17 August 2017

UOBKH: Retail Market Monitor: Thursday, August 10, 2017



- market is expected to turn risk-off on renewed geopolitical worries; US and NK
- Technically, MACD or the STI has exhibited a bearish crossover.
- Underlying support for the index lies at 3,275 with topside resistance at 3,360.
- Raffles Medical to watch for parital entry at 1.150 and below.
- DBS is impressive, came back from a low of 20.85 on tues. Today 21.32. the 30 cents dividend will XD this friday.
- If looking to buy Capitaland, a good entry to consider will be $3.65 where it coincides with the 50day average.

feel free to share with me any info or insights that you may have.




CORPORATE RESULTS
*F&N
- 3QFY17 net profit surged 59.9% to $60.7m mainly from increased associate income arising from its 18.74% stake in Vinamilk.
- This brought 9MFY17 net profit to $87m (+15.8%) or 76% of the FY17 consensus estimate.
- However, revenue in the quarter slipped 8.6% to $483.1m on weaker contributions across beverages (-17.1%) and dairies (-3.3%) on competitive pricing pressures, as well as reduced contribution from printing & publishing (-9.2%).
- Bottom line was weighed by increased FX loss of $4.6m (3QFY16: $0.9m loss) although mitigated by higher investment income of $33.4m (+107.3%).
- NAV/share at $1.98.

*Jumbo
- 3QFY17 results missed estimates on a 1.1% slip in net profit to $3.4m, as operating expenses rose at a faster pace from business expansion.
- Revenue grew 6.4% to $34.8m on increased contributions across Singapore and China outlets.
- Gross margin held at 62.7% (-0.2ppts).
- Opened its fourth China outlet in Beijing last month and first franchised restaurant in Ho Chi Minh City in May.
- Trades at trailing P/E of 24.6x.

*ISEC Healthcare
- 2Q17 net profit of $1.9m (+12%) came in at the low end of estimates.
- Revenue climbed 12% to $9.2m, bolstered by new contributions from four recently-acquired general clinics in Singapore.
- Gross margin held relatively steady at 47.3% (-0.2ppt).
- Interim DPS raised to 0.5¢ (2Q16: 0.22¢).
- Last traded at 20x FY17e P/E.

*Hong Leong Finance
- 2Q17 net profit soared 89% to $20.9m, mainly helped by lower interest expense (-30.2%) and reduced staff costs (-6.4%).
- However, on the back of a smaller loan base of $9.56b (-4.8%), net interest income declined 10.1% to $54.8m.
- Proposed higher interim DPS of 4¢ (2Q16: 3¢).
- NAV/share at $3.85.

*QAF
- 2Q17 net profit slumped 72% to $8.1m in absence of a $9.7m disposal gain booked last year from sale of its 20% stake in the KL business.
- Revenue edged 1% higher to $209.8m from rise in bakery operations (+5%) on strength in Philippines, but was pared by weakness in primary production (-2%) on lower ASPs.
- Bottom line was hit by higher distribution costs due to higher fuel prices.
- Maintained interim DPS at $0.01.
- NAV/share at $0.934.

*BHG Retail REIT
- 2Q17 DPU was flat at 1.35¢ despite a larger unit base (+4.7%).
- Revenue rose 3.2% to $15.8m on positive rental reversion and improved occupancy, although pared by a weaker yuan, while NPI rose at a faster clip to $10.9m (+5.7%) from favourable tax in China.
- Portfolio occupancy edged up 0.3ppt q/q to 98.9%, while aggregate leverage ticked 0.1ppt lower to 32.4%.
- Trades at 2Q annualised yield of 7.3% and 0.88x P/B.

*Fragrance Group
- 2Q17 net profit climbed 3.1% to $3.8m, on 14% rise in revenue to $34.9m.
- Top line benefitted from higher property development contribution from City Gate project, improved occupancy in investment properties, and newly acquired The Imperial Hotel in UK.
- Gross margin expanded 5.9ppt to 41.6%, bolstered by its new UK hotel.
- Bottom line was dragged by an absence of tax credit.
- NAV/share at $0.157.

*Boustead Projects
- 1QFY18 net profit slipped 5% to $5.8m as revenue dropped 25% to $45.7m.
- The decline in sales was due to weakness in the design-and-build segment (-28%) on reduced work progress and less contracts secured, while leasing (-7%) was impacted by AusGroup's early lease termination of the 36 Tuas Road property.
- Gross margin expanded to 32% (+10ppts) from improved productivity and cost savings from projects.
- NAV/share at $0.736.

*MoneyMax
- 2Q17 net profit jumped 20% to $1.7m on lower taxes.
- Revenue leapt 37% to $41.1m on stronger pawnbroking business, as well as retail and trading of pre-owned items.
- However, gross margin of 26.4% (-3.6ppt) was squeezed by higher material costs.
- Bottom line was alsoy weighed by increased operation costs due to the business expansion in Singapore and Malaysia, as well as higher finance costs.
- NAV/share at $0.1844.

*Rotary Engineering
- 2Q17 net profit tumbled 43% to $1.2m, from contraction in gross margin to 22% (-7.1ppts) and FX loss of $0.3m (2Q16: $0.3m gain).
- Revenue grew 21% to $62.8m on newly secured projects.
- NAV/share at $0.285.

*QT Vascular
- Swung to 2Q17 net loss of US$5.6m (2Q16: US$15.2m profit) in absence of a US$24.1m write-back for legal liability.
- Revenue jumped 47.8% from a low base to US$3.5m on increased sales of chocolate® PTA Balloon Catheter to Medtronic.
- However, gross margin compressed 19.5ppt to 26.6% following the termination of distribution agreement with Cordis.
- Net liability value at US$0.01/share.

News for today 10/8/2017:
- US stocks fall on North Korea worries
http://www.straitstimes.com/business/companies-markets/us-stocks-fall-on-north-korea-worries?xtor=CS3-18; What War Between North Korea and the U.S. Might Look Like https://www.bloomberg.com/news/articles/2017-08-09/what-u-s-north-korea-hostilities-might-look-like-quicktake-q-a; Tillerson Seeks to Calm Tension in Asia After Trump’s Korea Remarks https://www.bloomberg.com/news/articles/2017-08-09/tillerson-calms-north-korea-tensions-after-trump-rattles-markets; What the U.S. Military Does on Guam and Why North Korea Cares: Q&A https://www.bloomberg.com/news/articles/2017-08-09/q-a-what-does-the-us-military-do-on-the-island-of-guam

- Evans sees Sept Fed balance-sheet move, tech sapping prices http://www.businesstimes.com.sg/government-economy/evans-sees-sept-fed-balance-sheet-move-tech-sapping-prices

- Swiss franc up the most against euro since 2015 http://www.businesstimes.com.sg/companies-markets/swiss-franc-up-the-most-against-euro-since-2015

- China factory inflation holds up on steady demand http://www.straitstimes.com/business/economy/china-factory-inflation-holds-up-on-steady-demand?xtor=CS3-18

- Hong Kong's crowded currency trade enters dangerous territory http://www.straitstimes.com/business/hong-kongs-crowded-currency-trade-enters-dangerous-territory?xtor=CS3-18

- Normanton Park to be put up for en bloc sale at a minimum S$800m http://www.businesstimes.com.sg/real-estate/normanton-park-to-be-put-up-for-en-bloc-sale-at-a-minimum-s800m

- Amazon's Singapore play a precursor to S-E Asia e-commerce battle http://www.businesstimes.com.sg/companies-markets/amazons-singapore-play-a-precursor-to-s-e-asia-e-commerce-battle

- Reits generate average total return of 17.6% year-to-date http://www.straitstimes.com/business/reits-generate-average-total-return-of-176-year-to-date?xtor=CS3-18

Stocks to watch today 10/8/2017:
- Aspial Corp last close $0.255, 52wk high/low $0.325/$0.24 - Company's Q2 loss widens to $6.5m
http://www.straitstimes.com/business/companies-markets/aspial-corps-q2-loss-widens-to-65m?xtor=CS3-18

- Asiaphos last close $0.099, 52wk high/low $0.122/$0.072 - AsiaPhos says no casualty at its mines and facilities from Sichuan quake http://www.businesstimes.com.sg/companies-markets/asiaphos-says-no-casualty-at-its-mines-and-facilities-from-sichuan-quake

- Centurion last close $0.545, 52wk high/low $0.545/$0.305 - Centurion to buy 160-unit student housing in the US for US$70m http://www.businesstimes.com.sg/companies-markets/centurion-to-buy-160-unit-student-housing-in-the-us-for-us70m

- GuocoLand last close $2.02, 52wk high/low $2.05/$1.78 - Company looks to rise in private home prices http://www.straitstimes.com/business/guocoland-looks-to-rise-in-private-home-prices?xtor=CS3-18

- M1 last close $1.75, 52wk high/low $2.81/$1.75 - Company rolls out S-E Asia's first commercial nationwide IoT network http://www.straitstimes.com/business/m1-rolls-out-s-e-asias-first-commercial-nationwide-iot-network?xtor=CS3-18

- Pan-United last close $0.57, 52wk high/low $0.75/$0.52 - CEO: Change in mindset key to staying ahead http://www.straitstimes.com/business/companies-markets/pan-united-ceo-change-in-mindset-key-to-staying-ahead?xtor=CS3-18

- Top Glove last close $1.81, 52wk high/low $1.88/$1.48 - Remove obstacles to encourage investment: Top Glove founder http://www.straitstimes.com/business/companies-markets/remove-obstacles-to-encourage-investment-top-glove-founder?xtor=CS3-18

- UOB last close $24.27, 52wk high/low $24.60/$17.51 - The way forward is digital, says UOB's Wee Ee cheong http://www.straitstimes.com/business/banking/the-way-forward-is-digital-says-uobs-wee-ee-cheong?xtor=CS3-18

16 August 2017

FYI: A Warning To Penny Stock Investors: Do You Know About Death Spiral Financing


A Warning To Penny Stock Investors: Do You Know About Death Spiral Financing

Josh Sason was just 27 when Bloomberg reported in 2015 that he had made US$200 million by financing US penny stocks that were about to go broke.
A different financing method
Sason structured the loans he made slightly differently from traditional loans. His loans usually involve offering debt which can be converted into equity.
The deals are commonly known as “death spiral financing” as most of the companies that are involved with this sort of dealing (the companies are mostly penny stocks) usually end up with stock prices that plummet. The interesting thing is that the lender would still be able to make a healthy profit.
What to know about death spiral financing
So what exactly is “death spiral financing” and should investors in penny stocks be worried?
Death spiral financing involves a lender offering a loan to a company that is traded on a stock exchange. The company is typically in very bad financial shape and desperately in need of cash to stay afloat.
The lender would demand payback-plus-interest over a short period of time (usually around six months). If the company involved is unable to pay back the loan – which is often the case – it will instead offer shares to the lender at a huge discount to the market rate. In this way, the lender is able to get the company’s stock and immediately sell it for a profit, even though the company is unable to pay back the loan.
An example of a death spiral deal
Take this scenario for example. Lender B decides that company X is a good candidate for a $1 million loan with a six-month maturity. Company X agrees to take the loan at a 10% interest to keep itself afloat.
If it is unable to pay back the loan, Company X would offer Lender B shares of itself at say, a 70% discount, to the then-current market price. Since the shares were bought at a 70% discount to the market price, Lender B would be able to get around $3.3 million worth of shares which he can immediately sell in the open market for a healthy profit.
There are two positives that come out of such a deal. Firstly, Company X would be able to stay afloat. Secondly, Lender B ends up with a nice return on his investment – regardless of whether Company X can pay back the loan.
However, at the same time, there are also two parties that will suffer from this sort of financing.
The first group is the existing shareholders of Company X who may not have realised that the company has potentially diluted their shareholdings by offering Lender B cheap equity. The financing deal dilutes current shareholders’ equity and would very likely cause Company X’s stock price to decline steeply.
The second party to suffer would be unwitting new shareholders who buy Company X’s shares while Lender B is dumping his shares. Because getting information on penny stocks may often be difficult, investors or speculators may decide to buy, without realising what is happening.
The Foolish bottom line
There are other financiers besides Sason who have structured similar deals in the past to desperate companies. As investors and long-term shareholders, we need to be aware that such dealings are occurring, even if they don’t seem to be common in Singapore. In any case, the best way to avoid companies that could potentially be embroiled in death spiral financing is to stay away from companies that are in desperate need of cash.
Meanwhile, for more (free!) investing insights, sign up here for your FREE subscription to The Motley Fool's investing newsletter, Take Stock Singapore. It will teach you how you can grow your wealth in the years ahead.



Taken from https://www.fool.sg/2017/08/14/a-warning-to-penny-stock-investors-do-you-know-about-death-spiral-financing/

15 August 2017

FYI: Maximizing the Stock Price Is Not Job 1 for Company Directors



No, Maximizing the Stock Price Is Not Job 1 for Company Directors
 Boards can and should consider “prosocial” goals, say economists at University of Chicago and Harvard.
By 
Peter Coy
 August 1, 2017, 9:00 PM GMT+8 August 2, 2017, 7:55 AM GMT+8


Martin Shkreli, the ousted pharma executive, used to scoff at people who criticized him for raising the price of a pill of Daraprim, a drug for toxoplasmosis, from  $13.50 to $750 overnight. “In capitalism you try to get the highest price you can for a product,” he told
Bloomberg TV in 2016. “No one wants to say it, no one’s proud of it, but this is a capitalist society, capitalist system, and capitalist rules, and my investors expect to me to maximize profits,” he said at a Forbes conference in 2015. “I could have raised it higher and made more profits for our shareholders. Which is my primary duty.”
Is Shkreli (who's on trial now on an unrelated matter) correct that the primary duty of a company's executive and board is to maximize profits and the share price? Even some people who don’t like the “Pharma Bro” are inclined to concede that maximizing shareholder value is, after all, a company’s Job No. 1. The authority on this is the late Milton Friedman, a conservative giant of the Chicago School of economics, who preached that executives should “make as much money as possible while conforming to the basic rules of the society.” If people want to do good in society, Friedman argued, they should do it through personal charity, not through companies they manage, direct, or invest in.
An important new academic paper rejects the principle that profits are the ne plus ultra of business management. Intriguingly, one of its authors is a prominent member of the University of Chicago faculty, and the other is a Nobel Prize winner from Harvard University. The authors’ credentials are likely to attract attention to an argument that's more typically made by social activists and corporate gadflies.

Luigi Zingales of Chicago’s Booth School of Business and Oliver Hart of Harvard start with the proposition that company managers and boards do indeed have a fiduciary duty to shareholders, but their duty is to maximize the shareholders’ overall welfare, which includes things other than the value of their shares. They argue that most shareholders are “prosocial,” meaning they care about such things as helping the poor or saving the planet. That point isn't controversial: Even Friedman, in citing the basic rules of society as the standard, went on to specify that he meant “both those embodied in law and those embodied in ethical custom.”

The classic Friedmanian argument is that if shareholders don’t like something a company does, they’re free to use their own time and money to offset or reverse the effects of the company’s actions. For example, if the company pays workers less than you think it should, donate money to groups that help low-wage workers. Don’t drag others into supporting your pet causes.

The innovation of Zingales and Hart is to point out that reversing a company’s actions through private charity can be more expensive and troublesome than getting the company to do the right thing from the start. They give the example of Wal-Mart Stores, which used to sell high-capacity gun magazines of the kind used in mass killings. “If shareholders are concerned about mass killings,” they write, “transferring profit to shareholders to spend on gun control might not be as efficient as banning the sales of high-capacity magazines in the first place.” (They mean getting Wal-Mart to stop its own sales, not changing the law.)

You can think of other examples: It’s cheaper to refrain from polluting a stream than to pollute it and then clean it up with charitable donations. It’s cheaper to stop companies from putting greenhouse gases into the atmosphere than to build dikes around coastal cities when the ice caps melt.

An obvious question is, if shareholders are “prosocial,” why don’t more of them act on it by raising hell at annual meetings or divesting shares of companies they disapprove of? Zingales and Hart say shareholders who don’t think their individual choices will be enough to make a difference will give up and pick a dirty, profitable investment over a clean, less profitable one. This phenomenon they label “amoral drift.” The authors say there should be socially responsible mutual funds that specialize in proxy voting on certain issues—say, assault weapons. “Prosocial investors should rush to such product,” they write. They also say companies should routinely survey their shareholders on social issues and follow the wishes of the holders of the majority of shares.

Shareholders are happier—have more “utility,” in economic lingo—when the companies they invest in do good while doing well, the authors argue. As for the stubborn idea that corporate directors’ sole duty is to maximize shareholder value, even if that means cutting ethical corners, they offer a simple thought experiment: “If a company has a single shareholder, nobody would suggest that this single shareholder cannot instruct directors to maximize her utility rather than her financial return. Why should things be different when there are multiple shareholders?”

I asked Zingales if he feels that he’s trashing Friedman's legacy. Not at all, he said. His paper with Hart doesn’t say managers and boards should ignore shareholders, but rather that they should take all of shareholders’ interests into account, both the financial and the social ones. “I’m not saying you should not follow what shareholders want to do, he said. I’m saying you ought to do it more.(Corrects name of disease to toxoplasmosis in

first paragraph.)

(Corrects name of disease to toxoplasmosis in first paragraph.)


Taken from:
https://www.bloomberg.com/news/articles/2017-08-01/no-maximizing-the-stock-price-is-not-job-1-for-company-directors



11 August 2017

CapitaLand Mall Trust


CapitaLand Mall Trust (CT SP)  HOLD

Divestment of Serviced Residence Portion of Funan



  • CMT divested its interest in Victory SR Trust, which holds the serviced residence component of the Funan integrated development, to The Ascott Limited for S$90.5m. CMT stands to generate proceeds of S$101.8m and a net gain of S$20.6m.
  • Management have indicated that the proceeds will be used primarily to fund the Funan development. Management noted, however, that there are a few small opportunities for acquisition; Management have not committed to distributing proceeds from the divestment to unitholders.
  • The divestment is based on an agreed land value of S$90.5m for the serviced residence component of Funan, and other assets of approximately S$11.3m, which includes capitalised development costs up to the completion date of the transaction. Ascott will pay for all the development costs pertaining to the serviced residence portion of Funan thereafter.
  • The valuation for the serviced residence portion of the property by Savills and Knight Frank was S$86.5m and S$75m, respectively. Based on the average of the valuations, the S$90.5m sale comes at a premium of 12%.
  • The serviced residence property is slated to open in 2020. With a GFA of about 121,000 sq ft, the serviced residence portion of Funan will provide 279 units with an option to expand to 412 rooms. The transaction is expected to be completed in 4Q this year.
  • In addition to the S$90.5m invested for the acquisition of the serviced residence portion, the buyer, The Ascott Limited, will invest a further S$80m for development. The total S$170.3m investment will be made through Ascott's serviced residence global fund with the Qatar Investment Authority.
  • The Funan integrated development is set to have a GFA of 887,000 sq ft. In addition to the serviced residence, Funan comprises of a six-storey retail podium with a GFA of about 500,000 sq ft and two six-storey Grade A office towers with a GFA of about 266,000 sq ft.
  • The office towers in Funan are held in a trust structure, similar to that of Funan's serviced residence component. Management noted that they are keeping their options open on the office towers and that the trust structure of the office component of Funan reflects this.
  • Valuation. We have a  HOLD recommendation on CMT  with a target price of S$2.04. Our valuation is based on DDM (required rate of return: 6.3%, terminal growth: 1.5%).
  • The announcement has been attached for reference.

     








10 August 2017

Keppel Corporation [KEP SP] HOLD

Keppel Corporation [KEP SP]         HOLD
Price/Tgt: S6.53 / S$6.86        Mkt Cap: US$8,641m         52-wk avg daily value: US$15m         1-Yr Hi/Lo: S$7.22/S$5.18

2Q17: Earnings below expectations, Keppel Capital to drive growth


Link: https://research.uobkayhian.com/content_download.jsp?id=40815&h=50901a6542ade98ecedba98b403134bf


 2Q17 RESULTS
Year to 31 Dec (S$m)
2Q17
yoy % chg
1H17
yoy % chg
2Q17 Remarks
Revenue
1,554.3
(4.4)
2,802.3
(16.8)
Lower turnover from O&M.
Operating Profit
138.6
(40.7)
325.9
(36.3)
Impacted by marginal profitability of O&M unit.
Pre-tax Profit
217.4
(23.6)
564.2
0.3
Helped by higher associate results and divestments.
Net Profit
160.3
(22.1)
420.6
1.0
Net Profit (ex EI)
147.3
(21.8)
237.9
(43.1)
Excludes S$12.9m in net one-offs.
Op. Margin (%)
8.9
(5.5ppt)
11.6
(3.6ppt)
Segment Net Profit
O&M
1.3
(97.9)
1.4
(99.1)
Higher operating profit offset by higher interest expense.
Property
96.6
5.2
199.4
0.8
Strong home sales in China and Vietnam.
Infrastructure
24.6
(11.2)
56.7
36.3
Absence of contribution from KDC SG 3.
Investments
37.8
52.0
163.1
694.7
Segment EBIT Margin (%)
O&M
6.4
(6.4ppt)
3.9
(9.3ppt)
Improved performance from right-sizing.
Property
18.2
(3.4ppt)
21.2
(0.4ppt)
Infrastructure
4.5
(1.4ppt)
5.0
0.1ppt
Investments
-37.6
(77.9ppt)
89.2
6.1ppt
Source: Keppel Corp Ltd, UOB Kay Hian

RESULTS

·        2Q17 core net profit of S$147.3m, below expectations. Keppel Corp (Keppel) reported headline net profit of S$160.3m (-22.1% yoy, -38.4% qoq). Included in the results were S$12.9m in net one-offs, which included fair value losses on KrisEnergy warrants, forex gains, profit on sale of fixed assets and investments. Excluding these one-offs, core net profit was S$147.3m (-21.8% yoy, +42.1% qoq). Results were below expectations, with 1H17 core net profit coming in at 33% of our core full-year estimate of S$754m. The weakness stemmed mainly from the Offshore & Marine (O&M) segment, which recorded 1H17 earnings of S$1.4m, significantly below our estimates.

·        O&M improves in 2Q17, but barely breaks even. The O&M division reported an improvement in operating profit, which came in at S$32.3m and a operating margin of 6.4% (1Q17: S$3.7m, margin: 0.8%). Despite the improvement, this was largely offset by higher net interest expense. Owing to results from share of associates, the division was able to report a marginal net profit of S$1.3m. Bottom-line could have been worse, if not for the sale of fixed assets (S$17.1m), which we understand to mostly comprise of yard fixed assets from the O&M division.

·        Property earnings flat at S$96.6m. Keppel’s property unit reported higher revenue of S$542.2m (+15.7 yoy, +106.9% qoq), with net profit largely flat at S$96.6m (+5.2% yoy, -6.0% qoq). The division saw strong home sales for the quarter at 2,470 units, driven mostly by strong sales in China (1,080 units, +6% yoy) and Vietnam (280 units, +600% yoy). Profit from sale of some 5,860 units of overseas homes sold is expected to be progressively recognised over 3Q17 to 2019.

·        Infrastructure earnings lower at S$24.6m. The division saw higher revenue of S$521m (+28.9% yoy, +11.5% qoq) but lower earnings of S$24.6m (-11.2% yoy, -23.5% qoq). The quarterly difference was due to the inclusion of a one-off divestment gain of GE Keppel Energy Services (est. S$4.5m). Keppel’s Logistic business is undergoing a transformation that is not expected to see a turnaround till 2019.

·        Investments sees net profit of S$37.8m. Net profit was higher at S$37.8m (+52.0%), driven by higher asset management earnings of S$20m (+43% yoy, +54% qoq) and higher other investment income of S$18m (+64% yoy, -84% qoq). The higher investment income was likely due to the disposal of listed equities and equity funds, offset by losses from fair value losses on KrisEnergy warrants.

·        Net gearing largely unchanged at 0.58x, compared with 0.57x in 1Q17. Management opined that debt has largely stabilised, and the combination of fixed and floating rate on their debt should help them manage a rising interest rate environment.


STOCK IMPACT

·        O&M: Subtle shift in language on non-drilling, oil-related contracts. The contracting outlook for the O&M division remains moribund. Keppel’s language on its targeted opportunities has subtly shifted from “non-drilling solutions” to “non-oil and gas plays” and “gas industry”. This hints at the difficulty of securing non-drilling orders (ie FPSOs, FSOs, etc.) despite the uptick in oil prices. We envision that going forward, Keppel will focus more on developing its gas solutions product offering as detailed in its earlier gas strategy presentation. This venture looks promising, given the potential recurring earnings stream from being a co-owner (and co-developer). We re-iterate that this strategy will take a few years to play out.

·        Keppel Capital targets to double S$25b AUM in next five years. In a growing shift towards developing Keppel as an asset manager, it was announced that Keppel Capital aims to double its S$25b AUM in the next five years. This will be achieved through its O&M, Infrastructure, Data Center and Property verticals, where Keppel has expertise to create and develop these asset classes and manage them.

VALUATION/RECOMMENDATION

· Maintain HOLD, roll over to 2018 target price of S$6.86. We roll our SOTP target price over to 2018, which rises to S$6.86. The changes largely stem from an upward revision of the valuation from Keppel Capital, where we have increased our earnings forecast. Well-implemented cost controls on the O&M front, steady earnings from the Property division and growing Investment income will result in earnings largely bottoming out. While we appreciate Keppel to be on the long-term path of earnings recovery, there are no near-term earnings catalysts. Thus, we maintain HOLD. Entry price: S$6.20.

08 August 2017

UOBKH: Retail Market Monitor: Monday, August 7, 2017

-Last Friday's Non Farm Payroll data was better than expected. USD rebounded strongly. Not sure if it will continue to last.
-The market is likely to drift lower in the holiday-shortened week, with investors focused on next batch of results from Singtel, City Dev and ST Engineering.
-Technically, the STI faces topside resistance at 3,360, with downside support is at 3,275.
- As spoken the current SG market is focusing on property related counters.





SECTOR WATCH
*Property developers
- Brisk demand for new private homes continued unabated following another good take-up during the weekend launch of Le Quest, a 516-unit mixed development in Bukit Batok.
- Developed by Qingjian Realty, the 99-year leasehold project, all 280 units available were snapped up at an average price of $1,280 psf.
- MKE prefers UOL and City Dev for exposure to the residential sector.

CORPORATE RESULTS
*UOL
- 2Q17 results were in line as net profit jumped 59% to $109.4m on higher sales recognition from Principal Garden condo project, higher contributions from associates and fair value gains on investment properties.
- Revenue climbed 10% to $399.1m, with property development (+19%) accounting for 55% of turnover, while its hotel business was flat.
- The group plans to launch tow condo projects next year - 140-unit freehold development at Amber Road and a 750-init project at Potong Pasir Avenue 1.
- Trades at 0.79x P/B.
- MKE last had a Buy with TP of $9.05.

*Venture Corp
- 2Q17 net profit surged 61% to $69.8m, beating expectations on improved operational leverage.
- Revenue leapt to to $1.01b (+48.3%) to cross $1b for the first time, underpinned by strong execution of customers' orders.
- Gross margin dipped 1.6ppt to 21.9%, but pretax margin improved 0.7ppt to 8.3%.
- Last traded at 17.8x FY17e consensus P/E.

*Jardine C&C
- 2Q17 net profit of US$188.7m (+0.9%) was bolstered by fair value gains of US$15.4m. Excluding the non-trading items, core net profit fell 9.4% to US$173.3m, bringing 1H17 earnings to US$375m (+13%), or 43% of full-year consensus estimate.
- For the quarter, revenue rose 6% to US$4.29b, while operating margin was stable at 8.6% (-0.1ppt).
- Astra's profit contributions fell 5% to US$130.8m on declines across automotive (-21%), financial services (-8%),agribusiness (-35%), infrastructure & logistics (-41%), with only its heavy equipment business (+70%) doing well.
- Direct motor interests (-7%) were also hit by poor earnings from Malaysia (-55%) and Indonesia (-41%), with Vietnam (+10%) and Singapore (+4%) holding up.
- Interim DPS of US$0.18 was maintained.
- NAV/share at US$15.19.

*Cosco Shipping
- 2Q17 net loss narrowed to $20.8m (2Q16: $36.8m loss), shored by a positive FX swing of $14m.
- Revenue slid 31% to $524.7m, as persistent weakness in its core shipyard (-31.6%) business overshadowed improved contribution from the dry bulk shipping (+4.7%) due to higher charter rates.
- Gross margin widened 2.4ppt to 3.9%.
- Bottom line was lifted by a $32m write-back on trade receivables, although partly knocked by a $9.6m disposal loss and $7.6m drop in tax credit.
- Last traded at 3x P/B.

*Manufacturing Integration Tech
- Turned around to 1H17 net profit of $2.8m (1H16: $0.8m loss).
- Revenue leapt 52% to $33.1m on strong orders, underpinned by the upcycle in the semiconductor industry and impending new major handset launches, as well as better contract equipment manufacturing business.
- Gross margin expanded 9ppt to 34%.
- Declared maiden interim DPS of 0.25¢ (1H16: nil).
- Order book stood at $22.4m at 4 Aug '17, with management expecting recent momentum for new orders to persist.
- Net cash increased to $19.7m (8.8¢/share or 34% of market cap) from $14.1m in Dec '16.
- NAV/share at $0.2234.

*Chip Eng Seng
- 2Q17 net profit plummeted 94.3% to $0.8m, partly hit by higher provisions relating to a construction project.
- Revenue sagged 9.3% to $212.6m, mainly dragged by property development (-8.2%) and construction (-13.8%) divisions, while both hospitality (+5%) and property investments (+13%) improved on higher occupancies.
- Gross margin shrank 5.6ppt to 17% on the shift in revenue mix.
- Bottom line was impacted by higher marketing expenses for Grandeur Park Residences, which was launched in Mar '17, and the newly opened Maldives resort Grand Park Kodhipparu.
- Construction order book increased to $538.4m (1Q17: $457.2m).
- NAV/share at $1.2025.

*Yeo Hiap Seng
- 2Q17 net profit tumbled 35% to $5.3m despite realising a $5.4m FX gain on liquidation of subsidiaries.
- Revenue dropped 22.7% to $87.2m, as F&B sales were undermined by pricing pressure and transition to new distributors in Cambodia, as well as absence of $1.6m dividend income from the divested Super Group.
- Gross margin contracted 9.3ppt to 30.2%.
- Declared a special DPS of 2¢ (2Q16: nil).
- NAV/share at $1.1464.

*Sarine
- 2Q17 net profit slumped 46.5% to US$3.2m, bringing 1H17 earnings to US$5.7m (-36.9%), or just 27% of full-year consensus estimate.
- Quarter revenue slipped 13% to US$18.2m on lower sales due to the illicit competition in India.
- Gross margin narrowed 0.7ppt to 68.4%.
- Bottom line was weighed by higher operating expenses from R&D (+11.4%) and general & admin cost (+14.5%) due to professional fees.
- NAV/share at $0.3051.

*Challenger Technologies
- 2Q17 net profit inched up 2% to $3.8m on lower taxes (-23%).
- Revenue slid 14% to $78.7m, weighed by weak performances in retail and tradeshow divisions.
- Gross margin widened 2ppt to 22.3% following closure of several underperforming retail outlets.
- Maintained interim DPS of 1.1¢.
- NAV/share at $0.2336.

*CEI
- 1H17 net profit declined 22.7% to $3.6m, as revenue slipped 2.1% to $67.5m.
- Operating margin contracted 1.8ppt to 6.3% due to absence of a $0.5m write-back of provision, and higher staff cost amid increased headcounts to support higher order book for 2H17.
- Order book increased to $53.1m (FY16: $46.8m), and majority of orders are expected to be fulfilled in 2017.
- Maintained interim DPS of 1.04¢, but cut special DPS to 3¢ (1H16: 3.76¢).
- NAV/share at $0.453.

*Nera Telecommunications:
- 2Q17 net profit dropped 40% to $1.4m, as taxes spiked more than double, albeit pared by absence of an FX loss (2Q16: $1.8m).
- Revenue slipped 1.3% to $50.3m amid lower sales for network infrastructure in Singapore and Australia.
- Gross margin shrank 2.6ppt to 23.4% on a shift in product mix and lower project write-back.
- Bottom line was also eroded by higher staff costs.
- Maintained interim DPS of 1¢.
- NAV/share at $0.1899.

*GSH
- Turned around to 2Q17 net profit of $71.7m (2Q16: $3.2m loss), mainly due to a $74.9m disposal gain arising from sale of its entire 51% stake in GSH Plaza.
- Revenue surged 73% to $30.6m on stronger property development (+146%), as well as hospitality (+40%) due to higher occupancy and average room rates at its two hotels in Sabah, Malaysia.
- Gross margin narrowed 2ppt to 45%.
- Excluding disposal gain, however, bottom line was hurt by a spike in staff costs and increased finance expenses.
- Proposed special DPS of 1¢ (2Q16: nil)
- NAV/share at $0.212.

*Multi-Chem
- 2Q17 net profit of $3.9m (+175%) was boosted by $3.5m disposal gain.
- Revenue grew 31% to $105.6m, bolstered by core IT division (+39.3%), which outweighed a drop in the PCB segment (-56.9%) due to lost capacity after the disposal of drilling machines in China.
- Gross margin shrank 2.9ppt to 13.7% amid reduced profitability in IT.
- Net cash position improved to $44.7m ($0.49/share, or 54% of market cap) from $39.2m in FY16.
- Maintained interim DPS of 1.11¢.
- NAV/share at $1.0755.

*AF Global
- 2Q17 net profit slumped 33% to $1.5m on absence of FX gains (2Q16: $1.4m).
- Revenue rose 5% to $12.9m, bolstered by higher hotel contribution, while leisure and property businesses were muted.
- Gross margin widened 1.2ppt to 46.1%, and bottom line was also cushioned by higher JV profit (+$0.9m).
- NAV/share at $0.25.

*GCCP Resources
- 2Q17 close to breakeven with net profit of RM0.3m (2Q16: RM4.4m loss).
- Revenue spiked 113% to RM5.2m, due to increase in orders of ground calcium carbonate (GCC) stones.
- Gross margin expanded to 76% (+20ppts) due to ready stocks of GCC limestone from previous extraction activities.
- Group expects performance in the following months to be sustained by a step-up contract from another major customer.
- NAV/share at RM0.07.

*Serial System
- 2Q17 net profit edged higher to US$3.4m (+3%) on lower taxes (-26%) and reduced associate losses (-20%).
- Revenue slipped 1% to US$373.9m as stronger contribution from distribution of electronic components (+14%) was offset by a slump in consumer products (-83%).
- Gross margin expanded to 7% (+0.4ppts) on a favourable shift in sales mix.
- Interim DPS hiked to 0.29¢ (2Q16: 0.18¢).
- NAV/share at US$0.1511.

*Federal Int'l
- 2Q17 net profit rose 10.2% to $1.2m, despite a 137.1% spike in revenue to $43.7m, led by higher sales from the Zawtika 1C project.
- However, gross margin narrowed 8.1ppt to 14.4% due to lower profitability from the trading segment.
- Bottom line was further impacted by higher admin costs (+8.6%) on increased insurance for its land rig and professional & consulting fees arising from to its Indonesian operations.
- NAV/share at $0.601.

News for today 7/8/2017:
- July job creation better than expected in US
http://www.straitstimes.com/business/july-job-creation-better-than-expected-in-us?xtor=CS3-18

- Malaysia sees slower export growth in June https://asia.nikkei.com/Politics-Economy/Economy/Malaysia-sees-slower-export-growth-in-June

- Strong response on first day of sales at Le Quest in Bukit Batok http://www.straitstimes.com/business/property/strong-response-on-first-day-of-sales-at-le-quest-in-bukit-batok?xtor=CS3-18

- 'Gig' workers get their due http://www.straitstimes.com/business/economy/gig-workers-get-their-due?xtor=CS3-18

Stocks to watch today 7/8/2017:
- BHG Retail Reit last close $0.735, 52wk high/low $0.76/$0.57 - Company banks on growth of Chinese economy
http://www.straitstimes.com/business/companies-markets/bhg-retail-reit-banks-on-growth-of-chinese-economy

- Chip Eng Seng last close $0.74, 52wk high/low $0.77/$0.615 - Company's Q2 profit down on reduced margins, higher expenses http://www.businesstimes.com.sg/companies-markets/chip-eng-sengs-q2-profit-down-on-reduced-margins-higher-expenses?xtor=CS3-25

- Challenger last close $0.45, 52wk high/low $0.515/$0.44 - Company's Q2 profit up 2% http://www.businesstimes.com.sg/companies-markets/challengers-q2-profit-up-2?xtor=CS3-25

- Courts last close $0.43, 52wk high/low $0.48/$0.38 - Courts planning $10m revamp of 7 Singapore outlets http://www.straitstimes.com/business/companies-markets/courts-planning-10m-revamp-of-7-spore-outlets

- Cosco Shipping last close $0.31, 52wk high/low $0.36/$0.24 - Company shrinks Q2 net loss by 43% http://www.businesstimes.com.sg/investing-wealth/cosco-shipping-international-s-shrinks-q2-net-loss-by-43?xtor=CS3-25

- DBS last close $21.49, 52wk high/low $22.25/$14.72 - The (bad loan) woods are dark and deep for DBS http://www.straitstimes.com/business/the-bad-loan-woods-are-dark-and-deep-for-dbs?xtor=CS3-18; DBS shares down on warning of higher provisions over O&G stress http://www.businesstimes.com.sg/companies-markets/dbs-shares-down-on-warning-of-higher-provisions-over-og-stress?xtor=CS3-25

- Dukang Distillers last close $0.24, 52wk high/low $0.82/$0.24 - Can Dukang offer the cigar butt's last puff? http://www.businesstimes.com.sg/opinion/can-dukang-offer-the-cigar-butts-last-puff

- GSH Corp last close $0.57, 52wk high/low $0.60/$0.27 - Company in the black with Q2 profit of S$71.7m, helped by disposal gain http://www.businesstimes.com.sg/investing-wealth/gsh-corp-in-the-black-with-q2-profit-of-s717m-helped-by-disposal-gain?xtor=CS3-25

- Jardine C&C last close $40.08, 52wk high/low $48.50/$38 - Company posts 22% profit rise in first half http://www.straitstimes.com/business/companies-markets/jardine-cc-posts-22-profit-rise-in-first-half?xtor=CS3-18

- Jardine Matheson last close US$64, 52wk high/low US$67.27/US$52.90 - Company's H1 profit more than doubles to US$2.08b http://www.businesstimes.com.sg/companies-markets/jardine-mathesons-h1-profit-more-than-doubles-to-us208b?xtor=CS3-25

- Noble last close $0.37, 52wk high/low $2.80/$0.285 - SGX, MAS draw further fire over Noble saga http://www.businesstimes.com.sg/companies-markets/sgx-mas-draw-further-fire-over-noble-saga?xtor=CS3-25; Noble says it does not wish to comment further on Iceberg's allegations http://www.businesstimes.com.sg/companies-markets/noble-says-it-does-not-wish-to-comment-further-on-icebergs-allegations

- Rowsley last close $0.112, 52wk high/low $0.198/$0.065 - Albert Hong ceases to be substantial shareholder of Rowsley http://infopub.sgx.com/FileOpen/_Rowsley_AH_Form3_270717.ashx?App=Announcement&FileID=465683

- Sabana REIT last close $0.445, 52wk high/low $0.52/$0.34 - Warburg Pincus-backed ESR in talks to buy Singapore's Sabana REIT: sources https://www.reuters.com/article/us-sabana-shariah-m-a-esr-idUSKBN1AM0W1

- SPH last close $2.88, 52wk high/low $3.86/$2.85 - Company investing $8.5m in Han Language Centre http://www.straitstimes.com/business/sph-investing-85m-in-han-language-centre?xtor=CS3-18

- Stratech Group last close $0.061, 52wk high/low $0.19/$0.059 - Company in preliminary talks with potential investors http://www.businesstimes.com.sg/companies-markets/stratech-group-in-preliminary-talks-with-potential-investors

- Serial System last close $0.183, 52wk high/low $0.193/$0.128 - Company posts 3% growth in Q2 profit http://www.businesstimes.com.sg/companies-markets/serial-system-posts-3-growth-in-q2-profit?xtor=CS3-25

- UOL last close $8.06, 52wk high/low $8.25/$5.50 - Company's Q2 profit surges 59% on back of residential sector http://www.straitstimes.com/business/property/uols-q2-profit-surges-59-on-back-of-residential-sector?xtor=CS3-18

- Venture last close $13.85, 52wk high/low $14.38/$8.89 - Company's Q2 profit grows 61% to S$69.8m as net margin improves http://www.businesstimes.com.sg/companies-markets/ventures-q2-profit-grows-61-to-s698m-as-net-margin-improves?xtor=CS3-25

- World Class Global last close $0.245, 52wk high/low $0.28/$0.235 - Company's H1 bottomline still mired in red ink with S$2.9m loss http://www.businesstimes.com.sg/companies-markets/world-class-global-h1-bottomline-still-mired-in-red-ink-with-s29m-loss

- YZJ Shipbuilding last close $1.46, 52wk high/low $1.50/$0.705 - From Singapore's worst-performing stock in 2016 to best this year http://www.straitstimes.com/business/companies-markets/yangzijiang-shipbuilding-from-singapores-worst-performing-stock-in-2016






 

DBS Group Holdings (DBS SP)                BUY

Key Takeaways From Results Briefing
Analyst: Jonathan Koh, CFA       Tel: (65) 6590 6620

  • Guidance for 2017. Management expects loan growth of another 3% in 2H17, bringing full year loan growth to 6%. NIM is expected to improve by 2-3bp in 2H17 and should averages 1.75-1.76% for the full year. Specific provisions could creep up due to deterioration in valuations of collaterals.
  • NIM was flat at 1.74% in 2Q17. Singapore provided positive impact with NIM expansion of 2bp qoq. However, Hong Kong was affected by the drop in HIBOR, especially 1M HIBOR, as a result of excess liquidity, resulting in negative impact with NIM compression of 2bp qoq.
  • Integration of ANZ’s wealth management business underway.  DBS has completed the acquisition of ANZ’s wealth management business across five markets, namely Singapore, Indonesia, Hong Kong, Taiwan and China, at S$110m above book value. The acquisition would progressively add AUM of about S$20b (S$8-9b in 2H17). Management estimated that the acquisition would contribute income of S$125m in 2017 and S$475m in 2018.
  • Remnants of NPLs from the Oil & Gas sector to be recognised in 2H17 and 2018. Management expects asset quality to be under pressure and heightened credit costs to persist due to the depressed level of crude oil prices. DBS has exposures of S$3b to 90 smaller offshore support companies. 60% or S$1.8b of these smaller accounts are deemed vulnerable, of which S$0.8b is already recognised as NPLs as of Jun 17. S$500m of new NPLs could be recognised in 2H17 and the balance of another S$500m in 2018. This would necessitate specific provisions of S$250-300m each during 2H17 and 2018.
  • Good to receive more dividends. DBS’ fully loaded CET-1 CAR is the highest among the three local banks at 14% and its payout ratio is 36% even after the current increase in dividends. The review of Basel 4 by the Basel Committee could be completed by Oct 17. Management might review DBS’ dividend policy again if capital requirements from Basel 4 is clarified and finalised.



07 August 2017

Land Banking - Look Before You Leap

Received an offer to invest in undeveloped land in a foreign country, with the potential to double, treble or multiply your money in a few years?

Attractive as this may sound, consider carefully before you part with your money. Even if you are presented with financial reports showing the possibility of consistent and high returns for the investment, or testimonials of how other investors have benefited from land banking, take a step back and consider what the risks are. This is critical.

After all, where there is an opportunity for you to make some money, there is always a chance that you can lose some or all of your money. There is no free lunch. In the case of land banking, you may have seen media reports about investors losing money in land banking schemes in various countries. Some schemes have also turned out to be scams!

This article explains what land banking is, highlights the key risks and important questions you should consider before deciding whether to place your money in a land banking proposition. 

1) What is land banking?

Land banking is the practice of purchasing undeveloped land with the intention of holding on to it and selling it (often to a developer) at a profit at a future date.

Land banking companies typically seek investors to buy small plots of land and promise them high potential returns. Some may also promise regular payouts for a fixed period.

The land is usually on the outskirts of a city, where urban development appears to be likely to take place. Investors are often told that developers would be willing to buy the land at much higher prices when the land is developed or when plans for urban development are drawn up. 

2) What are the key risks?

a) It could turn out be a scam

Investing in land is not always equivalent to investing in solid ground. Some land banking schemes have turned out to be scams.

Investors should be cautious of land banking when the land is being sold in a location with which they are not familiar. It is also useful to check if warnings have been issued to caution investors.

b) What if plans to develop the land are derailed? 
Consider what factors could derail the land banking firms’ plans to develop the land plots as planned.

Land banking schemes generally project that the value of the land would increase exponentially when permission is obtained from the relevant authorities to develop the land, be it for housing or other purposes. This may sound promising. But if permission to develop the land is not obtained, the value of the land plots would be affected. Do also note that in some countries, “green belt” or agricultural land are often protected from development by planning law. Selling these land plots would be very difficult, especially at a profit.

Also, even though the company may project that the value of the land would increase in, say, four or five years time, this is only a projection and ultimately still depends on an acceptable offer coming in to buy the land.

Once an offer does come in, the sale may be conditional on a majority (for example 60%) of unit holders in the land parcel agreeing to sell. So when an offer comes in, there will be a vote. You may be willing to sell but if the majority wants to hold out for a higher price, your money will be tied in for longer.

If no offer comes in, your money could also be stuck in the scheme for longer than the projected period.

It is also useful to find out what could happen if the firm is unable to sell the land plots within a certain time frame. How would the timeline for developing the land be affected? Drawing up development plans and developing a piece of land takes time, at least a few years. What could happen to your investment if the firm does not have financial resources to see through the project?

c) What if you need cash urgently?

For land banking, you must be prepared to wait. If you find that you need cash urgently before the land banking operator sells the land to say a developer, you may find it difficult to sell your land plot to other parties.

d) Foreign exchange risks 
Land banking propositions are usually marketed to overseas investors. If you purchase a land plot in a foreign country such as Canada, USA or the United Kingdom, you would be exposed to foreign currency risks.

3) Is land banking regulated by the Monetary Authority of Singapore (MAS)?

Land banking which involves investors acquiring direct interests in real estate rather than securities (such as collective investment schemes) related to real estate is not regulated by MAS. Like many securities regulators around the world, MAS ' role is to regulate the financial markets and the activities of financial markets participants. The Securities and Futures Act (SFA) and the Financial Advisers Act (FAA) give MAS regulatory powers over stock and futures exchanges, financial institutions, brokers, fund managers, and the offering of securities and other financial products to the public in Singapore. The primary reasons for regulating financial markets are to manage potential systemic risks that may arise in the event of market failure and to help safeguard investors' interests when investing in financial products.

With the focus on financial markets, the SFA regulates the offering of real estate related investments if they are in the form of securities. However, land banking investments typically involve investors acquiring direct interests in real estate rather than securities related to real estate. As such, land banking investment typically falls outside the scope of the SFA and FAA.

MAS advises consumers to deal with regulated persons when it comes to managing their financial affairs such as investments. You can check two lists:
(i) The Financial Institutions Directory at the MAS website for a list of financial institutions regulated by MAS. After you have located an entity on the list, take note of the regulated activities they are authorised to provide. Note that land banking investments that involve investors acquiring direct interests in real estate are not regulated by the MAS.
(ii) The Investor Alert List (IAL) which contains a list of unregulated persons who, based on information received by MAS, may have been wrongly perceived as being licensed or authorised by MAS. It includes those operating in Singapore as well as those based overseas. However, you should bear in mind that this list is not exhaustive. You may wish to check the Financial Institutions Directory found at the MAS website to determine if the person you are dealing with is in fact regulated by MAS.

MAS aims to safeguard the interests of investors by authorising competent and professional persons to provide regulated financial services. If investors choose to deal with persons that are not regulated by MAS, they forgo the protection afforded under laws administered by MAS.

4) Key Questions to ask yourself

a) What do you know about the land you are purchasing?Often the land sold to investors in Singapore is abroad in UK or Canada. Ask yourself whether you really want to buy a plot of land that you have never seen. What do you know about the area?

Even if you have sighted the land, how much do you understand about the property, prices and land development laws in that country, and in that area? How can you be sure if the purchase price quoted to you is a good deal? Do you know what is the likelihood of the land value rising? Do your own research and do not simply rely on the salesman’s advice. They may exaggerate the value of the land in order to close the sale.

b) What do you know about the company you are dealing with?

There might be a professional looking website and an authentic sounding name but what is the background of the company? Have you checked if the firm is regulated in the country that they are set up in or selling the land in? If they offer to “reserve” you a plot of land for a small cost, how can you assess if this is a credible offer? Can you really trust them with your money? Have you found out what recourse options would be available to you if you later find that you have a problem in your dealings with the company?

c) What do you know about the law of the country where you are investing in?

What would be your rights to the land as an investor? What recourse is there if a dispute arises with the company?

d) How can the company afford to offer such high returns or promise of a big profit?What are the returns dependent on and how often will you receive them? Are the returns guaranteed and do you have this in writing? How easily can you find out about any increase or decrease in value of the land? How long must you stay invested for and what are the pitfalls if you need to draw out your money early?

5) Conclusion

Before you place your hard-earned money in a land banking proposition, examine the details carefully. Do not be lured by promises of high returns. Always ask when you can incur a loss, what factors could result in a loss, what can happen in the worst case scenario and your options for recourse should you have a problem. Do not rely entirely on what the person marketing the land banking proposition tells you. 



taken from: http://www.moneysense.gov.sg/understanding-financial-products/investments/consumer-alerts/land-banking-look-before-you-leap.aspx