UOB Kayhian - 15 Jan 2008

Wall Street got off to a positive start for the new trading with an overnight rally which lifted the DJIA and Nasdaq to their largest gains this year, following news of better-than-expected earnings by International Business Machines Corp (IBM). The DJIA surged 171.85 points to 12,778.15 while the Nasdaq gained 38.36 points to 2,478.30. The Standard & Poor's 500 Index recovered 15.23 points to 1,416.25 after last Friday’s worst start since 1982. Elsewhere, crude oil prices traded at around US$94/bbl.

From the media, some corporate news:

a) Hoe Leong Corp is acquiring shares in Supreme Energy Pte Ltd (SEPL) by investing US$600,000 for a 60% stake of SEPL, which is engaged in owning, chartering and managing offshore equipment. In addition, Hoe Leong has agreed to grant SEPL an interest-free bridging loan of US$593,750, secured by a mortgage over the barge currently valued at US$3m. SEPL is in the process of buying a steel flat top deck cargo barge for conversion into a floating mud plant barge for drilling and other offshore projects.


b) Holcim (Singapore), a wholly-owned unit of cement, crushed stone, gravel and sand supplier Holcim, has formed a JV with ecoWise Holdings. Holcim Singapore will pay US$3.8m for a 50% stake in ecoWise Materials wholly owned by ecoWise Holdings. ecoWise will receive a one-off gain from the cash injection to help it maintain and operate a plant to recycle and process used copper slag.

c) Pacific Shipping Trust's (PST) current portfolio of eight ships has been valued at US$287m, 15% higher than the book value and close to 6% higher than the total purchase price. The eight vessels had a book value of US$249m as at 31 Dec 07. At the trust's initial public offering in May 06, their total purchase price was listed as US$271m.

d) Qian Hu reported an 81.6% yoy rise in 4Q net profit to S$1.58m for the three months ended 31 Dec 07 as revenue increased 18.9% to S$24.6m. The 4Q results were boosted by a 42.4% gain in operating profit to S$2.32m from its ornamental fish segment.

e) Singapore Press Holdings (SPH) announced a 1.3% yoy climb in 1Q (ended 30 Nov 07) net profit to S$111.9m despite a 66.9% drop in investment income from S$29.7m to S$9.8m. Group operating revenue rose 14.7% to S$312.1m. Earnings per share was seven cents. Profit before investment income reflecting the recurring earnings of the media and property businesses jumped 19.8% from S$105.6m a year ago to S$126.5m, boosted by its newspaper and magazine businesses as well as profit contribution from its Sky@eleven condominium project.