CIMB Research downgraded Singapore Press Holdings Ltd (SPH) to ‘neutral’ from ‘outperform’ and cut its target price to S$4.27 from S$4.39, saying a weaker advertisement environment could hinder the company’s print revenue.
Shares of the Singapore media and property company were down 1 percent at S$4.07 on Tuesday. SPH stock rose about 9 percent in 2012, lagging the 20 percent gain in the Straits Times Index .
SPH posted a net profit of S$91.1 million ($74.3 million) for its first quarter, down 6.6 percent from a year earlier, mainly due to reduced contribution from its publishing and exhibition business.
Overall revenue growth this year is likely to be capped due to weak advertisement revenue, CIMB said, adding that the trend may continue due to the “dismal” economic outlook and a slew of tightening measures for the property sector.
However, CIMB forecast SPH’s dividends to remain intact as strong property income is expected to offset weak advertising revenue. It added that SPH’s balance sheet remains healthy, with net gearing decreasing to 0.3 times. SPH’s yields stood at 6 percent, CIMB said.
1321 (0521 GMT) (Reporting by Teo Jion Chun in Singapore; Editing by Anand Basu; email@example.com)
12:50 STOCKS NEWS SINGAPORE-Index down for third day; property stays weak
Singapore shares fell for the third day as property stocks remained weak after the government launched sweeping measures to cool the city-state’s housing market.
The Straits Times Index was down 0.7 percent at 3,183.99, while broadest index of Asia-Pacific shares outside Japan lost 0.4 percent.
Shares of property developers extended their decline from the previous day. City Developments Ltd fell more than 3 percent, while CapitaLand Ltd and Keppel Land Ltd eased over 1 percent each.
“While the timing of the new measures was expected, the measures surprised by being more severe than our expectations,” Citigroup said in a report. It expects private residential prices to fall by 5 percent in 2013, versus its previous estimate of a 2 percent rise.
CIMB Research said the latest property cooling measures would result in lower loan growth for Singapore banks. But given the deferred drawdown nature of mortgages, more significant drags would only be seen two years down the road, it noted.
Fitch Ratings said on Tuesday the property cooling measures, including higher stamp duty and tighter conditions for mortgages, may curb the build-up of potential threats to the credit profile of Singapore banks. 1239 (0439 GMT) (Reporting by Eveline Danubrata in Singapore; Editing by Anand Basu; firstname.lastname@example.org)
11:33 STOCKS NEWS SINGAPORE-OCBC downgrades Ezra to hold
OCBC Investment Research downgraded Ezra Holdings Ltd to ‘hold’ from ‘buy’ and kept the target price at S$1.30, after the offshore services firm reported weak quarterly earnings.
At 0329 GMT, Ezra shares were down 4 percent at S$1.20, but have gained around 5 percent since the start of the year, compared to the FTSE ST Oil & Gas Index’s 1.8 percent rise.
Ezra’s net profit for the three months ended November fell 49 percent to $6.8 million from a year ago, hurt by higher administration expenses and lower profits from associated companies.
OCBC estimates that Ezra’s core net profit for the quarter was around $4.3 million, below its expectations and 16 percent lower than a year ago.
However, OCBC expects Ezra to see a pick-up in the second half of the year, as margins in the subsea business improve and as the division sees estimated new order wins of about $925 million in fiscal 2013.