Singapore ExchangeBuyPhillip Securities Research | Oct 4 |Oct 4 close: $7.迷利倉24SGX Ltd will be announcing its Q1 2014 results on Oct 17. Based on monthly statistics recently released by SGX, 1Q14's SDAV (securities daily average value) decreased (17.5 per cent) q-q, (1.8 per cent) y-y to $1.329 billion. DDAV (derivatives daily average volume) was (19.4 per cent) weaker q-q, but 35.4 per cent y-y to 0.415 million contracts.Due to economic concerns during the quarter, q-q trading activities for both securities and derivatives were weaker than expected. On a y-y basis, Q1 2014's revenue is expected to be higher. Securities revenue is expected to be higher due to higher expected yield per dollar traded, mitigating the marginally lower SDAV. Derivatives revenue is also expected to be higher due to the y-y higher DDAV.On a q-q basis, we expect lower revenue due to the lower trading activities for both securities and derivatives. On outlook, we continue to be positive for securities and derivatives. Markets are likely to be quieter relative to the earlier part of this year on concerns over both the pace of recovery of the global economy, and assessments over QE tapering by the US Fed.We are positive on SGX on:Higher securities revenue forecast;Strong derivatives revenue;Attractive dividends, with potential for increase.We adjust our forecast to reflect the lower SDAV and DDAV revenue expectations, but continued positive FY14 outlook. Based on our unchanged PE multiple of 24 times, and lowered EPS of $0.33, we derive a revised target price of $7.90. Based on current share price, we maintain our "buy" rating.Regional oil and gas servicesOverweightDMG & Partners | Oct 4 |FROM our observations, the development of Indonesia's oil & gas (O&G) services sector is very similar to that of Malaysia back in 2004/2005. Asset localisation, thanks to the cabotage ruling, will drive a re-rating phase, as earnings visibility rises and asset owners move up the value chain to AHTS/PSVs and eventually rigs from tugs/barges. On this theme, we think investors should buy Wintermar Offshore Marine (TP: 640 rupiah) and Marco Polo Marine (TP: $0.61).In Malaysia, Petronas drives the O&G sector, acting as a regulator and自存倉also as a national oil company (NOC). In Indonesia, SKK Migas is the regulator and Pertamina is the NOC. However, unlike in Malaysia, where Petronas specifies a preference for locally-owned assets and local vendors for the O&G industry, Indonesia has the cabotage ruling, which states that only Indonesian-flagged vessels can ply point-to-point within the country's waters. While exemptions were made for the offshore O&G sector, this will lapse between 2013 and 2015, and we see this ruling having a similar impact as seen in Malaysia - promoting local asset ownership and creating room for reinvestment for local companies. We believe the tightening cabotage will raise long-term earnings visibility for the Indonesian players. Our observation on the O&G sector re-rating in Malaysia since 2005 suggests that Indonesian stocks could go on a similar re-rating path. The aggregate P/E valuation for Malaysian O&G companies was only 8.7 times at end-2005, but has averaged more than 20 times in the past three years.Telco sectorNeutralOCBC Investment Research | Oct 4 |IN a report recently, the Media Development Authority (MDA) explained that it forced SingTel to share its Barclays Premier League (BPL) content as the telco had made it "commercially unviable" for StarHub to separately purchase the rights. The cross-carriage ruling resulted in the two telcos offering hefty "subsidies" to either lure subscribers to switch or retain subscribers.But we do not expect the migration of pay TV customers from SingTel to StarHub to be significant, given that it may still be cheaper for existing subscribers to watch BPL on the mioTV platform. We have a "neutral" rating on the sector, with a "hold" on SingTel ($3.81 FV) and "sell" on StarHub ($3.82 FV). Compiled by Cai HaoxiangDisclaimer: All analyses, recommendations and other information herein are published for general information. Readers should not rely solely on the information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.Brokers who wish to send in their reports can email us at btnews@sph.com.sgmini storage
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