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Singapore stock market and companies daily report (Tiger Airways Hldgs, Lankom Electronics) (March 11, 2010)

Contributed by Shares Investment

By Shares Investment

Economists forecast robust 9.5% first-quarter growth
According to 20 private sector economists polled last month by the Monetary Authority of Singapore, an average 9.2% and 9.5% median have been forecasted for the GDP growth in 1Q10. The robust forecast is partly due to the low-base effect in play as the economy hit bottom in 1Q09 and GDP growth slipped off pace a little in 4Q09. Despite weak exports, manufacturing output recorded an impressive 39% surge in January, while an array of indicators in trade and tourism-related services are showing signs of renewed vigour, Citigroup economist Kit Wei Zheng notes. The pool of economists also forecast GDP growth easing to 6.3 and 4.2% – year on year – in 2Q10 and 3Q10, before picking up to 6% in 4Q10. On aggregate, growth is expected to average 6.5% in 2010.

Tiger’s Operating Numbers Leap 90% In February
Tiger Airways Hldgs yesterday reported strong February operating numbers for its Singapore and Australia operations. The budget carrier, which was listed last month, flew 437,000 passengers network-wide during the month – a 90% increase from February 2009. Contributing to the numbers were extra services such as twice-daily flights between Hong Kong and Singapore and strong demand during the Chinese New Year. As a result, Tiger’s average network-wide load factor increased, with 85% of all available seats sold. This was a six percentage point increase from February 2009.
President and group CEO Tony Davis is confident that consumers in Asia and Australia will continue to respond positively as the company remains focused on reducing its operating costs and offering even lower fares, coupled with the addition new aircraft and new flight routes in Australia. For the rolling 12 months to February, Tiger carried 4.7m passengers – a 51% increase from the preceding 12 months. Two stock brokerage houses have initiated coverage on the stock with a share price target of $2.10 and $2.00 by DBS Group Research and Citigroup respectively.

Lankom Electronics Proposes $586m RTO Deal
Beleaguered electromagnetic components manufacturer, Lankom Electronics, has proposed to acquire 2 property firms in a $586m reverse takeover (RTO) deal. The company has been placed on the SGX watch-list last week due to its record of pre-tax losses for 3 straight years and an average daily market capitalisation of less than $40m over 120 days.
Under the latest conditional agreement signed, Lankom will buy Newage Investment Hldg and Modena Property Devt. The 2 companies own 5 high-end properties in Jakarta – 3 office buildings and 2 hotels. Lankom will issue 9.8b new shares at $0.06 a share to the sellers, Creative Property Devt and Central Basic Corp. Once the deal is completed, the vendors will hold 99.1% of Lankom’s enlarged issued share capital. Lankom added that 2 shareholders who together own 48.8% of its issued share capital have given undertakings to vote in favour of the acquisition. Once the deal is completed, the company’s free float will not meet SGX requirements but it said it intends to then conduct a placement exercise of vendor and/or new shares.

This article is contributed by Shares Investment. Visit Sharesinv.com for the latest Singapore, Malaysia and China stock market news and reports.