OIR BITES - Noble +5% after issuing another rebuttal‏

Noble’s share price is up 3% at S$1.035 this afternoon, just off early S$1.045 intraday high, after issuing a 11-page rebuttal of the allegations raised by Iceberg Research. The stock closed at 1.055.

In the rebuttal, Noble sought to “clarify fair value and dissipate the smoke”.

Top pick for the day - South Korea’s KOSPI

Testing key resistance

The rebound in South Korea’s KOSPI since the turn of the year has been positive. 

Will the rebound continue? 

The key word here is rebound. We believe that the current up move is only a rebound and not the start of its next leg up. 

Phillip Futures Energy Daily Outlook - Strength of the USD is likely to affect crude oil prices today, nonfarm payroll going to be key to today’s movements

Fundamental and Technical Analysis

US natural gas inventory figures dropped by -228B ft³ , dropping more than estimates: Natural gas inventories dropped more than expected, trending nearer to the 2014 figures than 2013. This indicates weakness in inventories which caused prices to move up slightly.

US Nonfarm payrolls results will be released today: Nonfarm payroll usually results in big price movements of the USD. A strengthening USD affects USD-denoted crude oil by making it more expensive for the rest of the world to purchase. If nonfarm payroll figures turn out better than expected, expect some downward pressure on crude prices and vice versa.

Singapore Banking Sector - Soft end to 2014 Singapore system loans and weak start to 2015

Highlights

■ Loan growth momentum slowing down, expect muted growth ahead for 2015: Loan growth engines sputtered for 2014. Singapore system loans (DBU & ACU) ended off 2014 with +9.2% y-y/+1.5% q-q. Slowdown was broad-based with general commerce loans growth withering to +4.9% y-y/-1.7% q-q. Housing loans growth is pacing down as expected. 2015 started with a subdued +1.0% m-m total growth. We see a challenging environment ahead with economic headwinds in this region. 

Bright spots could be

1) building & construction as the Singapore government increases commitment to infrastructure and 

2) general commerce might pick up depending on recovery of China and ASEAN economies.

Singapore Public Transportation - Wheels in motion

We expect the following developments to continue underpinning the sector’s outlook: 

1) the expected implementation of Contracting Model for Singapore public bus, 

2) earnings tailwinds from low energy prices, 

3) government’s continued investment in public transportation, and 

4) potential overseas expansion of public transport operators (PTOs).

First Resources - Good And Getting Better

We recently hosted meetings with FR’s CEO, Mr Ciliandra Fangiono, in Malaysia with fund managers. Questions raised focus on CPO price outlook, the biodiesel programme in Indonesia, the slowdown in FR's new plantings, yield improvement and cost of production. FR is always our top pick given its attractive age profile, cost-efficient estates and hands-on management. It will continue to expand its plantation assets and improve productivity to sustain growth. 

Maintain BUY. Target price: S$2.80.

Sarine Tech - Key takeaways from NDR

During the NDR that we hosted for Sarine Tech, Chairman and ED Mr Daniel Benjamin Glinert explained the group’s value proposition in the industry and shared its new product initiatives with investors. We continue to expect a weaker 1H vis-à-vis 2H as the effects of the credit crunch in India and high rough diamond prices work their way through. We believe investors will relook this stock in 2H15 when its outlook becomes clearer. 

We maintain our Hold rating and target price of S$2.88 (18x CY16 P/E, +0.5 s.d. of 8-year average). Faster-than-expected customer wins for its Light/Loupe/Profile product offering are potential re-rating catalysts. Sarine Tech’s dividend policy remains an attractive 2.5 US cts payable semi-annually.

Hongkong Land - Better-than-expected FY14 results; improving Central office occupancy

Hongkong Land (HKL) reported better-than-expected FY14 underlying earnings of US$930mn, down 1% Y/Y, compared with our expectation of US$888mn. While the company experienced slight negative rental reversions for Central office for full-year 2014, improvement was shown in occupancy, where vacancy improved from 6.8% at Oct-14 to 5.4% at end-2014. In the outlook statement, management noted that it expects the HK commercial leasing market to remain stable in 2015. We believe the increase in DPS on flattish earnings is an indication of a positive outlook.

Dairy Farm International Holdings Limited - FY14 Result First Take - 2H14 Better than Guidance

Dairy Farm reported its FY14 profit better than guidance provided in Nov-14. The company previously indicated underlying earnings decline for the period of 1st July to 4th November 2014. However, underlying EBIT actually grew ~5% in 2H14.

Dairy Farm International Holdings Limited - FY14 Preview: Challenge in ASEAN business continues

Dairy Farm will report FY14 (12 months ended Dec-14) results today (5 March 2015, Thursday) after market close.

RH Petrogas Limited - Cash position presents optionality for inorganic growth

● OCF improved by a reduction in receivables. 2014 adjusted profit after impairments was US$5.7 mn in 2014 (-US$4.8 mn) and 2014 EBITDAX came in at US$21 mn (-US$7.8 mn). OCF grew US$12 mn to US$24.2 mn by a reduction in trade and other receivables.

● Cash position capable of supporting 2015 capex. RH Petrogas ended the year with US$36.7 mn which could support its 2015 capex and opens up an optionality for the company to pursue inorganic growth when asset prices across the board are down.

● Expand Fuyu-1 drilling plan. First oil at Fuyu-1 is unchanged for spring 2015. The company increased its guidance for planned wells from 40 to 40-100 which increases capex from US$2 mn to US$5 mn. Estimated net production add is cir. 200 b/d.

● Increase TP to S$0.40 from S$0.38. The next catalyst for RHPetrogas is production at Fuyu-1 in spring. It will be interesting to see how RH Petrogas will harness its balance sheet strength to evolve its asset base for growth. We revise down our EPS estimates by 2-6%.