SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Thematic (Sector/Industry)

<ul><li>Of the actively traded stocks listed on SGX, Singapore Medical Group saw the biggest jump in volume in August compared to its three-month average volume. The stock also gained 91.4% in August and earlier in the month reported a turnaround net profit of S$0.8 million for 1H2016 compared to a net loss of S$0.1 million in 1H2015.</li></ul><ul><li>
Consumer Staples plays, Sheng Siong Group and Dairy Farm International Holdings were also amongst the 10 actively traded stocks that saw the biggest jump in August volume.…</li></ul>

Of the actively traded stocks listed on SGX, Singapore Medical Group saw the biggest jump in volume in August compared to its three-month average volume. The stock also gained 91.4% in August and earlier in the month reported a turnaround net profit of S$0.8 million for 1H2016 compared to a net loss of S$0.1 million in 1H2015.
Consumer Staples plays, Sheng Siong Group and Dairy Farm International Holdings were also amongst the 10 actively traded stocks that saw the biggest jump in August volume.…

10 Biggest Volume Jumpers in August Spanned Seven Sectors

Differentiated global TMT & Internet Research

New Street Research Insights

New Street Research

Research is provided by our team of experienced analysts. Our work is idea driven, based on independence of thought, sector expertise, and firmly focused on fundamentals and valuation of telecoms and internet names globally. New Street is headquartered in London with offices in New York, Singapore and Australia. 

New Street Research is an independent, partner-owned, research firm specialising in equity and debt research. Our equity research embraces the following sectors:

Pan European Telecom Services and Cable
US Telecoms, Cable, Satellite and Towers
Global Emerging Market Telecoms
Japan Telecoms
Asian Internet
Pan European Healthcare
US Healthcare
Japanese Healthcare

We also provide debt research on:
Pan European Telecom Services and Cable

Equity Bottom-Up

The 2Q16 results from <a href="https://www.smartkarma.com/entities/4215" target="_blank" data-smartkarma-citation="entities:4215:1">PLDT (TEL PM)</a> and <a href="https://www.smartkarma.com/entities/1926" target="_blank" data-smartkarma-citation="entities:1926:1">Globe (GLO PM)</a> reveal the challenges facing the Philippine telecom industry, which is struggling despite robust economic growth.  The results show negative service revenue growth (-5.6% YoY), severe pressure on voice revenues (-16% YoY), SMS declines worsening, and low OpFCF. While the ongoing struggles at PLDT were expected, we were surprised to see Globe slipping into negative service revenue growth as well.We expect PLDT's increased capex to eventually lead to a stabilization of the market but there was no sign of PLDT turning the corner in latest numbers. In the meantime, elevated capex suggests that ROCI and OpFCF trends will remain poor. The SMS deal to entrench the duopoly has the potential to lower capex intensity in time but its completion is not as smooth as the operators had hoped for. Share prices of PLDT and Globe reacted positively to the SMC transaction but have since given back around half of the gains on worries over government intervention. Longer term, removing potential new entrants should lead to lower capital intensity and is positive.

The 2Q16 results from PLDT (TEL PM) and Globe (GLO PM) reveal the challenges facing the Philippine telecom industry, which is struggling despite robust economic growth.  The results show negative service revenue growth (-5.6% YoY), severe pressure on voice revenues (-16% YoY), SMS declines worsening, and low OpFCF. While the ongoing struggles at PLDT were expected, we were surprised to see Globe slipping into negative service revenue growth as well.We expect PLDT's increased capex to eventually lead to a stabilization of the market but there was no sign of PLDT turning the corner in latest numbers. In the meantime, elevated capex suggests that ROCI and OpFCF trends will remain poor. The SMS deal to entrench the duopoly has the potential to lower capex intensity in time but its completion is not as smooth as the operators had hoped for. Share prices of PLDT and Globe reacted positively to the SMC transaction but have since given back around half of the gains on worries over government intervention. Longer term, removing potential new entrants should lead to lower capital intensity and is positive.  

Philippine Telcos Struggle to Grow Despite the Vibrant Economy

<a href="https://www.smartkarma.com/entities/20" target="_blank" data-smartkarma-citation="entities:20">Singapore Telecommunications Limited</a> (Singtel) held an investor day this week to detail their key areas of progress. It was mostly reasonably upbeat with the exception of Thailand (we have commented on the outlook there previously in <a href="https://www.smartkarma.com/insights/thai-telcos-true-s-gains-are-ais-dtacs-loss" target="_blank" data-smartkarma-citation="insights:3902">Thai Telcos: TRUE’s Gains Are AIS/DTACs’ Loss</a>.  We like Singtel for its international assets and strong domestic position.Singtel trades at a modest discount to NAV but the upside in India is key to our positive view on the stock<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/008/871/original/SK%20HoldCos%20-%20Singapore%20Telecommunications%20Limited%20%282016-06-03%29.png?1464934982" class="editor-image img-responsive" data-smartkarma-image-id="8871"></figure> Shares have recovered from some of…

Singapore Telecommunications Limited (Singtel) held an investor day this week to detail their key areas of progress. It was mostly reasonably upbeat with the exception of Thailand (we have commented on the outlook there previously in Thai Telcos: TRUE’s Gains Are AIS/DTACs’ Loss.  We like Singtel for its international assets and strong domestic position.Singtel trades at a modest discount to NAV but the upside in India is key to our positive view on the stock Shares have recovered from some of…

The announcement that <a href="https://www.smartkarma.com/entities/22728" target="_blank" data-smartkarma-citation="entities:22728">San Miguel Corporation</a> (SMC) was abandoning its telecoms ambitions last week was received positively by the market. Both <a href="https://www.smartkarma.com/entities/1926" target="_blank" data-smartkarma-citation="entities:1926">Globe Telecom Inc</a> (Globe) and <a href="https://www.smartkarma.com/entities/4215" target="_blank" data-smartkarma-citation="entities:4215">Philippine Long Distance Tel</a> (PLDT) soared into and on the news. PLDT rose over 20% and Globe (which has been outperforming) gained 14%.This pretty much spells the end of any real competitive threat in the Philippines under current and known future technologies following the retreat of <a href="https://www.smartkarma.com/entities/690" target="_blank" data-smartkarma-citation="entities:690">Telstra Corp Ltd</a> . Although significant…

The announcement that San Miguel Corporation (SMC) was abandoning its telecoms ambitions last week was received positively by the market. Both Globe Telecom Inc (Globe) and Philippine Long Distance Tel (PLDT) soared into and on the news. PLDT rose over 20% and Globe (which has been outperforming) gained 14%.This pretty much spells the end of any real competitive threat in the Philippines under current and known future technologies following the retreat of Telstra Corp Ltd . Although significant…

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

Smartkarma

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Research Reinvented

Equity Capital Markets

Cemex Holdings Philippines / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/22701" target="_blank" data-smartkarma-citation="entities:22701">Cemex SAB De CV (ADR)</a> 's Philippines subsidiary <a href="https://www.smartkarma.com/entities/22700" target="_blank" data-smartkarma-citation="entities:22700">Cemex Holdings Philippines</a>  is planning to raise up to US$860m by June.In this insight, I look to answer the following questions:<ul><li>How is the company positioned in its market?</li><li>How does it fare versus its peers? </li><li>What are the key market trends one needs to be aware of? </li><li>Will the company's related party transactions be a concern?</li></ul>Once the deal is launched, we will re-evaluate the deal and run it through our framework in our next insight.

Cemex SAB De CV (ADR) 's Philippines subsidiary Cemex Holdings Philippines  is planning to raise up to US$860m by June.In this insight, I look to answer the following questions:How is the company positioned in its market?How does it fare versus its peers? What are the key market trends one needs to be aware of? Will the company's related party transactions be a concern?Once the deal is launched, we will re-evaluate the deal and run it through our framework in our next insight.

Cemex Philippines IPO Early Thoughts: Supply Glut, Notes on CG

Philippines

JG Summit Holdings Inc. operates in the consumer foods, agro-industrial and commodity food products, and textiles industries. The Company also invests in real estate, manages hotel, and provides apartment management services. In addition, JG also provides banking and financial services, and invests in telecommunications, petrochemicals, and air transportation businesses.

Aboitiz Equity Ventures Inc., through its subsidiaries, distributes and generates power, provides financial services, manufactures food, and provides inter-island transportation services.

GT Capital Holdings Inc. is an investment holding company. The Company, through its subsidiaries, provides banking, automotive, property development, infrastructure, utilities, and insurance services.

DMCI Holdings Inc., through its subsidiaries, provides general construction and infrastructure construction. DMCI also develops real estate and mines coal. In addition, DMCI manufactures cement and other products.

Alliance Global Group, Inc. is a holding company with interests in food and beverage, real estate development, and fast food restaurant businesses.  The Company distills brandy, manufactures glass containers, distributes wines and snacks, develops planned mixed-use communities, and either operates or sub-franchises hamburger restaurants.

Top Frontier Investment Holdings, Inc. produces, processes, and markets beverage, food, and packaging products in the Philippines and internationally. It offers alcoholic and non-alcoholic beverages. The company also engages in feeds production; poultry and livestock farming; processing and selling of poultry and meat products; processing and marketing of refrigerated and canned meat products; manufacturing and marketing of flour products, premixes and flour-based products, dairy-based products, breadfill, desserts, and cooking oil; and importation and marketing of coffee and coffee-related products. In addition, it produces and markets packaging products, such as glass containers, glass molds, PET bottles and preforms, PET recycling, plastic closures, corrugated cartons, woven polypropylene, kraft sacks and paperboard, pallets, flexible packaging, plastic crates, plastic floorings, plastic films, plastic trays, plastic pails and tubs, metal closures and two-piece aluminum cans, woven products, industrial laminates, and radiant barriers. Further, the company is involved in crate and plastic pallet leasing, PET bottle filling graphics design, packaging research and testing, packaging development and consultation, and contract packaging and trading. Additionally, it engages in power generation, distribution, and trading; coal mining; refining and marketing petroleum products; and construction and development of various infrastructure projects, such as airports, roads, highways, toll roads, freeways, skyways, flyovers, viaducts, and interchanges. The company also offers domestic and international telecommunications services; and banking services. In addition, it is involved in exploration, development, and commercial utilization of nickel, cobalt, chrome, iron, gold, and other mineral deposits; and commercial property development, sale and lease of real properties, and provision of corporate real estate services. The company is based in Makati City, the Philippines.

A. Soriano Corporation, through its subsidiaries, provides temporary health-care staffing services in the United States and the Philippines. It offers nurse/physical therapist staffing, and other healthcare and allied services. The company also provides hotel and resort accommodation, relaxation and entertainment, and other services; construction and sale of villas; air transportation, hangarage, real estate holding and management, and recruitment services; and online community management. In addition, it is involved in manufacturing, importing, exporting, buying, and selling building wires, power cables, aluminum wires and cables, copper rods, automotive wires, and other energy-related goods. The company was founded in 1930 and is based in Makati City, the Philippines.

Keepers Holdings Inc. operates as a holding company. The Company, through its subsidiaries, engages in the distribution of liquor such as wine, spirits, and other beverages. Keepers Holdings serves customers in Philippine.

APC Group, Incorporated operates in general services, mining and exploration and operates as a holding company.

PAL Holdings, Inc., through its subsidiaries, engages in the air transportation of passengers and cargo in the Philippines and internationally. As of December 31, 2014, its route network covered 32 points in the Philippines and 35 international destinations. The company was formerly known as Baguio Gold Holdings Corporation and changed its name to PAL Holdings, Inc. in January 2007. The company was incorporated in 1930 and is based in Makati, the Philippines. PAL Holdings, Inc. is a subsidiary of Trustmark Holdings Corporation.

Seibu Holdings Inc. offers diversified operation. The Company through its subsidiary companies operates transportation, construction, hotel, leisure facilities, and real estate business. Seibu Holdings provides group enterprises strategy planning, operation management, asset management and supply, and business promotions.

Beijing Enterprises Holdings Ltd. is a diversified company.  The Company brews beer; distributes natural gas through pipelines; invests in, designs, constructs and operates water supply and wastewater treatment plants; operates toll roads; disposes of hazardous waste; and offers electronic payment systems.

NWS Holdings Limited operates businesses under three main divisions: Service, Infrastructure, and Ports. Its Service division comprises facilities, contracting, transport, financial, and environmental. The Infrastructure portfolio includes roads and bridges, energy, and water treatment and waste management. Its port division includes container handling, logistics, and warehousing.

Apar Industries Ltd. manufactures aluminum conductors for power transmission. The Company also manufactures polymers, synthetic rubbers, latexes, transformer oils, pharmaceutical oils and other specialty oils.

Sime Darby Berhad is an investment holding company. The Group's principal activities include plantations, property development, heavy equipment and motor vehicle distribution, and energy and utilities.

Daetwyler Holding AG manufactures rubber components and sealing solutions for the automotive, pharmaceutical and civil engineering industries. The company also distributes electronic, automation, engineering and IT components and accessories.

Alfa, S.A.B. de C.V. through subsidiaries, operates petrochemical, food processing, automotive and telecommunication businesses. The Company produces refrigerated food products, high-tech engine aluminum heads and blocks for gasoline and diesel.

Yazicilar Holding AS is the holding company for the Yazici family's interest in Anadolu Holding, a diversified group with interests in beverage, automotive, financial services and writing instrument companies.

The Bidvest Group Limited is the holding company for a group of companies operating in a range of sectors. Subsidiaries manufacture and distribute food and allied products to the catering industry, as well as packaging, stapling, fastening and adhesive tapes, office products, cosmetics, toiletries and skin care products. Bidvest also provides laundering services.

Turkiye Sise ve Cam Fabrikalari AS (Sisecam)  manufactures glass.  The Company produces flat glass, bottles, household glassware, glass wire, chromium chemicals, glass fibre, and glass reinforced plastics.  Sisecam also offers packaging materials and machinery, composites and marketing, chemicals, trade, insurance and brokerage services.

San Miguel Corporation operates food, beverage, packaging, power, fuel and oil, infrastructure and telecommunications businesses.  The Company produces beverages, poultry, animal feed, meat, 
flour, dairy products, and glass and plastic packaging; generates electricity; refines and markets petroleum products; builds infrastructure; and provides telecommunications services.

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San Miguel (SMC PM)

10 Biggest Volume Jumpers in August Spanned Seven Sectors

Of the actively traded stocks listed on SGX, Singapore Medical Group saw the biggest jump in volume in August compared to its three-month average...

Singapore Exchange Ltd (SGX)

Philippine Telcos Struggle to Grow Despite the Vibrant Economy

The 2Q16 results from PLDT (TEL PM) and Globe (GLO PM) reveal the challenges facing the Philippine telecom industry, which is struggling despite...

New Street Research

Singtel's Mostly Positive Investor Day

Singapore Telecommunications Limited (Singtel) held an investor day this week to detail their key areas of progress. It was mostly reasonably...

New Street Research

Philippine Telecoms Duopoly Confirmed

The announcement that San Miguel Corporation (SMC) was abandoning its telecoms ambitions last week was received positively by the market....

New Street Research

Cemex Philippines IPO Early Thoughts: Supply Glut, Notes on CG

Cemex SAB De CV (ADR) 's Philippines subsidiary Cemex Holdings Philippines is planning to raise up to US$860m by June.In this insight, I look to...

Ke Yan, CFA, FRM

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