MARKET UPDATES :
- SINGAPORE’s first manufacturing data point this new year was bad news for the sector. Falling to its lowest in close to two years, December’s purchasing managers’ index (PMI) pointed to industrial activity contracting. This, after three months of expansion, showed that Singapore has not after all defied waning production momentum across Asia. The overall PMI reading of 49.6 for last month, down from 51.8 in November, was worse than expected.
- Oil edged up on Tuesday, recovering from a five per cent plunge in the previous session that saw prices touch fresh 5-1/2 year lows in an oversupplied market. Growth in oil supplies showed no sign of abating, with output in Russia hitting a record high in 2014 and exports from Opec’s second largest producer Iraq the highest since 1980.
- SECURITIES trading value fell 25 per cent while derivatives trading volume rose to a record high in 2014, the Singapore Exchange (SGX) announced on Tuesday. Total trading value of securities fell to S$266 billion in 2014, compared to the year before. In 2014, new company listings jumped to 41 from 32 the year before, but total funds raised tumbled 45 per cent toS$3.9 billion. New bond listings increased to a record 521 from 465, and listing value surged 21 per cent to S$213 billion.
- CITY Developments Limited (CDL) has come up with a novel way of monetising its Sentosa Cove assets in a soft property market, even as it anticipates more overseas acquisitions over the next few years.The Singapore-based developer cobbled together a club deal with US investment giant Blackstone and Malaysia’s CIMB Bank, which along with senior bank loans, amount to S$1.5 billion. Singapore Banks – Uncovered interest rate parity – good for NIM, bad for NPL-: The FX based monetary policy for Singapore makes interest rates (we use 3M Sibor as a proxy) a function of global rates, especially the Fed fund rates (R2 of 0.88 over last 15 yrs). The extent of change in rates has a theoretical underpinning in form of uncovered interest rate parity. As per UIP, the interest rate differential should broadly be in-line with FX changes.
- Singapore Airlines – Slower growth well anticipated, lacking catalyst; maintain Neutral-There is no change in our view on Singapore Airlines (SIA) and we maintain our Neutral rating on the stock. We cut our FY3/15-17E EPS forecasts by 19%/17%/18% respectively after factoring in lower passenger yield assumptions and updating capital expenditure and fleet expansion strategy after SIA’s analyst briefing.
- UOB delivered once again via its formidable fee franchise. Although some elements of the outperformance were due to less recurrent factors, we do not think it is fair to say that the outperformance was illusory. Its strategic focus on ASEAN should not change in the near future.
STOCK RECOMMENDATION :
- BUY MAPLETREE CORP CMP 1.440 TARGET 1.480 1.540 SL 1.390