Hot stock: Singapore Air jumps most in two months as profit beats estimates

PHOTO: BLOOMBERG

FEB 5, 201610:05 AM

[SINGAPORE] Singapore Airlines climbed the most in two months after reporting quarterly profit that beat analyst estimates, as lower fuel prices helped Southeast Asia's largest carrier attract more passengers with cheaper fares.

The stock rose 3.4 per cent to S$11.19 as of 9:47 am in Singapore, the largest intraday gain since Dec 8. The shares had fallen 3.4 per cent this year through Thursday, compared with an 11 per cent decline for the city's benchmark Straits Times Index.

Net income climbed 36 per cent from a year earlier to S$274.9 million in the third quarter ended Dec 31, Singapore Air said Thursday after the market's close, compared with analysts' estimates of S$224 million. The carrier boosted occupancy of its seats to 80 per cent from 78 per cent a year earlier with lower fares, helping achieve the profit even as it lost S$72 million in fuel hedges and S$77 million from the weakening of the local currency against the US dollar.

"The numbers should get progressively better as fuel hedges come close to spot prices," Alan Richardson, a Hong Kong-based money manager at Samsung Asset Management, said in an e- mail. Mr Richardson said last month that he's betting on improved earnings for Singapore Air as it benefits from plunging jet fuel prices.

See who is talking about SIA

Last 30 days:

• 581
• 7
• 42

30 days avg

HOT COMPANIES

Shell +353% messages

• AstraZeneca +320%
• RSA Insurance +123%
• Vodafone +114%
• EasyJet +85%
• Taylor Wimpey +54%
• Intertek +40%
• Compass +25%
• Imperial Tobacco +23%
• BP +22%

• AstraZeneca +320%
• RSA Insurance +123%
• Vodafone +114%
• EasyJet +85%
• Taylor Wimpey +54%
• Intertek +40%
• Compass +25%
• Imperial Tobacco +23%
• BP +22%

The price of jet fuel cargoes loading from Singapore fell 39 per cent in the past 12 months to US$42.84 Friday.

BLOOMBERG

    
 

Hot stock update: Singtel surges more than 3% in active trade

By

Angela Tanangelat@sph.com.sg

ST PHOTO: KUA CHEE SIONG

FEB 5, 201611:56 AM

SINGTEL shares surged more than 3 per cent in unusually active trade on Friday morning, fuelling the blue chip Straits Times Index (STI) to trade higher, bucking the regional trend.

After opening at S$3.51 a share, Singtel traded higher to S$3.60, up 12 cents, or 3.45 per cent. By 11:53am, the telco was trading around S$3.61, up 13 cents, or 3.7 per cent. A staggering 27 million shares changed hands.

The STI was up 40.16 points, or 1.57 per cent, at 2,598.65. Elsewhere in Asia, Japan, Australia and Malaysia, stock markets have opened weaker.

Earlier on Friday, the telco said its Australian subsidiary, Optus, has bought airwaves in the 1800 MHz spectrum band for A$196 million (S$197 million), helping it expand its 4G high-speed network in the country. The 1800 MHz spectrum is said to be the the most popular globally for 4G deployment and is compatible with the majority of 4G devices currently used in Australia.

See who is talking about SINGTEL

Last 30 days:

• 188
• 0
• 14

30 days avg

HOT COMPANIES

Shell +353% messages

• AstraZeneca +320%
• RSA Insurance +123%
• Vodafone +114%
• EasyJet +85%
• Taylor Wimpey +54%
• Intertek +40%
• Compass +25%
• Imperial Tobacco +23%
• BP +22%

• AstraZeneca +320%
• RSA Insurance +123%
• Vodafone +114%
• EasyJet +85%
• Taylor Wimpey +54%
• Intertek +40%
• Compass +25%
• Imperial Tobacco +23%
• BP +22%

Bernard Aw, market strategist at IG, said there was no apparent reasons for the jump in Singtel share price or activity, but speculated that "it could be position ahead of next Friday's earnings release, as there will not be any trading for four days due to Chinese New Year".

Singtel is scheduled to unveil its third-quarter results on Feb 12 before the start of trading. Meanwhile, the Singapore stock market will be closed for Chinese New Year celebrations on Monday and Tuesday, and will resume trading on Wednesday.

Some analysts, however, said the latest activity in Singtel could be due to a flurry of interest in defensive plays.

"All telcos have seen a run as they are defensive," one analyst explained. He noted that in the past five days, rival telcos like StarHub and M1 have risen sharply too, at 4.4 per cent and 3.9 per cent, respectively. "Singtel could be playing catch-up," he added.

    
 

SGH campus to get 20-year makeover under redevelopment masterplan

By

Claire Huanghuangjy@sph.com.sg@ClaireHuangBT

Singapore's largest healthcare hub, the Singapore General Hospital (SGH) campus, will undergo major redevelopment spanning 20 years, to meet the growing needs of the population. 

ST PHOTO: LIM YAOHUI

FEB 5, 201612:03 PM

SINGAPORE's largest healthcare hub, the Singapore General Hospital (SGH) campus, will undergo major redevelopment spanning 20 years, to meet the growing needs of the population.

Prime Minister Lee Hsien Loong shared the masterplan for the redevelopment of the 43-hectare campus on Friday, saying it would be dedicated to patient care, research and education.

The campus is currently home to SingHealth Duke-NUS Academic Medical Centre, SGH, the five national specialty centres for cancer, dental, eye, heart and neuroscience, as well as SingHealth Polyclinic (Outram). Together, these healthcare institutions serve about 33 per cent of the nation's healthcare needs.

Under the masterplan, the campus will expand current capacity by intensifying land use. When completed, 60 per cent of the campus will comprise patient care and other healthcare-related facilities, while the remaining 40 per cent is to be designated for research and education.

Redevelopment will take place in two phases over a period of 20 years.

SingHealth's flagship hospital, SGH, will be moved closer to the main public transport nodes, right along the cross junction of Outram Road and Eu Tong Sen Street.

Under phase 1, which will take place over 10 years, SGH's Accident and Emergency (A&E) block, the new 550-bed Outram Community Hospital, SGH Elective Care Centre, National Dental Centre Singapore and the new National Cancer Centre Singapore will be relocated or developed first.

The main SGH Complex will be developed in phase 2 of the master plan, after phase 1 is completed.

Under the master plan, provision has also been made for a new research park to further biomedical research and collaborations with industry partners.

Ivy Ng, group chief executive of SingHealth, said: "Developed in careful consultation with the Ministry of Health, the master plan caters to both current and anticipated healthcare needs. While we need more capacity because patient numbers have been rising steadily, the master plan is not just about adding capacity. In conceptualising, it was necessary to look beyond and plan ahead to formulate models of care that are designed around the needs of our patients while ensuring patient safety, accessibility and affordability."

    
 

Ivy League grads take on lenders charging 139% rates in Mexico

FEB 5, 201610:19 AM

[MEXICO CITY] Allan Apoj, a 26-year-old graduate of Brown University, said he couldn't help asking himself one question during his stint working at a payday lender in Mexico City three years ago: "How can this be legal?"

He was shocked by the interest rates the company charged small businesses, which are largely shunned by banks because they typically can't come up with enough collateral. Loans from payday and microlender Compartamos SAB, for example, carry average rates of 139 per cent. The experience motivated Apoj to team up with fellow Brown alum David Poritz to offer a cheaper alternative in a country where only about 7 per cent of small- and medium-sized businesses get loans from traditional banks.

In April, the pair founded online lender Credijusto (Fair Credit), which uses an algorithm they developed to determine a company's creditworthiness and what kind of interest rate to charge it. Credijusto is backed by Victory Park Capital, a Chicago-based firm that funded numerous startups focused on non- traditional lending, including Square Inc's merchant lending program and Kabbage Inc., which helps online merchants buy inventory.

Mexico City-based Credijusto plans to ramp up lending to US$2 billion over the next five years, charging interest rates that range between 26 per cent to 32 per cent on its loans, Mr Apoj said. While they're higher than the those charged by banks, they're significantly lower than rates from payday lenders and microlenders.

"The banks still offer, for a lack of a better word, an archaic service to the clients," Mr Poritz, 27, said. "Even in the non-bank sector, there's no leader. So we thought there's an opportunity to create and bring together the best customer service, the most transparent lending practices with the best US investors to solve this huge issue." Banks in Latin America's second-biggest economy remain reluctant to lend even after Mexico passed laws more than two years ago to increase companies' access to credit. Corporate lending in Mexico was equal to just 31 per cent of the country's gross domestic product in 2014, according to the World Bank. That trails even much smaller nations in the region like Costa Rica and Panama. Faced with limited options, three quarters of businesses in Mexico turned to their suppliers for financing last year.

Edelman, a communications firm that represents Victory Park, declined to comment on Credijusto.

Apoj, who worked at Mexico City-based payday lender Lana Facil for six months, describes Credijusto as a social enterprise that's seeking to bring about positive change in Mexico. It lends to businesses with average annual revenue of just US$48,000.

"Providing access to companies and helping a business owner unlock their collateral - and activate it by making it productive - has a positive social impact," Mr Apoj said.

BLOOMBERG

    
 

LinkedIn shares plummet after sales outlook trails estimates

LinkedIn Corp shares lost almost a third of their value after the professional networking site forecast a year of slower revenue growth amid signs of weakness in sales of advertising and marketing tools.

PHOTO: BLOOMBERG

FEB 5, 20169:20 AM

[SAN FRANCISCO] LinkedIn Corp shares lost almost a third of their value after the professional networking site forecast a year of slower revenue growth amid signs of weakness in sales of advertising and marketing tools.

Revenue will be about US$820 million in the first quarter, and US$3.6 billion to US$3.65 billion for 2016, the company said in a statement on Thursday. That missed analysts' average estimate for US$867.1 million and US$3.9 billion, according to data compiled by Bloomberg. LinkedIn had 414 million users in the fourth quarter, up from 396 million in the prior period.

"In this market, there's no mercy for a miss," said James Cakmak, an analyst at Monness Crespi Hardt & Co. "While the fourth-quarter results were solid, the outlook fell short as global macro and elevated investments pose headwinds for 2016." While chief executive officer Jeff Weiner has made investments to diversify the business, like acquiring education website Lynda.com for US$1.5 billion last year, it will be a while before those efforts contribute meaningfully to revenue. In the meantime, LinkedIn is facing a slowdown in its marketing- services business, which companies use to find potential customers, show them ads and relevant information and generate sales leads. Sales to recruiters, who use LinkedIn to find candidates for jobs, are also slowing.

The shares of Mountain View, California-based LinkedIn fell as much as 30 per cent in extended trading. The stock advanced less than 1 per cent to US$192.28 at the close in New York, leaving them down 15 per cent this year. The shares declined 2 per cent in 2015. If LinkedIn's shares stay near post-earning lows, it could cost co-founder Reid Hoffman more than US$750 million, lowering his net worth to about US$3 billion, according to the Bloomberg Billionaires Index.

LinkedIn has a tendency to give guidance that misses expectations, only to beat it later, said Colin Gillis, an analyst at BGC Partners. "This thing moves a lot on earnings," he said. "We've seen it before." LinkedIn is narrowing its focus in some areas, which is hurting sales. For example, it's discontinuing a tool that helps marketers find leads, incorporating the technology into its sponsored content business instead, contributing to a slowdown in its marketing solutions business. Revenue in the marketing solutions division rose 20 per cent in the fourth quarter to US$183 million.

The professional-networking website is also facing slower economic growth in Europe and Asia, though it said China is its fastest-growing country for new members. The company has a standalone app for Chinese users and has devoted much of its efforts over the past year to push deeper into that market.

For the fourth quarter, LinkedIn reported a loss attributable to common shareholders of US$8.43 million, compared with the average estimate for US$50.2 million. Revenue climbed 34 per cent to US$862 million, topping the prediction for US$857.4 million. LinkedIn has seen average annual sales growth of about 56 per cent since its 2011 initial public offering.

BLOOMBERG

    
 

Lawyers earning 1,100 pounds an hour put UK justice at risk

      

The cost of hiring a top London lawyer has risen to more than 1,000 pounds (S$2,019.38) an hour, meaning only major companies can afford the biggest law firms, according to a research group. 

ST PHOTO: KUA CHEE SIONG

FEB 5, 20168:29 AM

[LONDON] The cost of hiring a top London lawyer has risen to more than 1,000 pounds (S$2,019.38) an hour, meaning only major companies can afford the biggest law firms, according to a research group.

The average hourly fee charged by partners in the city's biggest and most profitable firms in 2015 was 850 pounds, and peaked this year at a record 1,100 pounds, or 18 pounds per minute, according to the report produced by the Centre for Policy Studies, a free-market think tank. In 2005, the average rate was 674 pounds per hour, adjusted for inflation.

"Those seeking to comply with UK legal procedure are forced to pay extremely high costs to do so - high enough to restrict access to law, particularly for smaller business clients," the CPS report said. A lack of transparency on fees and little competition at the elite law firms contributed to the cost increase, according to the author, lawyer Jim Diamond.

Britain's lawyers marched in London last year to protest cuts to government-funded legal aid that they said threatened access to justice for the poorest. The profession has been less vocal about another barrier to those wanting to use the UK legal system: the growing cost of hiring a law firm.

"It's the fear," said Mr Diamond, who specialises in cost disputes between attorneys and clients who carried out the research . "You have got to use the best. The numbers become the last thing you discuss." The biggest London firms don't publish information on their hourly rates, so Diamond compiles his data by surveying clients.

A 2013 lawsuit between Alexander Vik and Deutsche Bank AG left the Norwegian entrepreneur with a 36 million pound legal bill after he lost in London courts. In the UK, the loser pays the winner's legal costs. The Bank of England faced criticism last year after spending 2.9 million pounds on lawyers in an eight-month investigation into what its staff knew about foreign-exchange market rigging.

Law firms' preference for billing by the hour rewards inefficiency and leads costs to pile up, Lord Rupert Jackson, a senior judge, said in a lecture last month. "The result is inevitable - a civil justice system which is exorbitantly expensive," he said.

Firms have been able to raise fees because of demand for financial services advice, said David Carbery, a recruiter specializing in legal and compliance at Shadowhound.

"Banks want the best advice and they're happy to pay for it," Mr Carbery said. "It's not surprising that this is reflected in the fees.

Spokesmen for the UK magic circle firms - Clifford Chance, Linklaters, Allen & Overy and Freshfields Bruckhaus Deringer - declined to comment.

Rates at London second-tier firms were as high as 800 pounds an hour in 2015, according to the CPS report. Regional UK law firms charged as much as 500 pounds per hour for a partner.

BLOOMBERG