SPH - Q408 Estimates

FY08
- Q1 : EPS = 7ct
- Q2 : EPS = 6ct ; DPS = 8ct
- Q3 : EPS = 8ct

FY07 : Payout Ratio = 81.3%
- Q1 : EPS = 7ct
- Q2 : EPS = 7ct ; DPS = 7ct
- Q3 : EPS = 10ct
- Q4 : EPS = 8ct ; DPS = 19ct

FY06 : Payout Ration = 88.9%
- Q1 : EPS = 6ct
- Q2 : EPS = 5ct ; DPS = 7ct
- Q3 : EPS = 11ct
- Q4 : EPS = 5ct ; DPS = 17ct

From the above, EPS for Q4 is usually lower than Q3 (same also for FY05). However, for FY08, recent published ADEX figures is suggesting that SPH may show a strong Q4 earnings. If I were to assume an EPS of 9-10cts (use 10cts) and using an 80-90% payout ratio (reference from past years), we can expect a final DPS of 17-20ct. Note that if I were to take a Q4 EPS of 8ct (same as Q3), the final DPS would be 15-18ct.

A recent DBSV report is forecasting a 24ct final DPS but I think that would be a very optimistic case. Although earnings from their mainstream income of ADEX, Paragon and Sky@Eleven will likely continue to be strong, I'm expecting Net Profit to be dragged down by their Investment Income (same as Q3).

Nevertheless, from past trends of SPH, the share price will usually start to creep up slowly, leading towards their FY08 results announcement sometime in B/Oct. I hope to see it hit at least $4.50 and possibly higher if more reports, similar to DBSV appears. :D

FYR, my recent buys,
- 10 Jul 08 : $4.19
- 15 Jul 08 : $4.08
- 21 Jul 08 : $4.04
- 25 Jul 08 : $3.99 ; Contra off on 31 Jul-08 : $4.03
- 19 Aug 08 : $4.01

Comments
I used to be a long term investor of SPH. In 2005, SPH was the No.1 stock in my portfolio. However, over the years, I have noticed that, although SPH is a fundamentally strong stock, it's price fluctuations within a year can range from sub-$4 to $4.8x. The price run-up usually occurs prior to their mid-year and final year results and the decay, after it goes xd. From 2006, I have changed my strategy to holding only a small position of SPH, buying more on price dips and selling on price jumps of 10-20cts. This way, I make more from Capital Gains as compared to holding for the dividends. In between, the cash could also be better deployed for other investments/trades. This year, I'm planning to hang on to my SPH and wait for bigger Capital Gains of at least 10-15% before selling. Wish me luck! :D


Disclaimer : Not an inducement to buy, do your own research!

AllCo -> Frasers

The sale of Allco Fianance's stakes in Allco and the Trust mgmt co. to Frasers was completed on 14-Aug-08 as per their SGX Annc. So, what can we expect fm now?

Some background,

Allco
- Gearing high at 44%
- Allco Finance facing severe credit crunch
- Moody's downgraded Allco
- Allco planned to sell Aussie assets to reduce gearing and focus on Asia

Frasers
- Initially planned to hv own REIT for their Office assets
- Decided to takeover Allco and inject their assets into Allco at a later date

I see 3 possible scenarios fm now,

1) Continue with AllCo's Plan
- Sell off Aussie assets as Frasers may not hv the experience in Aussie mkt
- Money raised will be used to purchase assets fm Frasers

2) Issue New Shares as Payment for Frasers' Assets
- Frasers hv only 18%+ stake in Allco and may be willing to increase that (they hv 51% stake in FCT)

3) Equity Fund Raising at Discount
- Will subscribe for all excess (same as Mapletree and PST)
- Good for Frasers as they get to increase their stake in Allco at a discount
- Funds raised to be used to purchase Frasers' assets

IMO, (3) would be the worst case scenario (for shareholders) as it'd cause the share price to likely free fall to the New Shares discount level (same as Mapletree which dropped 20%) altho' it could be lower if they give a smaller discount (PST offered at 5%).

In all 3 scenarios, the yield will very likely drop as current yield of 9.6% @ $0.715 is already high and yield accretion is only possible if they fund any acquisition via debts.


Other Comments

Positives
- With Frasers, a lot of uncertainties have been removed
- Moodys will likely revise their ratings positively
- Refinancing of their debts will now be easier and they should be able to get competitive rates
- Best yielding Office REIT (KREIT, CCT aro' 6%)
- With Mr Lee Hsien Yang in F&N, shareholders ought to be better respected

Negatives
- Funds still need to be raised for their intended acquisitions from Frasers
- At last count, 6 other REITs are offering better yields


To be continued if I can think of anything else .....

Banks

Singapore Yield Stocks

For readers who are interested in Singapore Yield stocks that are listed in SGX. You can check the following link:

Singapore Yield Stocks: Information like Price vs Yield and PE of SGX Stocks in our Watch-List that gives At Least 4% Yield

Singapore REIT DATA

For those reader who are interested in Singapore Reit information. You can check out the following link:

SGX REIT DATA - Information like yield of Reits listed in SGX Market. IPO and placement price of Reits. Monthly performance of Reits.

Singapore Reits - News and Analyst Report related to Reits listed in SGX Market

Forum

Thank you for visiting this blog site. Currently, the members of this blogsite will not be actively updating content in this site as we have moved our effort onto a forum. Please click here to visit the forum instead.

Once again. Thank you for taking time in visiting this blogsite.

REIT Yield - Merrill Lynch

Extracts fm ML Report dated 30-May-06 (click on the tables for a bigger picture),

Share price performance
The Singapore REIT sector has experienced average share price declines of -5% over the past month which is better than Singapore developers -10% and the Straits Times Index at -7%. The best performing REIT has been Ascott Residential Trust (ACTRF,– – –,1.14) and the worst has been Mapletree Logistics Trust (XHWAF,B-1-7,S$0.92).

Stable interest rate outlook
10 year government bond yields appear to have stabilized in both the US (circa 5.0%) and Singapore (3.50%) with the yield around 1.50% which compares to the five year historical average of 1.18%. We maintain our view that 10 year bond yields are peaking and that the US 10 year bond yield should decline in 2007.

Undemanding yield gaps
The Singapore REIT sector has an average FY06E DPU yield of 5.3% which compares with the Singapore government 10 year bond yield (risk free rate) of 3.50%. The yield gap of 1.80% is undemanding when viewed globally where REITs have traditionally traded at between 1.0% and 2.0% above their respective risk free benchmarks.

Preferred picks
Our preferred picks within the sector are Prime REIT (XHWAF,B-1-7,S$0.92), Suntec REIT (XHWAF,B-1-7,S$0.92) and Ascendas REIT (XHWAF,B-1-7,S$0.92). While we remain positive on the outlook for both CapitaMall Trust (XHWAF,B-1-7, S$0.92) and CapitaCommercial Trust (XHWAF,B-1-7,S$0.92) the pending capital raising could hold back the stocks.

2005 Performance of STI

STI was at 2070.15 on 3 Jan 2005 and closed 2,347.34 on 30 Dec 2005. An increase of 13.4% for year 2005. 2005 is also a year that this blog was set up to record all the news of the share and IPO that interest us. Ever since the blog was setup, I found that my trading activities has increase compared to the rest of the years. News and discussion really increase the trading activities and furthermore, we have more discussion on shares among three of us. Let hope Year 2006 continue to see improvement in Singapore stock market. I think there will be election in Singapore in Year 2006 and project like IR and Singapore trying to increase the tourism activities in Singapore. Let hope STI continue to improve it performance.

STI @ 2323.66

STI closed at 2300.25 at end of Nov and it has been rising to 2323.66 when it closed today. Year 2005 is coming to a end and let hope STI continuing it run till end of the year and mantain its stream till next year. There are around eight IPOs that close application this month and only two that interest us is Genting and SP Ausnet. Genting managed to rise around 8% during the first day of debut but SP Ausnet is still below its IPO since the day it has started trading this month. For more posting regarding these two IPOs, you can track the news at this forum.


A Merry Christmas and a Happy New Year to you. Thank for the support.

K-Reit

Today Keppel Land has announced that it will be launching a new REIT in the first quarter of 2006. The new REIT will be called K-Reit. Initially, the properties that K-Reit own will be Keppel Land's office properties, which are Keppel Towers, GE Tower, Bugis Junction Towers and KepLand's 44% share of the space at Prudential Tower. This REIT counter will be focusing on Office and it nearest competition will be CCT which is trading at around 4.9% yield. At the present moment, no information is provided by Keppel Land on the yield of K-REIT. I think we can use CCT as a minimum benchmark as K-REIT will be very similar to CCT. There will be no IPO for this REIT counter as Keppel Land intends to distribute 200 shares of K-REIT for every 1000 shares of Keppel Land held. The only way to get a hold of this new REIT is either buying Keppel Land share at open market or buy the REIT counter when it started trading in 1Q06.

Maybe this is a good way to launch REIT now as the current market sentiment to REIT IPO is not that great as PRIME REIT is trading below IPO price now and the rest of the REIT counters has drop around 15%. Anyway, all these will only happen when Keppel Land shareholder approve the deal.

Let see how the event unfold.

Prime Reit

Well, Prime Reit has hit $0.975 in the afternoon trading and it is now trading below it IPO price (Hope that it will not close below it IPO price today). Look like Prime Reit will be the first REIT counter that is trading below it IPO price in the recent years since SGX started trading of REIT counter. Does this mean that REIT counter has lost it shine in Singapore market? How will this affects Centrepoint, F&N and other properties counters like UOL, UIC, Keppeland, etc in raising their fund. Will this affect their plan of offering REITs. With the recent interest rate hike, look like REIT counters will need to offer higher yield in order to attract investor to park their fund. There is only two ways to acheive that; one is the downward movement of the share price, while the other is to increase their revenue so that the DPU they paid out will make the share price look attractive. More work for the REIT management to improve yield :)

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Start of Nov Trading Month

Well, today is the first trading day of November in Singapore market and the market has react in a positive manner (STI is up by 30.21 in the morning session trading). We finally can said good bye to October. STI was 2305.14 on 30 Sept 2005 and it end at 2216.77 on 31 Oct 2005. A drop of 88.37 points. Is it true that October always caused the Singapore market to drop. I decided to check the STI record for the past 6 years and the following are the results I get:

2005 2305.14(Sept) 2216.77 (Oct) -88.37
2004 1984.74(Sept) 1980.69(Oct) -4.05
2003 1630.80(Sept) 1723.71(Oct) +92.91
2002 1352.30(Sept) 1463.37(Oct) +111.07
2001 1319.53(Sept) 1367.84(Oct) +48.31
2000 1997.03(Sept) 1976.54(Oct) -20.49

Well, it is a tie between the last past 6 years. So the conclusion is never time the market. Trust your own research.

Prime @ 0.98

Well, look like Prime will be the first REIT counter that hit it IPO price since listing. I wonder whether it will close 0.98 today. Recently, there is a gentle weakness in all REIT counters listed in SGX. This maybe due to the interest rate increasing especially the T-Bill offer by MAS has been staying around 2.2%, thus the margain behind REIT is around 2.5% depending on which REIT counters you are buying. Let hope Prime REIT can maintain at 0.98 today or recover, or else Prime will be the first REIT counter to close before IPO price. Furthermore, it has the most "PRIME" location of Singapore.

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Talkstock Forum

Oop, found out that the link that I provided in my previous posting is wrong. This is the correct link for the forum Talkstock Forum

New Forum - TalkStock

Recently, we has decided to start a forum called TalkStock, where all the information on the stocks that interested us can be stored and display. Furthermore, it is much more easy for us to discuss and track topic on stock as the forum has independent link for each stock that we created. For those who read this blogsite and would like to continuing reading on the stock in Singapore market, please refer to link provided above. In addition, you are encourage to join in the discussion to share your view in this forum as well.

Suntec @ 1.15

Extracted From Dow Jones

Singapore Suntec To Hike Carpark Charges From Oct 1

SINGAPORE (Dow Jones)--Suntec City, Singapore's largest office and retail development by floor space, will hike carpark charges from Oct. 1 in a move that could add a few million dollars to Suntec Real Estate Investment Trust's (T82U.SG) bottom-line.

Confirming the increase, Suntec REIT Chief Executive Yeo See Kiat said late Wednesday he expects the price revision to improve carpark utilization rates. This will result in more cars coming in and out of the carpark "which would also translate to improved business for tenants," he added.

The increased carpark fees won't go directly to Suntec REIT as the 3,125 lot carpark comes under the management corporation, an entity that maintains the entire Suntec City complex on behalf of all its owners.

Suntec REIT, which owns about 75% of the strata units in Suntec City, should, however, benefit from reduced contributions to the management corporation in the months ahead, a source linked to Suntec City said.

According to its Nov. 29, 2004 prospectus, Suntec REIT pays the management corporation around S$17.5 million a year in maintenance fees.

Peak hour parking charges at Suntec City are currently among the lowest in Singapore's central business district at S$1.05 an hour or part thereof for the first three hours, and S$1.05 per subsequent half hour.

But starting Oct. 1, the charges will be revised to S$1.05 for the first hour, and S$1.05 for every subsequent half hour. While a person who parks his car for one hour won't be affected, someone who parks there for two to three hours will have to pay 50%-67% more in parking fees.

By way of comparison, the government's Urban Redevelopment Authority charges S$1.00 for every half hour during peak hours while landlords in the central business district charge as much as S$2.50 per half hour.

Suntec City's off-peak rate - which applies 5:00 p.m. to midnight on weekdays and on weekends and public holidays - will be adjusted to S$1.05 for the first two hours and S$1.05 per hour thereafter, up from the current S$1.05 for every two hours

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Prime Reit

Extracted From Dow Jones

Singapore's Prime REIT Overallotment Fully Exercised

SINGAPORE (Dow Jones)--Macquarie Securities (Singapore) Pte. Ltd., the manager for the Prime Real Estate Investment Trust initial public offering, said Monday the over-allotment option of 47.15 million units in the REIT has been fully exercised.

It also said it hasn't undertaken any stabilizing action in the stock market and won't do so in the future.

Prime REIT, which owns stakes in two Orchard Road properties, closed unchanged at S$1.05 Monday, up 7.1% from its IPO price of 98 cents a unit.

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Singtel

Extracted From Dow Jones Newswires

UPDATE: SingTel Faces Stiffer Competition In Indonesia

(This story was first published at 1128 GMT Friday)

By Jessica Tan

Of DOW JONES NEWSWIRES

JAKARTA (Dow Jones)--PT Telekomunikasi Selular, an Indonesian mobile company 35% owned by Singapore Telecommunications Ltd. (T48.SG), expects heightened competition in 2006, posing another challenge to SingTel's earnings goals.

Telkomsel, Indonesia's biggest mobile operator by market share, Friday warned that average revenue per customer would fall 12%-14% in 2006 and, subject to shareholder approval, may cut its 2005 dividend to 50% of profit from 60% in 2004.

Attracted by Indonesia's relatively low mobile penetration rate, foreign telecommunications companies are queuing to begin operations in Southeast Asia's most populous nation.

Only about 18% of Indonesia's 220 million people have cell phones - among the lowest penetration rates in Asia.

Malaysia's Maxis Communications Bhd., which owns 51% of PT Natrindo Telepon Selular, and Hong Kong-listed Hutchison Telecommunications International Ltd., which has 60% of PT Cyber Access Communications, are expected to begin operating in Indonesia in 2006.

Telkomsel, which generated 16% of SingTel's net profit of S$796 million for its first quarter ended June 30, is putting a brave face on developments.

"We are not afraid of competition," Chief Executive Kiskenda Suriahardja told reporters at a briefing Friday.

"We are ready for competition as long as competition is rational competition," he said.

Telkomsel's 65% shareholder is PT Telekomunikasi Indonesia (TLKM.JK), or Telkom.

Kiskenda predicted Telkomsel, which has about 50% of Indonesia's mobile market, would at least maintain this market share in 2006.

The company expects to have 25 million customers at the end of 2005, compared with 22.5 million at June 30.

But the drive to retain market share may come at the expense of profit margins and dividends, particularly with Telkomsel ramping up capital expenditure in a preemptive move against the new entrants.

The prospect of greater competition in Indonesia comes on top of recent weakness in the Indonesian rupiah, which SingTel has said could hurt its share of earnings from Telkomsel.

SingTel, which is counting on its regional mobile businesses to deliver its goal of double digit earnings growth, is also facing pressure in Australia, where intense competition and a slowing telecommunications market has hit profit margins at its Optus unit.

Optus contributes over two thirds of SingTel's annual revenue.

The company faces similar problems in its home market Singapore, where mobile penetration is near 100% and the fixed line business has only limited prospects for growth.

Kiskenda said Telkomsel will spend US$800 million to US$850 million on capital expenditure in 2005, up from the previous estimate of US$700 million.

At the briefing, Kiskenda said the company will extend its network to cover all the sub counties of Bail and Java to lock in subscribers before new competitors launch their services.

In 2005, the company forecasts revenue and earnings before interest, tax, depreciation and amortization to grow 30% from 2004.

Kiskenda didn't give a forecast for 2006.

SingTel, which is 61.8% owned by Singapore's state-owned investment company Temasek Holdings Pte Ltd., has spent about S$20 billion over the past few years to bolster its regional presence.

The company's five regional associates accounted for 36%, or S$273 million, of the group's first quarter underlying net profit - up 23% from a year earlier.

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Prime REIT : IPO Results

Fm SGX,

APPLICATIONS AND INDICATIONS OF INTEREST RECEIVED

The Board of Directors of the Manager is pleased to announce that at the close of the Offering (as defined in the Prospectus), 27,876 valid applications pursuant to the Public Offer were received for a total of approximately 712,807,000 Units (excluding the 28,000,000 Reserved Units which have been applied for by the Eligible Applicants). In addition, indications of interest pursuant to the Placement Tranche were received for a total of approximately 20.975 billion Units. The total demand for approximately 21.716 billion Units under the Offering represents approximately 35 times the 629,068,000 Units available for subscription under the Offering (assuming the Over-Allotment Option is fully exercised).

To allow, among other things, sufficient time for the allocation of Units to overseas investors to be completed, an announcement of the allocation and spread of investors in respect of the Placement Tranche will be made via SGXNET before the commencement of trading in the Units on a “ready” basis on the Singapore Exchange Securities Trading Limited (the “SGX-ST”), which is expected to be 2.00 p.m. on 20 September 2005.

APPLICATION RESULTS FOR THE PUBLIC OFFER

To ensure a reasonable spread of unitholders, DBS Bank Ltd, Deutsche Bank AG, Singapore Branch, J.P. Morgan (S.E.A.) Limited and Macquarie Securities (Singapore) Pte. Limited (collectively, the “Joint Lead Underwriters and Bookrunners”), in consultation with the Manager, have decided that successful applicants who submitted valid applications for the 30,000,000 Units available under the Public Offer (excluding the Reserved Units) complying in full with the terms and conditions set out in the Prospectus, and who have been successfully balloted, will be allocated all or a proportion of the Units for which they have applied. The allocations are as follows:

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Range of Units applied for under the Public Offer ('000)	Balloting Ratio	Number of Units allocated per Successful Applicant ('000)
1	17 : 50	1
2 to 9	18 : 50	2
10 to 49	19 : 50	3
50 to 99	20 : 50	4
100 to 499	21 : 50	5
500 to 999	22 : 50	7
1,000 and above	25 : 50	12

Suntec @ 1.14

SINGAPORE PRESS: Suntec-CityDev Deal May Unravel

SINGAPORE (Dow Jones)--Suntec Real Estate Investment Trust's (T82U.SG) S$788 million deal to buy 11 properties from City Developments Ltd. (C09.SG) could unravel as the trust hasn't yet received regulatory approval for the purchase, the Straits Times reports.

According to the paper, the deal is supposed to be completed by Oct. 15 but that's not possible now judging by the little time remaining.

"The Oct. 15 date assumed Reit unit holders would have approved the acquisitions at a meeting to be held by Sept. 30. But that would have required the Reit to send unit holders a circular detailing the buy 14 days before the meeting," the Straits Times said.

According to the report, Yeo See Kiat, the chief executive of ARA Trust Management (Suntec), the Reit manager, confirmed the delay but declined to explain the difficulties in getting approvals from the Monetary Authority of Singapore and the Singapore Exchange.

Quoting industry sources, the Straits Times says the issues concerned Suntec's plan to defer part of the payment to CityDev which could mislead investors by improving yields in the short-term.

Web site: http://straitstimes.asia1.com.sg

Comment: Look like Suntec is facing a problem on the deal of CDL. I think the ARA management got alot of explaination to make on the meeting. Ever since the annoucement on the deal of CDL, they are facing negative report. Futhermore, the management status report on the deal is not that forthcoming. Need to improve on their PR skill to shareholder.

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