Thu Aug 2, 2012 1:26am EDT
Singapore shares slipped by midday in line with other Asian bourses after the U.S. Federal Reserve disappointed investors when it failed to offer new monetary stimulus after a two-day meeting.
The benchmark Straits Times Index was down 0.4 percent at 3039.03 points, falling for the first time in four sessions. MSCI's broadest index of Asia-Pacific shares outside Japan also eased 0.2 percent.
CIMB Research, which maintains its 'overweight' rating on Singapore stocks, said it is bullish on office real estate investment trusts like CapitaCommercial Trust on continued demand from corporates, and as Singapore develops as Asia's funding hub.
It has an 'outperform' rating on CapitaCommercial and Suntec REIT, which also owns offices, with a target price of S$1.48 and S$1.59 respectively.
Food company Cerebos Pacific Ltd jumped 21.4 percent to its highest in over 15 years, after Japanese food and beverage giant Suntory made an offer to buy out minority shareholders.
Suntory's offer price of S$6.60 per share for the 17 percent stake in Cerebos it does not own is an attractive one, CIMB said, and advises investors to take up the offer.
Thai Beverage Pcl shares rose 3 percent to S$0.34, ahead of an expected announcement from conglomerate Fraser and Neave and Asia Pacific Breweries Ltd, whose shares have been suspended from trading.
Thai Bev bought Oversea-Chinese Banking Group's 22 percent stake in F&N for $3 billion, and has since raised its stake in the conglomerate to 24.1 percent.
1255 (0455 GMT) (Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com)
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12:29 STOCKS NEWS SINGAPORE-DBS upgrades Hi-P to buy from hold
DBS Vickers upgraded electronics firm Hi-P International , to buy from hold and raised its target price to S$0.91 from S$0.86, citing an expected rebound in earnings in the second half of the year.
By 0403 GMT, Hi-P, which supplies components to Apple Inc , was up 6.8 percent at S$0.785. Its shares have jumped nearly 30 percent since the start of the year, outperforming FT ST Industrial Index's 12.9 percent rise.
Hi-P posted a loss of S$2.1 million in the second quarter, but management guided for higher sales and net profits in 2012, implying that net profit in the second half should be more than S$45 million, DBS said.
"We believe such optimistic guidance is driven by new tablets and smartphones for customers such as Apple, RIM and Amazon in addition to sports devices for Nike," said DBS.
The brokerage added that component suppliers are expected to ramp up production in July or August for the release of the new iPhone in October and Amazon's new e-book in the second half.
Hi-P's current valuations are cheaper than the average of its peers, and its shares have historically rallied ahead of new iPad launches, DBS said.
"Given that the company is growing bigger in its engagement in next generation smartphones, we urge investors to position in the stock ahead of the new launch," it said.
1212 (0412 GMT) (Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com)
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11:37 STOCKS NEWS SINGAPORE-Singapore's M&A market 2nd most attractive - E&Y
Singapore is the world's second most attractive market for mergers and acquisitions due to its highly developed infrastructure, availability of significant assets for purchase and business-friendly environment, according to Ernst & Young.
The annual M&A Maturity Index ranks 148 countries on their ability to attract both domestic and cross-border M&A deals. Coming in first was the United States, while the United Kingdom follows in third position and Hong Kong in fourth.
"Southeast Asia has emerged as an increasingly important global investment destination and Singapore serves as its deal structuring hub," said Luke Pais, partner of transaction advisory services at Ernst & Young in Singapore.
The accounting group said that Singapore was also seen as a favourable location from which Asian companies plan their investments into western markets as well as other emerging markets such as Africa and South America.
Singapore's M&A scene has been active -- the latest being a proposed $6 billion takeover of Tiger Beer maker Asia Pacific Breweries Ltd by Dutch brewer Heineken.
According to Ernst & Young's rankings, Asian countries now comprise half of the top ten M&A locations. South Korea ranked fifth, while China came in at ninth and Japan at tenth.
The rankings are based on an analysis of a country's regulatory, political, economic and financial environments, along with its technological capability, socio-economic characteristics, infrastructure and assets.
1107 (0307 GMT) (Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com)
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10:31 STOCKS NEWS SINGAPORE-CIMB cuts COSCO target price
CIMB Research cut its target price for Chinese shipbuilder COSCO Corp Singapore Ltd to S$0.85 from S$0.92 and kept its 'underperform' rating, citing lower-than-expected net profit and inconsistent margins.
Shares of COSCO were down 1 percent at S$0.955, but have gained 9 percent so far this year, underperforming the FT ST Industrial Index's 12.9 percent rise.
COSCO said its second quarter net profit fell 13 percent to S$27.6 million, partly due to lower revenue from shipyard operations and its shipbuilding segment.
The brokerage cut its 2012-2014 earnings per share estimates for COSCO by 13-15 percent, and noted that management expects the shipbuilding margin to be dragged by the execution of low-value projects ahead.
Deutsche Bank said that although COSCO's execution was improving, industry conditions remain challenging.
"Conditions are deteriorating in the Chinese shipbuilding sector. New vessel contracting continues to decline," Deutsche said in a report. It maintained its 'hold' rating on the stock with a target price of S$0.95.
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