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Singapore stock market and companies daily report (Nomura, BH Global Marine, IEV Holdings) (March 04, 2013)

Contributed by Shares Investment

Nomura: Single-Digit Returns For Singapore Market
The Singapore stock market is likely to provide investors with only single-digit returns this year, according to Nomura Equity Research. It noted that Singapore’s earnings per share growth of 11 percent appears optimistic against a weak macro backdrop. However, the market’s price-to-book (P/B) of 1.4x is not excessive relative to history but return on equity has been declining, reflecting a subdued profit outlook. Nomura estimates the market’s long-term P/B to be 1.7 and its recent average to be 1.5. As far as price-to-earnings is concerned, it estimates the market to be trading at the lower end of the 12-18x range but said earnings are at risk because of weak growth and rising costs. Nomura’s head of equity research for Southeast Asia Lim Jit Soon highlighted that while the market has proved us wrong as we have been expecting a property market pullback since 2009, the January property cooling measures are pretty stringent and will lead to a correction.
Significance: Overall, Nomura remains cautious on the stock market, with a bearish view on property and a neutral stance on banks, saying it expects loan growth numbers to decelerate, net interest margin to be flat and asset quality to be robust.

BH Global Marine FY12 Profit Falls Into The Red
BH Global Marine plunged into the red for its fourth quarter ended 31 December 2012 with losses of $28.3 million against a profit of $1.8 million in 4Q11. It has been dragged under by substantial losses incurred from its discontinued operations in Batam. For the full year period, it posted losses of $26.7 million over $12.9 million in earnings in FY11, its first full-year loss since its listing. Its woes began when the company’s deal to use 30 hectares of land in Batam had fallen through because the land in question had been allocated to another party by the Batam authorities. It had rejected other replacement sites as they did not “serve to further the group’s best interests”. Of the $32.7 million consequently lost, $11.6 million came from the impairment of fixed assets, inventory, and deposit for the purchase of the land. Another $17.1 million was due to the loss from operations, while a further loss of $4 million came from the depreciation of the Indonesian rupiah against the Singapore dollar. It declared a lower first and final dividend for FY12 at 0.5 cent per ordinary share.
Significance: BH Global Marine notes that marine industry continues to remain challenging whereas prospect for the oil and gas industry is expected to remain buoyant. It pledged to focus on its core competencies in the supply chain management division and is actively engaging in negotiations with various customers to secure new contracts.

IEV Receives Letter Of Award For US$100m Project
IEV Holdings has been awarded a letter of award to transport and install an integrated tension leg platform (TLP) from Sabah Shell Petroleum Company in the Malikai fields offshore Sabah, Malaysia. The project, which has commenced on 16 December 2012 and is expected to be executed over a period of three years, has been valued at around US$100 million. The scope of work includes the transportation and installation of the integrated TLP, both hull and topside, inclusive of pre-installation of the TLP tendon foundation piles, make-up of tendons and pre-installation of tender assist mooring system in a water depth of approximately 500 metres. IEV will be executing the project in cooperation with Heerema Marine Contractors of the Netherlands, a world renowned marine contractor in installing complex offshore infrastructures. A formal contract is expected to be signed between various parties on a later date.
Significance: The award of this large project will enable it to work alongside major contractors such as MMHE, Technip and Heerema in delivering the first TLP in Malaysia. Also, the successful completion of the project will be a boost to its track record.