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STOCKS NEWS SINGAPORE-Shares at 7-week high; GLP leads gains
November 30, 2012 / 5:20 AM / in 5 years

STOCKS NEWS SINGAPORE-Shares at 7-week high; GLP leads gains

Singapore shares rose to a seven-week high, led by Global Logistic Properties Ltd, as strong data from Asia boosted investor confidence about a recovering global economy.

By midday the Straits Times Index was up 1.2 percent at 3,082.57 points. It has advanced 1.4 percent this month.

GLP, which owns warehouses in China and Japan, rose 3.3 percent to S$2.84, on expectations it would benefit from recovering economies in the region.

Japan’s industrial output unexpectedly rose 1.8 percent in October, up for the first time in four months, government data showed on Friday, suggesting the impact of the global slowdown and a diplomatic row with China may have run its course.

Casino operator Genting Singapore Plc climbed 3.2 percent to S$1.29, its highest in over three weeks. However, CIMB Research downgraded the stock to ‘underperform’ from ‘neutral’, but kept its target price at S$1.20, citing increased risks from over-regulation.

Genting Singapore’s weak earnings over the last two quarters represents the start of a protracted earnings downcycle, CIMB said, adding that Singapore’s regulation on casinos has started to hurt, with the lack of junket VIP credit and a lacklustre mass market.

Credit Suisse said that more Singapore stocks it covered reported disappointing third quarter earnings than positive surprises, but better-than-expected earnings came mainly from property, real estate investment trusts and the banking sectors.

The brokerage prefers CapitaLand and CapitaMall Trust among the property sector, but remains underweight on banks as net interest margins are expected to continue their decline.

1303 (0503 GMT)

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

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12:33 STOCKS NEWS SINGAPORE-CIMB downgrades Singapore to ‘neutral’

CIMB Research downgraded Singapore to ‘neutral’ from ‘overweight’, citing lack of earnings growth and as economic restructuring results in rising costs, but said it still likes companies that can benefit from rising asset prices.

“Within the Singapore market, our main recommendation is to drift out of yields and hunt for safe growth at a reasonable price,” said CIMB in a report, adding that fears of a Chinese hard landing were receding and a break-up of the euro zone looks less likely.

The brokerage likes DBS Group Holdings and property developer CapitaLand Ltd, which will benefit from asset inflation and a recovering China. Smaller property developer UOL Group Ltd is another asset play that is trading at an attractive discount to its restated net asset value, it added.

CIMB has ‘outperform’ ratings on CapitaLand, DBS and UOL, with target prices of S$4.02, S$17.36 and S$8.44 respectively.

Defensive stocks have become expensive compared to cyclicals, and CIMB recommends investors to take small positions on beaten-down cyclicals.

Singapore faces inflationary pressures, especially as negative interest rates lead to higher asset prices and rents. Restriction of foreign labour also adds to manpower costs, which could continue weighing on corporate earnings, CIMB said.

1219 (0419 GMT)

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

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9:57 STOCKS NEWS SINGAPORE-CIMB upgrades S‘pore-listed palm oil firms

CIMB Research upgraded Singapore-listed palm oil plantation firms to ‘overweight’ from ‘trading buy’ but downgraded Indonesia-listed peers to ‘neutral’ from ‘overweight’.

Singapore-listed companies will be “less impacted by the minimum wage increase (in Indonesia) due to their geographically-diversified estates, as well as have better prospects in light of their exposure to the domestic cooking oil sector”, CIMB said.

It lowered its average crude palm oil price forecasts by 7-9 percent for 2012-2014 to reflect waning risks from El Nino.

The brokerage upgraded Singapore’s Wilmar International Ltd to ‘outperform’ from ‘neutral’, and raised its target price to S$3.90 from S$3.52, citing a recovery in earnings due to better crushing margins and higher sales volumes in 2013.

By 0147 GMT, Wilmar shares were up 0.6 percent at S$3.21, but are the biggest underperformer in the sector, falling 36 percent so far this year against the Straits Times Index’s 16 percent gain.

Golden Agri-Resources Ltd was also upgraded to ‘outperform’ from ‘trading buy’, as CIMB expects its shares to ride on the recovery in crude palm oil prices in the first half of the year.

CIMB downgraded Indonesia’s Astra Agro Lestari to ‘neutral’ from outperform and cut target price to 23,300 rupiah from 27,400 rupiah, due to rising cost pressures.

0949 (0149 GMT)

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