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Singapore stock market and companies daily report (DBS Group Holdings, Freight Links Express) (March 13, 2013)

Contributed by Shares Investment

UE Revises Offer For WBL To $4.15 A Share
In a filing with the Singapore Exchange this morning, construction, property and engineering group United Engineers announced a higher offer of $4.15 a share with regards to its takeover bid for WBL Corporation. The revised offer from UE increases the total value of UE’s bid from $687 million to $713 million. This came after certain members of the concert parties behind the UE bid converted $12.8 million of convertible bonds into 5.6 million new WBL shares at $2.29 each. Under Singapore’s takeover rules, the offer has to be raised from $4 to $4.15 a share as they were deemed to have paid $4.1483 a share based on the volume-weighted average price of WBL shares on Monday. Post conversion, the offeror and concert parties hold 39.54 percent of WBL. The rival bid of $3.36 a share from Straits Trading Company (STC) lapsed on 1 March after the firm decided not to extend the offer period nor revise its offer price. WBL shares resumed trading today after a trading halt was put in place on Tuesday. The shares opened $0.11 or 2.7 percent higher at $4.25 from Monday’s closing of $4.14.
Significance: The acquisition will be partially debt-funded with the balance coming from internal resources. Though UE’s bid is higher, UE still have a huge hurdle to overcome in the form of STC – the largest shareholder of WBL – before it can gain full control of the technology, property and luxury car distribution group.

DBS Looks To Grow HK Loan Book By 10% In 2013
Southeast Asia’s largest bank DBS Group Holdings plans to expand its Hong Kong loan book by about 10 percent this year, setting its sight on small and medium-sized companies and trade with mainland China. In 2012, DBS’ trade settlement in Chinese Yuan surged 60 percent from a year earlier. The Singapore-based bank’s chief executive officer for Hong Kong, Sebastian Paredes, told Bloomberg that he projects business using the Chinese Yuan will grow beyond the 17 percent of total revenue that it reached last year. Currently, one of the area the bank is looking at is the Qianhai district of Shenzhen, a city that borders Hong Kong. Paredes said “We are discussing with several customers the opportunities to finance.” In addition, the bank is also keen to participate in the Renminbi Qualified Foreign Institutional Investor programme, which allows Chinese Yuan raised offshore to be invested in China’s domestic capital markets.
Significance: With China pledging to expand global use of the Chinese Yuan as the nation seeks to cut reliance on the US dollar, this will bode well with DBS’ plans as the utilisation of the Chinese currency should see a continuation of rapid growth.

Fair Value Gains Send Freight Links’ 3Q13 Earnings Soaring To $8.7m
For the third quarter ended 31 January 2013, logistics provider Freight Links Express Holdings posted a 129.1 percent surge in earnings from $3.8 million in 3Q12 to $8.7 million. The massive growth came on the back of a 16.9 percent jump in revenue and a fair value gain of $2.4 million and a higher dividend income from Sabana Reit, reversing from a $2.55 million loss on fair value a year earlier. Revenue growth was underpinned by a 96.6 percent surge in turnover from its warehouse and logistics segment to $11.4 million. For the first nine months of its current fiscal year, revenue rose 15 percent to $130 million while earnings grew 51.6 percent to $22.6 million. As at 31 January 2013, the company has cash and cash equivalents of $32.9 million, and net gearing of 0.28 times.
Significance: Moving forward, the company said it will continue to strengthen and expand its logistics businesses and financial services as well as to explore viable investment opportunities.