STOCKS NEWS SINGAPORE-CIMB sees interest rates rising

Wed Jun 5, 2013 4:43am EDT

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CIMB Research said banks and companies with huge cash piles in Singapore will benefit from a potential rise in interest rates, while losers would be firms with high gearing and real estate investment trusts.

It maintained its end-2013 target of 3,460 points and "underweight" rating for the Straits Times Index, citing a lack of earnings per share growth. The index was down 1.4 percent around 3,245 on Wednesday.

"From a balmy scenario of low interest rates and mild growth, the investment climate has suddenly turned into a stormy one with the risks of rising interest rates and bubbly bond valuations," CIMB said.

Singapore banks will benefit from rising interest rates as large companies will find it more expensive to raise money from the bond market, CIMB said, adding that net interest margins will improve in the medium term as the yield curve steepens.

The three Singapore banks are DBS Group Holdings, United Overseas Bank and Oversea-Chinese Banking Corp .

Companies with relatively high cash piles like Overseas Education, Fraser and Neave, Singapore Airlines, Bukit Sembawang Estates, Parkson Retail Asia, Sheng Siong Group and Biosensors International Group are also potential winners, CIMB said.

But REITs and highly-geared companies like Olam International, Noble Group, Wilmar International, Swiber Holdings, Ezion Holdings and Ezra Holdings may lose out, CIMB said.

(Reporting by Eveline Danubrata; Editing by Jijo Jacob)

eveline.danubrata@thomsonreuters.com; +65 6403 5669; Reuters Messaging: eveline.danubrata.thomsonreuters.com@reuters.net

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14:58 STOCKS NEWS SINGAPORE-MDR gains on Myanmar deal

Shares in mobile phone distributor MDR Ltd rose as much as 6.3 percent after Nokia made MDR's business partner Golden Myanmar Sea Company Ltd a distributor of its products in Myanmar.

MDR was one of the most actively traded stocks on the Singapore bourse, with 164.5 million shares changing hands, and rose to an intra-day high of S$0.017, matching a peak in May.

MDR Myanmar will provide consultancy and retail franchisee procurement services to Golden Myanmar Sea, which will help MDR make a foray into the emerging telecommunication business in the country which has opened up after decades of isolation.

Myanmar is expected to award two mobile licences later this month to open up one of the largest untapped mobile markets.

(Reporting by Rujun Shen; Editing by Sunil Nair)

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11:24 STOCKS NEWS SINGAPORE-Index down; Keppel gains on rig order

Singapore shares weakened, while the world's biggest offshore oil rig builder Keppel Corporation Ltd gained on news that it won an $800 million rig order from Azerbaijan.

The Straits Times Index dropped 0.7 percent to 3,265.44, while the MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.7 percent.

Shares of Keppel Corp rose as much as 1 percent to S$10.68, after the company announced that it won a contract from Caspian Drilling Company Ltd, a subsidiary of the State Oil Company of Azerbaijan Republic, to build a semisubmersible drilling rig, worth about $800 million.

"This contract will lift Keppel's year-to-date wins to S$2.4 billion, forming 41 percent of our full year assumption of S$6 billion," said DBS Group Research, keeping an unchanged "buy" rating and target price of S$13.00.

Other brokerages had a bullish outlook on Keppel Corp.

"With Keppel's seven jack-up orders to date, all based on its KFELS B class jackup designs, we believe the outlook for margins in 2014 continues to improve," said Barclays analysts, keeping Keppel as its top pick in the rig-building space.

The oil and gas sector index gained 0.4 percent on Wednesday, down 1 percent so far this year, lagging behind the benchmark index's 3 percent rise.

1100 (0300 GMT)

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