During the briefing, CEO Wee Ee Cheong highlighted the bank’s balance-sheet strength, with core tier-1 capital adequacy ratio (CAR) at 11.9%, tier-1 CAR at 14% and total CAR at 19% — the highest for any Singapore bank.

 

“The environment has stabilised this year. Asia is the place to be and we would like to see top-line growth,” Wee told analysts and media at a briefing last Friday. He is looking at high single-digit loan growth this year, which would come from a mixture of corporate, SME and consumer sectors, but he concedes that consumer lending is competitive.

 

In an initial note, Kenneth Ng, head of research at CIMBGK Securities says, “We leave our earnings estimates unchanged. We maintain our target price of $23.32, based on 1.96 times FY2010 price-to-book. Our ‘outperform’ rating is also intact.” Ng forecasts net profits of $2.4 billion for this year, and $2.7 billion for next year. “As highlighted by this set of results, UOB’s key investment attraction remains its earnings tailwinds, spurred by falling allowances. While the results may not cause much excitement, as core cash earnings were nothing great, UOB rounded a quarter when Singapore banks did not really beat the Street,” Ng writes.

 

But City Developments beat consensus expectations when it announced net profits of $587 million for FY2009, down 2.3% y-o-y. “City Developments reported FY2009 results that were 5% and 7% above our operating and net profit ex-exceptional estimates, respectively — with property development contributing the largest proportion of profit before tax (66%),” says Morgan Stanley in a research note. Together with UBS, Deutsche Bank and Citigroup, they were all downbeat about the local developer. “Maintain ‘underweight’ rating on City Developments given the 19% downside,” Morgan Stanley says. “Policy risks overhang in Singapore and the region to deflate potential asset bubbles will likely continue to weigh on stock prices. In the near term, we prefer the S-REITs to the S-Developers given the limited impact from further policy risks.”

 

A report issued last Thursday by Nomura Securities valued Genting Singapore, which last traded at 89.5 cents, at just 68 cents, or 30% off its high in January. It seems the opening of Resorts World at Sentosa has disappointed analysts. Instead of high rollers, the casino is filled with foreign workers, according to press reports, and analysts are revising down their gaming revenues and profits quite swiftly.

 

Wilmar International and Otto Marine will announce results Monday. Dealers say investors have been asked to indicate their interest in Cache Logistics Trust, the first REIT to make an IPO since 2007. The indicative yield is

8.6%, they add.