BIZ DAILY by fjwuxn



                                                  BIZ DAILY
                                                   Friday, 22 / Saturday, 23 October 2010
                                             Singapore’s Largest Daily Online Business Publication

New Programme to Help Boost
                                                                              Jared Heng, Assistant Editor
Singapore Companies’ Innovation                                                Ernie Calucag, Assistant Editor
and Productivity
 by Jared Heng
                                                                                     In this issue
                                                                                   Baidu’s Net Profit Soars to RMB1.05 billion           Page 2
                                                                                   in Third Quarter

                                                                                   Insurer AIA's Share Sale Sets Hong Kong               Page 3

                                                                                   Tender for Singapore’s Largest Desalination           Page 4
                                                                                   Plant Attracts Competitive Bids

                                                                                    ListCo News                                       Page 5 & 6

                                                                                    First Real Estate Investment Trust
                                                                                    CapitaMall Trust
                                                                                    Ezra Holdings Limited
                                                                                    Mermaid Maritime Public Company Limited
                                                                                    Dapai International Holdings Co Ltd
                                                                                    Lian Beng Group
  Singapore’s government has launched the Innovation Improve-                       Samudera Shipping Line Ltd
  ment Initiative Programme, or i3 in short, to help enhance local                  First Ship Lease Trust
  companies’ capabilities in innovation and productivity.

  i3 is a project-based programme designed to jumpstart produc-
  tivity improvement through a series of initiatives.
                                                                                    Stock Picks                                           Page 7
                                                                                    by OCBC Investment Research
  Such initiatives include coaching corporate participants on inno-
  vation and productivity concepts, the use of diagnostic tools and
  intuitive hands-on projects.

  Announcing the programme Friday at a conference, Mr Gan Kim                       Biz Property:                                        Page 8
  Yong, Minister for Manpower, said that each company will send                     HDB Resale Flat Prices Up 4 Per cent
  a team, comprising top management and line operators, to be                       in 3Q2010
  coached and mentored by productivity experts from Motorola
                                                                                    Biz Lifestyle:                                       Page 9
  Based in the US, Motorola University developed the established                    Childhood Obesity Presents Opportunity
  Six Sigma methodology and is a leader in corporate education.                     for Retailers

  Companies that participate in the i3 programme will be guided to
  facilitate problem-solving and put in place best practices to
  improve productivity and innovation.

  Highlighting the national effort to boost productivity, Minister Gan
  said: “Making this significant leap in productivity will require a
  holistic and coordinated approach at all levels: at the industry-,
  enterprise- and worker-levels.”

  “At the industry level, we will have to fundamentally re-look the
  structure and operations of our key sectors, to review if we have
  the right industry set-up and the right value chain to capitalise on
  growth opportunities and build up capabilities for higher produc-
  tivity,” the manpower minister added.

  The Singapore Workforce Development Agency will fund up to
  70 per cent of the course fees, and is expected to invest up to
  S$1 million over two years for this programme.

  “The launch of the i3 programme signifies a strong commitment
  by the government to reach out to the business community in our
  productivity drive, through strategic partners such as the SBF
  (Singapore Business Federation),” Minister Gan said.

  SBF will actively reach out to companies and encourage them to
  improve productivity through skills and innovation.

SGX Cooperates with NASDAQ,
Reportedly in Takeover Bid for ASX
 by Jared Heng

Singapore Exchange (SGX) and NASDAQ OMX plan to offer com-
panies opportunities for listing on both exchanges, SGX said Friday.

The listing cooperation includes offering a cross listing opportunity to     On a separate note, SGX is reportedly expected to make a
currently listed companies on both the NASDAQ stock market and               full takeover bid for Australia’s ASX Ltd on Monday.
SGX, as well as dual listing opportunities for new IPOs.
                                                                             The Australian newspaper said that UBS is acting on behalf
This initiative allows better price discovery and trading opportunities      of ASX in the talks, while Morgan Stanley is advising SGX.
in the Asian and US time zones.
                                                                             Both sides are reportedly still working out the final details of
According to SGX, NASDAQ-listed companies with strong brand                  the deal, which needs to be cleared by the Australian govern-
awareness and active business endeavours in Asia will benefit from           ment.
a secondary listing on SGX. SGX-listed companies interested in
reaching US investors will also be able to list their American Deposi-       With SGX and ASX having a market value of about US$8
tary Receipts on the NASDAQ stock market.                                    billion and US$6 billion respectively, the deal, if successful,
                                                                             could create one of the world’s largest bourses.

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                                             BIZ DAILY
                                             Friday, 22 / Saturday, 23 October 2010
                                         Singapore’s Largest Daily Online Business Publication

Baidu’s Net Profit Soars to RMB1.05 billion in Third Quarter
Source: AFP

Chinese search engine Baidu said Friday its net profit more
than doubled in the third quarter, as rival Google continued to
lose market share following its public spat with Beijing over

The results came as a Chinese research report showed Baidu
increased its dominance of the world’s biggest online market at
the expense of Google, which has seen its share dwindle
throughout the year.

Baidu said its net profit soared 112.4 per cent year-on-year to
RMB1.05 billion (about US$157.80 million) in the third quarter.

Total revenue ballooned to RMB2.26 billion, up 76.4 per cent
from the same period last year, the company said.

“During the third quarter, both (average revenue per user) and
customer base increased healthily, which directly contributed
to the robust top-line increase,” Baidu’s chief executive Robin         The US internet titan had boasted a 31 per cent share in the
Li said in a teleconference, according to Dow Jones News-               first three months of the year, before its protracted tussle with
wires.                                                                  the Chinese authorities.

China has at least 420 million web users, accounting for almost         In March, Google said it would no longer bow to government
a third of the country’s population, official data show.                censors and effectively shut down its Chinese search engine,
                                                                        automatically re-routing mainland users to its uncensored site
Baidu’s share of the Chinese search engine market increased             in Hong Kong.
to 73 per cent in the third quarter from 70 per cent in the
second quarter, according to Beijing-based research firm                The web giant has since tweaked the way it re-routes users in
Analysys International.                                                 order to gain the renewal of its business licence in China,
                                                                        creating a new landing page with a link to the Hong Kong site,
Over the same period, Google’s share shrank to 21.6 per cent            which users must click on themselves.
from 24.2 per cent, Analysys said.

SGX Signs MOU with China’s Jiangsu Province
Singapore Exchange (SGX) has signed a Listing Memoran-
dum of Understanding (MOU) with the Financial Affairs Office
(“FAO”) of the Jiangsu government in China.

The MOU aims to further promote the listing of Jiangsu compa-
nies on the Singapore Exchange.

Under this MOU, Jiangsu’s FAO will assist in SGX’s efforts to
profile Jiangsu enterprises, and provide guidance to potential
listing aspirants. It will also facilitate regulatory processes and
approvals from relevant Chinese authorities.

“We will actively support and encourage enterprises from
Jiangsu to obtain additional capital by listing at the SGX,”
Wang Quan, Deputy Secretary General of Jiangsu Provincial
Government and Director of the Provincial Finance Office,
                                                                        vibrant province to explore listing on our venue to support their
In addition, the FAO will lend support to SGX in its supervision        business growth,” Lawrence Wong, SGX’s executive vice
of Jiangsu companies listed on its bourse.                              president and head of listings, said.

“There are currently 20 companies from Jiangsu listed on our            In 2009, the GDP of Jiangsu province rose 12.4 per cent year-
exchange, and we can expect more companies from this                    on-year to RMB3.41 trillion (about US$512 billion).

Hyundai Taps into China Market
 Source: AFP

South Korea’s Hyundai Motor Co on Friday announced a tie-up
with a Chinese company to produce commercial vehicles in
China as it seeks to build on its reputation for passenger cars
in the world’s largest auto market.

The largest South Korean automaker on Friday signed a
memorandum of understanding with Ziyang Nanjun Automo-
bile Co that will see a joint investment of KRW500 billion
(US$440 million).

Hyundai and Nanjun will establish several joint projects to
produce and sell trucks, buses and engines, as well as to
develop new models and provide follow-up services, Hyundai
Motor said in a press statement.

Through the joint venture, Hyundai hopes to sell about 90,000
commercial vehicles in 2011, rising to 300,000 by 2015, repre-
senting a five per cent share of China’s commercial vehicle             tion capacity of 300,000 cars each.
market, it said.
                                                                        The company sold 510,000 vehicles in the first nine months of
Hyundai Motor has two plants in Beijing with an annual produc-          this year, up 24 per cent from the same period last year.

                                            BIZ DAILY
                                             Friday, 22 / Saturday, 23 October 2010
                                          Singapore’s Largest Daily Online Business Publication

Insurer AIA's Share Sale Sets Hong Kong Record
 Source: AFP

                                                                       Industrial and Commercial Bank of China, which raised
                                                                       US$21.9 billion in 2006.

                                                                       However, Agbank's IPO was split and it raised US$12 billion in
                                                                       Hong Kong and the rest in Shanghai.

                                                                       Shares in the highly-anticipated offering were priced at almost
                                                                       16 times AIA's forecast earnings this year, Dow Jones News-
                                                                       wires cited an unnamed source as saying.

                                                                       AIA said on Sunday it would initially offer 5.86 billion shares at
                                                                       between HK$18.38 and HK$19.68, adding that it could issue
                                                                       additional shares if it exercised a so-called greenshoe option.

                                                                       That may bring the total raised to around US$20.5 billion and
                                                                       leave AIG with a stake of just 32.9 per cent in the firm.

The Asian unit of troubled US insurer AIG has set a Hong Kong          AIG, which is looking to repay US taxpayers after a govern-
record, raising US$17.8 billion in its initial public offering and     ment bailout in 2008, won approval last month for the sale.
could make more than US$20 billion, a report said Friday.
                                                                       The US insurer was forced to look at publicly floating AIA in
AIA priced its shares at HK$19.68 (US$2.53) ahead of its               Hong Kong after the collapse in June of a proposed US$35.5
debut on the Hong Kong stock exchange next week, the Wall              billion sale to the British insurer Prudential.
Street Journal said, citing unnamed sources.
                                                                       Among confirmed cornerstone investors are the Kuwait Invest-
The offering could be the world's second-largest this year.            ment Authority, the oil-rich Gulf emirate's sovereign wealth
                                                                       fund, and a number of Hong Kong tycoons.
Agricultural Bank of China in July raised a total of US$22.1
billion from an IPO, exceeding the previous record set by the          Chinese sovereign-wealth fund China Investment Corp is also
                                                                       among the buyers, according to reports.

US Pushes FX and Trade Target Plan to Reluctant G20
 Source: Reuters

                                                                       Geithner's overtures have already been rejected by countries
                                                                       as diverse as India and Japan and markets are sceptical of a
                                                                       universal deal that would address global economic imbalances
                                                                       and tackle attempts by many emerging economies and others
                                                                       to weaken their currencies.

                                                                       While the G20 won praise for coordination of stimulus pack-
                                                                       ages during the global financial crisis, its sense of unity has
                                                                       gradually evaporated in the face of strains resulting from
                                                                       unprecedented efforts to revive global growth.

                                                                       "There is an action plan, but there is an awful lot of complaints,
                                                                       proposals," Russian finance official Andrey Bokarev said
                                                                       ahead of the meetings.

                                                                       A financial source who met with Geithner in South Korea said
The United States sought to corral reluctant finance leaders           that the US official had asked countries to limit their current
into a deal that would commit emerging markets to cut their            account surpluses or deficits to 4 per cent of gross domestic
current account surpluses and allow their currencies to rise at        product, something that few G20 members felt able to accept.
a meeting on Friday.
                                                                       China, India, Saudi Arabia and Russia are all running substan-
G20 finance officials started their formal meetings on Friday          tial surpluses while the US is in deficit.
with nations from the developing world and Japan dismissing
the US proposals which it says are aimed at defusing tensions          "We need to talk about it first, but numerical targets are unreal-
that economists fear could trigger trade wars.                         istic," Japanese Finance Minister Yoshihiko Noda said.

US Treasury Secretary Timothy Geithner, in a letter to finance         The issue of addressing "undervalued" currencies will also tax
leaders that was seen by Reuters, said "countries with persis-         leaders, although Canadian policymakers said that China had
tent surpluses should undertake structural, fiscal and                 agreed in principle to move toward more foreign exchange
exchange rate policies to boost domestic sources of growth."           flexibility.

In return, countries such as the United States that are running        The US dollar was down 0.27 per cent against a basket of six
big budget and trade deficits would adopt "sustainable                 major currencies, near a low for the year struck last Friday and
medium-term fiscal targets."                                           currency strategists said there would be further weakness if
                                                                       the G20 disappointed.

EU Banks May Be Pushed to Hold Extra Capital in Credit Booms
 Source: Bloomberg

                                                                       paying dividends and bonuses if they fail to meet the targets to
                                                                       stem the flow of cheap money, under plans to be published

                                                                       “A vital lesson from the financial crisis is that banks must hold
                                                                       sufficient levels of capital,” said Hughes. The European Com-
                                                                       mission will seek views on the proposals for banks in the
                                                                       27-nation EU, she said.

                                                                       The Basel Committee on Banking Supervision gave regulators
                                                                       the option of introducing an additional capital buffer to curb the
                                                                       excessive lending that led to the financial crisis. The buffer
                                                                       would also help lenders absorb losses in a recession. The
                                                                       Basel proposals are the strictest since nations began regulat-
                                                                       ing the global banking system together in 1974.

                                                                       The European Banking Federation, an industry lobby group,
Banks may be pushed by the European Union to hoard extra               said it already signalled its “serious concerns at the imposition
capital buffers beyond minimum requirements proposed by                of yet another layer of buffers” to the Basel committee. “New
global regulators last month.                                          European measures would only make the matter worse,” it
                                                                       said in an e-mailed statement.
Lenders may be expected to hold the extra capital during
boom times in a bid to prevent another financial crisis, said          The Basel group agreed that the so-called countercyclical
Chantal Hughes, a spokeswoman for EU Financial Services                capital buffer could be as large as 2.5 per cent of a bank’s
Commissioner Michel Barnier. Banks may be banned from                  assets, and that it should be made up of common equity “or
                                                                       other fully loss absorbing capital.”

                                         BIZ DAILY
                                          Friday, 22 / Saturday, 23 October 2010
                                       Singapore’s Largest Daily Online Business Publication

Tender for Singapore’s Largest Desalination Plant Attracts
Competitive Bids
                                                                     To be built at Tuas and completed by 2013, the plant will be
                                                                     constructed under a Design, Build, Own and Operate (DBOO)
                                                                     arrangement and will supply 70 imperial million gallons (or
                                                                     318,500 cubic metres) of desalinated water a day over a
                                                                     25-year period from 2013 to 2038.

                                                                     A total of 10 companies participated in the tender, which
                                                                     closed on Thursday.

                                                                     The Public Utilities Board (PUB) said that the first-year price
                                                                     varies from S$0.45 to S$1.67 per cubic metre of desalinated

                                                                     In evaluating the bids, PUB said that it will mainly look at the
                                                                     robustness of the process design, operational strength based
                                                                     on the bidders’ track records in delivering similar projects, and
                                                                     financial strength.
The tender for the second and largest desalination plant in
Singapore attracted competitive bids from established local          This desalination plant project is PUB’s fourth DBOO project,
and international companies with good track records in the           and the tender is expected to be awarded by the end of the
water business.                                                      year.

German Business Sees Ever Rosier Prospects: Survey
 Source: AFP

                                                                     The widely-watched reading of sentiment had been expected
                                                                     to slip to 106.4 points according to analysts polled by Dow
                                                                     Jones Newswires.

                                                                     But “the firms have once again given more positive assess-
                                                                     ments of their current business situation and their business
                                                                     expectations have improved,” an Ifo statement quoted presi-
                                                                     dent Hans-Werner Sinn as saying.

                                                                     Ifo’s report contrasted with gloomy news on Thursday when
                                                                     data showed that activity across the 16-nation Eurozone
                                                                     slumped to a 12-month low in October in both the manufactur-
                                                                     ing and services sectors.

                                                                     Ifo’s measure of business expectations for the next six months
                                                                     also rose to 105.1 points in October from 103.9 points in
                                                                     September, defying an average analyst forecast for a drop to
German business managers are riding a wave of confidence,            103 points.
as a key survey released on Friday showed another surprise
jump in October to the highest level since May 2007.                 The Ifo institute surveys some 7,000 German manufacturing,
                                                                     construction, wholesale and retail companies each month to
The findings are in line with recent data, which show that the       establish the widely-followed index of business sentiment.
German economy, the biggest in Europe, is on a roll thanks to
boosts from exports and growing domestic support.                    Germany now forecasts full-year growth of 3.4 per cent, prob-
                                                                     ably surpassing advances elsewhere in the Eurozone, Japan
A string of strong figures has even revived talk of a new            and the United States.
German economic miracle.
                                                                     “The German economy did not suffer from any imbalances
The Ifo economic research institute said its business confi-         prior to the crisis, the government’s crisis measures were well
dence index climbed to 107.6 points from 106.8 points in             timed and targeted and the industry is benefiting from the
September.                                                           global investment-led recovery,” ING senior economist
                                                                     Carsten Brzeski noted.

                                              BIZ DAILY
                                              Friday, 22 / Saturday, 23 October 2010
                                            Singapore’s Largest Daily Online Business Publication

ListCo News
First REIT 3Q2010 Distributable Income                                   CapitaMall Trust DPU Rises 6.8 Per cent in
Up 2.5 Per cent                                                          January to September Period

Bowsprit Capital Corporation Limited, manager of First Real              CapitaMall Trust Management Limited (CMTML) announced
Estate Investment Trust (First REIT), reported continued                 that Capital Mall Trust (CMT) has achieved a distribution per
growth in distributable income for the third quarter ending 30           unit (DPU) of S$0.0688 for the period 1 January to 30
September 2010 (3Q2010).                                                 September 2010 (9M2010), 6.8 per cent higher than the DPU
                                                                         of S$0.0645 in the same period a year ago.
Distributable income rose 2.5 per cent year-on-year to S$5.4
million, translating to a 2.1 per cent jump in distribution per          For the third quarter alone, CMT’s DPU rose 0.3 per cent to
unit (DPU) to S$0.0194. Based on its annualised DPU of                   S$0.0236, exceeding the forecast DPU of S$0.0230.
S$0.077 and the closing price of S$0.95 on 20 October 2010,
First REIT achieved a distribution yield of 8.1 per cent for             During the January to September period, the Trust raked in
3Q2010.                                                                  S$219.35 million in distribution income, which includes the
                                                                         release of S$1.2 million of taxable income retained in the first
Including its S$0.3 million in deferred rental income from the           half of this year. This amount, together with the tax-exempt
Pacific Cancer Centre @ Adam Road, which is currently under              income of S$5.0 million retained in the first quarter of this year,
development, gross revenue increased 4.6 per cent to S$7.9               will be distributed to unitholders in FY2011.
million, while net property income rose 3.7 per cent to S$7.8
million.                                                                 The Trust’s improved performance was due mainly to higher
                                                                         rental rates for new and renewed leases, lower operating
In a bid to drive growth and improve the quality of healthcare           expenses and a maiden contribution by Clarke Quay, which
at its properties, First REIT has focused on enhancing its               was acquired on 1 July 2010.
assets, undertaking a S$18.6 million investment in transform-
ing the Pacific Cancer Centre @ Adam Road into a modern                  “CMT has delivered a good set of financial results in 3Q2010.
boutique cancer specialist hospital, and sinking in an                   With the increase in tourists, higher domestic demand and the
estimated S$4.5 million for a new extension block at Lentor              resultant pick-up in consumer confidence, the retail market
Residence.                                                               will remain positive throughout the year,” said James Koh
                                                                         Cher Siang, Chairman of CMTML. He added that the Trust is
Looking ahead, First REIT expects its acquisition growth to              well-positioned to benefit from the anticipated retail sales
gain momentum as it continues to be on the lookout for new               growth in Singapore.
yield-accretive, healthcare-related properties.
First Real Estate Investment Trust closed on
Friday at S$0.950.                                                       CapitaMall Trust closed on Friday at S$2.020.                                             

 Ezra FY2010 Net Profit Up 9 Per cent                                    Mermaid Maritime to Build Two Jack-up
                                                                         Rigs with Keppel FELS

Ezra Holdings Limited reported a 9 per cent jump in its net              Mermaid Maritime Public Company Limited entered into a
attributable profit to US$76.1 million for the full year ending 31       Letter of Intent (LOI) to build two jack-up rigs with options for
August 2010 (FY2010) despite the challenging operating                   another two jack-up rigs for a new Mermaid-led joint venture
environment during the year.                                             (JV) named Asia Offshore Drilling (AOD) Limited.

Turnover rose by 7 per cent to US$353.6 million in FY2010,               Mermaid said that Keppel Offshore & Marine Limited’s
mainly due to contributions from newly delivered vessels and             subsidiary Singapore Keppel FELS Limited is the other party
increased procurement, equipment supply and engineering                  in the LOI with a shared value of approximately US$360
activities from the Group’s Vietnam yard.                                million.

Prudent working capital management resulted in Ezra obtain-              Both jack-up rigs are scheduled for delivery on 1 December
ing a net inflow from operating activities of US$50.4 million, a         2012 and subsequently on 1 March 2013 respectively if the
strong turnaround from a net outflow of US$26.2 million in               deal should proceed. They will be built based on Keppel
FY2009.                                                                  FELS’s proprietary design, the Mod V – B Class.

In view of its strong cashflow generation, Ezra has proposed             The premium jack-up rigs will be capable of operating in
to reward shareholders with a S$0.015 tax-exempt dividend                waters of 350 feet. The rigs will also be able to accommodate
per share.                                                               150 people, and fully equipped with offline handling features.

To support its growth plans going forward, the Group said it             For its new JV, AOD, Mermaid said that apart from its invest-
successfully secured new funds of US$206.9 million through               ment, it plans to engage other interested parties who will
the issue of US$100 million in convertible bonds. It also man-           jointly invest with the company for the funding of the rigs.
aged to get a three-year unsecured financing, comprising
S$50 million in guaranteed notes and a syndicated term loan              Upon completion of the equity placement, it is expected that
facility of US$70 million.                                               the rig construction and the contracts between AOD and
                                                                         Keppel will be formally executed. Another announcement will
Separately, Ezra announced the acquisition of Norway-based               be made by Mermaid in due course, when this is achieved.
Aker Marine Contractors AS from Oslo Bors-listed Aker Solu-
tions ASA, a leading global provider of subsea products and
engineering services, with a market capitalisation of more
than US$3.5 billion.

                                                                         Mermaid Maritime Public Company Limited closed on Friday
                                                                         at S$0.480.                                           

                                            BIZ DAILY
                                             Friday, 22 / Saturday, 23 October 2010
                                           Singapore’s Largest Daily Online Business Publication

ListCo News
Dapai International Acquires Manufacturing                              Lian Beng Acquires Light Industrial Building
Site in China                                                           from SGX for S$23.6 million

                                                                        Building construction firm Lian Beng Group has signed an
Dapai International Holdings Co Ltd announced that it has               option with the Singapore Exchange (SGX) to acquire a light
entered into an agreement with the Wuhe county government               industrial building along New Industrial Road for S$23.6
to acquire approximately 200 acres of land in Mohekou Indus-            million.
trial Zone, Anhui province, China, for a consideration of
RMB110 million (about S$21.47 million) with a land use right            The six-storey building occupies a 30,221 square feet land
of 50 years.                                                            parcel, with a gross floor area of 75,477 square feet. This
                                                                        works out to an average price of about S$313 per square foot.
The acquisition consideration will be funded by internal
resources.                                                              Currently utilised by SGX as a disaster recovery centre, the
                                                                        building, which stands amidst a mixture of new high tech
The Group said it will build a new manufacturing facility on the        buildings and traditional multi-storey industrial units, is
site specifically for its luggage products. The new luggage             situated near the Bartley MRT station and directly connected
manufacturing plant has an estimated capacity to produce                to the main Upper Paya Lebar Road, which leads to both the
four million pieces of luggage each year. It added the new              PIE and CTE.
facility will be completed around 4Q2011 to 1Q2012.
                                                                        The property is situated at a good location and is accessible,
The Group said it had decided on the current location after             said Ong Pang Aik, Managing Director of Lian Beng Group.
considering the ready availability of suitable labour in the            He added that this acquisition is a good opportunity for both
area, the cost of setting up operations there, and the transpor-        long-term capital appreciation and rental yield.
tation network.
                                                                        Lian Beng’s current portfolio of investment property includes
                                                                        an office unit in Suntec City, as well as units at some residen-
                                                                        tial developments such as The Ritz Carlton Residences, The
                                                                        Laurels, and Waterbank @ Dakota.

Dapai International Holdings Co Ltd closed on                           Lian Beng Group closed on Friday at S$0.310.
Friday at S$0.205.

First Ship Lease Trust 3Q2010 DPU Stays                                 Samudera Shipping Line Back to Black with
at US$0.0095                                                            3Q2010 Net Profit of US$6.3 million

First Ship Lease Trust announced it will distribute US$5.7             Samudera Shipping Line, the regional container shipping line,
million (about S$7.4 million) or US$0.0095 per unit to its             has reported a turnaround in net profit of US$6.3 million
unitholders for the third quarter ending 30 September 2010             (about S$8.2 million) for the three months ending 30 Septem-
(3QFY2010).                                                            ber 2010 (3Q2010), compared with a net loss of US$4.0
                                                                       million in 3Q2009.
The distribution per unit (DPU) of US$0.0095 for 3QFY2010,
unchanged from 2QFY2010, represents an annualised                      The Group’s revenue for the period rose 14.2 per cent to
tax-exempt yield of 10.3 per cent, based on the Trust’s closing        US$97.2 million from US$85.1 million a year ago.
price of S$0.48 on 22 October 2010.
                                                                       For the nine months ending September 30 (9M2010), the
The distribution will be paid on 26 November 2010 to all               Group registered a net profit of US$5.5 million on a 9.1 per
unitholders on record as at 1 November 2010.                           cent increase in revenue to US$270.1 million, compared with
                                                                       a net loss of US$4.9 million and revenue of US$247.5 million
Revenue for the period declined 4.9 per cent to US$23.4                in the previous corresponding period (9M2009).
million from US$24.6 million in 3QFY2009. The 3QFY2010
revenue includes freight revenue of US$2.5 million earned by           The quarterly growth was largely due to better vessel utilisa-
the vessels FSL Hamburg and FSL Singapore deployed in the              tion and improved freight rates for the Group’s container
product tanker spot market during the period.                          shipping business. Accordingly, gross profit increased 13
                                                                       times to US$12.0 million in 3Q2010, from US$0.9 million in
This mitigated the loss of bareboat charter lease rentals of           3Q2009.
US$3.8 million for the quarter due to the premature termina-
tion of bareboat leases for FSL Hamburg and FSL Singapore.             Separately, Samudera Shipping said it is scheduled to deliver
                                                                       two Supramax bulk carriers with a carrying capacity of 57,700
The Trust incurred a total of US$2.1 million in voyage                 dwt each in 2011. Upon delivery, Samudera plans to deploy
expenses and vessel operating expenses in 3QFY2010.                    these vessels on time-charter contracts. These vessels are
These expenses were attributed to the operations of the                expected to start contributing to the Group from the second
vessels FSL Hamburg and FSL Singapore deployed in the                  quarter of 2011.
product tanker spot market. The Trust did not incur these
expenses previously as they were borne by the charterers               In line with the Group’s continued effort to participate in the
under the bareboat charters.                                           Indonesian shipping market, Samudera re-flagged another
                                                                       chemical tanker, Sinar Jogya, into an Indonesia-flagged
The Trust generated net cash from operations (before loan              vessel, and secured for the latter, a two-year extension of its
amortisation) of US$14.1 million in the July to September              existing time-charter contract.
period, which is 20.1 per cent lower compared with US$17.6
million in 3QFY2009. After deducting the loan amortisation of          Samudera Shipping Line Ltd closed on Friday at S$0.230.
US$8.0 million and cash retention of US$0.4 million, the net
amount available for distribution was US$5.7 million or
US$0.0095 per unit.

FSL Trust’s vessel portfolio presently includes 23 vessels of          panies. As at 30 September 2010, the leases of the 21 vessels
different types comprising containerships, chemical tankers,           have an aggregate remaining contracted revenue of
product tankers, crude oil tankers and dry bulk carriers.              US$618.8 million and an average remaining lease term of 7.4
                                                                       years. The remaining two vessels, both 47,000 dwt product
Of these, 21 vessels are chartered on a long-term bareboat             tankers, are presently deployed in the product tanker spot
charter basis to seven reputable international shipping com-           market.

First Ship Lease Trust closed on Friday at S$0.480.

                                             BIZ DAILY
                                              Friday, 22 / Saturday, 23 October 2010
                                           Singapore’s Largest Daily Online Business Publication

Stock Picks
by OCBC Investment Research

SATS Ltd: Robust Operating Data Reaffirms                               Mapletree Logistics Trust: 3Q2010 in Line;
2QFY2011 Performance                                                    Still a Compelling Play
Robust aviation operating data. SATS Ltd’s recent                       3Q2010 in line. Mapletree Logistics Trust (MLT) reported
2QFY2011 aviation operating data had lent support to our                3Q2010 gross revenue of S$54.5 million, up 7.4 per cent
view that the group is poised to deliver another positive set           YoY and 4.9 per cent QoQ. Net property income of S$47.6
of quarterly results on November 2. As a note, the group                million rose 8.1 per cent YoY and 4.0 per cent QoQ. Distrib-
registered improvement across all operating indices in the              utable income of S$31.5 million was up 9.5 per cent YoY and
quarter, thanks to the recovery in the aviation industry. In            2.2 per cent QoQ. Results were boosted by positive contri-
particular, unit services grew 5.9 per cent YoY as a result of          butions from recent acquisitions and lower vacancy rates.
increased flights from full-service and low-cost carriers. Unit         Distributable income was just 2 per cent shy of our S$32.3
meals also increased by 7.8 per cent YoY on the back of a               million estimate.
10.8 per cent YoY growth in passenger traffic, while cargo
throughput rose 7.9 per cent YoY. This is largely consistent            Occupancy improves. As at September 30, MLT recorded
with our September 17 report that SATS may potentially gain             portfolio occupancy of 98 per cent, up from 97 per cent three
from the continued expansion in industry demand, hence                  months ago. This was due to lower vacancies in Hong Kong
turning in better financial performance for 2QFY2011.                   (+500 basis points) and Malaysia (+300 bps). Recall that in
                                                                        2Q2010, the manager had chosen not to renew leases of
Improvements expected to continue, albeit at slower                     certain single-tenanted buildings because of unsatisfactory
pace. According to the International Air Transport Associa-             rent negotiations. Instead it increased its weighting to multi-
tion (IATA)’s October survey, aviation business conditions              tenanted buildings with three assets converted from single-
had continued to show improvements. While some airlines                 user assets to multi-tenanted buildings in 2Q2010 (two in
are starting to turn cautious in view of a modest economic              Malaysia and one in Singapore).
growth in 2011, we note that a still-high 60 per cent of the
airlines being surveyed expect further improvement in profit-           Still in acquisition mode. MLT recently raised S$305
ability over the next 12 months. On the passenger and cargo             million through a non-renounceable preferential offering to
business front, expectations for further improvements in                existing unitholders as well as a private placement. Exclud-
demand similarly appear to be moderating in light of the                ing the S$145 million of assets acquired on the back of the
economic outlook and the end of restocking activity, but are            November 9 private placement, MLT has announced
still high at 62.5-68.4 per cent. As such, we still expect to see       approximately S$447 million worth of acquisitions this year.
further improvements in SATS’ operating performance going               The gross proceeds from the equity issue are intended to
forward, albeit at a slower pace (in line with our FY2011-              partially finance these purchases, and are also expected to
2012F forecasts).                                                       take MLT’s leverage down from about 46 per cent (assuming
                                                                        all acquisitions were debt-funded) to approximately 38 per
Maintain BUY with S$3.30 fair value. We continue to like                cent. This is lower than MLT’s 45 per cent medium-term
SATS for its growth opportunities, consistently strong oper-            leverage strategy and will allow it to continue to acquire
ating cashflows and excellent management. The recent                    third-party and sponsor-owned assets.
launch of the first-ever city check-in and baggage accept-
ance service with Marina Bay Sands and contract win to                  DPU mechanics. Because of the recent private placement,
provide ground handling services for SIA in Hong Kong are               MLT has already declared a “cumulative distribution”
testaments to the group’s ability to innovate quality services          estimated at around 1.73 S cents for the period from July 1
and expand its market presence, in our view. We are keep-               to October 14 (the day immediately prior to the issue of the
ing our DCF-based fair value of S$3.30 pending the release              private placement units). This cumulative distribution will be
of its 2QFY2011 results (cost of equity: 8.5 per cent, terminal         paid on or around November 29. The next DPU payout will
growth rate: 1 per cent). At current level, we see an attrac-           be for the period from October 15 to December 31 (the
tive 17.0 per cent upside potential in the stock. As such, our          “adjusted 4Q2010 distribution”).
buy rating on SATS remains.
                                                                        Still compelling. 4Q2010 income is likely to be boosted (in
                                                                        our opinion) by contributions from recent acquisitions, offset
                                                                        by an increased equity base post-equity fund raising. MLT
                                                                        has a proven track record in executing a virtuous cycle of
                                                                        accretive acquisitions and competitive fund-raising; we
                                                                        believe more accretive acquisitions are likely in the coming
                                                                        months. After adjusting our valuation inputs to price in a
                                                                        higher possibility of positive rental reversions over FY2011
                                                                        (as per more optimistic guidance from manager), our fair
                                                                        value estimate increases from S$0.90 to S$0.97. Maintain
                                                                        BUY (14 per cent estimated total return).

(S$ m)              FY09        FY10        FY11F          FY12F
Revenue           1062.1      1538.9        1615.4         1690.6
EBIT               170.9        184.4        190.4          208.8
P/NTA (x)             3.3         3.0           2.9            2.8
EPS (cts)            13.6        16.6          18.2           20.0
PER (x)              20.7        17.0          15.5           14.1

                                           BIZ DAILY
                                           Friday, 22 / Saturday, 23 October 2010
                                        Singapore’s Largest Daily Online Business Publication

Biz Property
HDB Resale Flat Prices Up 4 Per cent in 3Q2010
 by Ernie Calucag

                                                                     measures the Government introduced on August 30 as most of
                                                                     the transactions for the third quarter were submitted before the

                                                                     The Housing Board added it will continue to monitor the prices
                                                                     and volume of resale transactions and come up with an update
                                                                     at the end of the fourth quarter this year.

                                                                     Meanwhile, HDB said it 'will continue to ramp up its new flat
                                                                     supply significantly to meet the demand from first-timer house-

                                                                     It will launch 1,320 flats under the Build-to-Order (BTO)
                                                                     Scheme in Bukit Panjang and Sengkang on October 26. HDB
                                                                     will also launch about 2,200 more in Yishun and Punggol in
                                                                     November and December.

                                                                     This will bring the total BTO flat supply for this year to about
                                                                     16,100, compared to the 9,000 BTO flats in 2009.
Prices of Housing Board resale flats continued to rise in the
third quarter, with prices going up by 4 per cent during the         Together with the August 2010 Sale of Balance Flats, the total
period compared with 4.1 per cent increase from the second           new flat supply for 2010 will reach 17,700.
                                                                     For the first quarter of 2011, HDB said it will launch about
Resale transactions, however, showed dampened demand as              5,000 BTO flats, as part of the 22,000 new flats planned for
it fell by about 10 per cent, from 9,114 cases in the second         next year.
quarter to 8,205 in the third. HDB said this was largely due to
the 25 per cent decline in monthly sale volume from August to        HDB will also release more land for the development of
September.                                                           Design, Build and Sell Scheme (DBSS) flats and Executive
                                                                     Condominiums (EC) units to provide choices for the higher-
The median Cash-Over-Valuation (COV) amount among all                income households.
resale transactions also remained at $30,000 and the propor-
tion of resale cases transacting above valuation also stayed at      Based on the land sales scheduled for this year, there will be
96 per cent.                                                         about 3,000 units under DBSS and 4,000 units under the EC
                                                                     Housing Scheme.
While the data showed a more stabilised resale market, HDB
said it does not reflect yet the impact of the property cooling      Developers will launch the EC and DBSS units for sale later
                                                                     this year or next year.

                                             BIZ DAILY
                                              Friday, 22 / Saturday, 23 October 2010
                                          Singapore’s Largest Daily Online Business Publication

Biz Lifestyle
Childhood Obesity Presents Opportunity for Retailers
  Source: Forbes

                                                                      US$47 billion industry, accounting for 27 per cent of all clothing
                                                                      sales and nearly 40 per cent of all women’s and girls’ apparel
                                                                      sales, according to

                                                                      Though some manufacturers and retailers cut back on plus-
                                                                      size offerings during the recession, they have now realised
                                                                      that curvy girls are willing to spend, especially on well-made,
                                                                      fashion-forward pieces. From April 2009 to April 2010, the
                                                                      plus-size market increased 1.4 per cent, even as women’s
                                                                      apparel as a whole declined 0.8 per cent, according to market
                                                                      research firm NPD Group.

                                                                      More companies are looking to expand their plus-sized offer-
                                                                      ings. In 2009, Hanesbrands announced that it would create a
                                                                      plus-size women’s line for Wal-Mart Stores, and some design-
Childhood obesity is on the rise, and no one is excited about         ers sent plus-size models down the runway at London Fashion
the prospects for affected children. But the public health crisis     Week.
may prove an opportunity for retailers: Plus-size kids clothing
is one of the most promising niche markets in the fashion             Meanwhile, overweight kids are starting to demand access to
world.                                                                the same things their thinner counterparts have: cool, well-
                                                                      made, trendy clothing. And children are a growing market with
As the waistlines of American adults have expanded, so have           serious spending power. By 2020, population estimates
those of their kids. According to the US Centers for Disease          predict there will be 80 million children in the US, accounting
Control and Prevention, an estimated 17 per cent of children          for about 24 per cent of the population.
and adolescents ages two to 19 years are obese. That number
is far higher than it was just a few decades ago. Among               Major retailers who already offer plus-size items for children
preschool children aged two to five, obesity increased from 5         include Sears, Lands’ End, JCPenney and specialty tween
per cent to 10.4 per cent between 1980 and 2008, from 6.5 per         retailer Justice. But while plus-sized adults can shop at their
cent to 19.6 per cent among those aged six to 11, and from 5          own stores, including Lane Bryant, Ashley Stewart, Avenue
per cent to 18.1 per cent among adolescents aged 12 to 19.            and Torrid, do not expect similar options for plus-sized kids.
                                                                      “The way to do it is to take a great children’s brand and extend
Plus-size clothing is already a major segment of the fashion          the size offerings,” said Oona McSweeney, vice president of
business. Sales of women’s and girls’ plus-size apparel is a          retail and special markets for StyleSight, a trend forecasting

 Biz Sage
 “Better beggar woman and single
 than queen and married.”
 - Elizabeth I
 England’s Queen Elizabeth I was a powerful leader, but she
 was not perfect. She was sometimes seen as independent to
 a fault, relying on her own judgment rather than the counsel
 of others. Elizabeth fiercely desired freedom from any politi-
 cal alliances that might threaten her country’s sovereignty.

 But, in 1578, England watched in horror as Spain began a
 campaign to expand its empire. Rich from its exploration of
 the new world, Spain set out to conquer the Netherlands. For
 England, this was geographically too close for comfort.
 Queen Elizabeth began serious engagement negotiations
 with the French prince, Francis, Duke of Anjou, in hopes of
 forming an alliance with France.
                                                                                  Elizabeth I
 Unexpectedly, she fell in love with him. Elizabeth continued
 the courtship, but her protestant subjects detested Francis,
 for he was a catholic. After much debate, a dejected Eliza-              The Sage is the wise philosopher who provides thought-
 beth stopped the engagement and made a vow of chastity. In               provoking and inspirational words for those on their business
 the end, her loyalty was to the sovereignty and the people of            journey to success. Here is a perspective advice to all profes-
 England.                                                                 sionals, business executives, and entrepreneurs. The daily
                                                                          entries in this section are organised according to a specific
 Sometimes, a leader must choose between personal feelings                aspect of business life like people management, leadership,
 and what is best for the company. Whether it is firing a                 or entrepreneurial skills. Each entry will be provided by famous
 relative for poor performance or telling a friend that you               business figures that can be applied to your life and business.
                                                                          These words of encouragement are also meant to be used as
 cannot do business anymore, a leader must always do the
                                                                          a guide.
 right thing, despite the pain. When it comes to the good of the
 company, consider your alliances and make them without
 compromise to your company or values.

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