For REITs, strong data-points emerged from the office space on rental reversions and tight occupancies. Hotel RevPARs are bottoming out with hotel REITs reporting a flattish RevPAR post a 9% drop in 2H13. Industrial REITs fared better than which reported a fall in shopper traffic and weakness in tenant sales. Our key picks in property include CapitaLand, Keppel Land, WingTai, Suntec REIT, CDLH-T and CCT. 

 

■ Our plantation picks delivered

There were no surprises from our top sector picks Bumitama Agri and First Resources. Bumitama Agri reported impressive 1Q14 results with Rp276b core net profit. Results were within expectation, supported by higher CPO and PK ASP and strong FFB production growth of 24.0% yoy (-10.6% qoq). As for First Resources, the 29% yoy decline in net profit was due to lower yoy CPO ASP and refining margin vs the strong performance recorded in 1Q13. However, strong FFB production of 13.1% yoy helped to partially cushion the drop in CPO ASP. We maintain BUY on both Bumitama Agri and First Resources.

 

■ Other notable results - Pacific Radiance and Super Group

Pacific Radiance was a star performer, with 1Q14 results exceeding our and market expectation on a sharply higher offshore subsea services (OSS) gross margin of 41% (1Q13: 22%) on higher fleet utilisation. We raise our 2014-16 net profit forecasts by 4-16% on a higher gross margin assumption of 38% (from 35%) and hike our target price by 27% from S$1.22 to S$1.55. Maintain BUY. Super Group disappointed as top-line declined 6% yoy as both branded consumer (BC) and food ingredients (FI) segments performed below expectations on challenging conditions in key markets such as Thailand and Indonesia. Consequently, we cut 2014-15 net profit forecasts by 11-16% to reflect weaker top-line growth for both BC and FI. On our new estimates, the group is expected to register a modest 3-year EPS CAGR of 9% for 2014-16. Maintain HOLD with a lower target price of S$3.33/share.

 

■ Trimming 2014 earnings forecasts marginal changes in 2015. Following the results season, we amended our market EPS growth to 6.1% (previously 6.7%) in 2014 and 12.1% (previously 11.8%) in 2015. The changes in 2014 growth largely reflect the cut in estimates for aviation and the plantation sectors.

 

■ Year-end target of 3,400 for FSSTI

We remain selective given external uncertainties and limited earnings visibility in 2014. 

 

 

Key SELLs include Tigerair, Mewah and Sabana REIT. (Read Report)

The decrease was largely due to the petroleum and petroleum products as well as telecommunications and computers sectors, which registered declines of 7.6 per cent and 13.4 per cent in domestic sales respectively.

Excluding petroleum, domestic wholesale trade rose 2.5 per cent compared to a year ago.

The general wholesale trade sector reported the largest growth of 35.4 per cent in domestic sales in first quarter 2014, primarily due to an increase in demand in the domestic market.

Similarly, the chemicals & chemical products sector recorded a double-digit increase of 13.1 per cent in domestic sales.

After adjusting for price changes, overall domestic wholesale trade registered a smaller year-on-year decline of 1.4 per cent.

Quarter-on-quarter, domestic wholesale trade (seasonally adjusted) decreased 0.6 per cent in Q1.

Foreign wholesale trade fell 1.1 per cent year-on-year in the first quarter, led by declines in the chemicals & chemical products as well as telecommunications & computers sectors.

Excluding petroleum, foreign wholesale trade dipped 0.8 per cent. After adjusting for price changes, foreign wholesale trade was down slightly by 0.2 per cent year-on-year.

Quarter-on-quarter, foreign wholesale trade (seasonally adjusted) fell 4 per cent in Q1 over the fourth quarter of 2013.

 

A NERVOUS Wall Street that has risen to numerous all-time highs this year despite an unsure domestic economic recovery, looks set to undergo a choppy week ahead. Closer to home, political tensions in Thailand as well as growing unease over China' s maritime dispute with Vietnam could add to market worries.

This, in turn, should translate to a volatile week for the Straits Times Index as there is a slew of US economic reports due, while China does not seem prepared to back down.

Wednesday' s release of the latest Federal Open Market Committee meeting minutes could prove one pivotal point for this week, and this would probably be followed by Thursday' s jobless claims and Friday' s new home sales.

Several Fed governors are also scheduled to deliver speeches during the five days - presumably on the economy and the outlook for interest rates - and, with earnings announcements and manufacturing numbers also scheduled to be issued, it looks very much like Wall Street is in for a rocky week.

 

 

Bankers say that it has been a bumper quarter, lifted mainly by privatisations in the property sector, and that they see many more deals in the pipeline.

But some are also watching if greater public dissent by minority shareholders and activists could put a damper on the mergers and acquisitions (M& A) process, including that of pricing.

CapitaLand last Friday sweetened its privatisation offer for CapitaMalls Asia (CMA), of which it already owns about 70 per cent, following concerns that CMA had been undervalued, a point hammered home in a published commentary by former senior managing director at Temasek Holdings, Michael Dee.

Shareholder activism is here to stay, say market insiders.

" There is greater activism around these transactions," Axel Granger, head of M& A for South-east Asia at Bank of America Merrill Lynch, told The Business Times. " Investment bankers will have to pay more attention to the opinion makers. It is a natural evolution. It is something we have seen in the United States, and it is moving to Asia."

But Willard McLane, head of Asean corporate and investment banking at Citi, noted that the current level of activism in this region is still relatively modest.

" I don' t see much shareholder activism in Singapore in the way we see it in the US, for example. We haven' t seen a lot of cases where shareholders are publicly promoting agendas or blocking deals," he said.

But not all calls for higher offers are successful.

United Industrial Corp stuck to its takeover offer price for subsidiary Singapore Land (SingLand), though the share price movement of SingLand - as it traded above the offer price - suggested that shareholders were looking for more.

But in other cases, more money was put on the table. Besides CapitaLand, the consortium led by tycoon Ong Beng Seng and Wheelock Properties also boosted its offer for shares in Hotel Properties.

There are several factors fanning this wave of privatisations. Bankers note that many deals were prompted by cheap financing, and the lacklustre market which often " undervalues" stocks.

The equity markets have valued real estate companies at " a significant discount to their underlying values" , noted Galen Lee, UBS' South-east Asia head of real estate.

" We are seeing some real estate companies undertake privatisations of their subsidiaries to streamline and re-align the groups' businesses and portfolios," he said.

In Singapore, the privatisation trend may also be driven by the cooling measures affecting listed real estate developers, Mr Lee added. This has significantly depressed many property stocks.

Despite the public protestations, Mr Granger noted that the average premium - which has historically been about 25-30 per cent - has stayed stable in Singapore over the past few years.

Meanwhile, M& A activity across Asia continues to buzz.

In the Asia-Pacific (excluding Japan), the total value of deals in the first quarter of the year stood at US$102 billion, up 36 per cent from the same period a year ago, according to Mergermarket. This is the strongest first-quarter deal flow on Mergermarket' s record, which began in 2001.

Singapore companies are also starting to get into the pan-Asian M& A party.

Temasek Holdings' US$5.7 billion purchase of a 25 per cent stake in drugstore chain Watsons was the third-largest deal announced in the period.

Bankers note that Temasek is likely in an investment cycle, and has been fairly active in snapping up stakes in non-financial companies. It has also " doubled down" on Olam International, one banker noted.

But Temasek has also not shied away from offloading companies in which it has a significant stake. STATS ChipPAC, which counts Temasek as its major shareholder, announced last Friday that it had received a " non-binding expression of interest" from a buyer. The semiconductor assembly firm has a market cap of just over $1 billion.

As Singapore companies regionalise, more outbound activity will be expected in the quarters ahead, as opposed to inbound deals, said Mr McLane.

Meanwhile in Singapore, bankers are watching for potential consolidation among locally-listed mid-sized real estate investment trusts (Reits), though they note that some of these deals may be complicated in structure.

" In an environment where everyone is expecting interest rates to rise, yield is becoming less attractive," said Mr Granger, referring to Reits.

There may be some spillover activity in Asia as large multinational corporations (MNCs) consolidate, observed Mr McLane. There is also likely to be more private-equity transactions in Singapore, he noted.

LAST week, major US stock indices closed near record highs despite continued weakness for the fastest-growing companies amid disappointing economic data and mixed earnings reports. This week, traders will take their cues from the Federal Reserve' s comments on Wednesday.

To some economists, the growth outlook does not seem as certain as the Fed' s policy statements would suggest. Data last week prompted some to downgrade their projections for second-quarter growth. Many investors had anticipated second- quarter growth would catapult higher as consumers emerged from a long hibernation with an increased appetite for spending. There is little evidence to suggest the spring splurge materialised. Last week, the world' s largest retailer by sales, Walmart, forecast a modest rebound in earnings growth in the current quarter from the winter quarter.

And, while the headline number for housing starts was positive, analysts cautioned that much of the 13 per cent increase comprised multi-family units. This statistic is often skewed by plans to build high-rise buildings in big cities. Unlike single-family homes, most high-rise buildings are not owned by their occupants and so their construction is not as closely correlated to broader growth.

This week, investors will get a clearer picture of the spring property market when April new-home sales are released. Investors will also see if " housing is starting to regain some of the traction that it lost over the winter and early spring" , said Quincy Krosby, investment strategist at Prudential Financial.

 

> 在 越 南 政 府 緊 盯 戒 備 下 ， 518排 華 遊 行 情 勢 平 和 ！ 但 之 前 脫 序 暴 動 ， 傷 透 台 商 的 心 ， 包 括 鴻 海 、 台 塑 、 寶 成 集 團 砸 重 本 投 資 越 南 ， 共 計 280億 美 金 ， 卻 換 到 這 樣 代 價 ， 在 馬 政 府 逼 促 下 ， 今 天 越 南 駐 台 代 表 裴 仲 雲 在 外 交 部 ， 代 表 越 南 政 府 「 鄭 重 道 歉 」 ， 還 說 「 拜 託 台 灣 的 朋 友 不 要 撤 走 ， 他 們 願 意 以 『 減 免 土 地 稅 、 營 業 稅 、 優 惠 貸 款 』 ， 甚 至 不 計 算 過 去 貸 款 ， 來 彌 補 外 資 損 失 」 。 > >

 

IS IT  TIME to claim all great grand father  lands ????? Is that all chinese from TW and ML mind think so ??????.