SINGAPORE DAYBOOK : Asiasons, Blumont, LionGold stocks soar. Their prices nearly double after SGX lifts trading curbs. [SINGAPORE] Share prices of Asiasons Capital, Blumont Group and LionGold Corp almost doubled in yesterdays no-holds-barred trading as the market sought to put a value on the stocks after trading curbs were ended. Traders The Business Times spoke to said the share prices of the three counters can now be freely determined by market forces after the Singapore Exchange (SGX) lifted trading restrictions on the stocks. Asiasons shares surged 91 per cent, Blumont stock rose 80 per cent and LionGold soared 93 per cent by the close of trading yesterday. They were among the top 10 actively traded stocks in early trade, with higher volumes than their 30-day full-day average. Asiasons, Blumont and LionGold shares finished at 24.5 cents, 24 cents and 29.5 cents respectively. The lifting of the trading curbs levels the playing field for these three counters. Investors put off by the trading restrictions previously can now buy into these counters just as they can buy into other counters, said Liu Jinshu, an analyst at Voyage Research. SGX yesterday allowed the counters to be traded freely without the trading shackles that had banned investors from contra trading and short-selling them since Oct 6. Traders said the pent-up demand for Asiasons, Blumont and LionGold shares will continue to move their prices to an equilibrium level determined by a free market. I feel (the increase) can be further sustained because the stocks have taken such a huge bashing. Now the market is trying to do a price discovery on them, said a broker who requested anonymity. Asiasons, Blumont and LionGold experienced strong run-ups in their stock prices this year, trading at around $2 before they were struck by a downward spiral on Oct 4, prompting SGX to suspend trading in the three counters. The suspension was lifted the next trading day on Monday but SGX labelled them as designated stocks, in a move aimed at reining in excessive speculation and possible disorderly trading. The stocks traded between 10 and 15 cents. The $2 they were trading before the designation was unrealistic; the 10 to 15 cent range was also unrealistic because it was due to unusual measures, the broker said. He believes Asiasons true value could settle in the region of 30 to 40 cents, while LionGolds could lie between 40 and 50 cents as it has a higher book value. Blumont shares might, however, come under pressure as its recent rights issue was under-subscribed, he said. Blumont may be the weakest of the three. (Source: The Business Times) MARKET SCOOP HPH Trust Q3 profit down 8.4% SGX to develop commodity products with Shanghai Futures ValueMax plans to raise S$70.4m in IPO Indofood plans to keep China Minzhong listed Singapore inflation seen easing in September (Source: The Business Times) NOMURA Securities says … OLAM INTERNATIONAL | BUY | TP: S$2.00 The last day of our trip was a ride through the ~USD200mn Special Economic Zone Olam is developing in partnership with government of Gabon (60:40 share) This is the first SEZ in Gabon, and among the few in West Africa (probably one of the largest) Spread over 1,200ha of land, phase 1 is developing 440ha, which is divided into commercial (19ha), industrial (240ha) and residential (via government) In our view, the locational advantage is connectivity through water, land and rail Besides receiving good tax breaks, other incentives for corporates/industrial houses for being based in Gabon include cheaper infra (power), trade incentives, access to forest land, government departmental access, etc. Industries that have stepped foot range from timber, pharma, retail, banking, etc Phase 1 infra is 99% complete and a significant portion has already been sold We believe this SEZ could contribute significant one-time income in the near term, although there is not much clarity yet on recurring income to Olam from this In our view, this is more of a strategic partnership venture to receive better co-operation from government in other key projects Key takeaways from the trip - With this, we wrap ~USD3bn worth of capex in Gabon/Nigeria (most of which is yet to be invested) Key takeaways from the trip include: ? Olam has considerable on-ground expertise in Africa - in terms of local regulations, management bandwidth, asset and infrastructure access, etc It seems that Olam has efficiently made the progression from supply chain manager to pan value chain presence Most of the investments already made are not fully gestating (CFM, rice farms, palm etc) and could contribute significantly over next few years if execution stays strong There is some material progress on the Fertilizer plant but we think the market should still be waiting for key milestones The assets which we saw could alone contribute to run rate of ~USD500mn+ EBITDA in next few years, per our estimates More than anything, this trip provides us with confidence in Olams execution capabilities and management presence for key processing and upstream assets and that capex could bear returns over a period of time We stick to our Buy call, as valuations appear reasonable, there are option values in terms of fertilizer/palm and growth vs sector should remain better The catalysts may yet take time but long term value creation should happen UOB KAY HIAN says … KEPPEL REIT | BUY | TP: S$1.46 Management is currently comfortable with the level of investments into Australia (at 12% of portfolio) and is increasingly looking at opportunities in Singapore, such as the acquisition of the one-third stake in MBFC Tower 3 from parent Keppel Land Asset sales increasingly likely to support the acquisition of MBFC The tantalising prospect of the acquisition of MBFC Tower 3 with minimal equity fund raising was discussed As part of their portfolio reconstitution strategy, management is exploring options including the sale of older assets to fund the acquisition In our view, a possible scenario for MBFC Tower 3 (~S$1.2b) could include a ~S$500m divestment of an older Singapore office building (Prudential Tower or Bugis Junction Office Tower) and perhaps one or two buildings in Australia (~S$200m-300m), supported by additional debt headroom from year-end revaluation gains for its portfolio However, management highlighted that timing the asset sales with the acquisition is challenging as DPU could be impacted in the short term if there is a gap between the asset sale and the acquisition Early refinancing to lock in interest rates KREIT completed the early refinancing of its debt maturing in 2014 and will not have any refinancing requirements over the next 24 months Management is also proactively refinancing debt due in 2015, with S$60m of 2015 borrowings already extended Financing rates achieved are still relatively attractive, with new debt pricing at a 10-20bps discount over the debt which was refinanced Income support at Ocean Financial Centre (OFC) continues to remain substantial (S$15.2m in 3Q13, down 2% qoq) as committed tenants have not fully moved into OFC and as rental contributions from the retail podium are not significant yet Also, management highlighted that over the next 1-2 years, rent reviews for key anchor tenants, such as ANZ and BNP, will improve passing rents, as some of these large leases were signed at the height of the great recession in 2008-09 8 Chifley Square, Sydney has managed to achieve 70% pre-commitments upon completion in July, and negotiations are ongoing to fill up the remaining space Management is confident that committed occupancy would soon reach 95%, although downside risk is protected by a 5-year rental guarantee from the seller, Mirvac Office leasing demand continues to be resilient supported by smaller financial institutions, legal firms and IT firms With occupancies essentially full at key buildings, KREIT is in discussions with larger tenants to extend leases prior to expiry DMG OSK Securities says… SINGAPORE EXCHANGE | NEUTRAL | TP: S$8.10 SGX had a decent start to the year with 1QFY14 net profit up 24% y-o-y (+5% q-o-q, based on reported net profit) to SGD92m Average daily turnover (ADT) in the securities market was stable y-o-y but down 16% q-o-q to SGD1.3bn Meanwhile, derivative volume posted strong y-o-y growth (+36% y-o-y) Our earnings forecasts and SGD8.10 FV (23x CY14EPS) are unchanged1QFY14 results in line SGX’s 1QFY14 net profit of SGD92m (+24% yo-y; +5% q-o-q) was within our and consensus expectations, accounting for 25% of our and consensus full-year net profit estimates Higher clearing fee, better derivative volume drive y-o-y profit growth Y-o-y, while average daily turnover (ADT) in the securities market was broadly stable at SGD1.3bn, securities revenue rose 15% Average clearing fee increased to 3.2bps from 2.7bps a year ago, as the proportion of capped trades fell to 35% from 46% in 1QFY13, with institutions trading a broader range of stocks and retail participation rising Turnover velocity, however, was weaker at 47% (1QFY13: 51%; 4QFY13: 55%) Meanwhile, derivatives revenue was up 16% y-o-y as total traded volume jumped 36% y-o-y to 26.4m contracts, led by the FTSE China A50 futures, Nikkei 225 futures and options, and iron ore swaps Q-o-q, revenue fell 9% reflecting weaker ADT (-16% q-o-q) and derivative volume (-16% q-o-q) Expenses broadly under control (+6% y-o-y; -6% q-o-q) Management continued to guide for FY14 operating expenses of SGD320m-330m (FY13: SGD300m) Technology-related capital expenditure is expected be around SGD35m-40m As expected, SGX declared an interim DPS of 4 cents (1QFY13: 4 cents) We are forecasting FY14 total DPS of 31 cents (FY13: 28 cents), based on a net payout ratio of 90% We are maintaining our SGD8.10 FV, which is based on target CY14 P/E of 23x (a 10% discount to average P/E of 25x) Maintain NEUTRAL
Posted on: Tue, 22 Oct 2013 01:01:24 +0000
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