EVP
MobileOne Ltd (M1) announced that Mr Neil Montefiore, Chief Executive Officer of M1, has decided to step down as CEO and Director of M1, with effect from 1st February 2009. Mr Montefiore, who joined M1 in April 1996 and has served as its CEO since then, has indicated that he wishes to pursue other personal interests. As part of M1’s succession planning and grooming, M1’s Chief Financial Officer, Ms Karen Kooi Lee Wah, will be appointed Acting CEO in addition to her cu rrent duties, with effect from 1st February 2009. The appointment of Ms Kooi is subject to the IDA’s approval.
Source: Kim Eng
MobileOne Ltd (M1) announced that Mr Neil Montefiore, Chief Executive Officer of M1, has decided to step down as CEO and Director of M1, with effect from 1st February 2009. Mr Montefiore, who joined M1 in April 1996 and has served as its CEO since then, has indicated that he wishes to pursue other personal interests. As part of M1’s succession planning and grooming, M1’s Chief Financial Officer, Ms Karen Kooi Lee Wah, will be appointed Acting CEO in addition to her cu rrent duties, with effect from 1st February 2009. The appointment of Ms Kooi is subject to the IDA’s approval.
Appointment of Ms Winnifred Heap as Group EVP
MobileOne Ltd (M1) announced that Mr Neil Montefiore, Chief Executive Officer of M1, has decided to step down as CEO and Director of M1, with effect from 1st February 2009. Mr Montefiore, who joined M1 in April 1996 and has served as its CEO since then, has indicated that he wishes to pursue other personal interests. As part of M1’s succession planning and grooming, M1’s Chief Financial Officer, Ms Karen Kooi Lee Wah, will be appointed Acting CEO in addition to her cu rrent duties, with effect from 1st February 2009. The appointment of Ms Kooi is subject to the IDA’s approval.
Source: Kim Eng
Thursday, January 1, 2009
Reward points or cash rebates
If you have visited this blog long enough, you will know that I am a credit card enthusiast. I am a fanatic of any credit cards that can give the highest return in cash rebates for all rounder type of spending. Recently I came across an article Play your cards right by Ignatius Low in Asiaone business section. You may read the whole article from the link. I tend to agree and disagree some of the points mentioned by the author.
It is certainly a good thing of the author to come out with the input and output equation thing. But I feel the author fail to address the relationship between the input and output. Usually in an investment, you always find the return of your investment in order to do a comparison. So similarly, you should do the same for credit cards. At what expense of inputs will you get the outputs which are the vouchers or cash rebates? Therefore you need to calculate the conversion rate to compare.
It is quite straight forward to calculate for cash rebate credit cards. With the best cards in the market, you can easily earn a maximum of 3.33% or 5% cash rebates using UOB One or SCB Manhattan credit cards. Now what is the conversion rate of a reward or point based credit card?
Take for example, the author mentioned about Citi Clear Platinum credit card. This credit card rewards card holder in terms of Citi Dollars. In case you do not know, 1 Citi Dollar is awarded for every $5 spent. I dig through the latest rewards catalogue from Citibank and let me show the conversion rate of a particular voucher. You can exchange for a $5 voucher from Popular Bookstore with 260 Citi Dollars. In order to obtain 260 Citi Dollars, which means you have to spend $1300 with this card. The conversion rate is simply 0.38% ($5 / $1300). But I know you can earn up to 5X rewards from a particular merchant as advertised by the banks. But that will only bring up the conversion rate to 1.92% (0.38% x 5). And how frequent do you go to the particular merchant to earn the Citi Dollars? Do you shop at Tangs or Popular Bookstore diligently in a month like you diligently need to pay for your bills?
You can calculate the conversion rate of the other vouchers for Citi Dollars and I can bet those rates will be more or less around 0.38% or 1.92% (for extra rewards). Let me show the conversion rate of another bank like OCBC.
For OCBC, the bank uses OCBC$ as rewards and you can earn 1 OCBC$ for every $1 charged to your OCBC credit card. The OCBC$ has about 1.5 years validity period and it is logical that if your expiry is shorter, the conversion tends to get better as bank wants you to spend more in the same period. Let us see a typical conversion rate for OCBC. Using the same example as Popular Bookstore, you can exchange for a $20 voucher with 4100 OCBC$. That means the conversion rate is at 0.49% slightly better than Citi Clear Platinum excluding the extra rewards.
Therefore you can see that the conversion rates are usually low compared to the percentage rebates given by some of the best all rounder cash rebates credit cards like UOB One and SCB Manhattan. All rounder means you can pay for any transactions including bills as long as the merchants accept credit cards.
There are some other reasons why rewards or points are not the right way to go. You may tend to spend more or extra while aiming for a particular point or reward. This habit can erode your conversion rate. The author do mention about Miles too. Obviously Miles are not suitable for the low spender as you may need to spend many years just to redeem your air flight ticket. I did not do a conversion rate exercise for Miles but logically even no matter how good the rate is, the effective rate will get diluted as you need to spend more in overseas if you don’t need the traveling. Unless you really need to travel, the Miles is not so useful in my opinion.
Despite the above criticisms, I do agree with the author mentioning that good cards usually expire after a year or two. For example, Citi Dividend used to be the best cash rebate credit card but who cares to use it now if you can enjoy UOB One or SCB Manhattan which have much relax requirements and reasonable conversion rates. In short, consumers always have to keep a look out for any possible replacement of the cards that I recommended.
It is certainly a good thing of the author to come out with the input and output equation thing. But I feel the author fail to address the relationship between the input and output. Usually in an investment, you always find the return of your investment in order to do a comparison. So similarly, you should do the same for credit cards. At what expense of inputs will you get the outputs which are the vouchers or cash rebates? Therefore you need to calculate the conversion rate to compare.
It is quite straight forward to calculate for cash rebate credit cards. With the best cards in the market, you can easily earn a maximum of 3.33% or 5% cash rebates using UOB One or SCB Manhattan credit cards. Now what is the conversion rate of a reward or point based credit card?
Take for example, the author mentioned about Citi Clear Platinum credit card. This credit card rewards card holder in terms of Citi Dollars. In case you do not know, 1 Citi Dollar is awarded for every $5 spent. I dig through the latest rewards catalogue from Citibank and let me show the conversion rate of a particular voucher. You can exchange for a $5 voucher from Popular Bookstore with 260 Citi Dollars. In order to obtain 260 Citi Dollars, which means you have to spend $1300 with this card. The conversion rate is simply 0.38% ($5 / $1300). But I know you can earn up to 5X rewards from a particular merchant as advertised by the banks. But that will only bring up the conversion rate to 1.92% (0.38% x 5). And how frequent do you go to the particular merchant to earn the Citi Dollars? Do you shop at Tangs or Popular Bookstore diligently in a month like you diligently need to pay for your bills?
You can calculate the conversion rate of the other vouchers for Citi Dollars and I can bet those rates will be more or less around 0.38% or 1.92% (for extra rewards). Let me show the conversion rate of another bank like OCBC.
For OCBC, the bank uses OCBC$ as rewards and you can earn 1 OCBC$ for every $1 charged to your OCBC credit card. The OCBC$ has about 1.5 years validity period and it is logical that if your expiry is shorter, the conversion tends to get better as bank wants you to spend more in the same period. Let us see a typical conversion rate for OCBC. Using the same example as Popular Bookstore, you can exchange for a $20 voucher with 4100 OCBC$. That means the conversion rate is at 0.49% slightly better than Citi Clear Platinum excluding the extra rewards.
Therefore you can see that the conversion rates are usually low compared to the percentage rebates given by some of the best all rounder cash rebates credit cards like UOB One and SCB Manhattan. All rounder means you can pay for any transactions including bills as long as the merchants accept credit cards.
There are some other reasons why rewards or points are not the right way to go. You may tend to spend more or extra while aiming for a particular point or reward. This habit can erode your conversion rate. The author do mention about Miles too. Obviously Miles are not suitable for the low spender as you may need to spend many years just to redeem your air flight ticket. I did not do a conversion rate exercise for Miles but logically even no matter how good the rate is, the effective rate will get diluted as you need to spend more in overseas if you don’t need the traveling. Unless you really need to travel, the Miles is not so useful in my opinion.
Despite the above criticisms, I do agree with the author mentioning that good cards usually expire after a year or two. For example, Citi Dividend used to be the best cash rebate credit card but who cares to use it now if you can enjoy UOB One or SCB Manhattan which have much relax requirements and reasonable conversion rates. In short, consumers always have to keep a look out for any possible replacement of the cards that I recommended.
My stocks portfolio - Dec 2008
My overall portfolio was down by 51.57% at the end of December 2008. Month of December was also a special month as I have put more than usual investment capital than in the previous months. I have used up my AWS and some spare savings to top up and buy into multiple stocks.
Even though I have put more cash into stocks, I still stick to my investment principle that is not to put too much weight into a particular stock. I try to keep less than 8% of total investment amount into a single stock. That means I like to keep a broadly diversified selection of stocks. I managed to utilize the remaining free trades with CIMB $1 commission.
There were 8 transactions for the month of December 2008.
Bought Rotary, new average price at $1.006
Bought Jaya Holdings, new average price at $1.354
Bought KS Energy, new average price at $1.540
Bought Capitacomm, new average price at $1.322
Bought ST Engg, price at $2.278
Bought Keppel Corp, price at $3.869
Bought Capitaland (PSBP), price at $2.860
Bought SGX (PSBP), price at $5.390
Rotary and Jaya Holdings were two stocks that I purchased prior to the crisis. I have wanted to average down on them ever since. I feel the sell down on these two stocks are way overdone so it is ideal for me to top up in small amount. No doubt their earnings will be affected in the short term but my long term fundamental views on them still remain the same. I don’t really like to speculate their future earnings but based on their current cash flow and balance sheet statements, I don’t see any short coming in the near term. In fact Rotary is currently priced at their cash per share level. These two are also solid dividend paying stocks in which both of them have never failed to pay since 1995.
On hindsight, I am fortunate not to have exercised my rights with KS Energy at a higher price. I managed to get at a discount of about 66% of the exercise price instead. Therefore the recent purchase brought down my average price to $1.540. I read about the deployment of KS Titan 2 lift boat for offshore wind power operations in the North Sea. I think it is good to tap on other source of energy instead of relying on oil and gas operations only.
Falling price and demand of prime office spaces coupled with refinancing worries for $580 million of debt expiring in March 2009 have hit Capitacomm very hard recently. The commitment by our government of making Singapore the biggest financial centre in the region makes me optimistic of the future of this quality REIT. It fell by more than 80% from previous peak to a low of $0.595 recently. Putting the refinancing worries aside, I feel the 80% fall is already fully factored in for any future fall of office rents. I managed to bring down my average price to $1.322 after purchasing equal number of shares at $0.635.
I am glad to add four more bluechips into my portfolio. Capitaland and SGX were purchased through PSBP while Keppel Corp and ST Engineering were purchased in the open market. Valuation for SGX still remains high. So that is why I don’t wish to buy in lump sum. But it is certainly a good stock to own in the long run and I don’t want to miss the opportunity of buying now. Just look at SGX cash flow statement and you will be impressed by the free cash flow generated!
In my view, Keppel Corp is definitely one of the top conglomerates in Singapore. The news of a possible contract cancellation in late November is a perfect timing for me to buy together after a series of previous sell down too. I don’t want to miss receiving good dividend payout and bonus shares in future from this gem.
Capitaland is one of the top property developers in Singapore. I am not so concerned of their short term earnings and at the same time I don’t want to miss buying at current price through PSBP. If there is any dividend payout, I like the small money to be automatically reinvested at no cost at all.
Last but not least, if you are not aware of how defensive ST Engineering can be, I suggest you take a look at their earnings in the previous crisis. Take note, defensive in earnings do not equate to defensive in share price movement. When price is offered to you cheaply while earnings remain the same, it is a no brainer to buy the stock. I present to you a quarterly orderbook of ST Engineering compiled by Nomura to let the picture speaks for itself.
I received total dividends of $70 for the month of December 2008.
Even though I have put more cash into stocks, I still stick to my investment principle that is not to put too much weight into a particular stock. I try to keep less than 8% of total investment amount into a single stock. That means I like to keep a broadly diversified selection of stocks. I managed to utilize the remaining free trades with CIMB $1 commission.
There were 8 transactions for the month of December 2008.
Bought Rotary, new average price at $1.006
Bought Jaya Holdings, new average price at $1.354
Bought KS Energy, new average price at $1.540
Bought Capitacomm, new average price at $1.322
Bought ST Engg, price at $2.278
Bought Keppel Corp, price at $3.869
Bought Capitaland (PSBP), price at $2.860
Bought SGX (PSBP), price at $5.390
Rotary and Jaya Holdings were two stocks that I purchased prior to the crisis. I have wanted to average down on them ever since. I feel the sell down on these two stocks are way overdone so it is ideal for me to top up in small amount. No doubt their earnings will be affected in the short term but my long term fundamental views on them still remain the same. I don’t really like to speculate their future earnings but based on their current cash flow and balance sheet statements, I don’t see any short coming in the near term. In fact Rotary is currently priced at their cash per share level. These two are also solid dividend paying stocks in which both of them have never failed to pay since 1995.
On hindsight, I am fortunate not to have exercised my rights with KS Energy at a higher price. I managed to get at a discount of about 66% of the exercise price instead. Therefore the recent purchase brought down my average price to $1.540. I read about the deployment of KS Titan 2 lift boat for offshore wind power operations in the North Sea. I think it is good to tap on other source of energy instead of relying on oil and gas operations only.
Falling price and demand of prime office spaces coupled with refinancing worries for $580 million of debt expiring in March 2009 have hit Capitacomm very hard recently. The commitment by our government of making Singapore the biggest financial centre in the region makes me optimistic of the future of this quality REIT. It fell by more than 80% from previous peak to a low of $0.595 recently. Putting the refinancing worries aside, I feel the 80% fall is already fully factored in for any future fall of office rents. I managed to bring down my average price to $1.322 after purchasing equal number of shares at $0.635.
I am glad to add four more bluechips into my portfolio. Capitaland and SGX were purchased through PSBP while Keppel Corp and ST Engineering were purchased in the open market. Valuation for SGX still remains high. So that is why I don’t wish to buy in lump sum. But it is certainly a good stock to own in the long run and I don’t want to miss the opportunity of buying now. Just look at SGX cash flow statement and you will be impressed by the free cash flow generated!
In my view, Keppel Corp is definitely one of the top conglomerates in Singapore. The news of a possible contract cancellation in late November is a perfect timing for me to buy together after a series of previous sell down too. I don’t want to miss receiving good dividend payout and bonus shares in future from this gem.
Capitaland is one of the top property developers in Singapore. I am not so concerned of their short term earnings and at the same time I don’t want to miss buying at current price through PSBP. If there is any dividend payout, I like the small money to be automatically reinvested at no cost at all.
Last but not least, if you are not aware of how defensive ST Engineering can be, I suggest you take a look at their earnings in the previous crisis. Take note, defensive in earnings do not equate to defensive in share price movement. When price is offered to you cheaply while earnings remain the same, it is a no brainer to buy the stock. I present to you a quarterly orderbook of ST Engineering compiled by Nomura to let the picture speaks for itself.
I received total dividends of $70 for the month of December 2008.
| No | Stock | Mode | Unrealised P/L (SGD) |
| 1 | ARA | CASH | -62.45% |
| 2 | CAPITACOMM | CASH | -32.30% |
| 3 | CAPITALAND (PSBP) | CASH | 8.74% |
| 4 | CHINA HONGXING | CASH | -68.38% |
| 5 | CHINA MILK | CASH | -48.92% |
| 6 | COSCOCORP | CASH | -71.85% |
| 7 | COURAGE MAR | CASH | -58.33% |
| 8 | FIBRECHEM | CASH | -76.88% |
| 9 | FRASERSCOMM | CASH | -77.70% |
| 10 | FSL TRUST | CASH | -59.13% |
| 11 | GEN INT | CASH | -31.19% |
| 12 | JAYA HLDG | CASH | -78.90% |
| 13 | KEPPELCORP | CASH | 11.92% |
| 14 | KS ENERGY | CASH | -35.71% |
| 15 | MACQ INT INFRA | CASH | -68.25% |
| 16 | PAC ANDES | CASH | -13.04% |
| 17 | PLIFE REIT | CASH | -2.69% |
| 18 | RAFFLES EDUCATION | CASH | -32.25% |
| 19 | ROTARY ENGRG LTD | CASH | -75.65% |
| 20 | SATS | CASH | -17.06% |
| 21 | SGX (PSBP) | CASH | -5.75% |
| 22 | ST ENGG | CASH | 4.04% |
| 23 | SWIBER | CASH | -73.73% |
| 24 | TAI SIN | CASH | -57.30% |
| 25 | TAT HONG | CASH | -13.90% |
| 26 | UOB-KAY HIAN | CASH | -59.63% |
| 27 | VICOM | CASH | -17.96% |
| 28 | VANGUARD EMER MRKTS | CASH | -45.87% |
| 29 | BH GLOBAL | CPF | -58.23% |
| 30 | COSCOCORP | CPF | -67.67% |
| 31 | SIAENGG | CPF | -57.88% |
Guess STI 2008 contest
STI (31 Dec 08) = 1761.56
Winner: bayhub (1580.50)
In order to reward fellow visitors of this blog, I have decided to create a contest and shall give away some cash to one lucky person. All you need to do is guess the STI closing price for the year 2008. Below are the requirements of this contest:
Contest Name: Guess STI 2008 closing price (31 Dec 08)
Prize: $20 cash
Eligibility: Only 1 entry is permitted per person. In order to prevent multiple entries from the same person, you have to submit your guess together with the userid of your local ISP email address. Userid from free email domains like google, hotmail, etc are not allowed! Userid from company emails are also not allowed!
To participate: Submit your guess and userid by replying to the comment at the end of this post. For example if your ISP email address is john1234@singnet.com.sg, leave a comment in the following format:
john1234
STI=1998.55
Failure to follow the desired format shall result in the deletion of your posted comment for cleaning up purposes. You should leave the suffix of your email address to prevent receiving unwanted or spam emails.
Closing date: 2359 of 30 Nov 08 (based on timestamp by google)
Please take note the winner shall be the one that makes the closest guess from the actual closing price of STI at year end. The winner needs to notify me through email with exactly the same userid as registered in the comments. For your information, my email address can be found under my profile on the right side of this blog. If winner is unable to notify me through email by 15 Jan 2009, the prize money shall be given to another winner with the next closest guess.
The prize money shall be transferred through POSB/DBS bank with account number that is to be communicated through email.
Good luck and don't forget to inform your friends to participate!
Winner: bayhub (1580.50)
In order to reward fellow visitors of this blog, I have decided to create a contest and shall give away some cash to one lucky person. All you need to do is guess the STI closing price for the year 2008. Below are the requirements of this contest:
Contest Name: Guess STI 2008 closing price (31 Dec 08)
Prize: $20 cash
Eligibility: Only 1 entry is permitted per person. In order to prevent multiple entries from the same person, you have to submit your guess together with the userid of your local ISP email address. Userid from free email domains like google, hotmail, etc are not allowed! Userid from company emails are also not allowed!
To participate: Submit your guess and userid by replying to the comment at the end of this post. For example if your ISP email address is john1234@singnet.com.sg, leave a comment in the following format:
john1234
STI=1998.55
Failure to follow the desired format shall result in the deletion of your posted comment for cleaning up purposes. You should leave the suffix of your email address to prevent receiving unwanted or spam emails.
Closing date: 2359 of 30 Nov 08 (based on timestamp by google)
Please take note the winner shall be the one that makes the closest guess from the actual closing price of STI at year end. The winner needs to notify me through email with exactly the same userid as registered in the comments. For your information, my email address can be found under my profile on the right side of this blog. If winner is unable to notify me through email by 15 Jan 2009, the prize money shall be given to another winner with the next closest guess.
The prize money shall be transferred through POSB/DBS bank with account number that is to be communicated through email.
Good luck and don't forget to inform your friends to participate!
Daily news - 31 Dec
CMT price hike appears to be due to hedging: SGX
CapitaMall Trust (CMT) – The Singapore Exchange yesterday said that the sudden spike in CMT share price on Monday appeared to be due to 'hedging activity' by an unnamed financial institution. On Monday, two million CMT shares were traded at $3 just before the market closed. That is 87.5 per cent above the previous closing price of $1.60. It was the stock's single largest daily gain and was its highest closing price since August. The trade added 22 points to the benchmark Straits Times Index, which closed up almost 55 points on Monday at 1,780.57. Yesterday, CMT shed most of the gains, closing at $1.64, down $1.36 or 45 per cent. The STI fell 9.92 points to 1,770.65. SGX said in its statement that it 'will investigate the possibility of any market misconduct and take up such action as may be necessary with the relevant authorities'. CapitaMall Trust said in a statement yesterday that it had not announced any new information and did not know of any other possible explanation for the trading. It was responding to a query from the exchange.
Source: Kim Eng
CapitaMall Trust (CMT) – The Singapore Exchange yesterday said that the sudden spike in CMT share price on Monday appeared to be due to 'hedging activity' by an unnamed financial institution. On Monday, two million CMT shares were traded at $3 just before the market closed. That is 87.5 per cent above the previous closing price of $1.60. It was the stock's single largest daily gain and was its highest closing price since August. The trade added 22 points to the benchmark Straits Times Index, which closed up almost 55 points on Monday at 1,780.57. Yesterday, CMT shed most of the gains, closing at $1.64, down $1.36 or 45 per cent. The STI fell 9.92 points to 1,770.65. SGX said in its statement that it 'will investigate the possibility of any market misconduct and take up such action as may be necessary with the relevant authorities'. CapitaMall Trust said in a statement yesterday that it had not announced any new information and did not know of any other possible explanation for the trading. It was responding to a query from the exchange.
Source: Kim Eng
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