Author: tfwee
MacCookPSF – SGX
Extracts,
Distributions for 2008/2009
The anticipated distribution for next financial year is 1.75 Australian cents per unit paid quarterly.
The proposed reduction in distribution for next financial year is a result of –
• distributions being suspended or reduced on a number of the Fund’s investments;
• increased borrowing costs on the Fund’s new debt facility;
• the lack of placement fees received in the period; and
• the requirement to reduce the Fund’s debt facility from $63m to $50m over the period to March 2009.
Based on market prices as at 19 June 2008 the forecast distribution represents a yield of 13.46% p.a over the financial year.
Source : SGX
SingTel – BT
SingTel in talks with Chinese telcos
Restructure of Chinese telecom market opens doors to foreign investors
SINGTEL, South-east Asia’s largest telco, is in talks with operators in China about investing in the world’s biggest telecoms market, which is being overhauled and opened to foreign investors.
‘It’s a market we have been monitoring. We have been in discussions with various operators in the China market,’ SingTel’s chief executive officer, Chua Sock Koong, told reporters on the sidelines of an industry conference.
Last month, Beijing unveiled a long-awaited sector revamp, aimed at improving competition and rolling out high-speed third-generation mobile services, in what has been called the world’s largest industrial reorganisation.
The restructure also opens the door to foreign investors who have been restricted to taking small stakes, such as Vodafone’s 3.3 per cent investment in China Mobile Ltd.
‘We are not financial investors, we want to make investments as strategic partners, and the stake is one that would give us the necessary governance rights and involvement at the board and management level,’ Ms Chua said.
‘There are ongoing engagements but no deal has been done,’ she added, without naming any firms.
Earlier this month, media reports citing unnamed sources said SingTel was considering investing in fixed-line operator China Telecom Corp, although there have been no formal talks.
This follows China Telecom’s comments that it was in talks to sell a stake to a strategic investor and had been approached by four or five companies.
China Unicom early this month paid US$24 billion for a fixed-line rival and sold a network for almost US$16 billion as part of the industry reshuffle.
SingTel, which derives about two thirds of its pre-tax earnings from operations outside Singapore, is seeking acquisitions in growth markets to expand its earnings by double-digits over the medium term.
SingTel was actively involved last month in potential takeover talks between India’s top mobile operator Bharti Airtel Ltd, in which it owns an around 30 per cent stake, and South Africa’s MTN Group Ltd, according to a source familiar with the situation.
But Bharti’s talks with MTN collapsed over how the two would structure a combined entity.
SingTel, Singapore’s largest listed company, holds stakes in various mobile operators in markets ranging from Pakistan to Indonesia. It also owns Australia’s second-largest telecoms firm Optus. — Reuters
Yield Stocks – BT
High-yield stocks in demand given soft interest rates: DMG
They also offer growth prospects from business expansions
WITH interest rates set to remain soft, stocks with a high dividend yield are expected to pack a hard punch.
According to DMG & Partners analyst Leng Seng Choon, such stocks are going to become more attractive to investors as interest rates in Singapore and the US stay low.
Despite remarks made by US Federal Reserve chairman Ben Bernanke earlier this month that further interest rate cuts are unlikely, high US unemployment could keep rates down.
And with local deposit rates starting at 0.325 per cent and capped at one per cent, stocks with dividend yields of more than 3 per cent look significantly more enticing in comparison.
Mr Leng pointed to stocks like ComfortDelGro and Suntec Reit, with current dividend yields of 6.6 and 5.1 per cent, respectively.
‘Apart from their higher yields compared with fixed income instruments, these stocks also have growth prospects coming from business expansion,’ said Mr Leng.
Local interest rates are expected to stay low despite the spike in Singapore 10-year government bond yields to 3.6 per cent.
‘The spread of the US 10-year bond yield over the Singapore equivalent is now 40 basis points, significantly lower than the 110 basis point average over the past five years,’ said Mr Leng. ‘We see the likelihood of further spread-narrowing as very low and this points to limited upside for Singapore 10-year government bond yields.’
The US 10-year government bond yield has risen from 3.3 per cent to 4 per cent since mid-March this year.
Its Singapore counterpart has recorded a swift rise from 2.3 per cent to 3.6 per cent over the same period, which Mr Leng said could be due in part to inflation concerns here.
‘We note that the current 3.6 per cent yield on Singapore 10-year government bonds may lead to some switching out of dividend yield stocks to these bond instruments,’ he said. ‘But stocks that offer high dividend yield remain interesting, particularly if they have accompanying growth prospects.’
The spike in the 10-year government bond yield is not expected to spill over into Sibor rates, Mr Leng told BT. ‘Even in a hypothetical scenario of the US Fed Fund rate rising, the current narrow spread provides scope for the three-month Sibor to remain soft.’
The spread between the US Federal Funds rate over the three-month Sibor rate is now 0.7 of a percentage point, against a three-month average of 1.5 percentage points.
The low rates paid by other fixed-income instruments like time deposits are also expected to continue, further fuelling the attractiveness of high-yield stocks.
‘As long as Sibor rates are low, time deposit rates will stay low,’ Mr Leng said.
SPH – OCBC
Testing support
– SPH has corrected over the last 3 months from a peak at S$4.64. We observed that recently the price decline had been on the back of low volume, suggesting the downtrend could be losing momentum.
– While the price is currently testing the support at the short-term uptrend line (formed by the higher lows between Aug 07 and Jan 08), we do expect it to hold.
– We observed that the stochastic indicator is not only trading within the oversold region but is also displaying a positive divergence – this indicates a possibility of a rebound.
– A rebound from here would result in SPH facing immediate resistance at the moving average convergence region around S$4.38 – 4.42. Should SPH succeed in trading past this region, the next resistance level is at S$4.50.
– If the current support at the uptrend line fails to hold, subsequent support is around S$4.09 – 4.15.
SPAusNet – BT
SP AusNet seeking loan of A$320m to refinance debts
AUSTRALIAN power firm SP AusNet said yesterday that it is looking to borrow another A$320 million (S$415 million) this year to refinance its debts, as borrowing costs rise amid a tight credit market.
The firm, which signed a A$1.55 billion loan with a syndicate of 12 banks in February, told Reuters that it will focus on organic growth, after dropping plans in December to pay parent Singapore Power A$8.3 billion for the assets of delisted Australian energy firm Alinta due to concerns over high borrowing costs.
‘We won’t be relooking at those assets as we speak. However we’ve agreed to look at ways for the two organisations to cooperate,’ Nino Ficca, managing director of dual-listed SP AusNet, said in an interview in Singapore.
Mr Ficca said he hopes to complete those discussions this year, and the two firms could collaborate in areas such as joint procurement, and by combining their backroom services. SP AusNet owns and operates power transmission networks in Victoria state.
The company’s February loan of A$1.55 billion was led by Citigroup, Commonwealth Bank of Australia, nabCapital, Royal Bank of Scotland and Westpac Banking Corp. — Reuters