STOCKS NEWS SINGAPORE-Population growth to benefit construction, transport - DBS

Fri Jan 18, 2013 3:41am EST

Related Topics

DBS Vickers expects an upcoming white paper on Singapore's population to raise its population target to 7 million from 6.5 million, which will benefit construction, land transport, property and healthcare companies.

Singapore's infrastructure is taking the brunt of an expanding population and demand for additional investment in train lines and road expansions will benefit construction firms such as crane operator Tat Hong Holdings and Sin Heng .

"We expect to see a step-up in infrastructure spending to cater to a larger population following comments from the government that population growth has outpaced infrastructure capacities in recent years," said DBS.

Singapore said on Thursday it plans to double its rail network to 360 kilometres by 2030, which is expected to boost ridership to 13.8 million rides a day, benefitting transport operators such as ComfortDelGro Corp Ltd.

DBS raised ComfortDelGro's target price to S$2.05 and kept its 'buy' rating, citing population growth and improving public transport network. Another major transport operator, SMRT Corp Ltd, on which DBS has a 'fully valued' rating and a target price of S$1.50, however, will face near-term challenges from higher operating costs.

The larger population will mean a greater need for homes, DBS said, estimating demand to rise 31 percent. The brokerage is positive on property developers such as Capitaland for its diversified portfolio and Wing Tai Holdings Ltd for its larger exposure to residential projects.

DBS also noted that falling birth rates and ageing population will be a focus for the government, and healthcare providers such as Raffles Medical and IHH Healthcare will benefit in the long run.

Stem cord blood bank provider Cordlife Group is also likely to benefit from potential incentives to boost birth rates.

1624 (0824 GMT)

(Reporting by Teo Jion Chun in Singapore; Editing by Prateek Chatterjee; teo.jionchun@thomsonreuters.com)

************************************************************

12:35 STOCKS NEWS SINGAPORE-Shares rise on positive China data

Singapore shares marched higher by midday in line with other Asian bourses as positive data about China bolstered confidence that the world's second largest economy was recovering.

By 0426 GMT, the Straits Times Index (STI) was up 0.4 percent at 3208.36 points, while the the MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.6 percent.

Franklin Templeton Investments said it expects China to show stronger growth in 2013, as stimulus measures work their way through the system.

"China's PMI (purchasing managers' index) has already turned around very smartly as a result of government measures to boost the economy," said Dennis Lim, portfolio manager at Templeton Emerging Markets Group.

China's economy grew 7.9 percent in the fourth quarter of 2012 from a year earlier, official data showed, strengthening from 7.4 percent in the third quarter -- the lowest since the depths of the global financial crisis.

Palm oil firm Wilmar International Ltd, which has a large exposure to Chinese markets, was up 1 percent at S$3.68, making it one of the largest gainers on the STI.

Around 1.7 million Fraser and Neave Ltd shares exchanged hands in a bloc trade at S$9.60, above its current share price of S$9.55.

Singapore's securities watchdog set a Sunday deadline for Thai billionaire Charoen Sirivadhanabhakdi and a group led by Overseas Union Enterprise Ltd to raise their respective offers to buy F&N.

1227 (0427 GMT)

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

************************************************************

10:37 STOCKS NEWS SINGAPORE-Maybank upgrades Wilmar to 'buy'

Maybank Kim Eng upgraded palm oil company Wilmar International Ltd to 'buy' from 'sell' and raised its target price to S$4.65 from S$2.75, on expectations its earnings will improve along with a recovery in its biggest market China.

By 0230 GMT, Wilmar shares were flat at S$3.64, having risen nearly 9 percent since the start of the year, compared with the Straits Times Index's 1.2 percent gains.

Expectations of low crude palm oil (CPO) prices in 2013 will benefit Wilmar, as it is a net buyer of CPO, although it owns some plantations, Maybank said, adding that lower feedstock cost will likely improve margins of its refining, trading and consumer divisions.

An improvement in China, which accounts for almost 50 percent of Wilmar's revenue, will boost the palm oil company and its plans to cut back capital expenditure will strengthen its balance sheet.

"With China's soybean imports hitting a surprising high towards the end of 2012, we believe earnings surprises lie ahead," said Maybank in a report.

1031 (0231 GMT)

FILED UNDER: