SINGAPORE - Stay up to date on market chatter with our picks of the latest broker research reports, compiled by The Straits Times Money Desk.
1. Singapore Exchange
We expect SGX to report a net profit of $78.9 million on 15 Oct for the first quarter of its 2015 financial year. Despite the record-low average daily value of securities traded of $969 million during the quarter, we believe that earnings will be propped up by strong demand for China A50 index futures; higher annual listing fees, which were revised in Jan; and, healthy appetite for IPOs and bond listings.
We keep our Hold call on expectations of weak market volumes in the near term, especially since the second quarter is seasonally the weakest.
Maintain Hold with a target price of $7.12
2. Sembcorp Marine
SembMarine's share price has retreated 20 per cent in the last year, spurred by worries over the delivery of its first drillship and weaker oil prices.
We think the selling is overdone and that valuations are looking attractive even at lowered net profit estimates. Positive surprises could arise from the repair segment as well as from rebounding operating margins.
Maintain Buy but target pride lowered to $4.50 to account for investor negativity on a weaker order-win outlook.
Company is insulated from oil-price swings as it is exposed to operational expenditure not capital expenditure. Liftboats remain an under-penetrated market with the potential for further expansion.
Buy with a target price of $2.38
Broker: Maybank Kim Eng