UOL @ 2.35

UOL Consortium Wins Bid For One-North Condo

Extracted From Dow Jones Newswires.

By Kevin Lim Of DOW JONES NEWSWIRES

SINGAPORE (Dow Jones)--A joint venture between United Overseas Land Ltd. (U14.SG), Kheng Leong Group and Low Keng Huat Ltd. (L32.SG) has won the bidding to develop the first condominium complex at Singapore's One-North research hub.

Liam Wee Sin, group general manager of UOL, told a press conference Tuesday that the joint venture, Vista Development Pte. Ltd., paid the Singapore government S$108.9 million for the land.

This works out to about S$255 per square foot of built-up space, he said.

When completed by the end of 2008, the futuristic 350-380 unit complex with sky gardens and aerial linkways will house researchers and other people working at One-North.

The 200-hectare One-North site has been set aside for research and development in the western part of the city-state near the National University of Singapore.

Vista is 50% owned by Kheng Leong, an investment company controlled by the family of Wee Cho Yaw, who is chairman of United Overseas Bank Ltd. (U11.SG), one of Singapore's largest lenders.

UOL owns 30% of the Vista with the remaining 20% owned by Low Keng Huat. Both the Wee family and UOB have stakes in UOL.

Pratik Burman Ray, a property analyst at UOB's stock broking arm UOB-Kay Hian, said the project's break-even cost will likely be in the region of S$550 per square foot.

This estimate takes into consideration the higher cost of building such a development and likely interest payments over the development period.

Chong Lit Cheong, chief executive of JTC Corp., the government agency responsible for the island's science and industrial parks, said One-North will eventually have more than 20,000 apartment units when fully developed 20 to 30 years from now.

Biopolis, a complex that houses government-funded institutes and companies engaged in medical and biotechnology research, is already operating in One-North, as is the Singapore campus of Insead, a European business school.

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Disclaimer: The above information is for your pleasure reading only. USE THE INFORMATION AT YOUR OWN RISK. Make your own decision for any investment.

CapitaLand

Temasek has sold 200 million shares in CapitaLand at $2.90 per share. The share is mainly sold as a placement to investor. Temasek is selling around 7.5% stake in CapitaLand and after this sale, Temasek holding still has around 44.5% stake in CapitaLand after this sale. This amount is around 4% discount to the closing price of $3.02 at Friday.

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Comments: This is the second sale done by Temasek holding. The first was SMRT. Before this sale, I was thinking that Temasek will be doing a placement share on Singtel but they decided to do a placement on SMRT and CapitaLand. Nevertheless, this should have a some minimum impact (limited movement in share price) on other Temasek Linked Companies (TLC) share price these few weeks as investors do not know whether Temasek will be doing another round of sale on other TLCs. This is due to the fact that Temasek has history placing the placement price lower then the current market price to generate interest for their placement exercise. Sometime, I am wondering why must they do it this way. So unfair to the investor that hold the share. If those private investor feel that the company is worthwhile investing then they should pay a slight premium instead of getting discount. So unfair to small time investor. If Raffles holding can sell their asset at a premium, why can't Temesak sell their share at a premium too? The only case that I can think that company are selling their company share at a discount is when they need fresh fund or they are facing problem, which is normally not the case for TLC. This comment is my personnel view on this share and I do not have any vest interest in this counter.


Disclaimer: The above information is for your pleasure reading only. USE THE INFORMATION AT YOUR OWN RISK. Make your own decision for any investment.

Property Bubble - A pessimistic view

House-price bubble set to hit semis, warns analyst

Peter Clarke, EE Times


LONDON - Malcolm Penn, chief executive of market analysis firm Future Horizons, warned that a house-price boom that has taken hold across the developed world is set to be biggest bubble in global economic history. When it bursts it will almost certainly trigger a collapse of the semiconductor market, just as the stock market bubble of 2000 did, Penn said.

Penn, writing in a monthly newsletter, acknowledged that such bubble trigger points are almost impossible to forecast, and, in the absence of such as burst, stuck to his previous prediction for semiconductor market growth in 2006 of 6.0 percent.

Penn said that at the present time semiconductor equipment purchase was moderate and that indicated the chip industry would avoid serious overcapacity in 2006. "Our big worry is the economy," Penn wrote saying that he is starting to lose confidence in the economic forecasts of the International Monetary Fund (IMF). "Right now the IMF is remarkably bullish, with a growth forecast of 4.4 percent, up 0.1 percent on 2005."

Penn argued that after three years of growth above the long-term average, it was time for some below average growth. The alternative would be a more catastrophic change later. "The economy is currently full of uncertainties, not the least being the current slow down in overall consumer spending, and the inevitable bursting of the (global) house price bubble," Penn wrote.

Penn cited an article in The Economist and reported that the total value of residential property in developed countries had risen by more than $30 trillion over the past five years, to $70 trillion, an increase equivalent to 100 percent of those countries' combined GDPs.

Soft landing possible

Penn went on to say that such rapid growth dwarfed the global stock market bubble of the late 1990s which demonstrated an increase over five years at 80 percent of GDP, and the Wall Street crash (55 percent of GDP). Penn also observed that the stock market crash of 2000 triggered a 32 percent decline in the semiconductor market in 2001.

Penn said that if the global economy grows at 4.4 percent in 2006, the semiconductor market would go through the roof with already tight capacity triggering shortages and price rises.

"If the economy slows, however, it WILL take the semiconductor market with it," Penn wrote. "It will cause demand for boxes to drop, and with it chips, which means automatic overcapacity, a collapse in ASPs, and a global market slowdown, the extent of which will be governed by how much the economy slows."

Penn added that current restraint in fab building by the chip makers should allow the industry to accommodate a moderate slowing in demand without a major crash, provided this triggers further conservatism in capital expenditure.

"Under such a scenario, a soft rein-back scenario is entirely plausible, hence our 6.0 percent 2006 market forecast number, the same as we were postulating in January 2005," Penn concluded.

UOL @ $2.29

UOL announced the unaudited second quarter financial statement today and the following is the summarized result. 2Q Report

UOL	2Q05	2Q04	1H05	1H04
Turnover ($'000)	101,552	102,436	203,808	204,821
Pretax Profit ($'000)	48,375	38,192	75,311	66,918
Net Profit ($'000)	37,257	38,192	58,372	56,086
Dividend Declared	Nil	Nil	Nil	Nil

The turnover for UOL in the second quarter is lower compared to 2Q04 and the profit is down around 2%. For year 2005(End 30 June 05), there is still a profit increase of around 4%. Based on the income statement for 2nd quarter, hotel operation, service charge, interest and foreign exchange gain are the main operation that contribute higher revenue in 2nd quarter.

The main reason for lower property investment is due to the absence of income from UOB building in Xiamen, China and the UOL building along Somerset Road, Singapore, which are undergoing conversion and redevelopment. Furthermore, with the sale of UOB share, dividend income is also reduced. Result of the associates were affected by the closure of 25% owned Marina Mandarin Hotel for major refurbishment works in May 2005.

The positive news from the report is that the NAV per share for the group has increased from $2.42 to $2.81 and NAV per share for the company has increased from $1.51 to $.182.

Comments:

The only positive news from the annoucement is that the NAV per share has improved. With Singapore economy improving and tourist expect to increase in the next two quarters, the hotel operation should improve the revenue for UOL. In additional with major refurbishment work completing soon. It should yield higher rent from the improving market.

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Disclaimer: The above information is for your pleasure reading only. USE THE INFORMATION AT YOUR OWN RISK. Make your own decision for any investment.

Property Stocks

Extract fm Report by GKGoh dated 20-July,

Latest government measures will give a fillip to residential property segment.
The government has just announced changes to its property policies, covering three major areas:

1. caps on bank financing for residential properties;
2. limits on the use of CPF funds for property purchases; and
3. restrictions on foreign ownership of lands and properties (details in the Appendix).

Although the government said it is not looking to stimulate the local property market, our view is that the net outcome of the changes will be mildly positive for the residential property market, especially the lower- to mid-price range of the market.

Why now?
Our guess is that the government believes there is sufficient slack in the property market. As at end-Mar 05, there were 19,790 units of completed but unoccupied private residential units, or 8.8% of the total stock. This overhang has been keeping overall property prices in check despite the steady progress of the Singapore economy over the past two years. With General Elections around the corner, the timing for change could not be better.

The key positive for the property sector is the improved cash affordability that comes from two measures:

1. a higher Loan-to-Value (LTV) limit for housing loans (up from 80% to 90%); and
2. a lower cash payment requirement for private residential and HDB homes from 10% to 5%.

This improved affordability will help boost buyer sentiment, especially in the lower-end market, which has been lagging behind the higher-end market this year. With stabilised HDB prices, current owners may potentially upgrade to private properties. With the reduced cash down payment requirement, more first-time buyers can directly migrate to lower-end private properties.

Developers which are most geared to the lower to mid-end markets are City Developments (CIT SP, S$8.85, Hold), Allgreen (AG SP, S$1.27, Hold) and MCL Land (MCL SP, S$1.50, Hold).

In addition, foreign buying is expected to increase with the relaxation of rules on foreign ownership. These will benefit higher-end developers such as Wheelock Properties (WP SP, S$2.90, NR), Wing Tai (WINGT SP, S$1.18, NR) and Keppel Land (KPLD SP, S$2.98, Buy).

Another Report by DBSVickers dated 20-Jul here. Extract fm this report,

Disclaimer : Above Materials are Meant to be used for Reference ONLY. It does not represent a recommendation from any of us

UOL@2.20

UOL is one of Singapore property companies in Singapore. The properties that is under UOL in Singapore are as follow:

Property	Tenure	Date Completed
Faber House	Freehold	1973
Odeon Towers	999 Year Lease From 1827	1992/2003
UOL Building	Freehold	1975
United Square	Freehold	1982/2002
Central Plaza	99 Year Lease From 1991	1994
Novena Square	99 Year Lease From 1997	2000
The Plaza	99 Year Lease From 1968	1974/1979
Plaza Parkroyal	99 Year Lease From 1968	1971/1979
New Park Hotel	Freehold	1976/1981
Grand Plaza Parkroyal	99 Year Lease from 1993	1996

UOL has other properties and hotels, which are located oversea as well. For more information regarding these properties and hotels please refer to UOL website.

The share price of UOL range from S$1.22(Jan 2001) to around S$2.02(Dec 2004). Now it is trading at S$2.20.

UOL	2000	2001	2002	2003	2004	1Q05
Turnover (M$)	297.47	315.39	464.99	427.44	411.82	102.256
Margin (%)	48.05	20.99	23.11	24.50	30.68	NA
ROE (%)	5.55	3.65	9.36	4.54	20.71	NA
EPS ($)	0.122	0.115	0.263	0.1278	0.507	NA
Dividend ($)	0.08	0.08	0.08	0.03	0.33	NA

Comments:

Based on UOL annual report, UOL's Singapore properties contribute almost 62% of the total turnover even throught it only constitute less than 50% of properties held by UOL and Singapore properties has highest asset value(almost 70%).

Disclaimer: The above information is for your pleasure reading only. USE THE INFORMATION AT YOUR OWN RISK

Capitaland

I bought some last year because there were a lot of hype about this stock with properties in China and Australia and was still a laggard and cheapeast amongst the lights of CDL, Keppeland,Singland.

Greedy, still holding it thinking I might get some goodies in the form of MapleTree some other distributable REITS or maybe some casino fever may drive it sky high.

Saw Kim Eng's report that says the current RNAV is $2.12 and that its trading at 8% premium.This prompted me to check out what made him arrive at RNAV of $2.12.

(1) Took the balance sheet: (net asset - minority interest) / total ordinary shares and walah .... came up to $2.12 !!
(2) At $2.30 Trailing PER is 18.8. STill thinking, how can I project its 2005 earnings .... Any1 can shed some light.
(3) The property index is way higher that STI !

So from the quantitative aspect this analyst is right ....