What’s on the table
Singapore Strategy - 3Q review – Coping with cost pressures Market earnings growth estimates for FY07 have been slightly lowered after the 3Q reporting season, the first time in recent quarters, led by EPS cuts for property (lower selling price assumptions) and telcos (cost pressure for M1). Generally, the big-caps did not disappoint. The change in index EPS is not as important as the underlying trends gleaned from the 3Q results of non-index stocks. In 3Q, as oil moved from US$70/bbl to US$80/bbl, CPO producers, coal producers, bulk freighters, O&M divisions and crane operators all did well. On the reverse, companies that needed coal-related feedstock, needed to pay high freight charges for commodity raw materials and China F&B companies suffered. As oil prices charge ahead from US$80/bbl (end-September) to US$94/bbl, we highlight the vulnerable sectors and the 'safe' sectors in this piece. We maintain our end-2007 STI target of 3,780 for now as we review our sector calls for 2008.
Quick Takes
· Asiapharm Group (S$0.54) - 3QFY07 results - New drugs to drive growth
· Pacific Healthcare (S$0.42) - Overseas growth yet to be proven News of the Day
· Another CBD condo site draws weaker bids
· Home sales dive in upmarket core, pick up elsewhere
· Labroy sinks into the red in sea of forex exposure
· Wilmar and Olam to invest in palm oil, natural rubber and sugar assets in Africa
· SATS to set up new joint venture in Macau
· Keppel Land to develop big housing project in Shanghai
· Xpress sells office building for $14m to MI-Reit
Friday, November 16, 2007
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