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STOCKS NEWS SINGAPORE-Index down, weighed by Q3 earnings caution

Source : REUTERS
Last Updated: Mon, Oct 29, 2012 06:20 hrs

Singapore shares were lower, with Citigroup saying that third-quarter corporate earnings will likely leave investors with weakened expectations as there have been more negative revisions than positive ones.

The Straits Times Index (STI) was down 0.5 percent at 3,041.37 points, while MSCI index of Asia-Pacific shares outside Japan slipped 0.1 percent.

Keppel Corp Ltd was one of the biggest losers on the index, falling as much as 2.3 percent. The stock had fallen nearly 5 percent since the world's largest rig builder reported a 15 percent fall in third-quarter net profit.

"In Singapore, a bottoming of export trends typically leads stock market and GDP cycles  investors will need to see a recovery trend in exports to drive the STI higher," Citi said.

It said it prefers stocks such as Hongkong Land Holdings Ltd , Noble Group Ltd, Neptune Orient Lines Ltd and Global Logistic Properties Ltd.

Recent earnings trends have been weaker than expected at firms with higher yields, such as Singapore Press Holdings Ltd and Hutchison Port Holdings Trust, Citi said, adding that it remains underweight on banks.

Shares of drinks and property firm Fraser and Neave Ltd , a takeover target of a company linked to a Thai billionaire, fell as much as 1.8 percent. There was a married deal of 688,000 shares at S$9.24 each.

F&N shares continued to trade above TCC Assets Ltd's offer price of S$8.88 a share in anticipation of a rival bid by Overseas Union Enterprise Ltd, a company controlled by Indonesia's Lippo Group.

1405 (0605 GMT)

(Reporting by Eveline Danubrata in Singapore; Editing by G.Ram Mohan; eveline.danubrata@thomsonreuters.com)

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STOCKS NEWS SINGAPORE-Brokers raise NOL target after first profit in 7 quarters

Several brokers raised their target prices on Neptune Orient Lines Ltd (NOL) after the container shipping firm swung to a net profit for its third quarter, breaking six consecutive quarters of losses.

NOL posted a net profit of $50 million for the three months ended September, compared to a net loss of $91 million a year earlier, helped by cost cuts as well as improvements in its liner and logistics businesses.

NOL shares were down 0.9 percent at S$1.16 on Monday. The stock has risen 3 percent so far this year, underperforming the 15 percent gain in the broader Straits Times Index.

"We take NOL's first net profit in seven quarters as a firm sign of a turnaround in the sector. 2014 will provide the plump rewards for shipping lines able to endure a potentially challenging 2013 supply situation," Maybank Kim Eng said.

The broker raised its target price to S$1.46 from S$1.35 and maintained its 'buy' rating.

UOB Kay Hian said carriers are likely to push through Asia-Europe rate increase of $500 per twenty-foot equivalent unit (TEU) from Nov. 1. Carriers' capacity discipline remains intact, which will help sustain the rate hike, UOB said.

NOL has agreed to sell its office building to Fragrance Group for S$380 million ($311.3 million) and will book a one-off gain of S$246 million, the broker noted. UOB upgraded NOL to 'buy' from 'hold' and raised its target to S$1.54 from S$1.26.

DBS Vickers increased its target to S$1.26 from S$1.23 and maintained its 'hold' rating. It warned that NOL's profitability may not be sustained in the following quarters, citing high fuel prices and disappointing trade data from Europe.

DBS expects NOL to report a core net loss of $217 million in 2012 fiscal year, while lowering its 2013 net profit estimate by 10 percent to $178 million.

1146 (0346 GMT)

(Reporting by Eveline Danubrata in Singapore; Editing by Anand Basu; eveline.danubrata@thomsonreuters.com)

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10:30 STOCKS NEWS SINGAPORE-Mermaid up on Seadrill deal, contract win

Shares of Mermaid Maritime Pcl rose as much as 12 percent after the offshore services provider said Seadrill Ltd plans to acquire its associate and its joint venture won a $530 million five-year contract.

Mermaid shares leapt as high as S$0.38, the strongest level since August 2011. Some 3.6 million shares changed hands, 2.4 times the average full-day volume over the past 30 days.

Seadrill bought 12.2 million shares in Mermaid's associate, Asia Offshore Drilling Ltd (AOD), at $5.00 each on Friday. Seadrill, which now has 64.23 percent in AOD, will then make a cash offer for the remaining shares.

Last week, Mermaid said its joint venture had secured a five-year contract, with an option for another two years, for offshore inspection, repair and maintenance services.

Mermaid's potential revenue is between 60 and 70 percent of the contract value, the company said, without disclosing the name of the client.

1016 (0216 GMT)




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