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Only one out of 33 listed firms which announced full-year results reports loss.

Many Singapore-listed companies last year enjoyed super profits in line with 2007’s buoyant economy, with some doubling their earnings.

As of Friday, full-year net earnings of 32 out of 33 listed companies which have announced results so far totalled $4.1 billion.

Keppel Corporation catapulted into the billionaire club when it announced a 50.6 per cent increase in full-year net profit to $1.13 billion last week, up from $750.75 million in the previous year.

Singapore’s ninth largest company in terms of market capitalisation, the conglomerate, which has four business segments - offshore & marine, property , infrastructure and investments - also achieved record turnover of more than $10.4 billion, up 37.2 per cent.

Property companies were among those which did particularly well in last year’s red-hot real estate market.

Keppel Land, which also reported full-year 2007 numbers last week, saw its net profit increase 289.2 per cent to $779.65 million on the back of sale of units of residential developments here as well as recognition of profit from the restructuring of its interest in One Raffles Quay. Turnover hit a record $1.41 billion, up 48 per cent.

Fragrance Land was the other property developer to see its earnings more than double in 2007 to $30.4 million from $14.84 million previously - thanks again to the hot property market. Its turnover increased 39.3 per cent to $136.12 million for the year.

Among the 20 real estate investment trusts, more than half have already posted full-year net earnings.

CapitaCommercial Trust reported a 2007 net profit of $120.42 million, an increase of 52.7 per cent, followed by City Developments Ltd Hospitality Trust with a net profit of $68.72 million and Macquarie MEAG Prime Real Estate Investment Trust with a net profit of $59.04 million, up 7.5 per cent.

Also reporting record numbers was STATS ChipPAC, which saw full-year net profit increase 22 per cent to $134.72 million and turnover of $2.33 billion (up 2.1 per cent), bolstered by its fourth-quarter performance. It attributed this to strong demand across the computing, communications and consumer-end markets, and revenue contribution from its recently acquired factory in Thailand.

But it was not all rosy in the tech sector.

Chartered Semiconductor saw its full-year net profit gain 51.7 per cent to $146.23 million. However, turnover fell marginally by 4.2 per cent to $1.95 billion. This was attributed primarily to weakness in the consumer sector and to a lesser extent the computer sector, partially offset by strength in the communications sector.

Fastech Synergy was the only company to announce a full-year net loss of $6.66 million, even though it posted three consecutive quarters of gross profit starting in the second quarter of 2007. Turnover for the year rose 5.9 per cent to $20.32 million.

But the euphoria that followed last year’s strong performance has proved to be short-lived, with some analysts cutting earnings projections for 2008 in the light of a possible global recession.

CIMB-GK has cut Keppel Corp’s earnings estimates for this year by 9.7 per cent. OCBC Investment Research has revised its target price for Keppel Corp shares to $14.80, from $17.10. Citi, in a research note, said that Keppel Land’s record numbers were ultimately ‘disappointing’, adding: ‘Excluding revaluation gains of $343.6 million, net earnings came in at $436.1 million for FY07, falling short of consensus and our estimate of approximately $500-510 million.’

Source : Business Times - 4 Feb 2008

THE recent plunge in CapitaLand shares and news that the company is offering a convertible bond issue are drawing traders into fresh positions on warrants for South-east Asia’s biggest developer.

CapitaLand shares fared better than other property plays during the recent sub-prime selldown, but they took a beating last week. They plunged 73 cents for the week, ending 10 cents down at $5.80 with 37.3 million units done last Friday.

Mr Ooi Lid Seng, Societe Generale’s (SG’s) vice-president of structured products for Asia excluding Japan, said: ‘The counter has dropped about 12 per cent in the last five trading days.’

One reason was the recent slew of analyst reports urging investors to exercise caution with property stocks. For example, Citigroup cut target prices for CapitaLand and City Developments last week, citing an expected moderation in office and residential prices.

Also last week, CapitaLand announced plans to raise $1.3 billion via a 10-year convertible bond issue. With a conversion price of $8.614, the bond pays a coupon rate of 3.125 per cent a year.

Mr Ooi highlighted a CapitaLand call warrant offered by SG for those who hold a positive view of the company. It has a strike price of $6 and expires on July 14. No trades were done last Friday.

Last Friday, the most active SG CapitaLand contract was a call warrant with an exercise price of $6.22 that lapses on July 7. That contract closed 2.5 cents lower at 21.5 cents with 5.07 million units done.

Another active SG CapitaLand contract was a call warrant that expires on March 10 with a strike price of $6.70. Last Friday, it ended one cent down at two cents with 150,000 units traded.

In Mr Ooi’s view, the short-term outlook for CapitaLand shares is negative. He added: ‘The counter is likely to retest the $5.92 level should it rebound with minor support at $5.40.’

A call warrant lets an investor buy into a stock or index at a preset price over a period of three to nine months.

A put warrant allows an investor to sell the stock or index at a preset price over a fixed period of time.

Source : Straits Times - 4 Feb 2008

Keppel Corp leads at half-time with record full-year earnings of $1.13b

THE stock market may have had a torrid time of late, but the financial reporting season has so far brought little but big smiles for investors.

With the reporting season for companies with Dec 31 year-ends now at the halfway mark, Singapore has so far registered another sterling year of profits.

Among the 32 Singapore- listed early birds that had reported by 5pm last Friday, total profits were $4.07 billion, up a dazzling 68.3 per cent on the $2.42 billion for 2006.

Of those that reported full- year results, 31 were in the black. And 22 of them posted higher earnings.

Racking up the largest profit number, in absolute terms, was Keppel Corp. The company’s earnings for the 12 months ended Dec 31 last year rose 50.6 per cent to $1.13 billion, thanks mainly to booming business at its oil rig and shipbuilding unit.

Keppel’s record gain calmed jittery investors concerned over whether it might face foreign-exchange losses similar to those that rocked other offshore and marine companies like SembCorp Marine (SembMarine) last year.

SembMarine, now mired in a lawsuit with BNP Paribas over forex losses, will report full-year results on Feb 22.

The sharp spikes in crude oil prices last year also helped propel the full-year net earnings of Keppel associate, Singapore Petroleum Company, to a record of $508.3 million.

On the property front, many real estate investment trusts have unveiled strong full-year profit scorecards.

One of the top performers in that category is CapitaMall Trust, whose net income available for distribution for last year came to $211.2 million, up 25 per cent from the $169.4 million posted in the same period a year earlier.

One of the poorest performers was Evergro Properties - a member of the Keppel group - which reported a 97.4 per cent plunge in full-year net profit for last year on the back of lower divestment gains.

Several big-cap counters - including StarHub, ComfortDelGro, City Developments, Great Eastern Holdings and SembCorp Industries - are due to report their results this month.

However, it is the traditional top earners - DBS Group Holdings, United Overseas Bank (UOB) and OCBC Bank - that are likely to come under the most scrutiny, with analysts not ruling out more write-downs on assets linked to United States sub-prime mortgages.

‘What is currently of utmost concern are the results of the local banks, as great uncertainty and anxiety rule in the wake of the big casualties surfacing from the sub-prime fiasco affecting the top banks and brokerages in the world,’ said Mr Najeeb Jarhom, the senior vice-president of research at AmFraser Securities.

Another concern is how the net interest margins of local banks will be affected by the falling Singapore interbank offered rate (Sibor) - the rate at which banks lend to one another.

‘A falling Sibor environment is likely to post a threat to the net interest margins of Singapore banks, as all three of them are net interbank lenders,’ said Kim Eng analyst Pauline Lee.

Economists expect the Sibor to go even lower by midyear, due partly to the US cutting its key interest rate.

Phillip Securities Research investment analyst Brandon Ng has declared OCBC his top pick. OCBC is a conservative bank and made the largest provisions in the last quarter to cover the fallout from risky debt, compared with UOB and DBS, he said.

Deutsche Bank analyst Michael Chang feels Singapore banks offer cheap valuations for their rapidly improving fundamentals.

‘We recommend an overweight position,’ he noted.

Source : Straits Times - 4 Feb 2008

A GROUP of property agencies plans to form a new association to raise standards in response to growing complaints about estate agents.

The group, which will be separate from the Institute of Estate Agents (IEA), will work closely with an ongoing accreditation scheme to lift the industry’s game.

Complaints about agents have shot up in the past two years amid a property boom, prompting disquiet among some about the sector, which remains largely self-regulated.

Unlike the IEA, which has individual agents as members, the new body will involve estate agencies, said the chairman of its interim committee, property consultant David Ong.

The new body is likely to be linked to the Singapore Accredited Estate Agencies Scheme (SAEA), which last year was reported to have vetted more than 7,000 agents out of the 30,000 or so working in the industry.

It is understood that more than 10 agencies - including HSR Property Group and KF Property Network - will be joining the group. KF Property is the agency division of Knight Frank.

More details are expected soon, but the director of KF Property , Dr Tan Tee Khoon, told The Straits Times that the new body would allow the agency heads to share information about rogue agents as well as host seminars and conferences to raise standards.

A register of agents from member agencies could also be set up.

The group could rival the efforts of the IEA, which introduced a registry in 2006. That registry lists about 350 agencies with almost 21,000 agents.

Dr Tan denied that the new group would rival IEA, saying rather that it would help curb the problem of errant agents. ‘We are really trying to cover more ground. Members of the public are free to choose whether they want to use an IEA agent or an agent with the new association,’ he said.

His firm was among a group of agencies that raised concerns about IEA’s practising certificate scheme when it was launched last year.

The certificate was given to IEA members - which number about 1,400 now - who pledged to abide by its code of conduct. The dissenting group, which included HSR, DTZ Debenham Tie Leung and Global Real Estate, felt the certificate could confuse the public and called instead for the industry to support the SAEA.

One agency chief, Mr Chris Koh from Dennis Wee Properties , said the new group could work if it united all the industry’s head honchos. But IEA’s first vice-president and the chief executive of Propnex, Mr Mohamed Ismail, felt it would divide the industry instead and spread resources too thinly.

There were 1,717 housing agencies in Singapore as at the end of last year. The largely unregulated property sector has had a bad reputation over the years. The Consumers Association of Singapore (Case) received 1,113 complaints last year, up from 991 in 2006.

Case said the complaints involved agents misrepresenting facts, failing to honour promised terms and providing unsatisfactory services, among other things.

Industry veterans say the problem lies in the fact that only agencies are licensed, so agents sacked for unethical conduct can simply practise in another firm.

The Government, however, has consistently shied away from regulating agents.

Case is working with IEA to look into setting up another accreditation system for housing agencies.

Source : Straits Times - 4 Feb 2008

I WOULD like to highlight some unpleasant experiences with housing agents in Singapore and, hopefully, I might find someone who shares the same problem as I do.

These happened while I was looking for an apartment to rent.

One housing agent advertise an apartment as renovated, but when we reached the apartment, we found that renovation had not been done, and that it would depend how much we had to offer.

Last week, an agent from PropNex advertised an apartment for rent. The ad stated the size of the flat and I even called to confirm the size and was also told that there was a maid room. But when we arrived, there was no maid room and the size of the flat was about 300 sq ft smaller.

I have written to PropNex about this incident, but have yet to get a reply.

Is there any real estate association in Singapore that governs these agents?

Melvenie Rasmussen (Mrs)

Source : Straits Times - 4 Feb 2008