15/02/2016 wired weekly - dbs bank...singapore market at 1.1x p/b. current pe and pb valuations are...

15/02/2016

Source: DBS Bank

15 February 2016

Singapore Traders Spectrum

Wired Weekly Refer to important disclosures at the end of this report

Straits Times Index FTSE Small Cap Index

STI and 12-mth forward PE Brent Crude Oil

Source: Datastream, DBS Bank FTSE Indices 5-Day Performance

Source: Bloomberg Finance L.P.

360

380

400

420

440

460

480

500

520

Feb-15 May-15 Aug-15 Nov-15 Feb-16

FTSE Small Cap Index

2,400

2,500

2,600

2,700

2,800

2,900

3,000

3,100

3,200

3,300

3,400

3,500

3,600


ST Index

2200

2400

2600

2800

3000

3200

3400

3600

3800

4000

Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16

Avg @ 13.8x

-1SD @ 12.2x

+1SD @ 15.2x

-2SD @ 10.6x

Index @ 1 Wk % YT D %

F TSE Sectoral Indices 12-F eb-16 Chg Chg

STI 2539.95 -0.4 -11.9

Mid Cap 626.89 -0.1 -6.1

Small Cap 370.54 -1.0 -8.2

All Share 629.34 -0.4 -9.4

China 173.49 -3.0 -17.0

Real Estate 636.11 -1.2 -9.3

Real Estate & Dev 594.55 -3.1 -17.5

Real Estate Inv Trust 684.77 0.4 -1.6

Oil & Gas 290.1 -0.3 -24.0

Basic Materials 87.03 -5.0 -19.3

Industrials 642.07 -1.7 -3.6

Consumer Goods 422.07 1.1 -1.8

Health Care 1400.03 -1.5 -4.8

Consumer Serv ice 735.71 0.8 -4.8

Telecommunication 930.19 2.6 -2.5

Utilities 342.36 -3.6 -18.1

Financials 672.35 -0.9 -12.9

Technology 277.79 -1.6 -12.3

Yeo Kee Yan (65) 6682 3706 [email protected]

Ling Lee Keng (65) 6682 3703 [email protected]

ed: JS / sa: YM

KEY POINTS STI – Maintain view for 2500 inflexion and rise to

2750

Prefer dividend stocks in current environment - FCL, Venture, SIA Eng, Sheng Siong, ST Eng, ARA, AREIT, FCT and MCT.

Wired Weekly

The Fire Monkey slipped and fell down the tree at the start of the New Lunar Year. There’s a good chance it escaped with minor injuries as the branch was near the ground.

At 2540, STI trades at 10.4x 12-mth forward PE and the Singapore market at 1.1x P/B. Current PE and PB valuations are comparable to previous major market troughs that included the September 2001 terrorist attack on New York, 2nd Iraq War and SARS in 2003 as well as the 2011 Eurozone crisis. The only time the Singapore market traded lower was during major crisis such as the 97/98 AFC and the 2008/09 GFC when trough PB valuations were 14-18% lower compared to the current level.

Based on these historical observations, with the exception of a financial crisis, the Singapore market has priced in plentiful of risk and in our opinion, including that of a possible technical recession.

Our base case view remains for an inflexion point around the 2500 level with rebound potential to 2750. We place a higher two-thirds chance of this scenario developing for the simple reason - the world is currently not heading towards a financial crisis and Singapore is currently not in a technical recession.

In a bear case scenario where current uncertainties degenerate further (e.g. fear of another financial crisis), we see STI sinking below 2500 to 2250-2300 before we seek an inflexion point. At this lower level, the STI would have retraced 61.8% of its post-GFC bull market, with PB valuation falling to just 0.99x and PE valuation sinking below 9.77x (-2.5SD) 12-mth fwd PE. We place a lower one-third chance of this scenario developing.

We maintain our preference for companies that offer dividend upsides in the current environment where growth is uncertain, and central banks (e.g. ECB, BOJ) are returning to monetary easing and the FED looks increasingly unlikely to raise rates anytime soon.

Our dividend stock picks are Frasers Centrepoint Ltd, Venture Corp, SIA Engineering, Sheng Siong, ST Engineering and ARA Asset Management. Among the SREITs, we pick Ascendas REIT, Frasers Centrepoint Trust and Mapletree Commercial Trust.

2025303540455055606570


Brent Crude OilUS$/barrel


Wired Weekly

Singapore Market Summary The Fire Monkey slipped and fell down the tree at the start of the New Lunar Year. The benchmark STI fell 84pts (-3%) last week. The decline was once again led by banks and SingTel. “Cheap” valuations provided no respite thus far Expectations are growing that the FED may not even hike interest rates this year and the accompanying decline in the USD did not bring any reprieve from the negative sentiment. Instead, investors’ attention turned to the negative impact of the current slowdown on the global economy especially from China, falling corporate earnings and rising credit risks.

With interest rates in Eurozone and Japan already negative and the FED increasingly unlikely to raise rates, concern is also rising that central banks are ineffective with few bullets left to lift their ailing economies. Holding steady our view for 2500 inflexion for a rise to 2750 The STI now trades at 10.4x 12-mth forward PE and the Singapore market at 1.1x P/B. The table below compares current valuation levels with previous major market troughs. Based on historical trends, with the exception of a financial crisis, the stock market has priced in plentiful of risk and in our opinion, including that of a possible technical recession.

Singapore market valuation at major troughs

Event MSCI SG 12-mth

fwd PE (x)

Singapore Market P/B (x)

97/98 Asian Financial Crisis 11.47 0.95

September 11 12.65 1.29

2003 Iraq War & SARS 13.07 1.03

Global Financial Crisis 8.16 0.90

Eurozone Crisis 10.85 1.23

Current 10.53 1.10

Source: DBS Bank, DataStream

STI at various fwd PE levels

-2.5 sd 9.77x

PE

-2sd 10.55x PE

-1.5sd 11.32x

PE

-1 sd 12.09x PE

-0.5 sd 12.87x

PE

FY16 2,364 2,553 2,739 2,926 3,114

FY17 2,531 2,733 2,933 3,132 3,334

12-mth fwd PE 2,390 2,583 2,771 2,960 3150

Source: DBS Bank

Base case scenario - Our preferred view remains for an inflexion point around the 2500 level with rebound potential to 2750 that coincides with the 65-day exponential moving average. STI’s valuation at 2750 remains a reasonable 11.32x (-1.5SD) 12-mth fwd PE despite the current uncertainties. The base case scenario foresees limited downside for the STI in the near-term and is in line with our observation that historically, the Singapore stock market tends to be underpinned during the March-April period as the ex-dividend dates for blue chip stocks draw near. We place a higher two-thirds chance of this scenario developing for the simple reason - the world is currently not in a financial crisis and Singapore is currently not in a technical recession.

Alternate bear case scenario - However, should current uncertainties degenerate further (e.g. mounting fears of a financial crisis) that lead to the STI slumping below the 2500 level, we see STI sinking lower to 2250-2300 before we look for an inflexion point. At this lower level, the STI would have retraced 61.8% of its post-GFC bull market, with PB valuation falling to just 0.99x and PE valuation sinking below 9.77x (-2.5SD) 12-mth fwd PE. We place a lower one-thirds chance of this scenario developing.

At 2550, STI currently trades below -2SD 12-mth fwd PE.

PE valuation lower than 97/98 AFC, Sept11, 2003 Iraq War & SARS; comparable to Eurozone crisis; higher than GFC

PB valuation lower than Eurozone crisis and Sept 11; almost comparable to 2003 Iraq War & SARS; higher than 97/98 AFC and GFC


Wired Weekly

Straits Times Index (weekly)

Source: DBS Bank

Parking in dividend stocks According to CME FedWatch, the probability for the FED to hike rates even once this year is just 33%. That is, consensus expectation for the FED to hike rates this year remains at zero. This is a drastic change from December last year, when the expectation was for the FED to hike rates at least 3 times this year that should lift the FED funds rate to 1.25-1.5%. Meanwhile, our economist has lowered his FED rate hike expectation to 3 times (previous 4), that would lift the Fed funds rate to 1.25% by year-end.

We maintain our preference for companies that offer upside in terms of dividend yields in the current environment where economic growth is uncertain, with an increasing number of central banks (e.g. ECB, BOJ) turning towards more monetary easing policies and the FED looks increasingly unlikely to raise rates anytime soon. In addition, the dividend yield for companies with resilient earnings has also risen with the stock market correction in recent months. For investors seeking to include some dividend paying stocks into their portfolio, below is the list under our coverage that you may consider.

Dividend stock picks

Source: DBS Bank

4Q15 results reporting to pick up pace It is mid-way through the 4Q results reporting season. So far, about 40% of the stocks in our coverage have released earnings. Of these, more than half are REITS. Most of the REITS reported results in line with our expectations. We have

tweaked FY16F and FY17F earnings for REITS by -0.8% and -1.4% respectively. The pace of results release will pick up from this week. Key results to watch out for include the three banks, SMM, SCI, Genting, CapitaLand and Wilmar. Banks - Moderated earnings growth

Pric e Ta rge t Div

(S$) Pri c e ups ide P/E (x) Yld (%)

10-Fe b ($) (%) FY16F FY16F FY17F FY15

Divide nd

Frasers Centrepoint Ltd 1.63 2.05 25.6 7.9 23.6 4.1 5.3

Ascendas REIT 2.33 2.52 8.0 15.8 8.4 1.0 6.4

Venture 7.96 9.00 13.1 12.6 11.8 6.9 6.3

SIA Engineering 3.46 3.84 11.0 21.7 (0.5) 4.1 5.1

Frasers Centrepoint Trust 1.90 2.04 7.6 17.4 (2.0) 1.6 6.1

Mapletree Commercial Trust 1.34 1.40 4.2 16.7 4.3 3.7 6.1

Sheng Siong Group 0.85 1.01 19.8 20.9 8.6 0.5 4.0

ST Engineering 2.69 3.60 33.8 15.6 0.9 1.6 5.6

ARA Asset Mgt 1.06 1.57 48.9 12.7 (7.3) 4.0 4.7

Compa ny EPS Growth (%)


Wired Weekly

All three banks will release their results soon – UOB on Tuesday, OCBC Wednesday and DBS next Monday. We expect earnings growth of 12% for FY15. If the excitement of the NIM spike for the Singapore banks cools off now that the Fed may slow down the pace of rate hike, there leaves hardly any drivers for growth in 2016. Judging from the trends we have seen in 2015, we believe that even with the Fed rate hikes, there is not much room for NIM to rise significantly. With loan growth likely stay in the low single digits, topline growth will be slower. Non-interest income is unlikely to excite as well and may be volatile depending on markets, and to some extent, be the wildcard to earnings. As we exit the benign credit cycle, credit costs will start to accelerate. We forecast 2016 earnings growth of 6%. Upside surprise could come from higher than expected NIM increase. Every 10bps increase in NIM translates to 4-7% rise in earnings. SMM to report 4Q15 net loss; SCI to maintain dividend payout of 16 Scts in FY15 Sembcorp Marine (SMM) had issued a profit warning that it expects a net loss for 4Q15, resulting in a significant y-o-y profit decline in FY15. The challenging operating environment and project deferments were cited as key

culprits. We reckon the potential losses in 4Q15 are attributable to profit reversal and impairment for the 95%-completed Marco Polo unit as well as prudent provisions for the higher risks of newbuild projects without back-to-back charter contracts. There may be more bad news to come - deferments, cancellations, asset deflation, etc. - in view of the prolonged oil crisis. Results will be released on Monday, 15 Feb. Sembcorp Industries (SCI) will release its results on Wednesday. We expect SCI to maintain similar payout of 16 Scts in FY15 (including 4 Scts interim dividend) despite the decline in recurring net profit. The successful divestments of SembSita and Bournemouth Water are expected to contribute 6.5 Scts to DPS, assuming a 30% payout ratio. Thereafter, DPS should normalize to 12 Scts per annum, representing a decent 5% dividend yield. We expect Genting to report a weaker 4Q15 VIP segment performance. In addition, with Genting implementing a more conservative provisioning policy, bad debts should remain elevated until at least 1H16. In the mass space, Genting may have also experienced a more challenging 4Q15. 4Q15 results will be released on Thursday 18 Feb.


Wired Weekly

Top large and small / mid cap picks

Source: DBS Bank

TOP LARGE CAP PICKSCompany Recom Pric e

Ta rge t Pric e

Ups ide Cata lys t

Ascendas Reit BUY 2.350 2.52 7% High y ields of 7.0% close to - 1SD level. Strongest earnings growth amongst the large cap REITs

Capitaland BUY 2.820 3.73 32% 1) Main business units delivering steady increases in performance2) Asset recycling of mature assets into REITs/Funds3) Growing recurring income base as retail malls in China stabilise

Frasers Centrepoint Ltd BUY 1.610 2.05 27% 1) Higher recurring earnings base at close to 70% of topline offer good earnings stability2) Potential asset sales to listed REITs to be positive catalyst

Mapletree Commercial Trust BUY 1.335 1.40 5% One of the strongest DPU growth amongst the commercial REITS. Yields of 6.5% is attractive.

SIA Engineering BUY 3.450 3.84 11% Worst could be over on the earnings front. Possibility of special div idends around the corner. Better entry point now.

TOP SMALL / MID CAP PICKSCompany Recom Pric e

Ta rge t Pric e

Ups ide Cata lys t

Frasers Centrepoint Trust BUY 1.860 2.04 10% 1) Strong earnings resilience amongst REITs with downside risk protection2) Upside to earnings growth from AEI on major asset (northpoint)3) Yields of 6.5% atttractive

Venture Corporation BUY 7.860 9.00 15% 1) Beneficiary of the strong US dollar and weak ringgit.2) Strong balance sheet and net cash position to support div idend payout of 50Scts, with a y ield of c.6%.


Wired Weekly

Major research reports released last week

Company Recommendation Target Price ($) Key Points

Plantation Companies

- - 1) Malaysian Jan16 output of 1.130m MT was in line with expectations2) But stronger-than-expected net exports had lowered inventory faster3) Malaysian palm oil stockpile forecast to remain range-bound throughout the year4) CPO prices under review with upside bias. Top pick: Wilmar

Trendlines Group BUY (Initiating Coverage)

S$0.28 Undervalued portfolio of B2B companies

Perennial Real Estate Holdings

BUY S$1.32 1) Steady returns in quarter ending Dec-152) Expected launch of TripleOne Somerset strata office sales to catalyse stock3) Execution of China projects on track

Croesus Retail Trust HOLD S$0.86 1) 2Q16 DPU of 1.79 Scts in line2) Results boosted by acquisition of One’s Mall and Torious Mall3) Maintain HOLD, TP S$0.86

Tiger Airways Holdings

- - 1) SIA announced on 5 Feb that it had received c. 93.77% acceptance for its offer for Tiger Airways shares at S$0.45 per share2) The closing date of the offer and PCCS offer is extended until 5.30pm, 19 February 20163) SIA intends to delist Tiger Airways and whoever remains as shareholders after the close of the offer will be shareholders in an unlisted company4) Trading of Tiger Airways Holdings shares on the SGX will be suspended after the offer closes5) Tiger Airways shareholders who accept the offer will be granted an option to subscribe for SIA shares at S$11.1043 per share

Singapore Airlines - - 1) 3Q16 (FYE Mar) EBIT rises 97% y-o-y to S$288m, led mainly by lower fuel costs, despite revenue falling by nearly 4% y-o-y to S$3,941m2) Core net profit before exceptionals increase 88% y-o-y to S$275m3) Offer of S$0.45 per share for Tiger Airways Holdings reaches 93.77% acceptance level as of 5 Feb; offer is extended until 19 Feb 20164) SIA intends to delist Tiger Airways and whoever remains as shareholders of Tiger Airways after the close of the offer will be shareholders in a private company5) Tiger Airways shareholders who accept the offer will be granted an option to subscribe for SIA shares at S$11.1043 per share


Wired Weekly

Shanghai Composite Index Hang Seng Index Taiwan Index

Nikkei Index Dow Jones Industrials NASDAQ Index

USD/SGD USD/JPY Euro/USD

USD/RMB SGD/RMB AUD/SGD

Source: Datastream, DBS Bank

12 mth: -12.5% YTD: -21.9% 12 mth: -23.7% YTD: -15.4% 12 mth: -14.8% YTD: -3.3%

1 mth: -8.6% 1 Wk: -0.6% 1 mth: -5.9% 1 Wk: -3.3% 1 mth: 3.8% 1 Wk: 0.0%

1,900

2,500

3,100

3,700

4,300

4,900

5,500


Shanghai Comp Index

16,000

18,000

20,000

22,000

24,000

26,000

28,000

30,000


Hang Seng Index

7,200

7,600

8,000

8,400

8,800

9,200

9,600

10,000

10,400


Taiwan Index

12 mth: -11.0% YTD: -17.4% 12 mth: -12.3% YTD: -10.1% 12 mth: -11.1% YTD: -14.8%

1 mth: -8.7% 1 Wk: -7.8% 1 mth: -5.2% 1 Wk: -4.6% 1 mth: -8.9% 1 Wk: -5.4%

15,000

16,000

17,000

18,000

19,000

20,000

21,000

22,000


Nikkei 225 Index

15,000

15,500

16,000

16,500

17,000

17,500

18,000

18,500


Dow Jones

4,200

4,400

4,600

4,800

5,000

5,200

5,400


Nasdaq

12 mth: 2.1% YTD: -2.0% 12 mth: -6.7% YTD: -6.6% 12 mth: 0.3% YTD: 4.4%

1 mth: -3.4% 1 Wk: -0.6% 1 mth: -4.4% 1 Wk: -3.7% 1 mth: 4.8% 1 Wk: 1.6%

1.30

1.35

1.40

1.45


usd/SGD

110

112

114

116

118

120

122

124

126

128


usd/JPY

1.00

1.02

1.04

1.06

1.08

1.10

1.12

1.14

1.16

1.18


Euro/USD

12 mth: 5.3% YTD: 1.2% 12 mth: 2.6% YTD: 2.4% 12 mth: -6.5% YTD: -4.5%

1 mth: 0.0% 1 Wk: 0.1% 1 mth: 2.8% 1 Wk: 0.2% 1 mth: -1.8% 1 Wk: -2.9%

6.10

6.20

6.30

6.40

6.50

6.60

6.70


usd/RMB

4.40

4.45

4.50

4.55

4.60

4.65

4.70

4.75


sgd/RMB

0.95

0.97

0.99

1.01

1.03

1.05

1.07

1.09


A$/SGD


Wired Weekly

Baltic Dry Index Volatility Index Fed Funds Rate

Brent Crude Oil Palm Oil Soya Oil

Aluminium Tin Steel

Copper Nickel Gold

Source: Datastream, DBS Bank

12 mth: -47.6% YTD: -39.3%

1 mth: -27.9% 1 Wk: -2.7%

200

400

600

800

1,000

1,200

1,400


Baltic Dry Index

8

12

16

20

24

28

32

36

40

44


Volatility Index

0.00

0.10

0.20

0.30

0.40

0.50

0.60


Fed Funds Rate

12 mth: -43.6% YTD: -13.1% 12 mth: -6.7% YTD: 12.8% 12 mth: -5.0% YTD: 1.7%

1 mth: 2.8% 1 Wk: -11.0% 1 mth: 15.8% 1 Wk: 1.9% 1 mth: 7.6% 1 Wk: 0.7%

2025303540455055606570


Brent Crude OilUS$/barrel

400

450

500

550

600

650

700


Palm OilUS$/ton

24

26

28

30

32

34

36


Soya OilUS$/Ib

12 mth: -13.3% YTD: -1.8% 12 mth: -11.2% YTD: 7.3% 12 mth: -17.9% YTD: 5.8%

1 mth: -1.4% 1 Wk: 1.3% 1 mth: 16.4% 1 Wk: 4.1% 1 mth: 2.8% 1 Wk: 0.0%

1,500

1,600

1,700

1,800

1,900


AluminiumUS$/MT

12,000

13,000

14,000

15,000

16,000

17,000

18,000

19,000


TinUS$/MT

1,400

1,600

1,800

2,000

2,200

2,400

2,600


Steel (rebar)RMB/MT

12 mth: -20.6% YTD: -5.3% 12 mth: -48.5% YTD: -13.9% 12 mth: 2.0% YTD: 17.5%

1 mth: 2.6% 1 Wk: -5.1% 1 mth: -7.8% 1 Wk: -11.1% 1 mth: 14.6% 1 Wk: 8.2%

4,000

4,500

5,000

5,500

6,000

6,500

7,000


CopperUS$/MT

6,000

8,000

10,000

12,000

14,000

16,000


NickelUS$/MT

1,000

1,050

1,100

1,150

1,200

1,250

1,300

1,350


GoldUS$/Ounce


Wired Weekly

Straits Times Index


Last PriceLast Day

V olA v g V ol for

the WeekRel ST I MT D

Rel ST I QTD

Rel ST I YT D Weight

A ctual Mk t Cap

S/No. B'berg Code Stock Name Crncy 12-F eb-16 (000 Shrs) (000 Shrs) (%) (%) (%) (%) (S$m)1 ST SP SingTel SGD 3.58 26,145 34,338 8 8 8 12.8 57,0782 OCBC SP OCBC Bk SGD 7.46 7,751 7,142 (4) 9 9 11.9 30,6913 DBS SP DBS SGD 13.02 9,642 7,442 (6) (13) (13) 11.3 32,5484 UOB SP UOB SGD 17.56 3,011 2,558 (2) (8) (8) 10.3 28,2245 HKL SP HKLand US$ USD 5.62 3,267 6,216 1 1 1 4.5 18,3766 CAPL SP Capitaland SGD 2.82 18,420 14,749 (9) (19) (19) 3.5 11,9797 KEP SP Keppel Corp SGD 4.84 6,234 8,247 (5) (34) (34) 3.4 8,7668 THBEV SP Thai Beverage PCL SGD 0.68 8,382 6,005 (8) (0) (0) 3.2 16,9499 WIL SP Wilmar SGD 2.91 7,100 8,750 5 9 9 3.0 18,39110 SPH SP SPH SGD 3.58 3,117 4,144 4 2 2 2.8 5,72211 CD SP ComfortDelGro SGD 2.79 7,077 5,437 0 2 2 2.8 6,00112 SGX SP SGX SGD 6.86 2,801 2,645 (3) (9) (9) 2.8 7,34913 SIA SP SIA SGD 11.00 2,009 2,174 0 5 5 2.7 12,79814 CT SP CapitaMall SGD 2.05 18,673 15,429 11 22 22 2.7 7,26115 AREIT SP A-REIT SGD 2.35 20,693 11,656 5 15 15 2.3 6,03816 GLP SP Global Logistics Properties SGD 1.60 30,873 39,076 (1) (13) (13) 2.3 7,56617 JCNC SP Jardine C&C SGD 37.75 493 370 12 28 28 2.0 14,92018 STE SP ST Engg SGD 2.69 2,959 5,170 (7) (1) (1) 2.0 8,34119 GENS SP Genting SP SGD 0.68 18,266 21,495 3 10 10 2.0 8,10920 CIT SP City Developments SGD 6.84 1,210 1,599 (5) (17) (17) 2.0 6,22021 HPHT SP HPHT (US$) USD 0.42 43,018 20,102 (9) (27) (27) 1.4 5,08422 UOL SP UOL Group SGD 5.39 1,829 1,114 (6) (13) (13) 1.2 4,29223 SATS SP SATS SGD 3.84 2,426 2,234 3 19 19 1.2 4,26624 GGR SP GoldenAgr SGD 0.36 19,806 22,625 3 32 32 1.1 4,58525 STH SP StarHub SGD 3.63 2,424 2,532 5 1 1 1.0 6,27526 SCI SP Semb Corp SGD 2.39 5,727 6,569 1 (6) (6) 1.0 4,26727 YZJSGD SP Yangzijiang SGD 0.89 9,382 9,334 (1) (5) (5) 0.9 3,41128 NOBL SP Noble Grp SGD 0.31 44,042 43,937 2 2 2 0.7 1,99329 SMM SP SembMar SGD 1.42 2,780 2,874 (4) 3 3 0.6 2,96630 SIE SP SIA Engg SGD 3.45 148 323 8 12 12 0.4 3,870


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Surce: Bloomberg Finance L.P.

At A Glance Currencies

Other Important Indicators

Important Dates (Singapore)

Announced Dividends and Capital Issues

Upcoming IPOs

NIL

Recent IPO Trading

SG$/US$ 1.43 (0.0) (0.4)

Yen/US$ 121.24 2.4 2.0

US$/Euro 0.92 (0.0) (0.3)

AUS$/US$ 1.42 (0.0) (1.1)

Pound/US$ 1.42 (0.0) (0.2)

Last Close

Pts chg 1wk

% Chg 1 wk

Gold 1117.76 9.8 0.9

Crude Oil 33.62 2.6 8.5

US$ Yield10-year 1.92 (0.1) (4.0)

Event Period DateRetail Sales SA MoM Dec 15-Feb-16Retail Sales YoY Dec 15-Feb-16Retail Sales Ex Auto YoY Dec 15-Feb-16Non-oil Domestic Exports YoY Jan 17-Feb-16Electronic Exports YoY Jan 17-Feb-16Non-oil Domestic Exports SA MoM Jan 17-Feb-16Automobile COE Open Bid Cat A Feb 17-Feb-16GDP YoY 4Q F 19-Feb-16GDP SAAR QoQ 4Q F 19-Feb-16Annual GDP Jul 19-Feb-16CPI NSA MoM Jan 23-Feb-16CPI YoY Jan 23-Feb-16CPI Core YoY Jan 23-Feb-16Industrial Production SA MoM Jan 26-Feb-16Industrial Production YoY Jan 26-Feb-16Money Supply M1 YoY Jan 29-Feb-16Money Supply M2 YoY Jan 29-Feb-16Credit Card Billings Jan 29-Feb-16Bank Loans and Advances YoY Jan 29-Feb-16Credit Card Bad Debts Jan 29-Feb-16

Company Ty pe Part iculars Ex Date Paid/ Pay ableAV I-TECH ELECTRONICS LIMITED DIV IDEND SGD 0.007 ONE-TIER TAX 15-Feb-16 29-Feb-16

LHN LIMITED DIV IDEND SGD 0.003 ONE-TIER TAX 15-Feb-16 25-Feb-16

CROESUS RETAIL TRUST DIV IDEND DRP;0107-311215 SGD 0.035 TAX EXEMPT 17-Feb-16 30-Mar-16

ROYAL DUTCH SHELL A ADR 10 DIV IDEND USD 0.799 17-Feb-16 29-Mar-16

XMH HOLDINGS LTD. ENTITL. SHARE CONSOL OFFER OF 1 FOR 4 17-Feb-16

LUM CHANG HOLDINGS LIMITED DIV IDEND SGD 0.0075 ONE-TIER TAX 18-Feb-16 11-Mar-16

SINGAPORE POST LIMITED DIV IDEND SGD 0.015 ONE-TIER TAX 18-Feb-16 4-Mar-16

ELLIPSIZ LTD DIV IDEND SGD 0.007 ONE-TIER TAX 19-Feb-16 16-Mar-16

GOODLAND GROUP LIMITED DIV IDEND SGD 0.003 ONE-TIER TAX 23-Feb-16 4-Mar-16

COSMOSTEEL HOLDINGS LIMITED DIV IDEND SGD 0.005 ONE-TIER TAX 25-Feb-16 11-Mar-16KARIN TECHNOLOGY HLDGS LIMITED DIV IDEND HKD 0.05 3-Mar-16 17-Mar-16

TAI SIN ELECTRIC LIMITED DIV IDEND SGD 0.0075 ONE-TIER TAX 3-Mar-16 16-Mar-16

TEE LAND LIMITED DIV IDEND SGD 0.0022 ONE-TIER TAX 3-Mar-16 28-Mar-16

TEE INTERNATIONAL LIMITED DIV IDEND SGD 0.0015 ONE-TIER TAX 8-Mar-16 31-Mar-16

N511100W 160401 ENTITL. REDEMPTION 100% 23-Mar-16 1-Apr-16

OSIM INTERNATIONAL LTD DIV IDEND SGD 0.02 ONE-TIER TAX 23-Mar-16 4-Apr-16

AVJENNINGS LIMITED DIV IDEND AUD 0.015 30-Mar-16 15-Apr-16

QIAN HU CORPORATION LIMITED DIV IDEND SGD 0.002 ONE-TIER TAX 7-Apr-16 21-Apr-16

CEI CONTRACT MANUFACTURING LTD DIV IDEND SGD 0.048 ONE-TIER TAX 12-Apr-16 27-Apr-16CEI CONTRACT MANUFACTURING LTD DIV IDEND SGD 0.004 ONE-TIER TAX 12-Apr-16 27-Apr-16

M1 LIMITED DIV IDEND SGD 0.083 ONE-TIER TAX 12-Apr-16 21-Apr-16

SINGAPORE O&G LTD. DIV IDEND SGD 0.0115 ONE-TIER TAX 14-Apr-16 4-May-16

ARA ASSET MANAGEMENT LIMITED DIV IDEND SGD 0.027 ONE-TIER TAX 21-Apr-16 6-May-16

KEPPEL TELE & TRAN DIV IDEND SGD 0.035 ONE-TIER TAX 21-Apr-16 10-May-16

KEPPEL CORPORATION LIMITED DIV IDEND SGD 0.22 ONE-TIER TAX 22-Apr-16 6-May-16

UNITED OVERSEAS INSURANCE LTD DIV IDEND SGD 0.02 ONE-TIER TAX 27-Apr-16 11-May-16

UNITED OVERSEAS INSURANCE LTD DIV IDEND SGD 0.12 ONE-TIER TAX 27-Apr-16 11-May-16

CHIP ENG SENG CORPORATION LTD DIV IDEND SGD 0.04 ONE-TIER TAX 3-May-16 20-May-16

HWA HONG CORPORATION LIMITED DIV IDEND SGD 0.01 ONE-TIER TAX 3-May-16 20-May-16VICOM LTD DIV IDEND SGD 0.1025 ONE-TIER TAX 3-May-16 12-May-16

VICOM LTD DIV IDEND SGD 0.095 ONE-TIER TAX 3-May-16 12-May-16

PERENNIAL REAL ESTATE HLDGSLTD DIV IDEND SGD 0.004 ONE-TIER TAX 4-May-16 20-May-16

SBS TRANSIT LTD DIV IDEND SGD 0.0105 ONE-TIER TAX 4-May-16 13-May-16

FIRST SPONSOR GROUP LIMITED DIV IDEND SGD 0.01 ONE-TIER TAX 5-May-16 26-May-16

MULTI-CHEM LIMITED DIV IDEND SGD 0.022 ONE-TIER TAX 16-May-16 30-May-16

NY01100F 160901 ENTITL. REDEMPTION 100% 24-Aug-16 1-Sep-16

Company NameIPO Share

Price Last Close ICB Sector Name IPO DateNo. of Share

IPO Mk t Cap

TLV Holdings Ltd 0.220 0.12 General Retailers 17/09/2015 566 124Jumbo Group Ltd 0.250 0.45 Travel & Leisure 09/11/2015 641 160Trendlines Group Ltd/The 0.330 0.15 Financial Services 26/11/2015 509 168Axcelasia Inc 0.250 0.16 Support Services 27/11/2015 160 40Eindec Corp Ltd 0.210 0.22 Household Goods & Home Construction 15/01/2016 108 23GS Holdings Ltd 0.250 0.26 Support Services 18/01/2016 124 31Secura Group Ltd 0.250 0.23 Consumer Services 28/01/2016 400 100Eindec Corp Ltd 0.210 0.20 Household Goods & Home Construction 15/01/2016 108 23


Wired Weekly

February 2016


Mon Tues Wed Thu Fri1 2 3 4 5

SIA Engineering 3Q 16 Hutchison Port Hldgs 4Q 15 Fraser and Neave 1Q 16 ARA Asset Mgmt 4Q 15 UOI 4Q 15Frasers Centrepoint Ltd 1Q 16 ASL Marine 2Q 16Kulicke & Soffa 1Q 16 Capitaland Retail China Trust 4Q 15Religare Health Trust 3Q 16 Global Logistic Properties 3Q 16

Hwa Hong 4Q 15Perennial Real Estate 2Q 16Singapore Airlines 3Q 16Singapost 3Q 16Wing Tai 2Q 16

Electronics Sector Index Nikkei Singapore PMIPurchasing Managers Index Automobile COE Open Bid Cat A Foreign Reserves

8 9 10 11 12

Accordia Golf Trust 3Q 16 Boustead S 3Q 16Bukit Sembawang 3Q 16ComfortDelgro 4Q 15Courts Asia 3Q 16FJ Benjamin 2Q 16GL Ltd 2Q 16Hiap Seng 3Q 16Memstar Technology 2Q 16Nam Lee Pressed 1Q 16Saizen REIOT 2Q 16SATS 4Q 15SBS Transit 4Q 15SingTel 3Q 16Tat Hong 3Q 16TTL International 3Q 16

15 16 17 18 19

Cosco Corp 4Q 15 Great Eastern 4Q 15 Axis Offshore 4Q 15 Genting Singapore 4Q 15 Aviation PLC 1H 16Sembcorp Marine 4Q 15 Starhub 4Q 15 Capitaland 4Q 15 iFAST Corporation 4Q 15 Rickmers Maritime 4Q 15

CWT 4Q 15 IFS Capital 4Q 15UOB 4Q 15 IREIT Global 4Q 15 Wilmar International 4Q 15

OCBC 4Q 15 Fragrance Group 4Q 15Sembcorp Industries 4Q 15

Automobile COE Open Bid Cat ARetail Sales SA MoM Electronic Exports YoY Annual GDPRetail Sales YoY Non-oil Domestic Exports SA MoM GDP SAAR QoQRetail Sales Ex Auto YoY Non-oil Domestic Exports YoY GDP YoY

22 23 24 25 26

DBS Group 4Q 15 Asian Pay TV 4Q 15 Ho Bee 4Q 15 China Aviation Oil 4Q 15 Aztech 4Q 15Roxy-Pacific 4Q 15 Hi-P 4Q 15 Far East Hospitality Trust 4Q 15 HTL International 4Q 15 BW LPG 4Q 15

XP Power 4Q 15 NOL 4Q 15 CSE Global 4Q 15 KrisEnergy 4Q 15 China Merchant 4Q 15Raffles Medical 4Q 15 Super Group 4Q 15 ST Engrg 4Q 15 Hotel Royal 4Q 15

AP Oil International 4Q 15 China Merchant Holdigns 4Q 15 Indofood Agri 4Q 15Hengxon 4Q 15 Mewah 4Q 15

Otto Marine 4Q 15UOL 4Q 15

CPI NSA MoMCPI YoY Industrial Production SA MoMCPI Core YoY Industrial Production YoY

29

Q&M Dental 4Q 15Olam 4Q 15Hiap Hoe 4Q 15

Bank Loans and Advances YoYCredit Card Bad DebtsCredit Card BillingsMoney Supply M1 YoYMoney Supply M2 YoY


Wired Weekly

DBS Bank Ltd recommendations are based an Absolute Total Return* Rating system, defined as follows:

STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)

BUY (>15% total return over the next 12 months for small caps, >10% for large caps)

HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps)

FULLY VALUED (negative total return i.e. > -10% over the next 12 months)

SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)

Share price appreciation + dividends

Traders Spectrum’s product is oriented towards readers with either a short-term trading horizon. It aims to highlight topical themes, which may

move stock prices on a daily basis. Readers should be aware that “TS Take” relies more on assessments of technical factors, likely sentiment

responses and short term money flows, rather than on fundamental analysis. As such the “TS Take” may from time to time conflict with

fundamental ratings (where stocks are ranked to Strong Buy, Buy, Hold, Fully Valued and Sell on a 12 month basis), which are maintained by DBS

Bank Ltd analysts. In keeping with the short-term orientation of the product, a stock highlighted may or may not be covered or commented on on

an ongoing basis. GENERAL DISCLOSURE/DISCLAIMER

This report is prepared by DBS Bank Ltd. This report is solely intended for the clients of DBS Bank Ltd and DBS Vickers Securities (Singapore) Pte Ltd,

its respective connected and associated corporations and affiliates (collectively, the “DBS Vickers Group”) only and no part of this document may

be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBS Bank Ltd.

The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS

Bank Ltd., its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively,

the “DBS Group”)) do not make any representation or warranty as to its accuracy, completeness or correctness. Opinions expressed are subject to

change without notice. This document is prepared for general circulation. Any recommendation contained in this document does not have regard

to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of

addressees only and is not to be taken in substitution for the exercise of judgment by addressees, who should obtain separate independent legal or

financial advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of

profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This

document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. The DBS Group, along with its affiliates and/or

persons associated with any of them may from time to time have interests in the securities mentioned in this document. The DBS Group may have

positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and

other banking services for these companies.

Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can

be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments.

The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it

may not contain all material information concerning the company (or companies) referred to in this report.

The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and

assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on

which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual

results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED

UPON as a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that:

(a) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and

(b) there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk

assessments stated therein.

Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies)

mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the

commodity referred to in this report.

DBS Vickers Securities (USA) Inc ("DBSVUSA")"), a U.S.-registered broker-dealer, does not have its own investment banking or research

department, has not participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction

in the past twelve months and does not engage in market-making.


Wired Weekly

ANALYST CERTIFICATION

The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies

and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her

compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of 15 Feb 2016,

the analyst(s) and his/her spouse and/or relatives who are financially dependent on the analyst(s), do not hold interests in the securities

recommended in this report (“interest” includes direct or indirect ownership of securities). COMPANY-SPECIFIC / REGULATORY DISCLOSURES

1. DBS Bank Ltd., DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”), their subsidiaries and/or other affiliates have proprietary positions in Ascendas REIT, CapitaLand, Croesus Retail Trust, DBS Bank Ltd., Frasers Centrepoint Trust, Genting Singapore, Mapletree Commercial Trust, OCBC, Sembcorp Industries, Sembcorp Marine, Sheng Siong Group, SIA Engineering, Singapore Airlines, SingTel, ST Engineering, UOB, Venture Corporation, Wilmar International recommended in this report as of 31 Jan 2016.

2. DBS Bank Ltd does not market make in equity securities of the issuer(s) or company(ies) mentioned in this Research Report.

3. DBS Bank Ltd., DBSVS, DBSVUSA, their subsidiaries and/or other affiliates beneficially own a total of 1% of any class of common equity securities of Croesus Retail Trust as of 31 Jan 2016.

4. DBS Bank Ltd., DBSVS, DBSVUSA, their subsidiaries and/or other affiliates beneficially own a total of 5% of any class of common equity securities of Croesus Retail Trust as of 31 Jan 2016.

5.

Compensation for investment banking services: DBS Bank Ltd., DBSVS, their subsidiaries and/or other affiliates of DBSVUSA have received compensation, within the past 12 months for investment banking services from ARA Asset Management, Ascendas REIT, Croesus Retail Trust, Perennial Real Estate Holdings, Singapore Airlines as of 31 Jan 2016.

DBS Bank Ltd., DBSVS, their subsidiaries and/or other affiliates of DBSVUSA have managed or co-managed a public offering of securities for ARA Asset Management, Ascendas REIT, Croesus Retail Trust, Tiger Airways Holdings in the past 12 months, as of 31 Jan 2016.

DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.

6. Directorship/trustee interests Peter Seah Lim Huat, Chairman of DBS Group Holdings, is a Deputy Chairman of Capitaland as of 28 Feb 2015. Euleen Goh Yiu Kiang, a member of DBS Group Holdings Board of Directors, is a Director of Capitaland as of 28 Feb 2015.

RESTRICTIONS ON DISTRIBUTION General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or

located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

Australia This report is being distributed in Australia by DBS Bank Ltd. (“DBS”) or DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”), both of which are exempted from the requirement to hold an Australian Financial Services Licence under the Corporation Act 2001 (“CA”) in respect of financial services provided to the recipients. Both DBS and DBSVS are regulated by the Monetary Authority of Singapore under the laws of Singapore, which differ from Australian laws. Distribution of this report is intended only for “wholesale investors” within the meaning of the CA.

Hong Kong This report is being distributed in Hong Kong by DBS Vickers (Hong Kong) Limited which is licensed and regulated by the Hong Kong Securities and Futures Commission.

Indonesia This report is being distributed in Indonesia by PT DBS Vickers Securities Indonesia.

Malaysia This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR"). Recipients of this report, received from ADBSR are to contact the undersigned at 603-2604 3333 in respect of any matters arising from or in connection with this report. In addition to the General Disclosure/Disclaimer found at the preceding page, recipients of this report are advised that ADBSR (the preparer of this report), its holding company Alliance Investment Bank Berhad, their respective connected and associated corporations, affiliates, their directors, officers, employees, agents and parties related or associated with any of them may have positions in, and may effect transactions in the securities mentioned herein and may also perform or seek to perform broking, investment banking/corporate advisory and other services for the subject companies. They may also have received compensation and/or seek to obtain compensation for broking, investment banking/corporate advisory and other services from the subject companies.

Wong Ming Tek, Executive Director, ADBSR


Wired Weekly

Singapore This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No. 198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from, or in connection with the report.

Thailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd. Research reports distributed are only intended for institutional clients only and no other person may act upon it.

United Kingdom

This report is being distributed in the UK by DBS Vickers Securities (UK) Ltd, who is an authorised person in the meaning of the Financial Services and Markets Act and is regulated by The Financial Conduct Authority. Research distributed in the UK is intended only for institutional clients.

Dubai

This research report is being distributed in The Dubai International Financial Centre (“DIFC”) by DBS Bank Ltd., (DIFC Branch) having its office at PO Box 506538, 3rd Floor, Building 3, East Wing, Gate Precinct, Dubai International Financial Centre (DIFC), Dubai, United Arab Emirates. DBS Bank Ltd., (DIFC Branch) is regulated by The Dubai Financial Services Authority. This research report is intended only for professional clients (as defined in the DFSA rulebook) and no other person may act upon it.

United States This report was prepared by DBS Bank Limited. DBSVUSA did not participate in its preparation. The research analyst(s) named on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company, public appearances and trading securities held by a research analyst. This report is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBSVUSA directly and not its affiliate.

Other jurisdictions

In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.

DBS Bank Ltd. 12 Marina Boulevard, Marina Bay Financial Centre Tower 3

Singapore 018982 Tel. 65-6878 8888, Company Regn. No. 196800306E

15/02/2016 wired weekly - dbs bank...singapore market at 1.1x p/b. current pe and pb valuations are...

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