buy sell hold 2021




Singapore Banking Monthly
Interest rates and loans still expanding


 September 3M-SORA/3M-SIBOR was up by 42bps/32bps MoM to 2.31%/2.85%, the highest in more than a decade. 3Q22 3M-SORA average in 2.31%, up 218bps YoY.
 Singapore domestic loans grew 6.7% YoY in August, tracking our estimates, while Hong Kong’s domestic loans declined 0.97% YoY in August.
 Maintain OVERWEIGHT. We remain positive on banks. Bank dividend yields are attractive at 5% with upside surprise due to excess capital ratios. Stable economic conditions and rising interest rates remain tailwinds for the banking sector. SGX is another beneficiary of higher interest rates [SGX SP, BUY, TP S$11.71].


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CSE Global (CSE SP)
Proposed Rights Issue To Fund Potential Acquisitions

CSE has announced a proposed rights issue of 1 right for every 5 shares at an issue price of S$0.33 (20.5% discount to the last traded price). If fully subscribed, the net proceeds of S$33.4m will be used to fund synergistic acquisitions in the communications business in the infrastructure industry in New Zealand and the US. This cash call amid poor market sentiment will likely create an overhang to share price. Our target price is reduced by 16% to S$0.37 after adjusting for dilution from
the rights issue. Maintain HOLD.


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Plantation – Malaysia
MPOB Sep 22: Inventory Nearly Hits Three-Year High On Higher Imports From Indonesia

Malaysian palm oil inventory nearly hit a three-year high mainly due to higher imports from Indonesia. There was strong export growth in Sep 22 as expected, thanks to higher import margins in China and wider PO-SBO price spreads. However, India’s exports came in lower mom in Sep 22 due to competition from Indonesia. We expect CPO prices to be supported at the current level as we believe that the recent price hike has factored in the normalising inventory. Maintain MARKET WEIGHT.


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Enviro-Hub Holdings Ltd
Focus on e-waste recycling and healthcare

■ ENVH plans to focus on growing its e-waste recycling and healthcare (gloves/pharmacies) segments from FY22F onwards, as per FY21 slides.
■ ENVH is trading at 0.9x CY22F P/BV, vs. e-waste recycling peers at 1.5x CY22F P/BV and glove peers at 0.8x CY22F P/BV, as per Bloomberg.


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Expect lower 3Q profit due to weaker price

■ Malaysian palm oil stocks climbed to 2.31m tonnes as at end-Sep 2022 — highest since Oct 2019 — spot on against our forecast but above consensus’.
■ We project palm oil stocks to rise 8.2% mom to 2.5m tonnes by end-Oct 2022F, due to Indonesia’s more competitive export tax vs. Malaysia
■ We expect Malaysian planters to post weaker 3Q earnings on a yoy and qoq basis, as falling prices and rising costs trump the better production.


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Regional Plantations
MPOB stockpile on seasonal build-up mode

CPO price should gravitate higher towards year-end

MPOB’s Sept stockpile hit a 35-month high at 2.32mt as seasonally strong output continues to outpace exports and domestic consumption. CPO price downside is presently buffered by the huge price gaps relative to other vegetable oils. The gap is needed to boost demand and flush out Indonesia’s bloated stockpile amid this peak cropping season. We believe CPO price will trade sideways for now and will make a gradual recovery towards year end. Stay NEUTRAL. Preferred BUYs: KLK, FR, BAL. 


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