singapore stock market news.singapore stock market ,sgx market , singapore stock market blog

CAPITACOMMERCIAL TRUST, gs maintain BUY with target price $1.52

CHINA SPORTS, philip downgrade to HOLD with target price $0.16

CITY DEV, daiwa maintain HOLD with target price $7.24($10.58)

COMFORTDELGRO by gs
COMFORTDELGRO, jpm maintain NEUTRAL with target price $1.65

EPURE, citi maintain BUY with target price $0.24($0.71)

FIRST RESOURCES, dbs maintain FLLY VALUED with target price $0.2($0.3)

GOLDEN AGRI, cimb maintain NEUTRAL with target price $0.21($0.23)

INDOFOOD, cimb maintain TRADING BUY with target price $0.52($0.62)

JASPER, daiwa downgrade to UNDERPERFORM with target price $0.225

KARIN, ocbc maintain BUY with target price $0.18

KENCANA, dbs maintain FULLY VALUED with target price $0.08($0.11)

KEPLAND, uob kay hian remains a BUY with target price $2.90

SGX, cl remains a SELL with target price $4.80

SP AUSNET, cimb maintain OUTPERFORM with target price $1.44($1.71)

VENTURE, bnp initial coverage REDUCE with target price $3.20

WILMAR, cimb maintain OUTPERFORM with target price $3.25($3.30)
WILMAR, dbs         maintain HOLD with target price $2.50($2.80)
WILMAR, mac maintain OUTPERFORM with target price $3

NOL, cimb maintain UNDERPERFORM with target price $1.30
-NOL today announced aggressive cost reduction initiatives as it
wrestles
with the impact of the global economic downturn. This is a positive
surprise. On 21 October, NOL announced that it was reducing Asia-Europe
capacity by 25% and transpacific capacity by 20% from November, which
is
expected to reduce vessel network costs by about US$200m in 2009 (when
including savings on fixed vessel and charter-hire costs). Today¡¯s
announcement is in addition to these capacity cuts, with the highlights
as
follows Retrenchment of the group¡¯s global workforce of about 1,000
positions with the largest impacts being in North America, where the
company’s cost base is highest, including 50 positions in the Singapore
office. The bulk of the staff reductions will be in non-customer facing
roles; Relocation of the Americas¡¯ regional headquarters from Oakland,
California to a more cost effective location elsewhere in the United
States; Changes in the way APL Logistics manages its business to create
efficiencies and clearer line of sight of roles and accountabilities;
Additional business adjustments in Europe and other Asian regions; and
Continuing strong focus on productivity measures to reduce operating
and
overhead costs.
-These measures are likely to result in a US$33m restructuring charge
in
the 4Q08 results, and additional charges in 2009. CEO Ron Widdows
justified
the measures by saying that the current industry downturn was not only
unprecedented, but also beyond a normal cyclical downturn¡± and
expected
challenging conditions to persist for the next few years.
-Maintain UNDERPERFORM and target price of S$1.30 for now; forecasts
and
target under review. Our target price is based on an unchanged trough
valuation of 0.5x P/BV. NOL¡¯s historic P/BV range is between 0.5x to
2.5x.
-While we are positive on the measures announced by NOL, the cost
cutting
initiatives may not be able to offset the severe top-line pressure at
the
Asia-Europe trades, and also the transpacific and intra-Asia trades
moving
into 2009.
-For 2007, staff costs and employee benefits came to US$576m, or just
7% of
group revenue. Hence, the planned 10% cut in the workforce at the
minimum
should help reduce costs by some 0.7% of revenue ¨C which is not a lot
when
Asia-Europe spot rates have collapsed 70-80% yoy. The US$200m savings
from
capacity cuts could be more significant, but with NOL guiding for a
grim
outlook for 2009 profitability, it may still not be enough to keep NOL
in
the black. As a result, we believe that our forecasts need further
downward
revision, likely into losses for the next two years.
-Downside catalysts include falling container rates and declining
container
volumes as the global economies synchronously decelerate into 2009. Our
base case in-house economics view is for a recovery in 2010, but the
probability of our bear case forecasts for continued GDP contraction in
2010 are increasing. Together with record newbuilding deliveries next
year,
the container shipping industry could in turmoil for a while yet.

AMSTRONG, dmg maintain BUY with target price $0.17
-Affected by forex losses. 3Q08 revenue was almost flat at S$48.5m
while
net earnings fell 26.7% to S$2.4m mainly due to a S$2.6m mark-to-market
derivative loss that in turn resulted from unfavourable FX movements.
Additionally, Armstrong¡¯s operating profit was also hit due to the
high raw
materials costs which have not yet abated while increased admin
expenses
attributed to the new factories in Wuhan (China) and Thailand was also
a
factor.
-Dragged down by translation losses. Turnover and net profit would have
stood at S$52.1m and S$3.8m respectively should the S$ stay stable
against
the various Asian currencies and the US$ ¨C this in turn equates to a
6% and
19% gain in top and bottomline in 3Q08. For 9M08, sales and net
earnings
would actually have been higher by 13% and 41% respectively.
-Consumer Electronics, the star performer. Among the company¡¯s various
business segments, sales from Consumer Electronics increased 8% to
S$18m
and accounted for 37.1% of 3Q08 revenue. Growth in Data Storage, which
now
mainly consists of Armstrong¡¯s higher-margined rubber business, inched
up
2% to S$12.4m.
-Due to a drop in automotive demand from the US, however, sales from
Armstrong¡¯s Automotive segment fell 6% to S$11.2m. Additionally, the
company¡¯s Office Automation business also continued to contract as
sales
fell 19% to S$5.9m in 3Q08, inline with Armstrong¡¯s focus on margin
enhancement and resource management strategy.

BEAUTY CHINA, philip downgrade to HOLD with target price $0.42
-Downgrade to HOLD. . In view of the Group¡¯s recent half year
financial
results and the current economic situation, we remain conservative and
have
further revised our fair value estimate to S$0.42. We have changed our
valuation method and pegged 1x to the Group¡¯s FY2008 book value per
share,
translating to 7.69% upside. Despite the Management¡¯s assurance, we
remain
concerned about the Group¡¯s strategy in extending full credit terms to
their distributors, which has in turn increased their exposure to
credit
risk, especially in the current credit climate.
-3QFY2008 and 9MFY2008 financial results. Beauty China Holdings Limited
(¡°Beauty China¡±) reported 31.69% (year-on-year) growth in revenue
from HKD
421.30 million in 9MFY2007 to HKD 554.79 million 9MFY2008. Net profit,
on
the other hand, grew by 15.22% (year-on-year) from HKD 122.26 million
in
9MFY2007 to HKD 140.87 million 9MFY2008. On a quarterly basis, revenue
grew
by 30.66% (yearon- year) from HKD 187.95 million in 3QFY2007 to HKD
245.58
million in 3QFY2008. In addition, net profit grew by 18.56%
(year-on-year)
from HKD 52.23 million in 3QFY2007 to HKD 61.92 million in 3QFY2008.
The
Group attributes the growth to the increase in their point-of-sales in
the
PRC.
-Profit Margins. The Group¡¯s gross profit margin continued to improve,
by
1.28ppts from 62.55% in 9MFY2007 to 63.83% in 9MFY2008; and by 2.31ppts
from 62.28% in 3QFY2007 to 64.59% in 3QFY2008. However, as anticipated,
net
profit margin continued to fall in 9MFY2008 and 3QFY2008, due to the
increase in advertising and promotions. Net profit margin decreased by
3.63ppts from 29.02% in 9MFY2007 to 25.39% in 9MFY2008; and by 2.57ppts
from 27.79% in 3QFY2007 to 25.22% in 3QFY2008.
-Full credit terms extended to distributors. The Group has full credit
terms extended to their distributors, in aid to ensure business
continuity
between both parties and revenue growth. However, in the current global
credit climate and concerns of solvency and liquidity issues, we are
concern about the Group¡¯s strategy which has increased their exposure
to
credit risk. The Management has assured that they have had
long-standing
relationships with their distributors and to date and they have not
experienced any defaults in payment as yet.
-Estimates. Based on the Group¡¯s recent financial results and the
global
economic situation, we have revised our revenue growth forecast to
26.51%
in FY2008, 22.74% in FY2009 and 5.82% in FY2010. These were derived
based
on the Group¡¯s possible production utilization rate over the years. We
also
believe that the Group will still be able to continue managing their
gross
profit margins; hence we have maintained our forecasted gross profit
margins of 63.89% in FY2008, 64.55% in FY2009 and 65.55% in FY2010. In
addition, with the Group¡¯s continuous focus in the advertising and
promotion of their Charming Lady brand, we have maintained our
forecasts
for net profit margins of 24.45% in FY2008, 23.55% in FY2009 and 22.21%
in
FY2010.

ASL MARINE, dbs maintain BUY with target price $0.84($1)

CAPITALAND, cimb maintain UNDERPERFORM with target price $2.30

CHINA HONGXING, dbs downgrade to HOLD with target price $0.24($0.4)
CHINA HONGXING, nomura maintain BUY with target price $0.47

CHINA ZAINO, cimb maintain OUTPERFORM with target price $0.49($0.95)
CHINA ZAINO, uob maintain BUY with target price $0.53

CSE GLOBAL, dbs maintain BUY with target price $0.85($1.24)

DBS, cimb maintain UNDERPERFORM with target price $11.36
DBS, citi maintain SELL with target price $9.50($12.15)
DBS, cl downgrade to UNDERPERFORM with target price $12($18.90)
DBS, csfb maintain UNDERPERFORM with target price $11.50($11.70)
DBS, db maintain BUY with target price $13.80
DBS, jpm maintain OVERWEIGHT with target price $20
DBS, ms maintain UNDERWEIGHT with target price $10($12.50)
DBS, nom maintain NEUTRAL
DBS, ocbc maintain HOLD with target price $12.70($20.10)
DBS, rbs maintain BUY with target price $14.4($15.30)
DBS, uob maintain BUY with target price $14($13.68)

GALLANT VENTURE, ocbc downgrade to HOLD with target price $0.26

GENTING INT, cimb maintain NEUTRAL with target price $0.45

HONGKONG LAND, cl maintain SELL with target price $1.99
HONGKONG LAND, csfb downgrade to UNDERPERFORM with target price $2.07
($3.38)

JAYA HOLDINGS, cl maintain BUY with target price $1.40
JAYA HOLDINGS, dbs downgrade to HOLD with target price $0.64($2.07)
JAYA HOLDINGS, jpm maintain OVERWEIGHT with target price $1.65

JARDINE C&C, gs maintain NEUTRAL with target price $14(from $16.6)

JIUTIAN, uob upgrade to HOLD with target price $0.05($0.1)

KODA, daiwa maintain SELL with target price $0.165
KODA, ocbc maintain HOLD with target price $0.185

MEIBAN, cimb maintain OUTPERFORM with target price $0.31

MIDAS, csfb maintain OUTPERFORM with target price $0.53($0.55)
MIDAS, dbs maintain BUY with target price $0.6
MIDAS, ocbc maintain BUY with target price $0.65

SEMBCORP INDUSTRIES, cimb maintain OUTPERFORM with target price
$3.31($3.6)
SEMBCORP INDUSTRIES, cl maintain OUTPERFORM with target price $3.60
SEMBCORP INDUSTRIES, csfb maintain OUTPERFORM with target price
$3.85($4)
SEMBCORP INDUSTRIES, daiwa maintain UNDERPERFORM with target price
$2.57
SEMBCORP INDUSTRIES, db maintain BUY with target price $3.55($3.45)
SEMBCORP INDUSTRIES, dbs maintain HOLD with target price $2.74($3.88)
SEMBCORP INDUSTRIES, gs maintain NEUTRAL with target price $3.20
SEMBCORP INDUSTRIES, jpm maintain OVERWEIGHT with target price
$3.50($3.40)
SEMBCORP INDUSTRIES, nom maintain NEUTRAL
SEMBCORP INDUSTRIES, uob remains a HOLD with target price $2.85(from
$4.70)

SEMBCORP MARINE, daiwa maintain UNDERPERFORM with target price $2.25

SIA, cimb maintain NEUTRAL with target price $13
SIA, citi maintain SELL with target price $9
SIA, cl maintain BUY
SIA, csfb maintain OUTPERFORM with target price $14($19)
SIA, db downgrade to SELL from Buy with target price $9.60($15.70)
SIA by gs
SIA, ms maintain EQUAL WEIGHT with target price $12

SINGTEL, dbs maintain FULLY VALUED with target price $2.34

VENTURE, csfb maintain OUTPERFORM with target price $7.13
VENTURE, dbs maintain HOLD with target price $6.80($10)
VENTURE, jpm maintain OVERWEIGHT with target price $10.50($11)
VENTURE, nom maintain NEUTRAL with target price $6.21
VENTURE, ocbc upgrade to BUY with target price $7.36($11.21)
VENTURE, ubs maintain BUY with target price $9

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CHINA HONGXING, cimb maintain OUTPERFORM with target price $0.4($0.53)

CHINA TAISAN, daiwa maintain BUY with target price $0.24

FIBRECHEM, dbs downgrade to HOLD with target price $0.28($0.32)

FRASERS COMMERCIAL TRUST, jpm maintain NEUTRAL with target price $0.36
($0.83)

HI-P, csfb maintian OUTPERFORM with target price $0.82
HI-P, nom maintain NEUTRAL

HOUR CLASS, uob downgrade to HOLD with target price $0.54($1.19)

IFS CAPITAL, dmg maintain NEUTRAL with target price $0.43

KEPPEL CORP, csfb maintain NEUTRAL with target price $7.10($7)

KEPPEL LAND, jpm maintain UNDERPERFORM with target price $1.56($3.50)

NOBLE, csfb maintian OUTPERFORM with target price $3.45

OCBC, cimb maintain UNDERPERFORM with target price $5.50
OCBC, citi maintain SELL with target price $4.80($6)
OCBC, cl maintain UNDERPERFORM with target price $5.90($8)
OCBC, csfb maintain NEUTRAL with target price $5($8)
OCBC, db maintian HOLD with target price $5.70
OCBC, dbs maintain HOLD with target price $4.40
OCBC, dmg maintain BUY with target price $6.80
OCBC, jpm maintain NEUTRAL with target price $6.50
OCBC, mac maintain OUTPERFORM With target price $7.56
OCBC, nom maintain NEUTRAL
OCBC, uob maintian HOLD with target price $5.4($5.66)

OLAM, csfb maintain OUTPERFORM with target price $3.65

SEMBCORP MARINE, citi maintain HOLD with target price $2.50($2.85)
SEMBCORP MARINE, csfb maintain NEUTRAL with target price $2.80($2.70)
SEMBCORP MARINE, dbs maintain BUY with target price $2.50($2.26)

SIA, ubs maintain BUY with target price $20

STARHUB, cimb upgrade to NEUTRAL with target price $2.50
STARHUB, citi maintain BUY with target price $2.65
STARHUB, cl maintain OUTPERFORM with target price $2.95
STARHUB, csfb maintian NEUTRAL with target price $2.38
STARHUB, daiwa maintain OUTPERFORM with target price $2.94
STARHUB, db maintain BUY with target price $3.3
STARHUB, dbs maintain FULLY VALUED with target price $2.34
STARHUB, jpm maintain OVERWEIGHT with target price $3($3.50)
STARHUB, ms maintain OVERWEIGHT with target price $3.20
STARHUB, nom maintain NEUTRAL with target price $2.50
STARHUB, ocbc maintain BUY with target price $2.81($3.19)
STARHUB, ubs maintain BUY with target price $2.80($3.10)

UOL, cimb maintain UNDERPERFORM with target price $2.02($2.16)
UOL, cl maintain OUTPERFORM with target price $3.06
UOL, dbs maintain FULLY VALUED with target price $1.90($1.95)
UOL, ocbc maintain BUY with target price $2.88($3.83)

VENTURE, ubs upgrade to BUY with target price $9($11)

CWT, daiwa downgrade to UNDERPERFORM with target price $0.46($1.33)

FIBRECHEM, dbs downgrade to HOLD with target price $0.28($0.32)

FORTUNE REIT, mac maintain OUTPERFORM with target price
HK$4.63(HK$4.46)

FRASERS COMMERCIAL TRUST, csfb maintian NEUTRAL with target price $0.33
($0.57)
FRASERS COMMERCIAL TRUST, dbs maintain HOLD with target price
0.31($0.5)

HI-P INTERNATIONAL, dbs maintain BUY with target price $0.58

HYFLUX , cs maintain OUTPERFORM with target price $2.67($3.60)
HYFLUX , dbs maintain BUY with target price $2.40($3.34)
HYFLUX , jpm maintain OVERWEIGHT with target price $3
HYFLUX by nom

OCBC by gs

PARKWAY, db initial SELL with target price $1

PARKWAY LIFE REIT, cimb maintain OUTPERFORM With target price
$1.30($1.46)
PARKWAY LIFE REIT, dbs maintain BUY with target price $1.19($1.31)

RAFFLES MEDICAL, db initial coverage HOLD with target price $0.6

SEMBCORP MARINE, cimb maintain OUTPERFORM with target price $3
SEMBCORP MARINE, cl maintian OUTPERFORM with target price $3.20
SEMBCORP MARINE, csfb maintain NEUTRAL with target price $2.70
SEMBCORP MARINE, daiwa maintain UNDERPERFORM with target price $2.25
SEMBCORP MARINE, db maintain BUY with target price $2.45
SEMBCORP MARINE, gs maintain NEUTRAL with target price $3
SEMBCORP MARINE, jpm maintain OVERWEIGHT with target price $2.60($4.20)
SEMBCORP MARINE, ms maintain OVERWEIGHT with target price $4.80
SEMBCORP MARINE, nom maintain BUY
SEMBCORP MARINE, ocbc maintian BUY with target price $3.05($3.86)
SEMBCORP MARINE by ubs
SEMBCORP MARINE, uob maintain BUY with target price $2.03($1.92)

SIA, gs maintain SELL with target price $13.90

SIHUAN, daiwa maintain BUY with target price $0.88

SINGTEL, cimb maintian UNDERPERFORM with target price $2.37
SINGTEL, mac upgrade to OUTPERFORM with target price $2.88($3.50)
SINGTEL, nom maintain BUY with target price $3.27

ST ENGINEERING, cimb downgrade to UNDERPERFORM with target price $2.61
($3.39)
ST ENGINEERING, citi maintain BUY with target price $2.80($3.20)
ST ENGINEERING, cl maintain BUY with target price $3.80
ST ENGINEERING, csfb maintain NEUTRAL with target price $3.14($3.22)
ST ENGINEERING, db maintain BUY with target price $3.30
ST ENGINEERING, dbs maintain HOLD with target price $2.80
ST ENGINEERING, jpm maintain NEUTRAL with target price $2.80
ST ENGINEERING, ms maintain OVERWEIGHT with target price $3.60
ST ENGINEERING, nom maintain NEUTRAL
ST ENGINEERING, ocbc maintain HOLD with target price $2.54($2.95)
ST ENGINEERING, ubs maintain NEUTRAL with target price $2.50($2.95)
ST ENGINEERING, uob maintain HOLD with target price $2.40($2.83)

UOB, nom maintian BUY with target price $18.10

VENTURE, cimb maintain OUTPERFORM with target price $8

YANLORD, citi maintain BUY with target price $1.21($4.03)

ASCENDAS INDIA TRUST, citi maintain BUY with target price $0.79($1.11)

ASCENDAS REIT, mac maintain OUTPERFORM with target price $2.44($2.89)

CAPITACOMMERCIAL TRUST, mac maintain OUTPERFORM with target price $1.85
($3.05)

CAPITALAND, cimb maintain UNDERPERFORM with target price $2.30($4.21)
CAPITALAND, cl maintain BUY with target price $4.48
CAPITALAND, citi maintain SELL with target price $3.11
CAPITALAND, csfb maintain UNDERPERFORM with target price $2.78
CAPITALAND, dbs maintain HOLD with target price $2.89($2.91)
CAPITALAND, jpm maintain OVERWEIGHT with target price $6.85
CAPITALAND, mac maintain OUTPERFORM with target price $3.87($7.04)
CAPITALAND, ms maintain EQUAL WEIGHT with target price $3.28
CAPITALAND, nom maintain REDUCE with target price $2.85
CAPITALAND, ocbc maintain HOLD with target price $3.28($3.71)
CAPITALAND, ubs maintain BUY with target price $3.70

CAPITAMALL TRUST, mac maintain OUTPERFORM with target price $2.98

CHARTERED SEMICONDUCTOR, citi maintain SELL with target price
$0.24($0.46)
CHARTERED SEMICONDUCTOR, csfb maintain NEUTRAL with target price $0.32
CHARTERED SEMICONDUCTOR, dbs upgrade to HOLD with target price
$0.38($0.66)
CHARTERED SEMICONDUCTOR,  gs upgrade to NEUTRAL with target price $1.60
CHARTERED SEMICONDUCTOR,  jpm maintain UNDERWEIGHT with target price
$0.18
CHARTERED SEMI, mac maintain UNDERPERFORM with target price $0.2
CHARTERED SEMICONDUCTOR, ms maintain UNDERWEIGHT with target price
$0.22
($0.43)
CHARTERED SEMICONDUCTOR, nom maintain NEUTRAL with target price $0.26
CHARTERED SEMICONDUCTOR, ocbc maintain HOLD with target price $0.31

CHINA XLX, cimb upgrade to OUTPERFORM with target price $0.47($0.76)
CHINA XLX, dbs downgrade to HOLD with target price $0.33($0.4)
CHINA XLX, uob maintain BUY with target price $0.57

CITY DEV, mac downgrade to NEUTRAL with target price $6.28($11.70)

DAIRY FARM, csfb initial coverage with target price $4.63

HYFLUX, csfb maintain OUTPERFORM with target price $2.67($3.60)
HYFLUX WATER TRUST, dbs upgrade to BUY with target price $0.61($0.53)

INNOVALUES, cimb maintain NEUTRAL with target price $0.14($0.15)

singapore stock market news,singapore stock market

ALLGREEN PROPERTIES, uob maintain BUY with target price $1.56

AVI-TECH, ocbc initial coverage HOLD with target price $0.16

CHARTERED SEMICONDUCTOR, citi maintain SELL with target price
$0.46($0.7)

COSCO, cimb maintain OUTPERFORM with target price $2.89
COSCO, csfb maintain UNDERPEFORM with target price $1.20
COSCO, ml maintain NEUTRAL with target price $1.75

FIRST SHIP LEASE TRUST, uob maintain BUY with target price $1.80

OLAM, mac maintain OUTPERFORM with target price $2.90

RAFFLES EDUCATION, ml maintain BUY with target price $2

RICKMERS MARITIME, ocbc maintain BUY with target price $1.22

SEMBCORP INDUSTRIES, db maintain BUY with target price $5.50

ST ENGINEERING, uob maintain HOLD with target price $2.83

CHINA FISHERY, cimb maintain OUTPERFORM with target price $2.90

MMP PRIME REIT, ubs upgrade to BUY with target price $0.95

MOBILE ONE, dbs upgrade to BUY with target price $2.20

SIA ENGINEERING, uob upgrade to BUY with target price $3

SINGTEL, csfb maintain OUTPERFORM with target price $4($4.15)

SINO-ENVIRONMENT, ocbc maintain BUY with target price $1.68

STARHUB, dbs maintain FULLY VALUED with target price $2.50($2.60)

WILMAR, db initial coverage BUY with target price $4

WILMAR, db initial coverage BUY with target price $4
-A misunderstood downstream play that offers double digit growth.
Wilmar is
a key beneficiary of growing consumption of edible oils and proteins in
China. As the largest refiner, rising industry CPO output will raise
downstream profits, which along with expansion into other markets
should
ensure double digit growth and lower volatility to earnings. We
forecast
51%, 11% and 17% EPS growth in FY08E, FY09E and FY10E. We initiate with
a
Buy and TP of S$4.0.
-Vegetable oil growth drivers in place, seeking new ones. Wilmar has
strong
manufacturing, marketing and distribution network in its China
vegetable
oil and proteins business. It also has the strongest vegetable oil
brand in
Arawana¡±. Wilmar plans to replicate this model in adjacent products
such as
cereal milling, which is larger than the cooking oil markets, and
provides
it with substantial growth opportunities.
-Not a plantation play, refining and retail hedge out CPO price
declines.
We have a bearish outlook on CPO near term, but much of this is already
priced in. Less than 20% of Wilmar¡¯s earnings come from plantations,
so the
correction in the stock, which has been sold down as a proxy for CPO
prices
is overdone, in our view. Increased margins in refining, consumer
products
and volume growth should adequately compensate for lower profits from
plantations.
-Target price of S$4.0 based on ROE- COE methodology. Our target price
of
S$4.0 is based on ROE-g/COE-g approach, which we crosscheck with DCF
and a
sum-of-the-parts method. Our TP implies 13x FY09 earnings versus
average
trading multiple of 15x. Changes in the Chinese government¡¯s
agricultural
policies can negatively impact Wilmar. Animal diseases can affect
soybean
meal demand. Trade disputes, commodity cost and price volatility, and
currency swings are near-term market risks.

CHINA FISHERY, cimb maintain OUTPERFORM with target price $2.90
- Strong fundamentals. We believe that CFG¡¯s fundamentals remain
strong as
rising demand for fishery products coupled with limited supply of
CFG¡¯s key
catch species due to fishing quota systems should help to support fish
prices and ensure profitability. We do not expect fishmeal prices to
hit
previous lows of US$800/tonne despite softer soymeal prices as fishmeal
is
preferred to substitutes due to its higher protein content.
- Debt level remains manageable. Concerns regarding the company¡¯s debt
levels are overplayed as a chunk of the US$218m debt is in the form of
a
long-term bond, not due till 2013. We forecast a gearing of 0.8x with
comfortable interest coverage of 5.5x for FY08.
- Maintain FY08-10 EPS estimates. Our higher trawling ASP assumptions
are
offset by lower Chilean Jack Mackerel contribution forecasts,
conservative
fishmeal ASP assumptions from FY09 due to softer commodity prices, and
higher vessel operating cost expectations.
- Maintain Outperform and target price of S$2.90. Despite its strong
fundamentals, China Fishery trades at a historically low forward
valuation
of 4.3x, a steep discount to its peers, while prospective dividend
yield is
6.8%. Our target price remains S$2.90, still based on 14x CY09 P/E.
Maintain Outperform.

This is no time for risk-taking.

I’ve been warning you for months about deteriorating credit conditions. If you haven’t done so yet, I urge you once again to park your cash balances in government-only securities or mutual funds that are strictly designated “government” or “Treasury” money-market funds.

The entire world is now running hard to buy government bonds, both Treasuries and foreign government bonds like German “bunds.” Yields continue to decline.

The ongoing crash in credit markets confirms this strategy. You can tell because everything else is dropping, even investment-grade corporate bonds and municipal bonds.

Once again, buy government debt now.

If you’re an American, this means short-term Treasury bonds and 90-day T-bills, which you can buy through a broker.

Equally, a government designated Treasury money-market fund, like Vanguard Admiral Treasury Fund (VUSXX) can save your portfolio. This fund manager charges just 0.10% per annum (US$50,000 minimum).

You can also look at the Vanguard Treasury Money Market Fund (VMPXX), charging 0.24% per annum and requiring a US$3,000 minimum investment. Both funds are secure, won’t break the buck and will protect your assets. I’d scramble to place my liquidity proceeds in Vanguard before most U.S. banks, except J.P. Morgan.

Government debt is now highly in demand. Last week, Treasury bills reached their lowest yields since the Japanese bombed Pearl Harbor in December 1941 at just 0.04%. These are Depression-era yields at the moment as investors dump everything and flock to safety. During the Great Depression benchmark T-bill yields actually turned negative!

The odds of that happening again are not only likely but probable as credit conditions are now literally frozen. The global credit system is effectively at a standstill. Lenders are hoarding cash and denying liquidity to other banks and institutions.

At some point I expect all of the Fed’s efforts, including help from other central banks, to finally put a lid on this crisis. Global central banks are already pumping in liquidity at an astonishing rate.

Until central banks win the battle against deflation, make sure your cash balances or portfolio liquidity is protected. Most banks and money-market mutual funds remain a high-risk place to park your cash. Make sure you have government securities sitting in your portfolio.

CAPITARETAIL CHINA TRUST, daiwa maintain OUTPERFORM with target price
$0.87
($1.30)

COSCO, csfb maintain UNDERPERFORM with target price $1.20($2.25)

JARDINE MATHESON, citi maintain SELL with target price US$21.9(US$31)

KEPPEL CORP, csfb maintain UNDERPERFORM with target price $7.20($9.80)
KEPPEL CORP, citi maintain BUY with target price $12.97

MEMSTAR, cimb initial coverage BUY with target price $0.06

OLAM, jpm maintain OVERWEIGHT with target price $2.50

PARKWAY LIFE, ubs upgrade to BUY with target price $1.14

RICKMERS MARITIME, ocbc maintain BUY with target price $1.22

SEMBCORP INDUSTRIES, csfb maintain OUTPERFORM with target price $4.20
($5.20)

SEMBCORP MARINE, csfb downgrade to UNDERPERFORM with target price $2.90
($3.90)

SIA ENGINEERING, gs maintain BUY with target price $4.60($4.80)
ST ENGINEERING, citi maintain BUY with target price $3.2

SPH, jpm maintain OVERWEIGHT with target price $4.65

STRAITS ASIA by gs

TELECHOICE, wc inital coverage BUY with target price $0.3

YANGZIJIANG, csfb downgrade to UNDERPERFORM with target price
$0.5($0.63)

YANGZIJIANG, csfb downgrade to UNDERPERFORM with target price
$0.5($0.63)
- We are reducing our target price from S$0.63 to S$0.50 while we
downgrade
our rating from Neutral to UNDERPERFORM.
- Following a 73% correction YTD, Yangzijiang is trading at 1.6x 2008E
P/B
which appears to be in line with the lower range of the its regional
peers.
- While newbuild contracts have sharply slowed down, the company
continues
to execute on existing order book. We believe that Yangzijiang is on
course
to deliver 26 vessels in 2008 as planned. We believe that margin
squeeze
remains a risk for the company.
- We are trimming our new contract estimates by US$300 mn for 2008E and
US$200 mn for 2009E, resulting in a 8-10% earnings cut in 2009-10E net
income estimates.
- We have revised our base-case TP to S$0.5 based on a target multiple
of
9x 09E earnings (previously 10x) to reflect deteriorating capital
markets
and a lack of short-term catalysts. That said, Yangzijiang appears to
be
trading closer to trough valuations than some of its peers.

The global economy is now slowing with several countries in Europe and Asia either in recession or at the brink of a contraction in output. But China, the world’s main driver of commodities consumption this decade, continues to grow, suggesting the severe declines witnessed for raw materials since July are way overdone.

Since hitting a peak on July 3, the benchmark Reuters/CRB Index has plunged 25%. All commodities representing this index have declined sharply, including crude oil (32%), gold (22%), copper (22%) and the grains (28%). The chart below, dating back to June, clearly shows an oversold condition based on the MACD that has progressively worsened over the last 60 days.

The “China Factor” applied to commodities demand remains one of the more formidable equations supporting raw materials. As commodities have crashed recently, the Chinese are once again hoarding industrial metals like copper, tin and steel scrap. This demand won’t disappear because of credit problems in the United States – not with USD inflation-adjusted interest rates in negative territory. The U.S. Fed Funds currently stand at 2% versus 5.6% inflation through July.

The Chinese have started to expand credit again after tightening the money-supply since 2006 in small increments. China can’t afford a recession; a major contraction in output would devastate the economy and result in tens of millions of people becoming unemployed. The People’s Bank of China also has the capacity to spend heavily to finance a continued expansion. 

As Eric put it in a recent blog post…

“If you think the Federal Reserve has muscle, think again. China is home to more than $1.7 trillion dollars in foreign-exchange reserves. They can literally bail-out the entire American banking system with one check! They’ll do everything they can to keep this expansion going strong.”

In short, commodities, which were heavily overbought heading into 2008, are now heavily oversold.

In Eric’s view, the U.S. government played a big role “talking down” commodities by attacking oil trading speculation. In an election year, it’s really no surprise the Feds are targeting oil prices. They wanted lower oil prices and they got it. But their talk won’t be able to hold down prices forever.

Yes, the global economy is slowing this fall. Europe is several months behind the United States in this credit squeeze and Japan is basically in recession again. But the emerging markets should get a dose of good news as oil and food prices have plunged by about 25% since July.

These countries, including China, will continue to expand even at the expense of weaker exports. China, India and many other emerging markets are piling billions into domestic infrastructure projects. Eric expects these and other domestic projects to keep those markets humming until the West can stabilize credit markets.

Business Times - 23 Sep 2008

SGX deters naked shorts with disclosure measures

Dealers laud move, saying it will provide more clarity to the investing
public

By LYNETTE KHOO

(SINGAPORE) To improve transparency and deter abusive naked
short-selling,
the Singapore Exchange (SGX) will start disclosing information on naked
shorts with immediate effect.

From today, SGX will publish the list of buying-in securities and the
volume of shares sought at 11am daily. The information will be
published on
SGXNET and on the SGX website.

SGX will publish the list of securities it bought-in, and the volume
and
dollar value, at 8.30am the following business day.

These measures are meant to ‘enhance existing transparency in the
market
and deter failed deliveries’, SGX said in a statement.

The Central Depository currently has a buying-in process that ensures
short
positions are covered by the end of the third trading day from the
short-sale date, at a price at least two bids higher than the last-
traded
price. Buying-in takes place from 11.30am every day.

SGX warned market participants against short-selling in the buying-in
market or simply put - cumulative short-selling that has the effect of
forcing down prices further before SGX buys-in.

‘Cumulative short-selling of individual share securities without the
discipline of borrowing to cover delivery obligations may threaten the
orderliness of our market, with implications for the integrity of the
clearing system,’ it said.

There will be a penalty of 5 per cent of the value of the failed trade
subject to a minimum of $1,000, on top of the current processing fee of
$30
per contract for buying-in.

From Sept 25, SGX will punish any failure to deliver shares in the
buying-in market with a $50,000 fine and/or disbarment from
participating
in the buying-in market.

SGX said it will review these measures after a month, and fees will be
reviewed from time to time.

The latest move by the exchange comes on the heels of short-selling
curbs
imposed by regulators in Taiwan, Australia, Ireland and Europe
following a
ban by the US Securities and Exchange Commission last week. Such bans
have
since drawn criticism that many hedge funds could be squeezed out of
business.

But a draconian curb on short-selling is unlikely, as SGX assured
yesterday
that trading of stocks has been orderly and settlement has been timely
despite current market turbulence and global financial uncertainty.

Dealers yesterday lauded the move by SGX, saying it will provide more
clarity to the investing public and deter abusive short-selling from
bringing down companies.

‘If you ask me ‘Should it have been earlier?’ my answer is definitely
yes,’
said DMG & Partners Securities senior dealing director Gabriel Yap.

‘The situation we have seen in the US in the past week shows very
clearly
that naked shorts with the intention of bringing down a company are a
very
serious thing. The least we can do is to publicise or have greater and
more
in-depth information pertaining to naked shorts.’

A dealer with a local brokerage said he believes the new measures are
aimed
at increasing market awareness, akin to those already in effect on the
Australian and Hong Kong stock exchanges.

The Australian Stock Exchange discloses both naked and covered
short-selling positions, while the Hong Kong bourse collates data on
borrowed scrip and releases a summary report twice a day.

‘This will give investors some sense of direction on where the market
is
heading,’ the dealer said.