Fwah Moment! Americans use a lot of Energy!
Now if only they can cut down to the level of Hong Kong people, we won’t have such a big energy Crisis!
[Source>>]
Yield Watch: Asia Telco Stocks Information
My dividend stock tracker have been updated for the night. Tonight we got a special Research Report from DBS Vickers analyzing the impact of iPad on the 3 Telcos.
Here is a screenshot of a comparison of Asia’s Telco Performance. Good Information here. (Click to see larger image)
Here is the report:
2010-Jul-30 – DBS Vickers – iPad Telco
I run a free Singapore Dividend Stock Tracker available for everyone’s perusal. It contains Singapore’s top dividend stocks both blue chip and high yield stock that are great for high yield investing. Do follow my Dividend Stock Tracker which is updated nightly here.
Zero Hedge takes notice of Singapore’s Economic Performance
I have always had a love/hate relationship with Singapore. During the seventies, the autocratic Prime Minister, Lee Kuan Yew, regularly locked up journalist friends of mine and banned magazines like The Economist that published my stories. The country is also notorious for public canings of offenders who had the audacity to discard chewing gum on public streets.
On the other hand, my hedge fund was once one of the largest commission generators on the Singapore Monetary Exchange (SIMEX), and there is no better place to spend a weekend with ten grand burning a hole in your pocket. I spent more than a few nights closing down the bar at the Raffles Hotel, home of the Singapore Sling.
Today, Singapore has won the sweepstakes to become the world’s fastest growing economy, bringing in a white hot first half 18.1% GDP growth rate. Analysts believe that the full year number could come in as high as 15%. Global equity investors have taken notice, pushing the stock index up 5%, making it one of the best performers (EWS).
The Singapore dollar has also been appreciating against its competitors. Even a slow ratcheting up of interest rates by the Monetary Authority of Singapore has done little to cool things off. The results were powered by a booming financial sector, which saw assets under management soar by 40% to $871 billion last year, thanks to an explosion of newly minted Chinese millionaires and billionaires.
Foreign banks are jumping on the gravy train, with Goldman Sachs and Morgan Stanley scrambling to add local staff. Tourism has received a huge shot in the arm, thanks to the recent legalization of gambling. Drug giants like Pfizer, Sanofi Aventis, Roche, and Glaxo-Smith Kline have gravitated there to ramp up large scale manufacturing for export to the rest of Asia.
The country’s leaders have wisely parlayed decades of trade surpluses into Temasek Holdings, one of the largest sovereign wealth funds, and long a major player in the foreign exchange markets (click here for their link at http://www.temasekholdings.com.sg/).
[Read full article @ Zero Hedge >>]
Cache Logistics Trust 2Q 2010 Results:Not bad
Cache released their maiden results today and it didn’t surprise analyst as it was inline with forecasted figures.
Cache Logistics Trust says it achieved a DPU of 1.71 cents for the 2nd quarter from 12 April 2010 to 30 June 2010 (2Q2010).
On an annualized basis, the DPU is 7.81 cents, 1.4% higher than the annualized forecast of 7.70 cents for 2010.
Net property income was $12.65 million while distributable income hit $10.83 million.
Cache’s current property portfolio comprises six quality logistics assets strategically located in established logistics clusters in Singapore.
All six properties are 100% leased with high underlying occupancy at each premises. The master leases are on long-term, triple-net basis with locked-in annual rent escalations.
The average lease to expiry of 6.1 years as at 30 June 2010.
Disclosure: Drizzt is vested in Cache Logistics Trust
I run a free Singapore Dividend Stock Tracker available for everyone’s perusal. It contains Singapore’s top dividend stocks both blue chip and high yield stock that are great for high yield investing. Do follow my Dividend Stock Tracker which is updated nightly here.
Yield Watch:Bought K-Green Trust @1.14
In the end, a lot of stocks that I wanted to get into are pretty high.
Today, for no apparent reason, Cache Log, Plife Reit and First REIT all shot up.
The current yield for a projected DPU of 7.83 cents is 6.86%. Current Debt levels is 0 debt and it’s a utility business that can change pricing based on inflation scenario.
The purchase size is small and I do have certain reservations about the Trust, so I will observe before adding more.
Right now the benefits does outweigh the negatives.
I run a free Singapore Dividend Stock Tracker available for everyone’s perusal. It contains Singapore’s top dividend stocks both blue chip and high yield stock that are great for high yield investing. Do follow my Dividend Stock Tracker which is updated nightly here.
$TEF:Telefonica finally agrees to buy Brazil’s Vivo for $9.8 Billion
Disclosure: Drizzt is vested in this stock.
Drizzt:
With this deal, Telefonica paid a premium, but the value of this deal could be higher than the price paid for Vivo. The synergy of Vivo’s mobile communication with Telefonica’s fixed line business to structure a comprehensive product could increase the switch over and increase revenue.
Telefonica SA agreed to buy Portugal Telecom SGPS SA’s stake in Vivo Participacoes SA, Brazil’s largest wireless company, after raising its bid for a third time to 7.5 billion euros ($9.8 billion).
Telefonica will initially pay 4.5 billion euros in the all- cash deal, 1 billion euros at the end of the year and the rest in 2011, the company said in a statement. Separately, Portugal Telecom agreed to pay 8.44 billion reais ($4.8 billion) for 22.4 percent stake in Brazil’s biggest phone operator Telemar Norte Leste, known as Oi.
Telefonica Chairman Cesar Alierta has raised the offer by 32 percent from his initial bid in May to gain control of Vivo. Alierta wants to merge Vivo with Telecomunicacoes de Sao Paulo SA, or Telesp, the Spanish company’s fixed-line unit in Brazil, to ride the growth in the Latin American country as business slows at home.
“Strategically, this was clearly necessary for Telefonica and the price reflects that,” said Alberto Espelosin, who helps manage about $12 billion at Ibercaja Gestion in Zaragoza, Spain, and owns Telefonica shares.
Both companies have sought growth in Brazil as markets at home cooled. Vivo had 30 percent of Brazil’s 179 million wireless subscriptions at the end of March, according to Anatel, the country’s phone regulator. Brazil’s economy is growing at the fastest pace in more than two decades.
Portugal Telecom shares were suspended and will resume trading at 1.30 p.m. in Lisbon. Telefonica rose as much as 1.1 percent to 17.07 euros in Madrid, giving the company a market value of 77.7 billion euros.
Bigger Than Whole
Telefonica’s latest offer for Portugal Telecom’s stake in Brasilcel NV, their 50-50 venture that owns 60 percent of Vivo, is greater than the Portuguese company’s market value of 7.44 billion euros.
Telefonica on May 6 offered 5.7 billion euros for the stake. It raised the bid to 6.5 billion euros in June and in the same month increased it to 7.15 billion euros, after the two earlier offers were rejected by the company.
The third offer, which won approval from the Lisbon-based company’s investors, was blocked by the Portuguese government last month using special veto powers.
Telefonica’s bid values Vivo at more than 10 times this year’s expected earnings before interest, tax, depreciation and amortization. Telefonica trades at 3.5 times estimated Ebitda.
The Portuguese government had defined Portugal Telecom’s stake in Vivo as “strategic” for the country.
Brazil Push
Telefonica, whose Brazilian unit Telesp’s first-quarter sales fell 1.4 percent in local-currency terms, needs a greater mobile-phone presence in the country.
Portugal Telecom has relied on Brazil for growth, with sales from the Latin American country rising 27 percent in the first quarter, while revenue at home fell 3.6 percent. Since 2006, Vivo has overtaken the fixed-line unit as the company’s biggest revenue contributor, accounting for half of sales in the first quarter.
For Portugal Telecom, a deal with Brazil’s Oi would let it keep a presence in the country even as it sells its Vivo stake to Telefonica. Oi, based in Rio de Janeiro, provides Internet access, mobile, fixed-line and pay-television services.
Telefonica will partly fund the Vivo transaction with a 5 billion-euro loan arranged by Citigroup Inc., people with knowledge of the deal said July 8. The company offered to pay initial interest of 65 basis points, or 0.65 percentage point, on the three-year borrowing, the people said.
The cost of insuring against losses on Telefonica bonds rose 13 basis points to 172.5, according to data provider CMA. Credit de fault swaps pay the buyers the face value in exchange for the underlying security if a borrower fails to meet its obligations, less the value of the defaulted debt.
To contact the reporters on this story: Paul Tobin in Madrid at ptobin@bloomberg.net; Anabela Reis at areis1@bloomberg.net
DBS Expects Starhub to disappoint
DBS Vickers lifts Starhub (CC3.SG) target price to $2.20 from $2.06 after changing valuation basis to discounted cashflow model from P/E “as investors increasingly focus on free cash flow”, says Dow Jones. Still, keeps Fully Valued call as stock trading about revised target.
DBS Vickers says market’s focus in 2H10 will be telco’s non-mobile telephony business, which could come under pressure with Singapore’s high-speed national broadband network being rolled out, and pay-TV competition intensifying.
“The key question is whether gains in the corporate (broadband) business can offset the loss in the consumer broadband business,” says the brokerage.
My question is: They should have been using Discounted Cashflow for a long time for companies with predictable cashflow as Telecoms! What took them so long!
I agree somewhat that, earnings will be better, but cashflow would be affected by increase CAPEX.
Do note that we will see first hand this time how losing the EPL affects them. Since the EPL has ended many people that watches EPL would have cancelled their Cable TV plan and move to Mio.
As a Tech Blogger, I do see a trend where Singtel and M1’s broadband package being better than Starhub. There could be a decline in broadband usage.
Here are the DBS report and OCBC report on the iPhone situation:
2010-Jul-28 – DBS Vickers – Starhub 2010-Jul-28 – OCBC – Telecoms Sector
Telecoms:The Argument for charging Peak Hour Mobile Data Rates rather than Tiered Data Caps
Drizzt:
After reading this article, the point driven across to me is that perhaps on a local context, the data bottle neck that was expected to be faced by telecoms like Singtel,Starhub and M1 will not happen.
The article argues that the bottle neck faced is in the 3G wireless spectrum rather than the backend network infrastructure. If that is the case, the spectrum usage might not be as high as previously expected.
Hoping to better handle the demands on its network from iPhones and iPads, AT&T retired its unlimited data 3G plans in June, in favor of a metered usage model intended to throttle heavy users.
Verizon is reportedly preparing to follow with monthly plans similar to AT&T’s $15 for 200MB, $25 for 2GB plans.
The solution looks like an ominous one to data-heavy services like Pandora, Rdio, Spotify, YouTube and Netflix and will likely turn smartphone users into megabyte counters and rationers. And it’s an odd business strategy — giving incentives to people to use your product less.
Even worse, it doesn’t necessarily solve the problem AT&T is intending to fix.
The caps are odd because they are an ill-fitting solution to the real problem — which isn’t heavy data usage. The real problem is congestion on the airwaves. 3G phones work by transmitting over specific frequencies mobile carriers have rented from the FCC to a tower, where the data is sent through a dedicated internet connection that sends the data through to an AT&T facility that counts the data going to and from the internet.
The cost for sending and receiving data from AT&T’s facility is cheap and still falling. The T1 line running to the tower, like the tower itself, is already paid for. The problem is just the scarcity of the airwaves — there are times when too many people want to use their devices at the same time.
It’s oddly not unlike what happens with pricing on using phones to make calls. We’ve all gotten used to the idea of peak hours with our phone minutes — and understand they idea of nights and weekends, where calls are cheaper or free because fewer people are making calls at that time.
So why not offer data pricing that offers (say) 1GB per month of peak data, with extra gigs priced at peak and off-peak rates? This way I’d be able to make better decision about how many YouTube videos as I care to watch, or decide to listen to all the NPR I’d like from my phone after I get home from work.
The peak hours could even be dynamic — so that if you say go to the geek-extravaganza Maker Faire on a Saturday or South By SouthWest and, like all the other people who think different, you have an iPhone, the phone and network could tell you that you have entered a peak zone and that you’ll be eating away at your cap?
That would be a reasonable way to deal with what’s surely going to be a longstanding problem. Spectrum isn’t unlimited the way that fiber optic cable essentially is. There’s more spectrum that carriers already have and aren’t fully using (the 700 Mhz), and engineers continue to find ways to make more efficient use of what is available. And the FCC is moving to free up 500 MHz more for wireless carriers over the next 10 years.
Oddly, if an AT&T customer decides to buy a micro-cell tower for their home or office (technically known as a femtocell), AT&T will still impose the cap. That’s despite the fact that using the 3G Microcell keeps your calls and data off their towers and takes care of the backhaul to the public network.
In its defense, AT&T says it interprets federal wiretapping law to require it to send all data that goes over 3G frequencies to run through its core network, so the femtocell can’t just ask your router and net connection to download YouTube — it has to ask your router to ask AT&T’s network to get it for you. Regardless of whether that’s actually required for data traffic (I’m doubtful), your femtocell skips the bottlenecks at the tower and the cost of data coursing through AT&T’s core network, rather than just letting your ISP find the fastest route, is miniscule.
Data transmission on core networks is cheap — see Facebook or YouTube or Amazon’s cloud computing for proof of that.
Perhaps AT&T’s solution will be fine. AT&T 3G users can now check their usage history and current usage on the web, and many found they weren’t using nearly as much data as they had suspected.
Regardless, it sets a bad precedent. These little computers in our pockets make us productive and are inspiring engineers and entrepreneurs to find all sorts of solutions to problems. Like how to make and edit movies on the go. Or how to find a decent restaurant in an unknown suburb. Or how to listen to music on the go that isn’t programmed by some greatest hits-obsessed executive at Clear Channel.
I asked AT&T if they could offer an explanation of why this wouldn’t work, but they couldn’t come up with anyone who can answer the question.
In the meantime, those who love their unlimited data can try other carriers — such as Sprint — though you can’t take the iPhone with you.
Read More http://www.wired.com/epicenter/2010/07/peak-data-hours/#ixzz0uvlS3TPG
UBS Downgrades M1 Limited
After a string of favorable Analyst reports on M1 Limited we finally see UBS downgrading it, in line with my analysis here:
UBS downgrades M1 (B2F.SG) to Neutral from Buy, citing weak free cash flow, reduced likelihood of special dividend, limited broadband revenue upside when Singapore’s high-speed national broadband network rolls out in coming months, says Dow Jones.
UBS says free cash flow down 66% on year in 1H10 at $30 million due to increased working capital needs arising from sale of smartphones: “We expect M1’s cash flows to remain weak in 2H10 because the iPhone 4 will be launched on 30 July 2010 and capex is seasonally higher in 2H”.
Research house notes while national broadband network will open new revenue stream for M1: “The question is how well M1 will be able to execute” as gaining wireline subscriber market share from SingTel (Z74.SG), StarHub (CC3.SG) likely to be difficult. Sets target price at $2.17. Shares off 0.5% at $2.22.
I run a free Singapore Dividend Stock Tracker available for everyone’s perusal. It contains Singapore’s top dividend stocks both blue chip and high yield stock that are great for high yield investing. Do follow my Dividend Stock Tracker which is updated nightly here.
High Yield Investing:M1 Limited Just kept rising
Here are today’s updated figures. The highlight for today have been the good performance of Parkway Life REIT. No doubt people believe that the acquisition of Parkway by Khazanah will be beneficial to Parkway Life REIT for more acquisition in Malaysia.
The key thing I notice today is the good performance of M1 Limited. Now I regret my decision to let it go but its truly astounding how well it performed considering the results release were medicore to below average.
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