SGX daily average value of securities plunged to $927m
57 bonds were listed in November.
In a release, Singapore Exchange said derivatives trading and clearing activities grew in November from a year earlier while securities trading declined. The derivatives market also had a record-high open interest.
Value of securities traded was $19.5 billion, down 30% from $27.8 billion last year; daily average value of securities traded declined to $927 million from $1.3 billion. A total of 57 bonds raising $11.3 billion were listed.
The biggest debt listed was Singapore Housing Development Board’s $1.5 billion fixed rate notes due 2017. There were 3 new IPOs in November raising $2.7 billion.
Meanwhile, derivatives volume rose 23% year-on-year to 8.9 million contracts. Open interest at end-November rose 54% from a year earlier to a record 4.0 million contracts.
Courts Asia will not be able to pass on most of the impending cost pressures, including labour wages and rental, according to Maybank Kim Eng, which led it to reduce its FY14F-15F earnings outlook by 3-5%.
Here's more from Maybank: Mired in a highly competitive market; downgrade to SELL.
The electronics and furniture retailing market is highly fragmented, with scant opportunities for price or cost leadership.
As such, we think Courts Asia is taking steps in the right direction to create differentiation, though for now, the company’s credit operations seem to be its only competitive edge.
Share price has declined 22% YTD but a reversal looks unlikely anytime soon.
Downgrade to SELL. We transfer coverage of Courts Asia to James Koh. Negative margins signal weak pricing power. In our view, Courts Asia will not be able to pass on most of the impending cost pressures, including labour wages and rental.
This will mean operating margins, which are already down significantly YTD, slipping even further.
Stripping out customer credit income (and associated costs), operating margins for the group have historically been negative, a sign of the intense competition in this industry.
Overhang from impending GST in Malaysia. The 6% GST to be implemented in Malaysia from April 2015 will only affect Courts Asia from FY16 onwards. In the meantime, we expect this to be a share overhang.
While details remain under discussion, our analysis shows it will increase the tax burden on the company, a cost it may not be able to fully pass on.
When Singapore rolled out a 3% GST in 1994, overall retail sales shrank 1.5% that year and 19% QoQ seasonally adjusted.
Credit book quality healthy, but fully valued. Courts Asia has a gross credit book of SGD523m, funded against borrowings of SGD291m. Indeed, 180-day delinquency rates represent historical lows and reflect management’s efforts to keep the integrity of its credit book.
However, upside value here is already reflected in the lower provision allowances (4% of gross credit book). Thus, any deterioration in terms of higher impairments may reduce margins going forward.
Trim earnings forecasts.
We cut our FY14F-15F earnings by 3-5% mainly on less optimistic margin assumptions. Courts Asia’s ROE profile and EPS growth this period is among the lowest in its peer group.
As a result, we peg our new TP of SGD0.60 to a lower PER of 10x (FY14F-16F average EPS).
Hold the line: M1's roaming revenues stuck under pressure
Here's what to blame.
According to CIMB, roaming revenues are under pressure due to declining usage of voice and data roaming and
falling inter-operator termination rates.
Here's more:
We expect a special DPS of 4 cts at end-FY13 given its low net debt/EBITDA of only 0.5x. Our call changes from Outperform to Add under our new rating structure.
Likely re-rating catalysts are strong earnings growth and special dividend payouts. Our DCF-based target price is $4.10.
Monetising mobile data
Twelve months after the launch of tiered data plans, 32% of postpaid users have switched to these plans which cost 5% more on average. We expect the adoption rate to double to 60% by end-14.
ARPUs are also bolstered by the move to higher tiers by 11% of subscribers who renew contracts. C.15% of these users exceed their data bundles and incur a penalty.
Data usage is rising, spurred by higher speeds with the introduction of LTE and richer content available.
Fixed broadband
Fixed broadband, where M1 rides on the NGNBN, is a growth driver. Competing on price and bundling it with mobile broadband, M1 has been disrupting the market and challenging SingTel’s and Starhub’s dominance. Revenue contributions from fixed broadband have doubled yoy to 4.5% in 9M13.
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Rats run loose in SGX market....Again!