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Singapore stock market and companies daily report (Far East Organization, Sarin Technologies) (August 06, 2012)

Contributed by Shares Investment

2Q12 GDP Number To Be Adjusted – Analysts
Analysts anticipate that Prime Minister Lee Hsien Loong will announce better final 2Q12 GDP figures as well as a narrowing of the current official GDP forecast for the year during his National Day Message on Wednesday, 8 August 2012. Market economists on the street feel that the economy grew instead of contracted due to an unexpected surge in industrial output in June, powered by the volatile pharmaceutical sector. Citi economist Kit Wei Zheng was quoted by The Business Times as saying that quarterly growth would be “choppy and uneven” in light of the global economic uncertainties. Kit opined that the possibility of the government narrowing official forecast to the lower 1-2 percent end cannot be ruled out and that such a range would imply a high possibility of a technical recession. Separately, economists feel that the unfolding eurozone crisis will be key in economic developments in 2H12.
Significance: The forecast better 2Q12 GDP figures might not bring much cheer after recent global economic data and policy statements have amplified fears of a sustained global economic slowdown.

Far East Organization To List Hospitality Trust
Far East Organization is offering investors a chance to have a portion of its pie as the organization lists its first hospitality trust. The Far East Hospitality Trust will be listed via stapled securities of both Far East Hospitality REIT and Far East Hospitality Business Trust and is expected to raise about $656 million. Listing at a price range of $0.86 to $0.93, the trust’s forecast yield will translate to around 6 to 6.5 percent. The deal has already fetched strong interest from institutional investors such as Aberdeen Asset Management Asia, AIA Group and NTUC Income. The strong interest could be because of the nature of the assets (total of 11 Singapore properties) under the trust’s portfolio. Most of assets under its portfolio are under master lease arrangements which could provide downside protection to unitholders. In addition, the trust would be the first locally listed hospitality REIT with only Singapore properties in its portfolio.
Significance: The name behind the trust, Far East Organization is the largest private property developer in Singapore and is both owner and operator of hospitality properties. This track record could provide currently risk adverse investors with further comfort.

Sarin Turns In Strong 1H12 Growth
Diamond and gems manufacturer, Sarin Technologies turned in a strong set of financial figures for its 1H12 results. In 1H12, Sarin reported a 35.8 percent jump in top line performance while its bottom line grew 73.4 percent. Sarin attributed the strong growth figures to overall positive business sentiment as well as accelerated penetration and usage of its Galaxy system. In 2Q12, Sarin delivered its 14 Galaxy systems, of which 13 were shipped to customers and one XL system to a service centre in Belgium. Including the new deliveries made in 2Q12, Sarin has an installed base of over 80 Galaxy systems which will provide recurring usage fees. Separately, Sarin said that one of its strategic polished diamond trade initiatives, Sarin-Light has received very positive response during its trade shows in the US and Hong Kong. The firm is now working to establish commercial agreements with major opinion leaders in the industry to build on this positive momentum.
Significance: Sarin opines that the demand for its Galaxy product line will continue to grow in major industry centres to customers in India, Africa and China. The firm looks set to be on track to achieve its goal of installing 100 systems by the end of 2012.