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| | Singapore Press Holdings - Pseudo retail REIT With a growing retail property arm and stable media business, SPH is increasingly like a retail REIT with limited cash-call risks, in our view. Offering forward yields of 6.4% vs. 6.1% for retail S-REITs after its YTD underperformance, we think it offers a cheaper alternative. We raise our EPS marginally on property rental adjustments and our SOP target price after rolling one year forward. We also raise DPS on less conservative payout assumptions. Upgrade from Neutral to Outperform. We see catalysts from higher-than-expected ad growth. Shipping Monitor - VLCC rates plunge below costs VLCC rates fell 21% wow, which could presage a potential slowdown in the pace of Chinese crude oil stockpiling in 2H12. Capesize rates also continued their decline and are in deep in the red. Only container freight to the US did well last week and may continue to outperform. This is because the US economy has been strong relative to Europe which is in a recession that is causing Asia-Europe container rates to fall. Our call on the overall shipping sector is Underweight although we note that some quality names like Pacific Basin and OOIL, our top picks, are trading at significant discounts to underlying asset values. News of the Day... • HDB issues $500m, 7-yr fixed rate notes • FCOT seeks approval to sell KeyPoint for $360 million • Aussino Group in $60m reverse takeover deal • Otto Marine secures US$7.6m charter contract with extension option • Banyan Tree to launch integrated resort project in Vietnam • Sunpower Group wins US$6.3m contract | |
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