SPH News

SINGAPORE (XFN-ASIA) - DBS Vickers Securities says it has raised its
rating for Singapore Press Holdings (SPH) to "buy" from "hold" and
increased its target price to 4.78 sgd from 4.42 because of its
attractive
valuation and the boost to the company's earnings expected from its
development of the Times Industrial Building here.

"The proposal to develop its Times development site should boost
group earnings [in the years] to August 2007-2009, amid a rising mid-
[to]
high-end residential market," DBS Vickers said in a note.

The brokerage has raised its estimate of net profit for the
company
for the year to next August by 16 pct to 440.8 mln sgd to factor-in
earnings from this development, and for the year to August 2008 to
482.7
mln sgd.

DBS Vickers also said it had raised its valuation for SPH's
Paragon
building to 1.65 bln sgd, or 1.05 sgd per share, because it expects
rents
for retail premises here to continue to rise.

At 9.51 am, SPH was up 0.06 sgd or 1.46 pct at 4.18, on volume of
2.46 mln shares.



(1 usd = 1.58

SinPOst

Singapore Post
Moving into the property transaction business
SingPost and ERA Realty Network of Hersing Corporation have signed an
agreement to offer a new service to customers. Known as PostREALTY, this
one-stop service is a convenient and reliable new channel for customers to buy,
sell and rent public and private residential and commercial properties at post
offices.
This service will initially be offered at three of SingPost’s branches, namely Ang
Mo Kio Central Post Office, Marine Parade Post Office and Toa Payoh Central
Post Office from 16 Oct 06 (SingPost currently has 62 branches). A dedicated
team of service staff from ERA Realty Network will be stationed at these post
offices to assist customers with enquiries and property transactions.
We view this partnership positively, as SingPost has tied up with a leader in
the business. ERA Realty Network currently enjoys leadership position in HDB
resale transactions and private resale market, capturing an estimated 35% of the
market.
More importantly, this partnership reinforces SingPost’s diversification strategy
to leverage its wide retail network to offer more value-added products and
services. We can expect SingPost to announce more of such similar initiatives
in future.
Market concerns are unwarranted. Some market players are concerned that
the impending opening of the low-income unsecured
lending market to commercial banks will mean more competition for SingPost’s
EzyCash. We feel likewise too. However, it should be noted that the retail
segment accounts for only 4.5% of FY06 operating profit, and EzyCash is but
one portion within the retail segment. Hence, we believe the impact on
SingPost’s earnings will not be significant.
The other concern of market players is that the exclusive postal licence will
expire on 31 Mar 07. Our view is that other players are unlikely to enter into a
market which is relatively small, and compete with SingPost which has an
elaborate postal infrastructure setup. Hence, we expect minimal impact on
postal earnings upon expiry of the exclusive licence.
Divestment of non-core assets progressing. Separately, SingPost
announced that it has completed the sale by tender of its HDB shop unit at
Marine Parade Central. The net book value of the property is S$0.83m, and the
sale price is S$5.68m, giving a gain on disposal of S$4.78m.
SingPost remains a BUY. Our DCF valuation gives a fair value of S$1.23 per
share. Based on a dividend payout ratio of 89% (management guided payout
ratio of between 80-90%), we are forecasting FY07 dividend of 6¢, translating
to a dividend yield of 5.9%. This is very attractive when compared against 3-mth of Sibor 3.4%

SingPOst

Singapore Post

Moving into the property transaction business

SingPost and ERA Realty Network of Hersing Corporation have signed an
agreement to offer a new service to customers. Known as PostREALTY. this
one-stop service is a convenient and reliable new channel for customers to buy,
sell and rent public and private residential and commercial properties at post
offices.

This service will initially be offered at three of SingPost's branches, namely Ang
Mo Kio Central Post Office, Marine Parade Post Office and Toa Payoh Central
Post Office from 16 Oct 06 (SingPost currently has 62 branches). A dedicated
team of service staff from ERA Realty Network will be stationed at these post
offices to assist customers with enquiries and property transactions.

We view this partnership positively, as SingPost has tied up with a leader in
the business. ERA Realty Network currently enjoys leadership position in HDB
resale transactions and private resale market, capturing an estimated 35% of the
market.

More importantly, this partnership reinforces SingPost's diversification strategy
to leverage its wide retail network to offer more value-added products and
services. We can expect SingPost to announce more of such similar initiatives
in future.

Market concerns are unwarranted. Some market players are concerned that
the impending opening of the low-income lending market to commercial banks will mean more competition for SingPost's
EzyCash. We feel likewise too. However. it should be noted that the retail
segment accounts for only 4.5% of FY06 operating profit, and EzyCash is but
one portion within the retail segment. Hence. we believe the impact on
SingPost's earnings will not be significant.

The other concern of market players is that the exclusive postal licence will
expire on 31 Mar 07. Our view is that other players are unlikely to enter into a
market which is relatively small, and compete with SingPost which has an
elaborate postal infrastructure setup. Hence, we expect minimal impact on
postal earnings upon expiry of the exclusive licence.

Divestment of non-core assets progressing. Separately, SingPost
announced that it has completed the sale by tender of its HDB shop unit at
Marine Parade Central. The net book value of the property is S$0.83m, and the
sale price is S$5 68m. giving a gain on disposal of SS4.78m.

SingPost remains a BUY. Our DCF valuation gives a fair value of SS 1.23 per
share. Based on a dividend payout ratio of 89% (management guided payout
ratio of between 80-90°.0), we are forecasting FY07 dividend of 6¢. translating
to a dividend yield of 5.9%. This is very attractive when compared against 3-mth
SIBOR of 3.4%.

Singapore Market

ST Index- The ST index broke above the sideway consolidation and
rallied
sharply on Friday hitting an intra- day high of 2446. Our earlier
recommendation was to sell into strength as we felt that the odds of a
breakout from the 2380 was less likely. Still, we had highlighted that
the
next eventuality was for a move towards the 2430 level . We saw that
move
unfold within the space of a day as large cap index stocks rallied
sharply.
Interestingly small cap stocks did not make any significant gains and
most
of them continued to trade off their recent highs. It is also
worthwhile
noting that small cap stocks had rallied ahead of the index and this
could
be a situation where large cap stocks are playing catch up. We think
the
risk/ reward ratio for the both small caps and large caps are not
attractive at this juncture and further declines are likely even as
recent
euphoria abates. Immediate resistance for the ST index is at 2446 and
then
at 2470. We continue to view this move up as a bear rally and a trap.



Best Regards

K Ajith

64195411

Singapore Market

Singapore market- Our initial expectation was for the ST index to top
out
near 2620. We also stated that a drop below 2570 would confirm a
downtrend.
That did not materialise. The index rebounded off the 2578 level and
headed towards 2666 mainly due to sharp gains in banking stocks. Even
so,
there are signs that the index has difficulty hanging on to the gains.
The
high established at 2666 was re tested on Monday but the gains were
quickly
erased the next day. By most accounts, we think the market is
overstretched. RSI indicator is overbought not only on daily and weekly
charts but also on monthly charts outlining price action over 20 years.
Thus from a statistical perspective, there are valid reasons to at
least
expect a correction in the Singapore bourse.We are also not seeing a
broad
based rally in index stock but more sudden sharp movements and these
are
quickly reversed. SIA which reported a weak 4th quarter result could
also
see it's share price coming under pressure. Chart formation shows
strong
resistance near $14.80 and also a potential double top formation.
We see little upside catalyst for the Singapore bourse at current
levels
and would prefer to await opportunities as opposed to chasing the same.
A
drop below 2620 would confirm a near term bearish set-up.

Best Regards

K Ajith

64195411

Singapore Market

ST Index could have ended a five wave structure from 2190. Regional
markets
show signs of trend deterioration

In our recent mails, we stated that the ST Index was in the terminal
stages
of a wave 5 move and recommended reducing exposure to high beta stocks
and
switching defensive high yielding stocks. Today's price action appears
to
mark a swift reversal. The ST index briefly rallied to 2620 probably
due to
the expiry of Simsci futures and then quicky corrected. On Wednesday,
we
stated that we expected the ST index to rise marginally above 2605 and
then
quickly correct back down. The index has exactly done that. We have
attached 2 charts outlining the wave patterns on the ST index for
readers.

We think that an impulsive 5 wave structure from 2190 has ended at 2620
and
the index could retrce back towards 2430 in the coming weeks. A break
below recent low of 2470 would strengthen the view. We are witnessing
similar signs of trend deteriorationon in regional markets. In Japan,
the
Nikkei shows a double top formation with critical support at 15780
after
failing to retrace past 62% of recent fall. The index has so far
corrected
by 300 odd points and the risk of a break below 15780 is very high. In
HongKong, the HSI has corrected by 300 points breaking below a prior
low.
All in all, we think that regional markets show signs of trend
deterioration and a bear trend could be looming.


(See attached file: stiwave count.jpg)(See attached file: STI60min.jpg)
Best Regards

K Ajith

64195411

Singapore Market

ST Index- Limited upside, sell into strength.

Singapore market - Last Thursday, we issued a report stating that
small
cap stocks appeared risky and price action suggested an imminent
reversal.
Since then, we have seen a pullback in several China related small
caps,
some of which have corrected more than 10% from their recent highs.
The
broad based pullback in the sector suggests that we are witnessing a
trend
reversal and prices are likely to ease further in the coming weeks. A
similar view cautious view was also extended towards the HSCEI index in
Hong Kong, when we mentioned that a wave 5 price objective for the
index
was near the 7180 level. The actual high turned out to be 7287. The
index
had subsequently corrected to close at 6858 as of yesterday. At this
stage,
it appears that we are witnessing a macro change in sentiment for China
related stocks.

As for the ST index, we also maintained that even as the index rose
past
2580 which was our original upside target, a meaningful correction was
not
too far away. Price action so far supports this view. The index rose
to a
high of 2605 on last Friday and then quickly retraced 50% of it's gains
from 2537. We are now looking for the index to breach the 2605 level
marginally and then correct down below 2570. Such a move would have
heighten the possibility that a medium term top is in place. Our
preferred
strategy would be to reduce exposure on high beta stocks and to look
into
defensive plays.





Best Regards

K Ajith

64195411