Page | 1 MCI (P) 154/09/2015 Ref. No.: SGMN2015_0207

Singapore Morning Note 09 November 2015

MARKET WATCH

Singapore Level D %

Straits Time Index 3,010.47 (13.2) (0.4)

All stocks

Up: 148

Unchanged: 354

Down: 210

Volume (mn shares) 158.0

Volume (US$ mn) 327.9

Volume (% of 6M avg) 55.0

Top risers S$ D %

Jasper Investments 0.01 0.004 66.7

Blumont Group 0.003 0.001 50.0

Tiger Airways 0.41 0.100 32.3

Seroja Investments 0.068 0.010 17.2

China Int'l Holdings 0.49 0.070 16.7

Top decliners S$ D %

Infinio Group 0.001 (0.002) (66.7)

Intl Press Softcom 0.018 (0.009) (33.3)

Ossia 0.16 (0.075) (31.9)

Metech 0.003 (0.001) (25.0)

Magnus Energy 0.004 (0.001) (20.0)

Top volume % of 6m avg S$ D %

LH Group 9,764 0.5 0.000 0.0

Wilton Resources 4,501 0.068 0.000 0.0

AEI Corp 3,436 0.8 0.000 0.0

Southern Packaging 3,080 0.08 0.000 0.0

Fabchem China 2,367 0.32 0.000 0.0

FSSTI INDEX

2,700

2,800

2,900

3,000

3,100

3,200

3,300

3,400

3,500

3,600

REL. PERFORMANCE BY MARKET CAP

2,000

2,500

3,000

3,500

4,000

Oct-14 Jan-15 Apr-15 Jul-15

STI (Large caps) Next 50

Rest of Mainboard Catalyst

Source: Bloomberg Upgraded Downgraded Maintained

RESEARCH REPORTS

Riverstone Holdings Limited – Cashing In Big On Strong USD

Non – Rated Closing Price: S$2.15 Target Price: N/A Soh Lin Sin

• Net profit surged 114% y-y in 3QFY15 due to (i) stronger USD against MYR; (ii) economies of scale; and (iii) stable raw material prices.

• We are Positive that the company will continue to reap the benefit from higher demand alongside its timely-and-on-target-expansion. Favorable FX rate trend remains a tailwind to the company.

• Nevertheless, we view its FY15 annualize PER of 20x as undemanding.

BREAKING NEWS

Jumbo Group Limited IPO is largest Singapore IPO year to date. 88,233,000 shares were 8.0 times subscribed at Issue Price of S$0.25. Gross IPO proceeds amount to approximately S$40.1 mn from both Invitation and Cornerstone Tranche. Listing and trading of Jumbo’s shares is expected to commence on a “ready” basis at 9.00 a.m. on 9 November 2015. Neptune Orient Lines Limited (“NOL”) notes recent media reports and confirms that it is in preliminary discussions with CMA CGM SA and A.P. Moeller-Maersk A/S with respect to a potential acquisition of NOL. Source: SGX Masnet, Phillip Securities Research,

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Singapore Morning Note

WEEKLY MARKET OUTLOOK WEBINAR

In this week’s webinar, we give a results update on SIA Engineering and SATS, both of which are tied to the Singapore Aviation Sector.

Register HERE for Today’s 11.15am webinar if you have not already done so.

Our webinars are an opportunity for clients, remisiers, and sales staff, to ask questions on our coverage and the market's direction. We hope to have as many of you as possible.

Archived webinars available.

Source: Phillip Securities Research Pte Ltd

MORNING COMMENTARY

STI DJIA S&P500 FTSE100 HSI CSI300 Brent Gold SGD JPY EUR

(0.4%) 0.3% (0.0%) (0.2%) (0.8%) 2.4% 0.1% 0.1% (0.1%) (0.1%) (0.0%)3,010.47 17,910.33 2,099.20 6,353.83 22,867.33 3,793.37 47.42 1,088.93 1.42 123.13 1.07

(13.18) +46.90 (0.73) (11.07) (183.71) +87.40 +0.04 +0.92 +0.0010 +0.15 (0.0001)

The Straits Times Index (STI) ended 13.18 points or 0.44% lower to 3010.47, taking the year-to-date performance to -10.54%.

The top active stocks were DBS, which declined 0.63%, SingTel, which declined 0.76%, UOB, which declined 0.78%, Ascendas Reit, which declined 0.86% and CapitaLand, with a 0.94% advance. The FTSE ST Mid Cap Index declined 0.28%, while the FTSE ST Small Cap Index rose 0.23%.

The outperforming sectors were represented by the FTSE ST Industrials Index, which rose 0.34%. The two biggest stocks of the Index - Jardine Matheson Holdings and Jardine Strategic Holdings – ended 1.03% higher and 0.47% lower respectively.

The underperforming sector was the FTSE ST Technology Index, which slipped 2.95%. Silverlake Axis shares declined 3.50% . Source: SGX Masnet, Phillip Securities Research Pte Ltd

MACRO DATA

US

The positive surprise of the Non-Farm Payroll came in at 271K, more than the consensus of 180k. This bought the unemployment rate down to 5% for the first time since April 2008. Many economists believe this is as close as it gets to full employment. Although wage inflation was observed with the average hourly earning up 0.4% (2.5% p.a), however labour rate participation remained low at 62.4% of population.

The data was quickly priced into the market as 10-yr treasury yield was up above 2.3% and the Dollar gain against the Euro as the possibility of a December rate hikes surge to 74% from 58% a month earlier.

China

October Export fell 6.9% y-y, in dollar terms, The drop recorded the fourth consecutive month of year-on-year decline in export for the second largest economy. Import fell 18.8% too, widening the trade surplus to $61.64 billion from September’s $60.3 billion.

The central bank has cut rates for the sixth time this year in October and has lower the required reserves rates for the banks in hope to spur the economy. The unexpected de-valuation in August has also been ineffective in boosting export and another round of de-valuation is unlike. We are of the view that China still have room for expansionary fiscal policy with a high foreign currencies reserves and relatively low fiscal deficit.

Source: CNBC, Reuters, Phillip Securities Research Pte Ltd

USA INSIGHT

Iconix Brand falls almost 57%

Iconix Brand Group Inc (ICON) fell by almost 57% on Friday after the company announced poor 3Q15 results as well as cutting full year guidance and having to rectify accounting errors in their financial statements over the past 3 years. The restatement would include slashing operating profits for FY14 down US$6 mn. Non GAAP EPS is expected to be cut from US$2.15 to about US$1.35.

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Singapore Morning Note

COMPANY RESULTS

Company Name Q/HY/FY Currency

(Units)

Revenue Net Profit

Current Previous Change

(%) Current Previous

Change (%)

Frasers Centrepoint ltd FY14/15 SGD(mn) 3561.5 2203.0 61.7 543.8 469.8 15.8

International Healthway Corp

3Q15 SGD(mn) 11.69 9.01 29.8 0.33 2.72 (87.8)

Fraser and Neave ltd FY15 SGD(mn) 2103.8 2093.0 0.5 131.6 148.1 (1.1)

Starhub ltd 3Q15 SGD(mn) 603.1 592.0 1.9 118.7 97.7 21.5

ARA Asset Management ltd

3Q15 SGD(mn) 112.56 130.82 (14) 52.50 69.35 (24)

Source: SGX Masnet

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Singapore Morning Note

TECHNICAL CALL

Hi-P International Ltd – Daily timeframe

Price has been recovering sharply and it even caused the 20 MA to cross above the 60 MA. However, the 200 day moving average, 50% Fibonacci retracement level and 0.540 resistance area seemed to be causing some trouble for the buyers.

The 04/11/15 shooting star was the first sign of bearish rejection and Friday’s Bearish Outside Bar was an even more convincing bearish reversal. Additionally, the Bearish Outside Bar also managed to close below the 200 MA.

If the bearish momentum continues, price should be heading down to test the 20 and 60 day moving average next.

Fraser & Neave Ltd - Daily timeframe

Price seemed to be retracing now after a protracted period of strong downtrend.

The pullback looks exhausted here as price is being capped by the 2.2 resistance area and 60 day moving average. Moreover, there is still no sign of any strong buyers yet from looking at the candlesticks. We have yet to get any strong bullish body candlestick for the past 27 days. Furthermore, the combination of the Gravestone Doji and Bearish Engulfing Bar from 04/11/15 suggests the breakout to the downside is likelier to happen.

Once price breaks and closes below the pullback line, the downtrend should resume with price targeting the 1.99 and 1.92 previous support area.

Sarine Technologies Ltd – Daily timeframe

There was quite a strong retracement since 09/09/15 but price was met with solid rejection near the 1.795 resistance area. Since then, price has been dropping down and the bears even closed price below the 20 day moving average suggesting the resumption of the downtrend.

The Bearish Engulfing Bar from 02/11/15 was a sign that further selling is to come but there wasn’t any bearish follow through thereafter. This formed the basis for drawing the new pullback line and the break below this pullback line should kick start the next down-leg.

If that happens, price should be targeting the 1.445 first followed by 1.31 support low.

Red line = 20 day moving average, blue line = 60 day moving average, Green line = 200 day moving average Source: Bloomberg, Phillip Securities Research Pte Ltd

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Singapore Morning Note

MARKET WATCH

Asia-Pacific 1 month change Level 1M (%) 1Y (%)

Nikkei 225 JP |||| 19,265.60 5.6 15.4

KOSPI KO 2,041.07 0.5 4.7

CSI 300 CN |||||||||| 3,793.37 13.6 51.6

HSCEI CN | 10,555.97 1.4 0.2

Taiex TW || 8,693.57 2.9 (2.5)

Hang Seng HK | 22,867.33 1.8 (2.9)

Sensex IN || 26,265.24 (3.0) (5.8)

Nifty IN || 7,954.30 (2.9) (4.6)

SET TH 1,414.54 0.2 (10.4)

KLCI MY 1,685.70 (1.2) (7.6)

STI SG 3,010.47 0.4 (8.4)

JCI ID 4,566.55 (0.5) (8.4)

Phil Comp PH 7,118.20 (0.3) (1.2)

S&P/ASX 200 AU | 5,215.01 (2.0) (6.7)

US/Europe 1 month change Level 1M (%) 1Y (%)

DJIA US ||| 17,910.33 4.8 1.9

NASDAQ Comp US |||| 5,147.12 6.6 11.1

S&P 500 US ||| 2,099.20 4.2 3.3

FTSE 100 UK 6,353.83 (1.0) (3.2)

DAX GR |||||| 10,988.03 8.8 18.3

CAC 40 FR |||| 4,984.15 6.0 19.0

Euro STOXX 50 EU |||| 3,468.21 6.7 13.2

VIX US 14.33

Currencies X-Rate 1M (%) 1Y (%)

Yen JP |||| 123.13 (2.4) (6.8)

Won KO | 1,141.93 (0.7) (5.9)

RMB CN 6.3535 0.0 (3.8)

NT$ TW | 32.59 0.8 (6.2)

HK$ HK 7.75 (0.0) 0.1

Rs IN 65.76 (0.5) (6.6)

RM MY ||||||||| 4.31 (5.1) (23.5)

S$ SG ||| 1.42 (1.9) (9.2)

P PH | 46.93 (1.0) (4.1)

Rp ID |||||||||| 13,564 5.0 (10.4)

A$ AU ||||||| 0.70 (4.0) (18.3)

Euro EU |||||||||| 1.07 (5.4) (13.5)

GBP UK ||| 1.51 (1.7) (5.0)

Bt TH | 35.84 (0.9) (8.5)

0

10,000

20,000

30,000

Oct-14 Jan-15 Apr-15 Jul-15 Oct-15

Hang Seng Index

0

2,000

4,000

6,000

Oct-14 Jan-15 Apr-15 Jul-15 Oct-15

CSI300

100

105

110

115

120

125

130

Nov-14 Feb-15 May-15 Aug-15 Nov-15

Yen

1.0

1.2

1.4

Nov-14 Feb-15 May-15 Aug-15 Nov-15

Euro

Source: Bloomberg

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Singapore Morning Note

EARNING ANNOUNCEMENTS

Date Company Status Fiscal period9 Nov 15 Pharmesis Conf. Q39 Nov 15 Best World Conf. Q39 Nov 15 Hotel Royal Conf. Q39 Nov 15 Breadtalk Conf. Q310 Nov 15 CNA Group Est. Q310 Nov 15 Hengyang Petrolc Est. Q310 Nov 15 China Hongcheng Est. Q110 Nov 15 Fuxing China Grp Est. Q310 Nov 15 Plastoform Est. Q310 Nov 15 Dapai International Est. Q310 Nov 15 Metech Est. Q110 Nov 15 Blumont Group Est. Q310 Nov 15 Combine Will Int'l Est. Q310 Nov 15 KTL Global Est. Q110 Nov 15 China Yuanbang Est. Q110 Nov 15 Beng Kuang Marine Est. Q310 Nov 15 PSL Holdings Est. Q310 Nov 15 Ley Choon Group Est. Q310 Nov 15 Shanghai Turbo Est. Q310 Nov 15 Compact Metal Industries Est. Q310 Nov 15 Powermatic Data Est. S110 Nov 15 Global Yellow Pages Est. Q210 Nov 15 Hiap Seng Engineering Est. Q210 Nov 15 Mirach Energy Est. Q310 Nov 15 Avi-Tech Electronics Est. Q1

DIVIDENDS

Ex-date Company S$ Type9 Nov 15 Vibropower 0.015 Final9 Nov 15 Karin Technology 0.09 Final9 Nov 15 Cache Logistics Trust 0.0086 Pro Rata9 Nov 15 Far East Hospitality Trust 0.012 Distribution9 Nov 15 SMRT 0.015 Interim12 Nov 15 Multi-Chem 0.011 Interim12 Nov 15 Lippo Malls 0.0077 Distribution12 Nov 15 Parkway Life Reit 0.0336 Distribution12 Nov 15 SIA Engineering 0.06 Interim13 Nov 15 E-2 Capital 0.035 Return Of Capital13 Nov 15 Datapulse Tech 0.002 Regular Cash13 Nov 15 Ascendas India Trust 0.0274 Distribution13 Nov 15 SingPost 0.015 2Nd Interim13 Nov 15 StarHub 0.05 3Rd Interim16 Nov 15 Logistics Holdings 0.008 Regular Cash16 Nov 15 Religare Health Trust 0.039 Distribution16 Nov 15 Singapore Airlines 0.1 Interim16 Nov 15 UOB 0.2 Special Cash17 Nov 15 Japan Foods 0.0075 Interim17 Nov 15 Indiabulls Properties 0.000638 Regular Cash18 Nov 15 SATS 0.05 Interim19 Nov 15 K1 Ventures 0.015 Return Of Capital23 Nov 15 Sunright 0.002 Regular Cash23 Nov 15 PEC 0.01 Regular Cash25 Nov 15 KSH Holdings 0.003 Special Cash

Source: Bloomberg

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Singapore Morning Note

PHILLIP SECURITIES RESEARCH – SINGAPORE STOCK COVERAGE

Company Analyst Last report Rating Target Price

(S$) Price (S$)

Change since last report (%)

Upside to TP (%)

Consumer Goods

OSIM Soh Lin Sin 28-Oct-15 Neutral 1.440 1.355 (5.9) 6.3

Fraser & Neave Change of Analyst 8-May-15 Reduce 2.40 2.17 (22.5) 10.6

Sheng Siong Soh Lin Sin 26-Oct-15 Accumulate 0.960 0.840 (4.5) 14.3

Banking & Finance

DBS Change of Analyst 27-Apr-15 Buy 23.00 17.40 (16.7) 32.2

OCBC Change of Analyst 30-Apr-15 Accumulate 11.30 9.07 (15.1) 24.6

SGX Change of Analyst 14-Apr-15 Buy 8.75 7.620 (11.7) 14.8

UOB Change of Analyst 30-Apr-15 Accumulate 26.00 20.46 (16.5) 27.1

Healthcare

Raffles Medical Change of Analyst 15-May-15 Accumulate 4.49 4.28 0.9 4.9

Q&M Dental Change of Analyst 25-May-15 Accumulate 0.920 0.765 (12.1) 20.3

Property Developers

Perennial Real Estate Change of Analyst 13-Feb-15 Buy 1.280 1.000 (5.2) 28.0

Investment Trusts

Cache Logistics Trust Richard Leow 22-Oct-15 Accumulate 1.110 0.975 (15.9) 13.8

Croesus Retail Trust Dehong Tan 14-Sep-15 Buy 0.960 0.825 3.1 16.4

Fraser Centrepoint Trust Dehong Tan 23-Oct-15 Accumulate 2.07 1.93 (4.0) 7.3

Soilbuild Business Space REIT Richard Leow 15-Oct-15 Buy 0.910 0.795 (3.0) 14.5

CapitaLand Retail China Trust Dehong Tan 30-Jul-15 Buy 1.900 1.510 (7.1) 25.8

First REIT Dehong Tan 30-Oct-15 Accumulate 1.490 1.210 (15.4) 23.1

Industrials

Sarine Technologies Change of Analyst 12-May-15 Buy 2.80 1.53 (23.8) 83.6

800 Super Holdings Richard Leow 25-Aug-15 Buy 0.660 0.475 4.4 38.9

CivMec Change of Analyst 19-Mar-15 Buy 0.475 0.420 7.7 13.1

Cogent Holdings Richard Leow 14-Aug-15 Buy 0.480 0.365 (7.6) 31.5

Offshore & Marine

Triyards Change of Analyst 1-Dec-14 Buy 0.980 0.445 (28.8) 120.2

Transport

ComfortDelgro Richard Leow 14-Aug-15 Reduce 2.97 3.09 2.7 (3.9)

SMRT Richard Leow 30-Oct-15 Sell 1.110 1.495 14.6 (25.8)

SATS Richard Leow 5-Nov-15 Accumulate 4.05 3.98 4.7 1.8

SIA Engineering Richard Leow 4-Nov-15 Reduce 3.46 3.95 1.8 (12.4)

Technology & Communications

M1 Change of Analyst 20-Jan-15 Accumulate 4.00 2.81 (24.3) 42.3

Silverlake Axis Change of Analyst 12-Feb-15 Reduce 1.160 0.690 (36.8) 68.1

SingTel Change of Analyst 12-Feb-15 Accumulate 4.42 3.92 (6.2) 12.8

StarHub Change of Analyst 26-Feb-15 Accumulate 4.50 3.67 (14.8) 22.6

Valuetronics Change of Analyst 29-May-15 Buy 0.600 0.425 (16.9) 41.2

SingPost Change of Analyst 4-Dec-14 Accumulate 2.03 1.895 (0.7) 7.1

SECTOR/STRATEGY REPORTS:

Sector Reports : Hospitality, 30 Oct / REITs, 14 Oct / Transport, 04 Aug / Shipping, 04 May / Banking, 30 Apr / Consumer, 08 Apr / US Oil

& Gas, 27 Mar / Telecommunications, 09 Mar / Property, 08 Dec

Macro Reports : Asia, 13 Oct / China, 16 Jul / Global, 15 Jun / Japan, 27 May / Indonesia, 23 Apr / Hong Kong, 15 Apr / Spain, 30 Mar /

Eurozone, 20 Mar / India, 2 Mar / Singapore, 24 Feb / Greece, 27 Jan / Malaysia, 14 Jan

Country Strategy : Thailand, 04 Nov / China & HK, 02 Mar

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