Reports » Singapore

Singapore stock market and companies daily report (Religare Health Trust, Olam International) (October 03, 2012)

Contributed by Shares Investment

PMI Contraction Signals Technical Recession
Singapore has entered into a technical recession in 3Q12 as it experienced a deeper manufacturing contraction in September 2012, casting a shadow over the current quarter – 4Q12. The latest purchasing managers’ index (PMI) signalled a third straight month of contraction with a reading of 48.7, as shrinking new export orders pulled it down from August’s 49.1. Singapore’s PMI report yesterday showed that new export orders contracted for the first time after seven months of growth, while new orders contracted more rapidly. Indeed, the deterioration in Singapore’s industrial sector was in line with fellow major exporters in the region, South Korea and Taiwan. Taiwan’s PMI fell to a 10-month low of 45.6 in September 2012, while South Korea’s PMI fell to 45.71, its lowest since February 2009.
Significance: With no September rebound in manufacturing activity in sight and poor exports and industrial production numbers in August, Singapore’s 3Q12 GDP performance is expected to confirm a technical recession with a second quarter-on-quarter drop in GDP.

Religare Health Trust Seeks To Raise $550.4m
Religare Health Trust (RHT) – backed by India’s Fortis Healthcare – is looking to raise up to $550.4 million through a listing of some 567.5 million units on SGX at a price range of $0.88 to $0.97. RHT’s initial portfolio located across India will consist of 11 clinical establishments, two hospitals managed and operated by the trust and four greenfield clinical establishments. As at 30 June 2012, RHT’s portfolio has 1,782 operational beds and an installed capacity of 3,197 beds. Fortis, which owns 28 percent of the units in RHT post-listing, saw operating revenues of $685 million for its healthcare business for FY12, and has operations in 10 countries across Asia-Pacific, including Vietnam and Australia. Fortis has also granted RHT a right of first refusal should the healthcare operator or any of its subsidiaries be divesting any relevant medical healthcare infrastructure and facilities.
Significance: RHT’s SGX-listing comes at an opportune timing as India’s healthcare industry is experiencing a boom phase, with healthcare infrastructure in India failing to keep pace with the demand growth. By 2015, its medical tourism market is expected to be worth US$2.1 billion with an expected 520,000 medical tourists.

Olam Plans Buyout Of NZ Unit
Olam International, the biggest shareholder of NZ Farming Systems Uruguay at 85.9 percent, is offering to acquire the remaining 14.1 percent stake it does not own for NZ$25.8 million (approximately $26.4 million). Olam is paying NZ Farming shareholders NZ$0.75 per share and noted that it will not increase its offer as it believes this is a “full and fair price”. The commodity trader added that it planned to delist NZ Farming from the New Zealand stock exchange once it hits its target of a full takeover. NZ Farming develops and operates dairy farms in Uruguay and its shares, listed on the New Zealand stock exchange, were last traded at a 6.7 percent discount to the offer price at NZ$0.70 on 27 September 2012. Noteworthy to investors, under the takeover terms, if NZ Farming issues any bonus shares as of yesterday, shareholders who have accepted Olam’s offer would have to transfer them to Olam without extra payment.
Significance: The latest offer to buy the remaining stake in NZ Farming represents a closing sequel to another takeover attempt by Olam back in June 2011, when it offered NZ$0.70 per share to increase its shareholding in NZ Farming from 78 percent. If Olam is successful this time round, the latest offer to buy the remaining stake in NZ Farming will bring Olam’s total acquisition cost to NZ$159.6 million.