Docstoc

SG WFG 080912

Document Sample
SG WFG 080912 Powered By Docstoc
					SINGAPORE RESEARCH
www.estockresearch.com

Breakfast News Friday, 12 Sep 2008
Indices (Closed as at 11 Sep 08 )
Indices FTSE-STI KLSE Hang Seng Nikkei DJIA Nasdaq Close 2,541.15 1,041.07 19,388.72 12,102.50 11,433.71 2,258.22 Chge % Chge -81.26 -3.1 -21.63 -2.0 -611.06 -3.1 -244.13 -2.0 164.79 1.5 29.52 1.3

Market Commentary
Singapore market – Sentiments likely to improve • Singapore: Singapore market fell for a third day and broke a new 23month low. Market opened down on disappointment over the US Lehman Brothers’ 3Q FY08 results and its restructuring plans. The market continued to fall all the way to its new 23-month low as investors began to worry about the outlook of the global economy as overseas market falls. The benchmark STI dropped 81.26 points or 3.1% to close at 2,541.15. Sold down was broad base with all FTSE sector indices in the red for a third day. Losers led gainers 345 to 150. However, no panic sell pressure was felt. Turnover was moderate with 1.11 billion shares worth S$1.53 billion transacted. Wall Street: Wall Street rose for a second day on selective buying into financial stocks and lower oil prices. A day after a widespread sold down on financial sectors after a disappointing Lehman Brothers’ restructuring plans, investors began to pickup stocks of stronger financial institutions. Transport sectors were chased after as oil prices continue to trend downwards. Dow rose 164.79 points or 1.5% to close at 11,433.71 points while the tech-heavy Nasdaq increased 29.52 points or 1.3% to close at 2,258.22. Light sweet crude dropped US$1.71 to close NYMEX at US$100.87. Outlook: A second day of rise in the US could boost market sentiments, after being sold down for three-day 6% fall. However, investors are likely to stay away from the market ahead of the weekend and before the release of the US retail sales number tonight. While the health of the US financial sectors continue to affect market sentiment, concerns over the global and local economies are becoming more significant. This can be shown from past month performance in Singapore and Hong Kong market relative to the Dow (see Chart below). The Dow (INDU:IND) dropped less than 3% over the past one month while Hang Seng (HSI:IND) and STI (STI:IND) fell about 10% during the same period. This was due to concerns over the China economy as well as the Singapore economy. In fact, the Singapore market started to fall last Thursday, when the Monetary Authority of Singapore said that economist surveyed had lower Singapore GDP forecast from 5.5% to 4.2%. Unless we see some improvement in the Singapore economic releases, we are not likely to see significant recovery in the stock market. We still hold on to our view that the Singapore economy remains healthy. The current weakness in the economy was due mainly to the Biomedical Manufacturing sub-sector, which is itself volatile in nature. Given that this sub-sector was weak for the past four months to July, we expect it to turnaround towards the end of the year.

IPO Launches
Company Offer Price Offer Debut Closes Day

Results announcements
Company China Flexible Packaging Hldgs Ltd Date of Release 3Q08 13/09

MICA (P) 214/09/2007

•

•

1

Westcomb Securities Pte Ltd

Breakfast News

Source: Bloomberg

Company Highlights
Midas Holdings Ltd - To supply 66 train cars for Incheon Intl Airport Railroad Project worth €2.35m • Midas Holdings Limited (“Midas”), a leading manufacturer of aluminium alloy extrusion products and PE pipes, primarily for the transportation and infrastructure sectors in the PRC, announced that its Aluminium Alloy Division, Jilin Midas Aluminium Industries Co., Ltd (“Jilin Midas”), has successfully secured a contract worth €2.35 million (approximately S$4.73 million) to supply aluminium alloy extrusion profiles for 66 train cars for Incheon International Airport Railroad Project in South Korea. Awarded by Hyundai Rotem Company, this contract marks Midas’ first foray into the South Korean market, and yet another milestone in the Group’s international market expansion efforts. The contract is expected to be fulfilled in 2009, and is, therefore, expected to contribute positively to the Group’s financials for FY09.

•

C&O Pharmaceutical Technology (Holdings) Ltd - Streamlines operations with disposal of non-exclusive product distribution unit • C & O Pharmaceutical Technology (Holdings) Ltd, an established and integrated pharmaceutical group in China, announced that its whollyowned subsidiary, Shenzhen Liancheng Medicine Company Limited (“Lian Cheng”), had entered into an agreement to dispose its 70% equity interest and its shareholder loan in Cang Nan Province Hong Tai Pharmaceutical Company Limited (“Hong Tai”) to the remaining shareholder of Hong Tai at a consideration of RMB2,424,450 and RMB7,670,000 respectively, resulting in a gain of approximately HK2,500,000 which will be recorded in 1Q09 results. The divestment of Hong Tai is not expected to have any material impact on the EPS and NTA per share of the Group. Prior to C&O’s acquisition of Lian Cheng in July 2006, Hong Tai was already a subsidiary of Lian Cheng, mainly engaged in the distribution of non-exclusive pharmaceutical products and medical apparatus in Cang Nan and the nearby region in Zhejiang Province.

•

2

Westcomb Securities Pte Ltd •

Breakfast News The disposal of Hong Tai is in line with the Group’s strategy to focus on higher-margin exclusive and own-branded products, which will streamline the Group’s structure and enhance cost efficiency.

3

Westcomb Securities Pte Ltd
Disclosure

Breakfast News

Westcomb Securities Pte Ltd is a wholly-owned subsidiary of Westcomb Financial Group Limited (“WFG”). WFG and its related corporations (including Westcomb Securities Pte Ltd) (collectively the “Westcomb Group”) are principally engaged in the provision of a wide range of capital market advisory and other related services. Each member of the Westcomb Group together with their respective directors and employees may also act as a market maker, or have taken or take positions, or effect transactions in the securities covered or recommended in this Report and may also perform or seek to perform broking and other investment or securities-related services for the Company. For purposes of Section 36 of the Financial Advisers Act (Chapter 110) (“FAA”), as at the date of this Report (being the date of publication of this Report):(a) Westcomb Securities, its associated persons and its connected persons do not have an interest in the securities covered or recommended in this Report; and (b) The research analyst of Westcomb Securities who has prepared this Report and his associated persons and connected persons do not have an interest in the securities covered or recommended in this Report; and The terms “associated persons” and “connected persons” have the meanings ascribed thereto in and as defined in Sections 36(3), 2(1) and 3 of the FAA. Westcomb Securities Pte Ltd Rating Systems Buy Trading Buy Hold Trading Sell Sell Disclaimer This Report is based on information obtained from sources which Westcomb Securities Pte Ltd believes to be reliable and correct at the time of publication of this Report. Whilst Westcomb Securities Pte Ltd has taken all reasonable care to ensure that such information is correctly reproduced in the preparation of this Report, no guarantee is given as to the adequacy, accuracy, completeness, reliability or fairness of such information. Any opinion, estimate or recommendation in this Report is subject to change without notice. This Report is not, and should not be construed as, an offer or a solicitation of an offer to buy or sell any securities covered or recommended in this Report. This Report may not be published, circulated, reproduced or distributed in whole or in part to any other person without the written consent of Westcomb Securities Pte Ltd. This Report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any jurisdiction where such distribution or use would be contrary to applicable law or regulations. This Report and the recommendations (if any) therein: (i) is intended for general information and circulation only, and does not purport to contain all the information that a prospective recipient of this Report may require to make an investment decision on the securities covered or recommended in this Report; (ii) have not taken into account, the specific investment objectives, financial situation and particular needs of any specific recipient of this Report; and (iii) should not be taken in substitution of the exercise of judgment by any recipient of this Report, who should instead consult their own professional and financial advisers as to the legal, business, financial, tax and other aspects regarding the suitability of the securities covered or recommended in this Report for investment having regard to the specific investment objectives, financial situation or particular needs of such recipient, before making any investment decision in relation to such securities. Consequently, Westcomb Securities Pte Ltd does not assume or accept any liability whatsoever for any direct or consequential loss occasioned to any recipient of this Report arising from any use of this Report or otherwise arising in connection with this Report. : : : : : >15% upside over the next 12 months + 10% to + 15% range over the next 3 months +/- 15% range over the next 12 months - 10% to - 15% range over the next 3 months >15% downside over the next 12 months

Goh Mou Lih Head of Research Westcomb Securities Pte Ltd (Reg. No. 200300646M) A member of Singapore Exchange Securities Trading Limited 5 Shenton Way #09-08; UIC Building Singapore 068808 Tel : 65- 6319 4988, Fax : 65-6220 489

4