STOCKS NEWS SINGAPORE-Index rises, led by Genting Singapore

Mon Jul 30, 2012 1:35am EDT

Singapore shares were higher, with Genting Singapore Plc rising more than 4 percent after a recent drop in its stock price on concerns about the casino operator's upcoming results.

The Straits Times Index was up 0.9 percent at 3,025.57 points, while MSCI's broadest index of Asia-Pacific shares outside Japan gained 1 percent.

Genting Singapore shares rose as much as 4.5 percent on a volume of nearly 45 million shares, 1.1 times the average full-day volume over the past 30 days. Genting was the second-highest traded stock by value in the Singapore market.

Genting Singapore shares were beaten down last week after rival Las Vegas Sands' second-quarter earnings miss raised concerns over the Singapore company's results. Genting Singapore will report its second-quarter earnings on Aug. 10.

"Today we are probably seeing a spurt of either bargain-hunting or short-covering. Their cash flow is still very strong and what could swing the result in Genting's favour is the win factor," said Carey Wong, an analyst at OCBC Investment Research.

Shares of Singapore Airlines Ltd underperformed the broader market, falling as much as 1.5 percent. DMG & Partners Securities downgraded the airline's stock to neutral from buy, and cut its target price to S$11.17 from S$12.13.

The broker said stepped-up promotional efforts may further pressure SIA's overall yields in the near term. "Being a premium carrier, raising yields to pre-crisis levels to maximize profit would be tough when the outlook improves," DMG said.

1319 (0519 GMT)

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

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12:42 STOCKS NEWS SINGAPORE-Brokers raise Ascott Residence Trust target price

CIMB Research raised its target price for Ascott Residence Trust to S$1.21 from S$1.19 and kept its neutral rating, as it expects the serviced residence owner to report stronger revenues in the second half due to the London Olympics.

By 0422 GMT, units of Ascott REIT were 1.2 percent higher at S$1.225, and have gained about 26 percent since the start of the year, versus the FT ST Real Estate Investment Trust's 23 percent rise.

Ascott REIT reported second-quarter distribution per unit rose 2 percent to 2.38 Singapore cents, boosted by newly acquired assets in Japan, CIMB said.

However, the trust's growth in Europe was eroded by foreign exchange fluctuations, which CIMB said is a growing concern.

OCBC Investment Research also raised its target price for Ascott REIT to S$1.34 from S$1.23, and maintained its buy rating, citing better-than-expected second quarter earnings.

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1229 (0429 GMT)

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

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12:28 STOCKS NEWS SINGAPORE-Wilmar faces margin squeeze after China move-CIMB

CIMB Research said Wilmar's consumer products unit in China may see a margin squeeze after the government asked producers to avoid raising edible oil prices "unless it is absolutely necessary", although there is no control on cooking oil prices.

"This news could trigger near-term selling pressure on the stock. Given its underperformance relative to the market, we believe that this news has been more than priced in. But we do not advise additional exposure to the stock," CIMB said.

It estimates that China's move could drain 3 percent from the group's 2012 fiscal year earnings if edible oil prices trend higher. Wilmar will report its second-quarter result on Aug. 14.

Wilmar shares were down 0.3 percent at S$3.27 on Monday after falling 8.4 percent l ast week. The stock has dropped more than 34 percent so far this year versus the 14 percent gain in the Straits Times Index, making it the worst performing stock on the index.

Wilmar is the largest producer of consumer pack cooking oil in China with around 50 percent market share, CIMB said. The consumer products division made up 4.5 percent of the group's 2011 fiscal year pre-tax profit, it added.

Citigroup said investors have feared that Wilmar's weakness in oilseeds in the last two quarters will extend into the second half of 2012 and the consumer division will be weaker than expected, but the impact may be better managed in this cycle than in 2008.

China's inflationary pressure is currently lower versus the 2008-levels and authorities have historically allowed for price increases as China relies on imports for soybeans and has to pay international prices for these imports, Citi said.

Wilmar's valuations are attractive, Citi said, adding that it believes earnings should show some recovery in the second half versus the previous six months as the industry will likely not continue to grow crush volumes if losses continue to widen.

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1212 (0412 GMT)

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

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10:38 STOCKS NEWS SINGAPORE-OCBC cuts SGX target to S$6.80, keeps hold

OCBC Investment Research lowered its target price on shares of Singapore Exchange Ltd (SGX) to S$6.80 from S$7.00 and maintained its hold rating to take into account a more cautious environment for the bourse operator.

SGX shares were up 0.3 percent at S$6.67 and have risen nearly 9 percent so far this year. Last week, SGX reported a 23 percent drop in quarterly profit, hurt by a fall in securities income as volumes declined on global economic uncertainties.

SGX has recently announced new initiatives such as higher admission criteria for mainboard listing, revised bid-ask spreads, enhancing exchange traded fund products as well as emphasis on retail investor education and participation, OCBC noted.

"While there are more initiatives ahead, global market conditions remain weak and this will mean that most of these measures will not lead to immediate results," OCBC said.

"We are expecting the outlook for global equity markets to remain fairly muted, and this will continue to be a drag on SGX's performance, and it has also been shown with the recent delay in some IPOs due to lower valuations."

1029 (0229 GMT)

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