SGX To Merge With LSE?
Speculation is rife about a possible merger between the Singapore Exchange (SGX) and the London Stock Exchange (LSE) as the London newspaper, The Telegraph reports that informal conversations have begun. The Telegraph reported that Magnus Bocker, chief executive officer of SGX had held a series of discussions with LSE chief executive officer Xavier Rolet in recent weeks. CNBC reports that the deal could reach a potential value of approximately £7.2 billion and create the world’s third-largest exchange group. The daily also speculated that while the structure of the deal is unclear, SGX would take over its British rival with a bid of £13.50 per LSE share. Earlier in July, both bourses signed an agreement to allow each other’s largest counters to be traded on both boards, increasing access for investors and giving a boost to liquidity. News outlets have been neutral about the merger talks, pointing out to failed purchases by both parties in recent months. The LSE had scrapped its bid for the Toronto Stock Exchange while the SGX had its bid for the Australian Stock Exchange scuttled by Australian Treasurer Warne Swan in April 2011.
Significance: While market talk is rife with the potential merger, analysts point out that these talks, if confirmed, are still very much in the initial stages.
SIA Engrg Secures Cebu Air Contract
SIA Engineering (SIA Engrg) announced that it had secured a new agreement with Cebu Air covering its fleet of A320 series aircraft. The agreement entails the provision of a wide range of fleet management and maintenance, repair and overhaul services at Singapore as well as at SIA Engrg’s facilities in the Philippines. The five-year contract will cover Cebu Air’s growing fleet grow from the current 30 A320/A319 aircraft to 48 A320/A319 aircraft, with the new aircraft being delivered over a five year period. William Tan, chief executive officer of SIA Engrg opined that the new agreement will further strengthen the “strong synergies and excellent relationship between SIA Engrg and Cebu Air”. Tan also said that the 30 years of experience that SIA Engrg had accumulated in servicing a wide range of Airbus aircraft will assure its customers of high quality and on-time delivery of Airbus aircraft entrusted to it.
Significance: With the latest signing, SIA Engrg expects total revenue that it will receive from Cebu Air to grow to $236 million, which would account for roughly 20.2 percent of its previously announced FY12 results.
Keppel Corp Releases Stellar 1H12 Results
Despite continued volatility in the markets in the first half of 2012, Keppel Corporation again, turned in improved performance over 2011. Key figures include an 82.6 percent jump in earnings as well as a 69.3 percent gain in revenue. However, Keppel’s chief executive officer, Choo Chiau Beng was quick to emphasis the lumpy performance in 1H12 was exceptional and is not expected to be repeated in the second half. Choo pointed out that 1H12 figures had benefited from one-time profits from its property division, due to earnings recognition from homes sold under the deferred payment scheme at Reflections at Keppel Bay. Despite this, Choo said that “Keppel’s key businesses have worked hard to capture value in areas of growth this year”. In light of the good performance, Keppel announced a $0.18 interim dividend per share.
Significance: Keppel has had a good start to the year, and even though the second half might not be as stellar as the first, Keppel can look to various growth opportunities such as its stake in KrisEnergy to propel growth further.