STOCKS NEWS SINGAPORE-Citi downgrades SPH to 'sell' from 'buy'

Mon Oct 15, 2012 10:06pm EDT

Citigroup downgraded print and property company Singapore Press Holdings Ltd to 'sell' from 'buy' and cut its target price to S$3.80 from S$4.15 on weaker-than-expected quarterly earnings and slower growth prospects for the next year.

Shares of SPH were down 0.5 percent at S$4.09, but have risen 10.8 percent since the start of the year, compared to the Straits Times Index's 15.4 percent gain.

SPH posted net profit of S$365.5 million ($299.3 million) for its financial year ended August, down 5.9 percent from a year earlier.

Citi said SPH's fourth-quarter net profit of S$84 million was weaker than expectations, due to poor print ad sales, falling circulation demand and rising cost pressures.

Citi cut its 2013-2014 earnings estimates for SPH by 8-11 percent, reflecting the company's challenges to grow its core media business in Singapore as classified and circulation segments continue to decline.

"We think demand for print ads is unlikely to pick up strongly amid moderate growth expectations in 2013 and a lackluster structural outlook for circulation," said Citi in a report.

1001 (0201 GMT)

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

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9:58 STOCKS NEWS SINGAPORE-OCBC raises Midas target price

OCBC Investment Research raised its target price on Midas Holdings Ltd, which supplies components for railway projects, to S$0.51 from S$0.435 and kept its 'buy' rating, citing brighter outlook for China's railway sector.

At 0144 GMT, shares of Midas were up 2.4 percent at S$0.425. They have jumped 28.8 percent since the start of the year, compared with the FTSE ST China Index's 0.4 percent rise.

According to China's Ministry of Railways, the country's total railway fixed asset investments for September surged 92.7 percent from a year ago to 72.7 billion yuan, OCBC said, indicating progressive recovery in its railway sector, which will benefit Midas.

Midas is likely to see re-rating catalysts when China resumes tendering of new high-speed passenger train car contracts in the near term, OCBC said.

"We believe that China's easing economic growth has provided strong impetus for the Chinese government to speed up its stimulus programmes on infrastructure spending, thus enhancing the outlook and prospects of the railway sector," said OCBC.

0949 (0149 GMT)

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

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9:33 STOCKS NEWS SINGAPORE-UOB upgrades Keppel REIT to 'buy'

UOB Kay Hian upgraded Keppel REIT, previously known as K-REIT Asia, to 'buy' and raised its target price to S$1.36 from S$1.26, on expectations of improving office rentals.

Units of Keppel REIT, which owns office buildings, were up 2.5 percent at S$1.22. They have jumped 47.3 percent since the start of the year, compared with the FTSE ST Real Estate Industrial Trust's 34 percent gain.

Keppel REIT said its third-quarter distribution per unit was 1.96 Singapore cents, in line with UOB's expectations and up 84.5 percent from a year earlier, helped by higher rents and property income.

"We anticipate office rentals to bottom out in the next 2-3 quarters, with K-REIT expected to remain resilient due to its near-full occupancies, long weighted leases and its highest exposure to Grade-A office assets in Singapore," UOB said in a report.

The rate of decline for office rentals in Singapore is slowing, and UOB expects Keppel REIT to start seeing positive rental reversions, while acquisitions in Australia will also contribute to further growth.

0911 (0111 GMT)

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

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