CONSUMER SECTOR | NEUTRAL
OCBC INVESTMENT RESEARCH, MARCH 14
Retail sales print for Singapore in January this year might have seemed positive at a cursory glance, as retail sales were up 2 per cent year on year even excluding motor vehicle sales.
In particular, supermarkets and F&B sales were up 13 per cent and 12 per cent respectively. Discretionary sales growth was also positive when looking at performance of department stores (+3.2 per cent) and watches and jewellery (+4.7 per cent). On the other hand, we believe retailers continue to face high operating costs, especially from labour and rent.
Nielsen's consumer confidence index for Singapore in Q4 2016 was also down two points quarter to quarter to 86, suggesting general sentiments were still in the pessimistic territory (levels below 100).
SINGAPORE EXCHANGE | BUY
TARGET PRICE: $9.10
MARCH 14 CLOSE: $7.53
RHB RESEARCH, MARCH 14
SGX is enabling companies to seek a general mandate for an issue of pro-rata renounceable rights shares of up to 100 per cent of the share capital from 50 per cent previously. The enhanced rights issue limit is aimed at helping companies raise funds expediently for expansion activities or working capital.
The boards of companies proposing such a rights issue must have formed the view that the enhanced share issue mandate is in the interest of the issuer and its shareholders.
Companies must also make periodic announcements on the use of the proceeds as and when the funds are materially disbursed and provide a status report on the use of proceeds in the annual report.
This will help listed companies raise more funding for their needs.
CHINA EVERBRIGHT WATER | BUY
TARGET PRICE: $0.64
MARCH 14 CLOSE: $0.465
DBS GROUP RESEARCH, MARCH 13
After securing multiple upgrading projects in Shandong and Liaoning, China Everbright Water won the bid for Hubei Suizhou High-tech Industrial Park PPP (public private partnership) project.
Year to date CEW's total project win amounts to over 1.1 billion yuan (S$225 million), compared with 2.5 billion yuan in the whole of fiscal 2016. In addition, the Suizhou High-tech Industrial Park PPP project involves landscaping and greening of Fuhe's riverbanks, treatment of industrial waste water treatment for Xihe county and water environment restoration of Piaoshui Park.
Thus, it has successfully stepped into more integrated water projects, where there is strong demand in China.
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