The people gave Obama support for 4 more years and sent the Wall St
financial markets in to shock. Dodd Frank, Volcker Rules and increased taxes
paniced local and foriegn investors a like.
Wall St Tanked, and it is not
over yet, the good news for us in Asia is that we are set to see an influx of
investment from companies and individuals moving business and investments out
of the USA.
Tokyo was 0.11 percent down by
the break, Hong Kong edged down 0.55 percent, Sydney climbed 0.35 percent,
Shanghai fell 0.20 percent and Seoul eased 0.10 percent.
Chinese consumers’ confidence
stabilized in the third quarter, due to lower inflation across all categories
and double-digit disposable income growth in both urban and rural regions,
research from Nielsen showed on Tuesday.
The quarterly consumer confidence
index rose by 1 percentage point to 106 in the third quarter – 14 points ahead
of the global average, according to Nielsen’s survey. The index dropped to 105
in the second quarter, from 110 in the first quarter.
Less concern over inflation in
the last quarter drove up confidence among consumers in first-tier cities,
which posted a 10-point gain in willingness to spend in 2013.
Singapore
United Overseas Bank, the
smallest of Singapore’s three banking groups, on Wednesday posted an almost 36
percent rise in third-quarter net profit, helped by strong fee and commission
income and trading gains.
UOB earned S$707 million ($577.52
million) in the three months ended in September, compared to S$522 million a
year earlier. The results beat the S$652 million average estimate of five
analysts polled by Thomson Reuters.
The Singapore bank said net interest
income in the third quarter grew 6.1 percent to S$971 million from a year
earlier even though interest rate margins were weak. Trading and investment
income tripled to S$173 million.
Philippines
Ayala-led Globe Telecom is moving
to acquire an equity stake in financially distressed Bayan Telecommunications
in a bid to improve its position in the industry dominated by Philippine Long
Distance Telephone Co.
In a disclosure on Tuesday, Globe
said it has obtained internal approval for the acquisition of all financial
obligations of Bayan, which is under corporate rehabilitation.
In separate discussions, Globe
said it had reached deals with Bayan’s controlling shareholders, ABS-CBN’s
Lopez family, for the acquisition of an equity stake in the company.
The planned transactions come
after a recent co-use deal for radio frequencies between Globe and Bayan that
allowed both firms to expand their market reach.
“Potentially combining Globe’s
assets and capabilities with [Bayan] through collaborative business efforts
will enable both companies to become more competitive and help accelerate the
completion of Bayan’s rehabilitation,” Globe said in a statement.
Globe said it was in discussions
with the Lopez group on the “price and other conditions under which the
acquisition may be effected.”
The acquisition of Bayan’s
obligations will involve a tender offer to purchase for cash any and all of the
13.5-percent senior notes originally due last 2006 issued by Bayan. The tender
offer will push through only if creditors holding at least 70 percent of the
debt agree to sell their holdings to Globe.
If the tender offer succeeds,
Globe will become the major creditor of Bayan and will perform a role similar
to Bayan’s creditors in respect to its rehabilitation plan, including
representation in the monitoring committee.
The National Telecommunications
Commission (NTC) recently approved Globe’s application for the joint use by
Globe and Bayan of the frequencies 1750-1760MHz/1845-1855MHz assigned to the
Lopez telecommunication firm.
The joint-use agreement will
allow Globe to address increasing demand for voice, SMS and mobile data
services and allow Bayan to offer its mobile telecommunications services to
customers.
“Our long-term collaboration with
Bayan is a strategic initiative that will enable Bayan to unlock and maximize
the potential of its key business assets and capabilities,” Globe chief
financial officer Albert de Larrazabal said. “I believe this is consistent with
the objectives of the NTC and is in the best interests of Bayan’s stakeholders
and customers.”
Dominant carrier Smart
Communications earlier opposed the frequency co-use deal between Bayan and
Globe. Smart, the mobile unit of PLDT, said the NTC should have recalled the
Bayan frequencies instead of approving their use by Globe.
Commenting separately on Globe’s
possible entry into Bayan, PLDT chairman Manuel V. Pangilinan said the
transaction was expected to increase competition in the industry already
struggling to keep profit margins up.
He said he expected Globe to end
up with a controlling stake in Bayan and that the partnership between the Ayala
group, Globe’s controlling shareholders, and the Lopezes, would likely expand
to other businesses. “But this is all just speculation on my part,” Pangilinan
said.
Malaysia
SapuraKencana Petroleum Bhd
shares have hit an all-time high, closing 17 sen higher at RM2.88, following
news it is taking over Seadrill Ltd’s tender rig business for an enterprise
value of US$2.9bil or RM8.9bil.
The latest development is poised
to help the oil and gas outfit be a major global company in this particular
segment.
The counter, which reached an
intra-day high of RM2.93, was among the top three gainers and most actively
traded yesterday with 46.9 million shares changing hands.
Research houses responded
positively to the development and a majority have revised SapuraKencana’s
target price upwards.
Kenanga Research was pleasantly
surprised with the news given that it expected any large acquisitions to be
only after SapuraKencana received the delivery of its ongoing newbuilds.
“We are positive on the
acquisition as it will strengthen its dominance on the engineering,
procurement, construction, installation and commissioning market.
“We estimate that the exercise
could be financed on a 57:43 debt-to-equity structure.
“Based on our assumptions, a
financial year 2014 ending Jan 31 net profit accretion of 58% is on the cards
for SapuraKencana.
“The proposed acquisition is
still subject to due diligence and approval from clients of the rigs, and as
such, there could still be changes to the financing structure of the exercise.
“Based on an implied targeted
price-to-earnings ratio (PER) of 23.7 times, we are tactically raising our
target price on the stock to RM3.42 from previously RM2.90,” said the reseach
house that mainted an outperform call on the stock.
On Monday, SapuraKencana
announced that it had entered into a non-binding memorandum of understanding to
acquire Seadrill Ltd’s tender rig business for an enterprise value of US$2.9bil
to be satisfied by a mix of shares and cash.
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