UOB Kayhian Report - 08 Jan 2008

US stocks gained for the first time this year, led by drugmakers and utilities, after analysts recommended shares of companies least affected by an economic slowdown. The DJIA added 27.31, or 0.21%, to 12,827.49. The Nasdaq shed 5.19, or 0.21%, to 2,499.46, dragged down by a 10% decline in Nvidia Corp.

a) Design Studio shares were heavily traded yesterday amid rumours that it had bagged significant new contracts. The stock leapt nearly 10% to a five-month high of $0.68 before closing the day at $0.65, with 22.2m units traded for the day. After the market closed, Design Studio announced that it had secured new orders worth $52.2m, bringing its order book as at 31 Dec 07 to $152.4m.

b) Aqua-Terra Supply plans to set up a rigging and testing and certification facility on the Indonesian island of Batam. The facility will be run under PT MH Global Indonesia, a subsidiary of Aqua-Terra unit Marinehub. It will serve the needs of the growing number of oil-and-gas (O&G) and marine companies operating in Batam amid the O&G and offshore marine industry construction boom there.

c) Singapore Windsor Holdings, which produces printed circuit board moulds, is investing Rmb60m (S$11.8m) in two electric furnaces in China to produce silicon manganese. The silicon manganese project will replace a steel production project that has not materialised. The investment will be made through a new wholly-owned subsidiary, Windsor Manganese, in Hong Kong.

d) Macquarie MEAG Prime Reit plans to raise as much as S$150m from a bond sale. The property trust is offering investors yield premiums of 30bp more than corporate benchmark borrowing rates in Singapore for bonds that mature in a year, and 70bp for three-year securities. Macquarie MEAG is raising more debt as it is acquiring more property assets in Asia. Its leverage increased to 34% as of 30 September, up from 25% as at end-06.

e) KSH Holdings' wholly-owned subsidiary Kim Seng Heng Engineering Construction (KSHEC) and Beijing Jia Hua Hong Yuan Investment Co have decided to form a JV firm in China. KSHEC will hold a 50% equity interest in the JV, which will have a registered capital of Rmb50m (S$9.9m) and total investment of Rmb95m. It will engage in engineering and construction.

f) Noel Gifts has entered into a sale-and-purchase agreement with Humming House Flowers & Gifts to purchase the latter's assets for $1.82m. The assets will be held by Humming Flowers & Gifts, a wholly-owned subsidiary set up by Noel Gifts for the acquisition.