Published July 2, 2009

Keppel unit wins 11m euro WTE deal

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KEPPEL Seghers Belgium NV, a wholly owned subsidiary of Keppel Integrated Engineering (KIE), has secured an 11 million euro (S$22.3 million) contract to provide technology to a waste-to-energy plant (WTE) in Hangu, Tianjin Province, China. The contract was awarded by Tianjin Binhai Environmental Industry Development Ltd. KIE is a unit of Keppel Corp.

Located in Binhai Technical & Economic Development Area (TEDA), Tianjin, the plant will have three incineration lines which will be able to treat 1,500 tonnes of municipal waste per day to generate more than 20 MW of green energy. It is expected to be operational in 2011.

Keppel Seghers will provide equipment for the furnace, boiler and flue gas cleaning components of plant.

The KIE group is currently the market leader for imported waste-to-energy solutions in China, with 60 per cent of the market. Earlier in March this year, Keppel Seghers was also awarded a $30 million contract to provide technology to a WTE plant in Jinan, Shandong. That plant will be able to treat 2,000 tonnes of municipal waste per day.

The latest contract is not expected to have material impact on the net tangible assets or earnings per share of Keppel Corp for the current financial year.

Published July 2, 2009

Midas bags contracts worth 73.8m yuan

By JOANNE TANG

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MIDAS Holdings has clinched its first two downstream fabrication contracts worth 73.8 million yuan (S$15.6 million), as part of its bid to become a one-stop service supplier to China's transportation industry.

The latest contracts brought to 918.8 million yuan the orders that the group has announced over two weeks. Midas' order book before these 918.8 million yuan of deals stood at $120 million. Based on this, BT estimates that its total order book now stands at some $300 million.

The contracts secured are in line with the revenue guidance of between $200 million and $300 million worth of new contracts that were being pursued by the company's management.

The group, which manufactures aluminium alloy extrusion products primarily for the Chinese rail transportation sector, has been benefiting from the Chinese government's fiscal stimulus package and the infrastructural development projects in the mainland.

The latest two contracts were awarded by CNR Tangshan Railway Vehicles Co Ltd and comprised 23 million yuan for aluminium alloy extrusion profiles and 50.8 million yuan for fabrication processing fees.

The first contract - worth 43.8 million yuan - involves the supply of 12 types of specialised stretch band, roll bend and press bend fabricated aluminium alloy extrusion profiles for 1,280 train car bodies.

The second contract - valued at 30 million yuan - involves the production of specialised stretch bend, roll bend and press bend fabricated curved surface profiles for 100 units of driver's cabins.

Commenting on the new contracts, Patrick Chew, CEO of Midas, said: 'These two contracts represent another key milestone for our group as they mark our successful foray into the business of downstream fabrication. Our foray into downstream fabrication marks the beginning of our long-term strategy to become an integrated manufacturer and one-stop service supplier to the rail transportation industry.'

A company spokesman has said that the majority of the contracts will be completed between 2009 and 2011. Thus, the contracts will have a positive impact on the earnings for financial years 2009 to 2011.

Over the past four weeks, the Bloomberg consensus analyst estimates for 2009 earnings per share have been revised upwards by 0.1 cents to 4.4 cents. The EPS for 2008 was 3.87 cents.

The series of new contracts secured have led some analysts to raise the possibility of a fourth production line. Currently, the company has two production lines and have invested in a third one which will only be ready in 2010.

The management has said that capital expenditure needs will be funded using a blend of internal funds and bank loans.

Published July 2, 2009

Wealthy locals miss out on recent rallies: survey

By GENEVIEVE CUA

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SINGAPORE investors saw opportunities earlier this year when markets were on the floor, but felt that the risk of further price falls was too high.

Opportunity and risk: In the study, 45 per cent of Singapore investors say that they will invest only in what they know, compared with 53 per cent globally

A survey suggests the wealthy here - and elsewhere - missed out on the sharp rally in equities that started in March.

The study, by Barclays Wealth and The Economist Intelligence Unit, also found that half of Singapore respondents do not intend to change the risk level in their portfolios over the next 12 months.

The survey was conducted between March and May this year. Respondents included the mass affluent, high net worth and ultra high net worth segments.

Forty-five per cent of Singapore investors said they will invest only in what they know, compared with 53 per cent globally.

According to Didier von Daeniken, chief executive of Barclays Wealth Asia-Pacific: 'There are always early adapters, those who are risk takers. The average investor would have missed out because they were too nervous. A few who are lucky or very prescient did very well.'

Slight differences in behaviour among countries could reflect varying economic backdrops, he says. 'If you are in an economy doing very poorly, you would be extremely reluctant to invest worldwide.'

Barclays has sought to harness behavioural finance in its advisory process.

Greg Davies, the bank's head of behavioural finance, says it is seeking to use psychometrics to better understand clients' profiles.

'Instead of just measuring risk tolerance, we measure clients' composure or people's short-term engagement in the market,' he says.

'We have clients whose actual financial objective is to grow their wealth in the long run. At the same time, most of us have an emotional time horizon that is very short term. And when things are bad, it gets even shorter.'

The bank has been nudging up the risk exposures of its portfolios gradually.

Asia strategist Manpreet Gill says: 'The survey was done in a period where there were opportunities. From a strategic point of view, we see opportunities, but we also see a risk of correction. If there is a correction, that should be used as an opportunity to add risk.'

The fixed-income space in particular has yielded 'unusual' gains in the past three months, he says. 'But spreads are still wide, and there are still opportunities to make better-than-normal gains.'