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Singapore stock market and companies daily report (Ezion Holdings, OCBC, SingTel) (February 18, 2013)

Contributed by Shares Investment

Ezion Wins US$79.9m Contract
Owner of one of the largest and most sophisticated class of multi-purpose self-propelled jack-up rigs, Ezion Holdings, announced that it has secured a charter contract with a value of approximately US$79.9 million over a three-year period with additional two-year extendable option to provide a jack-up rig to support a South Asian-based national oil company. The jack-up rig will be deployed in the Arabian Sea and is expected to be working by the fourth quarter of 2013 after its refurbishment and upgrading, which will be funded through internal resources as well as bank borrowings. Shares of Ezion have been on an upward trajectory and have climbed 10.7 percent this year. It opened at $1.90 today.
Significance: While this charter contract is not expected to have a material impact on its financial performance for 2013, Ezion’s contract win momentum so far has provided strong earnings visibility for the company in the longer term.

OCBC’s FY12 Net Profits Leap 73%
Oversea-Chinese Banking Corporation (OCBC) reported a 72.7 percent jump in net profit after tax to $4 billion for the financial year ended 31 December 2012 while core net profit after tax (excluding gains from divestment of non-core assets) grew 23.9 percent to a record $2.8 billion. OCBC attributed the stronger results to a combination of record net interest income, fee income and net trading income as well as significantly higher contributions from Great Eastern Holdings. However, OCBC disappointed with no special dividend despite hefty $1.2 billion divestment gains from the sale of its stake in Fraser and Neave and Asia Pacific Breweries. OCBC noted that consistent with its practice, the realised proceeds and gains from its non-core investments are put back into growing its core assets and businesses. It will be focusing on wealth management, which makes up about 28 percent of its total revenue, and its two high-growth markets, Indonesia and China.
Significance: Notably, net profit contribution from OCBC’s 87 percent-held Great Eastern Holdings’ quadrupled and accounted for 22 percent of its core net profit. It continues to see a healthy growth momentum in its wealth management segment, which also comprises of asset management, stock broking and private bank business.

SingTel Eyes Myanmar Mobile Operator Licence
Singapore Telecommunications (SingTel) intends to focus on wireless services in Myanmar as it vies for the right to operate in one of the world’s last untapped mobile market. The company expressed its interest for a phone licence last month and is awaiting further details on the bidding process and the terms of permit, chief executive officer Chua Sock Koong told Bloomberg. Notably, only 9 percent of Myanmar’s 64 million people have handsets and the nation’s fixed-line penetration rate is about 1 percent. The government hopes to boost the telecommunications coverage to as much as 80 percent by 2016, suggesting a very attractive market potential. Still, SingTel faces competition for the two Myanmar licences the government plans to award by June. Malaysia’s Axiata Group, Singapore’s ST Telemedia, and Norway’s Telenor ASA were among phone operators that indicated their interest in the licences.
Significance: OCBC Investment Research analyst, Carey Wong noted that the growth would be exponential. Nonetheless, SingTel highlighted that how attractive an investment in the telecoms industry in Myanmar would be, would depend on a large extent to the regulatory environment.