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STOCKS NEWS SINGAPORE-Shares slip by midday as SingTel weighs

Source : REUTERS
Last Updated: Wed, Sep 26, 2012 05:31 hrs

Singapore's key index fell to its lowest in nearly two weeks, dragged by losses in Singapore Telecommunications Ltd shares after state investor Temasek Holdings sold S$1.28 billion worth of stocks in the company.

Asian shares outside Japan shed 1 percent, as protests in Spain fuelled investors' concerns about its weak economy and its impact on the ongoing euro zone debt crisis.

The benchmark Straits Times Index slipped 0.6 percent to 3,049.27 points. By midday, SingTel shares were down 3.6 percent at S$3.21, recouping some losses earlier in the session when they fell as much as 5.1 percent to a three-month low.

Daiwa said Temasek's placement of SingTel shares will likely be an overhang on its stock price in the near term, adding that its valuations look reasonable but unexciting.

SingTel is undergoing a strategic shift from a telecoms player to a multimedia and information, communications and technology provider, through a series of acquisitions totalling $365 million so far this year, Daiwa said.

"At this juncture, however, visibility over whether the company can deliver value over the hefty prices paid for these acquisitions remains vague at best," said Daiwa, which has a 'hold' rating and target price of S$3.15 on SingTel.

1315 (0515 GMT)

(Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com)

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11:57 STOCKS NEWS SINGAPORE-CIMB raises target price on Ezion

CIMB Research raised its target price on Ezion Holdings Ltd , an offshore services firm, to S$1.65 from S$1.19 and kept its 'outperform' rating, citing strong contract wins.

At 0339 GMT, Ezion shares were up 3.1 percent at S$1.33 in a broader market that was down 0.7 percent. Its shares have more than doubled since the start of the year, compared with the FTSE ST Oil & Gas Index's 29.5 percent rise.

Ezion said on Tuesday it secured a charter contract worth about $201 million and a letter of intent valued up to $82.1 million to provide two service rigs to a national oil company based in Southeast Asia.

CIMB said Ezion has secured 12 contracts worth over S$1 billion in 10 months, underscoring its growing traction with Southeast Asian national oil companies.

The brokerage also likes Ezion for its growing track record and its management's networking in Australia and Denmark, and resourcefulness in securing funding.

1143 (0343 GMT)

(Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com)

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11:18 STOCKS NEWS SINGAPORE-DBS, OCBC start Far East Hospitality with 'buy'

DBS Vickers and OCBC Investment Research have initiated coverage of Far East Hospitality Trust with 'buy' ratings, citing its attractive exposure to Singapore's fast-growing tourism sector.

At 0305 GMT, units of Far East Hospitality were down 1.9 percent at S$1.015. They have gained about 6.8 percent since its market debut in August.

Far East Hospitality, which owns 11 hotels and serviced residences in Singapore, offers potential earnings growth with an acquisition pipeline that can increase the number of its rooms by 49 percent, said DBS. It has set a target price of S$1.10 on Far East.

"Organic growth prospects remain bright, coming from operational ramp-up of the newly completed Oasia Hotel and phased completions of various refurbishment programs," said DBS.

OCBC, which has a target price of S$1.08 on Far East Hospitality, said the trust's hotels would provide the upside, while the serviced residences would provide downside protection during economic slowdowns due to their longer average stay.

1106 (0306 GMT)

(Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com)

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10:22 STOCKS NEWS SINGAPORE-DMG starts AusGroup with 'buy' rating

DMG & Partners initiated coverage of AusGroup Ltd, which provides services to the mining and oil and gas industries, with a 'buy' rating and a target price of S$0.755, citing a positive industry outlook.

By 0210 GMT, AusGroup shares were up 2 percent at S$0.505, and have surged 60 percent since the start of the year, compared to the FTSE ST Industrials Index's 20.5 percent rise.

A record A$261 billion has been committed towards capital expenditure in 98 major minerals and energy projects between 2012 and 2016 in Australia, DMG said, which will benefit AusGroup.

The brokerage expects AusGroup to see net profit growth of 29 percent on an average a year over the next three years, helped by improving net margins.

The company also said it was planning to spin off its operating subsidiaries in a listed entity on the Australian Securities Exchange (ASX).

"If this plan goes through, AusGroup shareholders stand to gain as the industry average forward price-to-earnings on the ASX is 10 times versus AusGroup's 5.4 times today," said DMG.

1012 (0212 GMT)

(Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com)



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