Singapore Exchange Launches Dual Currency Trading For ETFs
Singapore Exchange (SGX) announced that it will be launching dual currency trading for ETFs on 15 June, enabling investors to trade foreign-currency dominated ETFs in Singapore dollars. The ETFs will be fungible, which means an investor can buy and/or sell the ETF in US or Singapore dollars regardless of the currency in which it was first bought and/or sold. SGX worked with issuers BlackRock’s iShares and CIMB-Principal Asset Management to offer seven ETFs with a secondary trading counter in Sing dollars. Separately, SGX noted that the volume of its derivatives business and OTC clearing continued to see growth in May.
Significance: The launch of dual currency trading will provide investors with trading flexibility in accessing ETFs denominated in a foreign currency as well as cost efficiency. For issuers, they will be able to tap on a wider pool of investors as those who prefer to trade in Sing dollars enter the market.
Olam Buys Kayass Enterprises For US$66.5m
Marking Olam International’s second major acquisition in Nigeria this year, the commodities trader announced its acquisition of a dairy products and beverages business through 100 percent-stake in Kayass Enterprises S.A. for US$66.5million. Kayass, which has been an important customer of Olam for the past six years, fits well into Olam’s packaged foods strategy with its principal focus on dairy products and beverages in Nigeria as it operates two plants in Lagos – a dairy products and beverages manufacturing plant and a milk powder packaging facility. It also provides Olam with opportunities to realise back-end supply chain synergies in the sourcing of key raw materials, logistics, distribution and marketing. The business is expected to add to earnings from fiscal 2014, and to deliver 20 percent in EBITDA (earnings before interest, tax, depreciation and amortisation) margin by fiscal 2016.
Significance: Olam’s acquisition of an existing player with modern, high quality manufacturing asset in these categories would accelerate Olam’s entry into Nigeria’s fast growing consumer market where dairy and beverages has a market size of approximately US$1.2 billion with attractive margins.
Ezion Secures US$86.3m Contract
Ezion Holdings bagged a charter contract with a value of approximately US$86.3 million over a four year period to provide a service rig to be used by a national oil major to support its oil and gas activities in Central America. The service rig is Ezion’s third one to be deployed in the Sonda de Campeche field and is expected to be working by the last quarter of 2012 after its refurbishment and upgrading. According to DMG & Partners, Ezion will spend US$23 million to purchase an old rig from the market and US$32 million to upgrade and refurbish the rig. Going forward, it is expected that Ezion’s fleet of liftboats and service rigs would grow from four units to 14 units by 3Q13.
Significance: DMG & Partners expect Ezion’s fleet expansion to be the key driver for earnings growth as year-to-date, the company has already secured six long-term charters valued at US$524 million from various oil majors.