Singapore listed Chinese Companies - S Chips

Some of my friends asked me what i think of Singapore listed Chinese Stocks know as S chips, I shall do a brief writeup about my personal views :

Many of the S chips listed in Singapore are now trading at low PE (share price to EPS ratio) or near cash per share because :
1. Despite some signs that the global financial crisis may be over, recent reported financial results remain weak (eg profit continue to decline or margins have not recovered)

2. Confidence were badly shaken due to the accounting scandals or corporate governance issues affecting some S chips

Let’s look at the above 2 points separately.

Point 1 - this is a more general reason which can affect all companies, not just S-chips, so all we have to do is do more homework and analyze the financial results of the companies, and look for signs of recovery. One of the early signals which I use sometimes is look for “sequential” earnings recovery, rather than year-on-year recovery. Sequential means comparing the latest net profit (eg 3Q09) to that 3 months ago (eg 2Q09) and if you see the company profit improving due to better operating performance (rather than forex gains or unusual items like writebacks) than this is the first thing that will get my attention.

Point 2 - i personally think that the entire S-chips sector have been “over-punished” by the actions of a few bad apples. Bear in mind that be it accounting scandals or frauds or corporate governance issues, all these happen to all stock markets, even in Hong Kong and US stock markets. But the interesting part is how the people “react” to it when it happens.

In Hong Kong, when you see certain negative news about the market, the press will just report it (usually in smaller column) and move on. Hong Kong press seldom devote a large section of the newspaper to play up the issue. In Singapore, I saw the press devoting half a page to highlight certain things and continue to highlight these issues for many days. Doing it and over-doing it is a fine line…….. to me hong kong press just do it but singapore press may have over-done it.

If the press over-report certain negative aspects, then it will hit the core of investor confidence, that they will think ALL S-chips are bad and this will bring down the valuations of ALL S-chips.

In Hong Kong and even US, we have seen the press reporting certain fraud cases but they do not over-report it and quickly move on to other matters. Investors take these incidence as part and parcel of the stock market, fraud are things that have happened and will continue to happen in the financial markets. One should not react as though it is incomprehensible that fraud can happen to listed companies in Singapore. This is one of the possible reasons why the PE of china companies in hong kong has recovered much “faster” compared to those China companies PE in Singapore. I use the word “faster” because HK listed china companies PE are usually higher than S-chips.

What’s done is done, so what to expect next for Singapore S-chips…..

If you look at the PE S-chips are at now ie trading 3 to 5x pe, these valuations to me are pre-ipo valuations and we know that pre-ipo valuations means High risk High returns.

These means “some” of the s-chips may yet blow up due to the high risk associated with but “some” who survive will give high returns later from the low valuation they are at now. One good example would be an S-chip called Sinotel. The lowest price was around 7c (when EPS was about 10c) this means the stock was trading below 1x PE haha, we can laugh now in hind-sight. But when smart money realize the rediculous under-valuation, the stock price start to recover and recently went to as high as 70c (10 bagger is the high return some pre-ipo projects may give).

So when we look at S-chips now, we should adopt they way PE (private equity) fund invest in pre-ipo project…..they expect high risks and high returns, so they DIVERSIFY.

PE fund usually try to go in at 2-4x pe before ipo and wait to make few baggers when the ipo goes through.

But if the ipo is stucked or failed, their money may go up in smoke.

So they usually try to spread their money evenly in a few projects such that as long as some make it, they will still make money at the end of the day.

In summary, look at s-chips as pre-ipo projects (high risk high return), and learn to diversify when you put money in s-chips with the expectation that some may still blow up in your face ;)

Before I sign off, let’s not forget the quietly growing number of I-chips (Singapore listed Indonesia Owned) listed in Singapore share market and the “thrill” that they are giving us now………hmm sounds familiar eh

Happy Trading

Rooney

Singapore Stock Market Update :

What is STI ETF ?

STI ETF is short for Straits Times Index Exchange Traded Fund and it is managed by State Street Global Advisors (SSgA). It has been listed on SGX since 17 April 2002. The benchmark for STI ETF is Singapore’s Straits Times Index (STI). The Fund's investment objective is to replicate as closely as possible, before expenses, the performance of the STI.

The price of each share for STI ETF is approximately 1/1000th of the STI. If the STI is at 1700 points, then STI ETF will be 1700/1000 = S$1.70. Usually the price of STI ETF will not match STI exactly since the portfolio does not match STI component stocks 100% but it is close enough to mirror STI overall performance.

STI ETF can be traded like a stock.on the Singapore Stock Exchange and it also pays out dividend, usually twice a year. The following are some of the recent corporate actions related to dividend and stock split for STI ETF (source : SGX):

DIVIDEND 22 Jan 2009 28 Jan 2009 6 Feb 2009 SGD 0.04 ONE-TIER TAX

DIVIDEND 22 Jan 2009 28 Jan 2009 6 Feb 2009 SGD 0.01 TAX EXEMPT

DIVIDEND 22 Jul 2008 24 Jul 2008 4 Aug 2008 SGD 0.0176 NET OF TAX

DIVIDEND 22 Jul 2008 24 Jul 2008 4 Aug 2008 SGD 0.0424 ONE-TIER TAX

DIVIDEND 24 Jan 2008 28 Jan 2008 6 Feb 2008 SGD 0.0547 ONE-TIER TAX

DIVIDEND 24 Jan 2008 28 Jan 2008 6 Feb 2008 SGD 0.0053 NET OF TAX

ENTITL. 10 Jan 2008 14 Jan 2008 STOCK SPLIT OFFER OF 10 FOR 1

DIVIDEND 20 Jul 2007 24 Jul 2007 2 Aug 2007 SGD 0.2 NET OF TAX

DIVIDEND 20 Jul 2007 24 Jul 2007 2 Aug 2007 SGD 0.25 TAX EXEMPT

DIVIDEND 20 Jul 2007 24 Jul 2007 2 Aug 2007 SGD 0.05

DIVIDEND 18 Jan 2007 22 Jan 2007 1 Feb 2007 SGD 0.28

DIVIDEND 18 Jan 2007 22 Jan 2007 1 Feb 2007 SGD 0.22 NET OF TAX

For 1H09, STI ETF will pay out 5 cents dividend, which works out to be about 5.78% dividend yield assuming the stock price is about S$1.73 and it also pays 5 cents in 2H09. In 2008, STI ETF paid 12 cents dividend for the full year.

The following are component stocks of STI ETF in January 2009 (source : www.streettracks.com.sg)

Kepcorp, Jard C&C, City, Capland, Capmall, SIA, Starhub, DBS, Golden Agri, Wilmar, Cosco, F&N, Genting, HKLand, JMH US$, JSH US$, Keplan, NOL, Noble, Olam, OCBC, SembMarine, SIE, ST Engg, SGx, SPH, UOB, Sembcorp, YLLG

The following is the fund profile for STI ETF as at 23 January 2009 :

NAV per share : S$1.70

Investment Objective :
streetTRACKS STI's investment objective is to provide investment results that closely correspond to the performance of the Straits Times Index.

Trading :
You can buy or sell shares of streetTRACKS STI just like any other share listed on SGX-ST any time during the trading day through your broker or any online dealing facility.

Use of CPF Funds :
streetTRACKS STI is included in CPF Investment Scheme - Ordinary Account. CPF members are allowed to invest up to 100% of their CPF savings in streetTRACKS STI, compared to only 35% for other Singaporean stocks listed on SGX-ST.

Manager :
The Manager of streetTRACKS STI is State Street Global Advisors Singapore Limited, part of the State Street Global Advisors (SSgA) group, one of the largest investment managers in the world with over US$2.0 trillion under management (30 September 2008).

Trustee :
The Trustee of streetTRACKS STI is DBS Trustee Limited, a wholly-owned subsidary of the Development Bank of Singapore (DBS).

Benchmark :
The Straits Times Index.

Board Lots :
A board lot is 1000 units.

Price of each share :
Approximately 1/1000th of the Straits Times Index.

Total Annual Costs (Expense Ratio)* :
0.3% per annum.

Dividends :
Investors can expect to receive dividends twice a year.

*: the annual cost of the fund comprises the management fee, the trustee fee, and other fund expenses. Investors will also pay the standard costs associated with buying and selling shares on SGX-ST.

Source : http://www.streettracks.com.sg/ssga/jsp/en/FundInvestment.jsp

Singapore share market update :

DBS downgrades singapore listed S-chip China XLX to FULLY VALUED (Bloomberg Code: CXLX SP) Price Target : 12-Month S$ 0.33

DBS comments :
DBS expects China XLX to report weak 4Q08 earnings, plunging 50% qoq and 33% yoy to c. RMB50m. This comes on the back of 30%-40% fall in ASP, which affects the profitability of compound fertilizer and methanol segments. Looking into 2009, the consolidation phase is likely to be accelerated and margin contraction is expected in the transition. The share price has performed well and is now trading above our valuation. Downgrade to Fully Valued.

Outlook in 2009 = Consolidation + Margin Contraction
The urea sector in China is expected to accelerate its consolidation and increase industry concentration in 2009. Given most of the small players are operating at losses currently, many of them are likely to be phased out in the next 6-12months. Meanwhile, margins for urea producers will be compressed in the transition. We expect big players to garner 15%-25% of gross margins vs 30%-40% in 1Q06 to 2Q08, assuming urea prices hover around RMB1600-1650/ton and coal prices about RMb900-1000/ton.

Valuation appears relatively rich
Our TP is maintained at S$0.33. We have cut FY09 and FY10 earnings by 23% each year but have raised valuation peg to 7.0x (vs 5.0x previously) FY09 PEs. This is in line with a 30% discount to global peers average valuation. We also believe that CXLX would benefit from the accelerated consolidation in the longer term. However, current valuation appears stretched at 8.2x 09PE, relative to its global peers as well as other S chips. With the lacking of near term catalyst, we downgrade the stock to Fully Valued.

Singapore stock market update

Macquarie remains Bearish on Singapore listed Cosco :

Event
Order cancellation and deferrals over the past month will result in delayed
profit recognition, affecting COSCO’s DCF-derived valuation. We are also
concerned about the possibility of balance sheet write-downs, which we
suspect is behind the company’s profit warning. We therefore lower our target
price from S$0.69 to S$0.65, while retaining our Underperform rating.

Impact
Order cancellations and deferrals have begun: Two orders have been
cancelled and a further ten have been deferred; incidentally this is equivalent
to the sum-total of all shipbuilding orders won by COSCO in 2008. That the
affected orders were all won in mid-2007 is all the more alarming given that
orders placed in 2008 would be less expensive to cancel for COSCO’s clients.
We expect further cancellations and/or deferrals through the remainder of
2009.

Balance sheet write-downs expected: As steel plate and ship engine prices
have come off over the past two quarters, COSCO will be forced to mark to
market its inventory. Given prices have dropped 30–40%, we estimate a writedown
of S$118m, which would lead to a 27% drop in net profits vs. 2007. We
suspect this is the main reason behind COSCO’s profit warning on 30
December 2008.

Valuation not compelling yet: Assuming the write-down, the stock is trading
at 8.6x FY08, with marginal growth in FY09; this suggests the stock is still
expensive. Even without any write-down, the stock is trading at 6.7x FY08,
with negative earnings growth likely over the next year, not to mention a
significant drop in newbuilding order wins.

Earnings revision
FY08E and FY09E EPS have been reduced by 18.7% and 8.2%, respectively,
while FY10 EPS has been raised by 29.9% to reflect deferred profit
recognition.

12-month price target: S$0.65 based on a DCF methodology.

Singapore stock market update

DBS comments on Raffles Education :

Post our conference, we are more confident that management will be able to convert part of the upcoming installment for OUC (Oriental University City) to interest bearing loan. This should re-instill confidence on the counter and boost share price. Student enrollment remains firm. Reiterate Buy, TP: S$0.80.

Scrip Dividend Scheme should be approved. Raffles Ed’s management representative appears confident that the proposed SDS to be put before shareholders’ approval on 12 Jan 09 will be approved. The SDS provides alternative to shareholders to opt for cash or scrip. Investment banks
and/or strategic investors will underwrite un-subscribed scrips.

Operations stable. Management shared that they have not witnessed any significant impact to operations and student enrollment continues to trend well. While they have seen some rise in private students asking for payment
of fees in installment, management indicates that the proportion is insignificant to total student population. 1H09 results will be released on 5 Feb.

Singapore share market update : Sinotel Positive on impending rollout of 3G technologies in China

Singapore mainboard listed Sinotel stock price recently rebounded from a low of 7c to close at 17.5c, a four month high, likely due to the latest news flow about the Chinese government FINALLY announced the release of 3G license in China and the potential orders that may be associate with the implementation of the 3G technology. It has been mentioned that Chinese telcos are expected to spend up to a mind boggling RMB280 billions dollars to upgrade existing equipments over the next 2 years.

Sinotel also made the following announcement to indicate that the company is excited about the latest development :

CHINA ANNOUNCES THE RELEASE OF 3G MOBILE LICENCES TO ALL THREE TELCOS

Singapore, 7 January, 2009 – Singapore Exchange (SGX) mainboard-listed Sinotel Technologies Limited (“Sinotel” or the “Group”), an innovator in the provision of wireless telecommunications infrastructure and solutions in the PRC, is pleased to announce that China has officially released third-generation(3G) mobile phone licences to the nations 3 main carriers, New China Mobile, New China Telecom and New China Unicom.

Seen as potential growth driver to the Telecoms sector, Premier Wen Jia Bao said at the end of a parliamentary meeting on Wednesday, 31 December 2008, that the Government formally agreed to give its blessing to the 3 newly restructured telecommunications companies to rollout their 3G implementation plans. A week after the announcement, China’s Ministry of Industry and Information Technology officially released the licences to the 3 telcos this afternoon.

The ministry said the official implementation will see the 3 telecoms giant spend up to RMB280 billion over the next 2 years on equipment upgrading. The new technology handles faster data transfers and avail mobile users to a host of new value added services such as video streaming and making video calls.

In light of the announcement, Mr Jia Yue Ting, Executive Chairman of Sinotel commented, “Now that the Government has finally given its official endorsement, we can expect the restructured telcos to expedite their 3G upgrading works. To woo customers over, the telcos are likely to compete intensely to have the widest coverage in the shortest time possible. This is a golden opportunity for Sinotel, who has over the years positioned itself as a network expansion specialist and market leader in system integrations.”

Being the world’s largest population for mobile phone users, the telecommunications sector in China is a rapidly growing industry that recently underwent a major restructuring exercise. Upon completion, the 3 telecom giants will offer all rounded services encompassing Fixed Line, Internet Broadband and Wireless Mobile.

The 3 telcos have decided to adopt different 3G platforms with the largest carrier New China Mobile taking a lead to develop the nation’s highly acclaimed proprietary TD-SCDMA system. Respectively, New China Telecom and New China Unicom will adopt the more established CDMA2000 and WCDMA platforms which are being used globally.

Irregardless of their differences, industry experts agree that the new technology is likely drive spending and stimulate growth for associated businesses.
Looking ahead, Mr Jia adds that “2009 will be an exciting year for the China telecommunications industry and we believe there are good prospects for our business with the release of 3G mobile licences.”

If Sinotel starts to secure some of the 3G related orders, the recent low at 7c may be the last we see of it at this level for a long time………

SINGAPORE SHARE MARKET NEWS : Straits Asia Resources
OCBC Investment Research, Oct 8

STILL a 'buy' despite bear-case assumptions: Shares of Straits Asia Resources (SAR) have plunged by 49 per cent over the past two weeks, starkly underperforming the Straits Times Index's (STI) 14 per cent fall.
We spoke to management and gathered that other than the recent cancellation of its restructuring plans, the fundamentals have not changed.

A substantial portion of SAR's shareholding spread comprises US funds, several of which have been trimming their positions. We suspect that this could have triggered the price fall, and weakness could persist if global funds continue to face high redemptions.

Restructure cancellation renders SAR a pure Indonesian coal play: SAR recently called off restructuring plans, citing volatile market conditions and lack of shareholders' support. To recap, the restructuring would have involved SAR acquiring coal interests in Madagascar and Brunei for US$100.3 million and taking up a secondary listing in Australia.

We were positive on the acquisition as it would have transformed SAR, which currently derives all its coal from Indonesia, into a global player with geographically diversified coal assets and larger reserves. The cancellation of the acquisition has eliminated what we view as a key catalyst for SAR's growth. Nevertheless, management remains positive on its organic growth and reiterates that it is on track to raise production levels at its Indonesian mines.

Pressure off its balance sheet: On the bright side, the restructure cancellation takes some pressure off SAR's balance sheet. We were expecting the US$100.3 million acquisition cost to be funded by debt, which would have been challenging in light of today's tight credit market and could have strained the company's gearing levels.

With the restructuring exercise out of its way, SAR can now focus on refinancing its US$230 million bridge facility (for the acquisition of
Jembayan) that matures in December 2008.

We understand that SAR is close to securing a US$300 million loan. Finance costs, however, are expected to rise in line with London Interbank Offered Rate (Libor) and widening spreads.

Changing our assumptions to factor in bear-case scenario: We have lowered our earnings and fair value estimates to reflect the following bear-case
assumptions:
lower production from FY2009, assuming that SAR fails to obtain
relevant permits to extend its Sebuku Mine boundary;
lower ASP on softening global demand for energy and commodities; and
higher borrowing costs.

In addition, we change our valuation methodology to the free cash flow to the firm model, bringing our fair value estimate to S$2.25 (from S$4.66).
Nevertheless, we maintain our 'buy' rating on SAR.

Singapore share market IPO - China Kunda Technology

OCBC short note :
Summary: China Kunda Technology Holdings Ltd. (China Kunda) is a provider of precision moulds, plastic injection parts, and IMD products. Based in Shenzhen city, Guangdong province, PRC, its plastic engineering solutions include design, R&D of plastic injection and IMD technologies. China Kunda will be publicly listed on SGX-ST on 9 October 2008. At an IPO price of S$0.215, China Kunda will raise about S$11.64m in net proceeds from the issue of the 67.2m new shares. The proceeds will be used to acquire Shenzhen Precision and corresponding investments in plant, machineries and production facilities, enhancement of R&D capabilities, expansion of sales and marketing network, and for general working capital. We do not have a rating on the stock.

comments :
FY07 profit only HK45.1m a rather small size company to float during turbulent times for the singapore stock market.....plus tech related sector is not too sexy at the moment......i will give it a Five Z rating (z = sleepy level)

Singapore share market update

listed companies results release date - updated on 4aug

Date of Release Company Remarks
5-Aug Celestial NutriFoods 1H FY08
5-Aug China Hongxing 1H FY08
5-Aug Hi-P 1H FY08; Before 9am
5-Aug Hyflux Water Trust 1H FY08; After 5pm
5-Aug Li Heng Chemical Fibre 1H FY08
5-Aug Mermaid Maritime 1H FY08
5-Aug Tuan Sing Hldgs 1H FY08; After 5pm
6-Aug SembCorp Industries 1H FY08; After 5pm
6-Aug Synear Food Hldgs 1H FY08; After 5pm
7-Aug Broadway Industrial Grp 1H FY08; After 5pm
7-Aug Centraland 1H FY08; After 5pm
7-Aug China Sun Bio-Chem Technology Grp 1H FY08; Profit Warning
7-Aug Electrotech Investments 1H FY08; After 5pm
7-Aug LMA Int'l 1H FY08
7-Aug Midas Hldgs 1H FY08; After 5pm
7-Aug NOL 1H FY08
8-Aug Hiap Hoe 1H FY08
8-Aug Hotel Royal 1H FY08; After 5pm
8-Aug NippeCraft 1H FY08
8-Aug SuperBowl Hldgs 1H FY08
11-Aug Eastern Asia Technology (Eastech) 1H FY08
11-Aug Fabchem China 1H FY08; After 5pm
11-Aug Ho Bee 1H FY08
11-Aug Lee Kim Tah 1H FY08; After 5pm
11-Aug MegaChem 1H FY08
11-Aug Pine Agritech 1H FY08
11-Aug Sino-Environment Tech Grp 1H FY08; After 5pm
12-Aug Armstrong Industrial Corp 1H FY08
12-Aug China Lifestyle Food and Beverages Grp 1H FY08; After 5pm
12-Aug China Taisan Tech Grp 1H FY08; After 5pm
12-Aug Chip Eng Seng 1H FY08
12-Aug Golden Agri-Resources 1H FY08; After 12.30pm
12-Aug Hong Leong Asia 1H FY08
12-Aug Hotel Plaza 1H FY08
12-Aug IFS Capital 1H FY08; After 5pm
12-Aug Macarthurcook Industrial REIT 1Q FY08
12-Aug SingTel 1Q FY08; Before 9am
12-Aug ST Engg 1H FY08; After 5pm
12-Aug Straits Trading 1H FY08
12-Aug UOL Group 1H FY08
13-Aug Advanced Holdings 1H FY08; After 12.30pm
13-Aug Breadtalk Group 1H FY08; After 5pm
13-Aug ComfortDelgro Corporation 1H FY08; After 5pm
13-Aug Datacraft Asia 1H FY08; Before 9am
13-Aug Ellipsiz FY08; Profit Warning
13-Aug Foreland Fabritech 1H FY08
13-Aug Petra Foods 1H FY08; Before 9am
13-Aug Swiber Hldgs 1H FY08; After 5pm
13-Aug United Overseas Insurance 1H FY08
14-Aug China Sports Int'l 1H FY08
14-Aug City Developments 1H FY08
14-Aug CSE Global 1H FY08
14-Aug FerroChina 1H FY08; After 5pm
14-Aug HTL Int'l 1H FY08
14-Aug IndoFood Agri 1H FY08; After 5pm
14-Aug Nera Telecommunications 1H FY08; After 5pm
14-Aug Wilmar Int'l 1H FY08; After 5pm
18-Aug Chosen Hldgs 1H FY08; After 5pm
18-Aug Jaya Hldgs 1H FY08
20-Aug ASL Marine 1H FY08; After 5pm
13-Sep China Flexible Pack 3Q FY08
29-Oct NOL Tentative

Singapore stock market news & update

Singpoare listed companies results release date - updated as at 31july08

4-Aug ARA Asset Management 1H FY08; After 5pm
4-Aug Cosco Corporation 1H FY08; After 5pm
4-Aug Memtech Int'l 1H FY08; After 5pm
5-Aug Celestial NutriFoods 1H FY08
5-Aug China Hongxing 1H FY08
5-Aug Hi-P 1H FY08; Before 9am
5-Aug Hyflux Water Trust 1H FY08; After 5pm
5-Aug Mermaid Maritime 1H FY08
5-Aug Tuan Sing Hldgs 1H FY08; After 5pm
6-Aug SembCorp Industries 1H FY08; After 5pm
6-Aug Synear Food Hldgs 1H FY08; After 5pm
7-Aug Broadway Industrial Grp 1H FY08; After 5pm
7-Aug Centraland 1H FY08; After 5pm
7-Aug Electrotech Investments 1H FY08; After 5pm
7-Aug LMA Int'l 1H FY08
7-Aug Midas Hldgs 1H FY08; After 5pm
7-Aug NOL Tentative
8-Aug Hiap Hoe 1H FY08
8-Aug Hotel Royal 1H FY08; After 5pm
8-Aug SuperBowl Hldgs 1H FY08
11-Aug Eastern Asia Technology (Eastech) 1H FY08
11-Aug Ho Bee 1H FY08
11-Aug Lee Kim Tah 1H FY08; After 5pm
11-Aug Sino-Environment Tech Grp 1H FY08; After 5pm
12-Aug Armstrong Industrial Corp 1H FY08
12-Aug China Lifestyle Food and Beverages Grp 1H FY08; After 5pm
12-Aug Golden Agri-Resources 1H FY08; After 12.30pm
12-Aug Hotel Plaza 1H FY08
12-Aug IFS Capital 1H FY08; After 5pm
12-Aug Macarthurcook Industrial REIT 1Q FY08
12-Aug SingTel 1Q FY08; Before 9am
12-Aug ST Engg 1H FY08; After 5pm
12-Aug Straits Trading 1H FY08
12-Aug UOL Group 1H FY08
13-Aug Advanced Holdings 1H FY08; After 12.30pm
13-Aug Breadtalk Group 1H FY08; After 5pm
13-Aug ComfortDelgro Corporation 1H FY08; After 5pm
13-Aug Ellipsiz FY08; Profit Warning
13-Aug Petra Foods 1H FY08; Before 9am
13-Aug Swiber Hldgs 1H FY08; After 5pm
13-Aug United Overseas Insurance 1H FY08
14-Aug City Developments 1H FY08
14-Aug HTL Int'l 1H FY08
14-Aug IndoFood Agri 1H FY08; After 5pm
14-Aug Nera Telecommunications 1H FY08; After 5pm
14-Aug Wilmar Int'l 1H FY08; After 5pm
18-Aug Chosen Hldgs 1H FY08; After 5pm
20-Aug ASL Marine 1H FY08; After 5pm
29-Oct NOL Tentative

Singapore share market news update 15july08

- China Energy - PricewaterhouseCoopers' review of company's CNY197.8 million acquisition of Jiutai Energy last year found no evidence of irregularity. According to PwC, additional CNY190 million came from company's IPO proceeds, used mainly to repay Jiutai's debts, incurred to fund construction of phase 1 of its DME production plant. PwC says while review uncovered no discrepancy, China Energy failed to disclose payment of bulk of CNY190 million in 3Q07 to explain fall in its cash balance. Company says it'll take steps to strengthen its approval processes.

- Indofood Agri Resources said it did not plan to issue new shares to help repay loans that will become due next month.

- Singapore's central bank said it is closely monitoring financial markets in the wake of the crisis surrounding U.S. mortgage giants Fannie Mae and Freddie Mac, and warned of big downside risks in global markets.

- ST Engineering’s aerospace arm has signed an agreement for global cooperation with GE Aviation.

- Advanced Holdings has landed four new contracts totaling S$19.3m for projects in Singapore and China.

- Chosen Holdings warned it expects to report lower profits for FY08, citing lower demand from the data media storage industry and the slow ramp-up of new programs for the Malaysia and Thailand operations due to the slower US economy.

- ECS Holdings said it is working on a possible placement of shares to a sufficient number of placees in order to meet the 10% public free float requirement.

Singapore Share Market S-chips update :

Composition of the Merrill Lynch S-shares index
BBG Code Short Name Market Cap (USD MM) Weight Sector

COS SP Cosco Corp Singapore 5,462 6.63% Industrials
YZJ SP Yangzijiang Shipbuilding 2,175 6.63% Industrials
FRC SP Ferrochina Limited 734 6.63% Materials
CHHS SP China Hongxing Sports 842 6.63% Consumer Discretionary
LHCF SP Li Heng Chemical Fibre 817 6.63% Consumer Discretionary
YLLG SP Yanlord Land Group 2,823 6.63% Financials
CEGY SP China Energy Ltd 429 6.63% Materials
CENU SP Celestial Nutrifoods 371 6.63% Consumer Staples
CXLX SP China Xlx Fertiliser 568 6.04% Materials
SINOT SP Sino Techfibre 423 5.28% Consumer Discretionary
CMILK SP China Milk Products 414 5.22% Consumer Staples
SINE SP Sino-Environment Tech 348 5.04% Utilities
SYNF SP Synear Food Holdings 431 4.67% Consumer Staples
SVC SP Sunvic Chemical 158 3.75% Materials
CZAI SP China Zaino International 378 3.59% Consumer Discretionary
DLNG SP Delong Holdings Ltd 1,286 3.34% Materials
MIDAS SP Midas Holdings Ltd 560 3.13% Industrials
JIUC SP Jiutian Chemical Group 163 2.70% Materials
PAG SP Pine Agritech Limited 360 2.13% Consumer Staples
FBCM SP Fibrechem Technologies 434 2.09% Consumer Discretionary

Source: Merrill Lynch Equity Derivatives Strategy
Weights as of 30-Jun-08

SINGAPORE SHARE MARKET UPDATE 4july2008
- Another IPO bites the dust

Hong Kong dry-bulk shipping line Maritime Capital Shipping has
decided not to proceed with an initial public offering (IPO) in the Singapore Stock Exchange due to weak sentiment for the Singapore stock market in recent weeks.

"The performance of the global equity markets has deteriorated
sharply in the last few days and equity markets have closed for
IPOs, regardless of the underlying fundamentals of the company,"
said Maritime Capital chief executive officer Mark Harris. Mr. Harris
did not say when or whether the company might revive listing
plans.

After witnessing the "failure" of some of the recent IPOs in Singapore stock market, most investors would find it hard to jump into another IPO.
Most recent Singapore IPOs have tanked on day one of listing and are
still trading below their respective IPO prices. The last count is that
15 of the 18 new companies whose shares are listed in the Singapore stock exchange this year are now trading below their offer prices.

After the recent sell off in the broad market, some recent IPOs are
trading at 3-4 times FY08 earnings.......its no wonder new IPOs are finding hard
convincing investors to subscribe to them at 4-5 times FY07 earnings.

What is CFD or contract for difference

CFD gives high leverage compared since you only need to put down about 20% of the investment value - but just like margin account, this can work for as well as against you if you do not know how to manage your position.

Also, CFD allows traders to "shortsell" a stock ie selling a stock which someone who does not own with the aim of buying back later at a lower price. CFD allows traders to hang on to the short position for as long as one month or even beyond. See below for more information.

1. What is Contracts for Difference (CFD)?
A CFD is an agreement between 2 parties to settle the difference between the opening price and closing price of the
contract multiplied by the number of shares specified. It is therefore a unique trading instrument that allows the
customers to trade in stocks with the key features of leveraging and short-selling.

2. Key Features of Phillip CFD?
These are the advantages of using Phillip Stock CFD:
_ Portfolio Diversification
Besides SGX, HKSE and KLSE, customers now have the added advantage of diversifying their stocks and CFD portfolio
with selected companies listed on the NYSE and NASDAQ. With lesser initial capital outlay (20%), customers can now
effectively perform portfolio diversification.

_ Convenience to Short Sell*
A CFD allows you to take a position on a stock without needing to buy and sell the shares themselves. Therefore, CFD
investors can take short position, and not be limited to the T+3 days contra period or be tired out by the
administrative hassles that accompany SBL trading.

* Share Borrowing and Lending(SBL) facility allows you to short the market by borrowing shares, the accompanying administrative hassles often
results in investors missing out on the ‘right’ price to sell.

_ 5 Times Trading Power, Increased Leverage
Phillip CFD will enable you to leverage up to 5 times the capital, allowing clients to pay only a fraction of the
underlying capital required.

_ 30 Calendar Days “CONTRA”
Each CFD contract has an expiry date of 30 calendar days. Investors can choose to close out anytimebefore
expiration. If contracts are not closed out within 30 calendar days, they will be automatically renewed at the end of
the 30th day.

_ Sophisticated Trading Strategies
You will have the added ability to protect your existing share portfolio against adverse market conditions by utilizing
the Phillip CFDs to hedge your exposure, via strategies such as pair trading and spread trading.

_ Smart STOP Order§
Increase your chances of winning and minimize losses with the use of the STOP order type. Our Stock CFD (US) now
has a system which allows for higher entries and cut loss trades. Simply by the differentiation of the mid-price and
the price input, the system will be able to identify if a customer is putting in a STOP order.

§STOP order is currently applicable for US markets only.

** Customers are advised to exercise caution when executing orders at current spread especially during volatile conditions.

_ 1.5%p.a. Interest Receivable for Short-Selling
Customers using Phillip US Stock CFD to short-sell will receive interest on their overnight short positions.

3. Corporate Actions

Dividends
A holder of long Phillip CFD on the quoted shares* will receive a credit adjustment** in the account, where the adjustment is equivalent to the net dividend payment due on the underlying shares. Conversely, a holder of short
Phillip CFD will incur a debit adjustment** where it is equivalent to the gross dividend.
*Shares refers to companies being listed on the respective exchanges
**Dividends adjustment will be in the respective exchanges’ currencies.

Bonus, Stock Splits, and Reverse Splits
Quantity and price adjustment will be made to reflect the market equivalent.
Note: Notwithstanding the foregoing, PSPL reserves the right to close all open positions relating to the underlying security before the ex-date for
any corporate action not mentioned above.

In the event there is a combination of Corporate Actions (“CA-Cum All”), where it includes corporate actions other than above mentioned,
clients might not be able to enjoy the entitlement and may be required to close off all open positions before the ex-date.

Eg. ABC stock announces $0.05 dividend per share (which Phillip CFD originally caters for) & 1 for 10 rights issue at $0.60 (which Phillip CFD
originally does not cater for). Ex-date for both Corporate Actions is on 1st October 07.

Clients who are holding the above position would not be entitled to both the rights & dividends and would have to liquidate their positions before
ex-date.

4. Settlement Currency
All Phillip CFD contracts would be settled in the traded currencies. Client’s MYR ledger is not allowed to go into deficit. Should there be a deficit, MYR ledger will be forced converted into SGD. For USD and HKD, there will be NO
AUTO CONVERSION for USD and HKD should there be any margin deficit in these 2 currencies. Should there be any margin deficit in the respective ledger, clients should submit conversion request to avoid margin debit interest.

Exchanges - Settlement Currency
SGX - Singapore Dollars
KLSE / HKSE / US - Traded Currency

Counters Available
For the latest list of counters Phillip CFD issues, please visit our CFD website @ www.phillipcfd.com to download the counter list.

Placing Orders
Phillip CFD orders can be placed in a similar way as placing an ordinary share order. They can be placed through
POEMS online or through your Trading Representatives.

Mini CFDs – Trade BLUE CHIPS at half a lot
You may place long or short CFD order of 500 shares instead of 1 board lot for the following SGX Blue Chips.
Mini CFDs counters
1 City Dev 6 Keppel Corp
2 DBS 7 SGX
3 F&N 8 SIA
4 Great Eastern 9 UOB
5 Jardine C&C 10 Venture

Minimum Deposit
Investors are required to put up an initial deposit of S$3,000 before any trades can be initiated. Thereafter, the
maintenance margin will be 20% of your portfolio market value, marked to market daily.

Withdrawal
Margin Excess from cash deposit may be withdrawn.

Mode of Payment
_ Cash payment for your CFD trading account can be made at the Head Office’s cashier counter.
_ EPS (Electronic Payment for Shares): Please choose “Lump Sum” payment and initiate payments before 9 pm to
ensure that your CFD ledger is credited punctually before the next market day. Kindly inform your dealer/remisier that the EPS is meant for your CFD trading account.
_ Cheque should be crossed and made payable to “Phillip Securities Pte Ltd”. Please state your trading account number, name and contact number on the back of the cheque, and stating clearly that this payment is meant for
Phillip CFD.
_ Existing Phillip clients can initiate transfer from your stock & shares trading account to CFD account via online or through your dealer / remisier.
_ Telegraphic Transfer (TT): Please state your trading account number and name along with the telegraphic transfer. Kindly inform your dealer/remisier that the TT amount is meant for your CFD trading account.

Closure of Account
An administrative fee of up to S$1.07 (inclusive of GST) would be levied for account closure with credit balance
of S$1.00 or below.

Fees & Charges
_ Commission‪
Market Commission Minimum Commission
SGX 0.3% for contract value > S$12,000
0.5% for contract value X S$12,000
Above applies to non STI component stocks
*0.1% for Component Stocks (*Promo till 31 Jul 08)
S$22 / US$15 / HK$150
KLSE 0.6% (Settlement Currency in MYR) RM60 (Settlement Currency in MYR)
HKSE §0.35% (§Promo till 30 Jun 08) HK$150
NYSE / NASDAQ 0.25%* US$25*
An additional renewal commission will be applied on the 30th day closing price. GST on commission.
Upon renewal, the new contract value will be the last done price (on T+30) multiplied by the contract quantity.
* Commission will be calculated on per trade basis, no amalgamation will be performed.

Differences between CFD & Traditional Shares (Singapore Market)
CFD Traditional shares
Settlement period _ T+30 calendar days _ T+3 market days
Capital Outlay _ 20% _ 100% on T+3

“Short-sell”function Just a mouse click away Subjected to T+4 buy-in if you
shortsell
without buying
back on same day
Financing charges 5.5% p.a. (Long) N.A
4.0%* or 8.0% p.a. (Short)
(based on 100% of opening
contract value)

Share ownership No Yes
Commission 0.2% or 0.3% or 0.5% 0.28% - 0.5%
*Rates are subjected to change*

SGX clearing
& access fee N.A 0.0475%


Short A Stock in Singapore Stock Market Using CFD For Example

A client is bearish on ZZ (listed on SGX and non-STI component stock) and sells 4,000 shares (2 times leverage) at S$1.40 after borrowing from SBL. Alternatively, the client can deposit the S$2,800 and sell up to S$14,000 worth of CFD contract in counter ZZ at S$1.40.

Scenario 1: Positions are closed 10 days later @ S$1.30

Original Investment Short CFDS$2,800 Short StockS$2,800

Opening contract value (Day 1) S$14,000 S$5,600
Opening commission (incl GST) (S$44.94) (S$16.78)
Clearing & Access fees (incl GST) S$0 (S$2.85)
Borrowing Charge (S$30.68) (S$10.74)
Closing contract value (Day 10) (S$13,000) (S$5,200)
Handling fee (incl GST) S$0 (S$21.94)
Closing Commission (incl GST) (S$41.73) (S$15.58)
Clearing & Access fee (incl GST) S$0 (S$2.64)
Net Gain S$882.65 S$329.47


Scenario 1: Positions are closed 10 days later @ S$1.50 (with a loss)

Original Investment Short CFDS$2,800 Short StockS$2,800
Opening contract value (Day 1) S$14,000 S$5,600
Opening commission (incl GST) (S$44.94) (S$16.78)
Clearing & Access fees (incl GST) S$0 (S$2.85)
Borrowing Charge (S$30.68) (S$10.74)
Closing contract value (Day 10) (S$15,000) (S$6,000)
Handling fee (incl GST) S$0 (S$21.94)
Closing Commission (incl GST) (S$48.15) (S$17.98)
Clearing & Access fee (incl GST) S$0 (S$3.05)
Net Loss (S$1123.77) (S$473.34)

Source : www.phillipcfd.com

Singapore stock market news

- Aztech Systems has secured a S$253m contract for the supply of construction material.

- China Essence Group posted an 85% YoY increase in 3Q08 net profit to RMB100.m as revenue almost doubled from RMB166m to RMB330.3m.

- Jade Tech is selling its wholly-owned, loss-making subsidiary Jade Precision Engineering to United Pacific Industries (UPI) for about S$6m in UPI shares and cash.

- Yoma Strategic Hldgs posted a S$21.06m net profit in 3Q08, a turnaround from a S$13.82m loss a year ago, thanks mainly to the completed acquisition of a 27% interest in Winner Sight Investments.

- Mercator Lines reported a 3Q08 net profit of US$14.4m, up sharply from US$2.4m a year ago. The company attributed the 106% YoY gain in revenue at US$43.1m to improved vessel day rates and an increase in the number of operating days.

- Vicom, the vehicle inspection unit of ComfortDelGro, posted a 31% YoY gain in FY07 net profit to S$13.5m.

- KTL Global has secured a 5-year contract to supply up to US$7m worth of wire ropes for crane equipment to the McDermott Group. It also announced a 24.6% YoY increase in 1H net profit to S$2.18m.

- Saizen REIT’s 2Q08 net property income jumped 77.8% YoY to S$7.95m on the back of an 85% increase in gross revenue to S$11.23m.