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Singapore stock market and companies daily report (SMRT Corp, Pan Hong Property Group) (August 02, 2010)

Contributed by Shares Investment

By Shares Investment

US Stocks Rise Over 7% For July
Stocks ended relatively flat on 30 Jul-10 after a disappointing GDP report but the Dow logged its best month in a year, rising more than 7%. The Dow Jones Industrial Average slipped just over a point to close at 10,465.94. The S&P 500 and Nasdaq also finished roughly flat for the week but all three finished up more than 6% for the month. Consumer discretionary, materials and health care were the best performing sectors today. Utilities, techs and energy stocks were the laggards. For the month, materials were one of the best performers, while health-care stocks were among the weakest. The CBOE volatility index, widely considered the best gauge of fear in the market, ended below 24. At the same time, gold fell over 5% as investors have started to move away from such safe-haven plays.

SMRT’s 1Q11 Bottomline Falls 20.7%
SMRT Corp registered a 20.7% fall in net profit to $38.24m for its fiscal first quarter ended June 30, has cautioned that it may not be able to maintain FY10’s profitability for FY11. The drop in Q1 earnings was a result of lower operating profits, partially offset by its share of better results of associates and lower income tax expenses. Revenue rose 9% to $235.3m due mainly to higher MRT ridership, contribution from Circle Line Stages 1 and 2, higher Bus ridership and higher rental revenue, partially offset by lower revenue from Palm Jumeirah Monorail. While ridership for the Circle Line has risen from an average daily ridership of 124,000 to nearly 145,000, this has yet to meet the expected ridership of 200,000. Profitability was also affected by high electricity costs.
Significance: Outlook in the next 12 months for train operations is expected to be challenging with continuing losses from Circle Line operations, increasing cost pressures and the impact of distance fares on fare revenue.

Pan Hong Expects Sales Jumping 50% This Year
Pan Hong Property Group, a residential developer in China, expects to sell more homes this year amid a rebound in the real estate market. The Hong Kong-based developer, which is building four properties in the south-eastern cities of Yichun, Fuzhou, Huzhou and Nanchang, plans to boost the amount of real estate that it would sell by 50% from 4m square metres in 2009, executive chairman Wong Lam Ping said. Property prices in 70 Chinese cities fell 0.1% in June from the previous month, snapping 15 months of gains, according to state data, as the government restricted loans to developers in the past year and introduced controls on mortgages for second and third homes to contain property prices. Meanwhile, Pan Hong recorded a 27.4% jump in its 1Q11 earnings on the back of a 269.9% increase in revenue, mainly contributed to higher number of units sold from the Group’s property development projects particularly in Hangzhou Liyang Yuan and Nanchang Honggu Kaixuan Phase 2.
Significance: Regardless of the measures in cooling China’s property, Pan Hong is able to stay firm as the urbanization and growing affluence of the population will continue to spur the demand for property in Tier 2 and 3 cities.

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