Its taxi fleet idle rate is still close to 0%.

Transport group Trans-cab announced its taxi rental cuts ranking between -22% and -35% for one-man operation taxi-hirers to battle lower fleet idle rate in the shortest time possible. But does this affect ComfortDelGro's taxi business too?

According to OCBC Investment Research, ComfortDelGro is not expected to engage in direct rental rate cuts because of two reasons: its taxi fleet idle rate is still close to 0%, and its continuous fleet renewal programme helps justify the higher rental rates.

"That said, CDG is also not sitting still as it is gradually shifting taxi operations from fixed rental rate to revenue risk sharing model. In short, taxi hirers pay up to 50% lesser in rental rates but CDG takes a cut in their fare revenues. We believe this will help ease the hirers’ cost burden, which greatly reduces risk of hirers switching out, and with CDG still (partially or fully) compensated through the revenue sharing mechanism, we believe the impact of revenue decline will at least be partially mitigated," the brokerage firm stated. 

But the rebound on Wall Street could keep local bourse fairly bouyant.

The Straits Times Index (STI) ended 5.08 points or 0.17% lower to 3000.94 on Wednesday, taking the year-to-date performance to +4.10%.

OCBC said this came as Dow Jones Industrial Average closed less than 50 points from the psychologically-important 20,000 mark following President-elect Donald Trump’s first news conference in months. The Nasdaq also extended gains to its fifth straight record close.

Meanwhile, eight out of eleven S&P 500 industries ended higher, with Energy (1.20%) leading the gains while Health Care (-1.04%) led the declines.

"The rebound on Wall Street overnight could make local sentiment fairly buoyant this morning," the firm noted.

The top active stocks today were DBS, which gained 0.28%, Singtel, which gained 0.53%, UOB, which declined 0.57%, Ascendas REIT, which gained 0.41% and OCBC Bank, with a 0.54% fall.

Here's more from OCBC:

We note that RSI is starting to turn down just above 70% level, and the daily MACD continues to look pretty positive.

As before, we peg the initial resistance at 3015, where a failure to overcome this level convincingly could send the index back towards 3000, and even 2970.

Overall volume tumbled further, dropping 7.0% to 1.8b units traded, and total value fell 4.6% to S$1.2b, while average value/unit rose 2.6% to S$0.66. 

They managed to add a total of 11,000 new customers between 2QCY16 and 3QCY16.

Ahead of the official entry of TPG Telecom as the fourth telco, the incumbents seem to be in good shape, at least in terms of their broadband segments.

According to OCBC Investment Research, the residential broadband market remains stable as the three telcos added a total of 11,000 new customers between 2QCY16 and 3QCY16.

"As at end-3QCY16, the total broadband subscriber base of the three telcos was 1.23m subscribers, which represent ~91.2% of the overall Singapore broadband market in 3QCY16, slightly higher than the 89.7% in 2QCY16," the brokerage firm noted.

It also pointed out that the broadband segments of M1 and StarHub were bright spots in the previous quarter, as revenue grew YoY on higher subscriber base for M1 and higher ARPU for StarHub.

"Over the past few quarters, we are also seeing stabilizing monthly broadband ARPUs across all three telcos. Currently, telcos are pushing out higher broadband speeds and M1 is charging the lowest monthly subscription fee over a 24-month contract. StarHub is also trying to differentiate by offering “dual” broadband (i.e. both fiber and cable connections), albeit at a higher price point," the brokerage firm explained.

However, it believes ARPUs growth may stagnate once most of the subscribers are on the 1Gbps plan, which is more than sufficient for most users. While some providers have started to offer 10Gbps plans at $189.00/month, OCBC does not expect this ultra-high speed broadband to become mainstream anytime soon.

"The lack of affordable consumer hardware and more importantly, lack of any applications requiring ultrahigh broadband speed do not justify mass adoption of 10Gbps plans," it stated. 

The Cross Island Line's western depot will also be located on the site.

The Singapore government has identified the current site of Raffles Country Club as the location for the facilities of the Kuala Lumpur-Singapore High Speed Rail (HSR), the Cross Island Line (CRL)’s western depot and other transport related needs.

In a statement released by the LTA, it said that the site is the most suitable location to run the at-grade HSR tracks immediately after the bridge crossing, and to place the tunnel portal leading to the underground tunnels that would take the HSR to the Jurong East terminus.

"The site will also be used for required HSR crossover tracks and a HSR siding facility to temporarily house a train near the border for safety or operational reasons, if necessary," it said.

It furthered, "The RCC site is also required for the CRL’s western depot for stabling and maintenance facilities, as well as other transport related needs, which may include train testing facilities. Further details of the projects will be given after detailed feasibility and engineering studies."

The Singapore and Malaysia Governments are working towards commencing HSR operations by the end of 2026.

A full length HD movie could now be downloaded in less than two minutes.

The game of telcos has intensified suddenly with Singtel's launching of Singapore’s fastest mobile network with the nationwide deployment of a 450Mbps 4G LTE-Advanced service.

This could deliver up to 50% faster download speeds than prevailing LTE services, which allows customers to download a full length HD movie in less than two minutes1 over mobile data. The 450Mbps service is available to all Singtel 4G customers at no additional charge.

Singtel Consumer Singapore chief executive officer Yuen Kuan Moon said this is part of the group's journey to 5G. He noted that the speed enhancement is made possible by Singtel’s nationwide LTE network upgrade to support 256 Quadrature Amplitude Modulation, or 256 QAM, which is a pre-5G technology.

“Singtel is investing ahead to deliver faster speeds and wider connections with the steady deployment of innovative technologies on our live network. With more customers consuming and sharing mobile videos, 450Mbps speeds will enable them to download movies in a flash and give them a better entertainment experience while on the go," he said.

Singtel subscribers with Samsung Galaxy S7 and Samsung Galaxy S7 edge can already enjoy 450Mbps speeds while LG V20 users will also be able to harness the higher speeds with a soon-to-be released software update. More compatible smartphone models are expected to be launched by early 2017.
 

It ranked seventh, with KLM topping the list.

Singapore Airlines emerges as one of the best international airlines for 2016, as ranked by aviation insights company FlightStats.

FlightStats puts together a list of airlines with the best on-time performance records. Singapore Airlines regained its seventh spot after failing to make it to the list last year. In 2014, Singapore ranked as 10th in the list.

"The FlightStats OPS Awards recognizes airlines around the world that deliver the highest percentage of flights to their arrival gates within 15 minutes of the scheduled arrival time. To determine the finalists and winners, FlightStats examines flight status and arrival data aggregated from global sources including civil aviation authorities, airlines, airports, and major airline reservation systems," FlightStats said.

Topping the list is KLM, closely followed by Iberia. JAL came in third, with Qatar Airways trailing in fourth place. Austrian and ANA also made it to the list. Completing the top 10 are Delta Air Lines, TAM Linhas Aéreas, and Qantas
 

It is forming a consortium to bid for the industrial property owner.

According to Bloomberg, Warburg Pincus is forming a consortium to bid for Global Logistic Properties Ltd., the Singapore-based warehouse operator, according to people with knowledge of the matter. Warburg Pincus has been speaking with banks and potential bidding partners about an offer for the industrial property owner, which has a market value of about $8.5 billion, the people said. GLP, which has assets in China, Japan, the U.S. and Brazil, has asked for first-round offers by early February, people with knowledge of the matter said previously.

Shares of GLP rose as much as 4.8 percent Thursday, hitting the highest intraday level since June 2015. They were up 3.2 percent to S$2.59 at 9:44 a.m. in Singapore, making GLP the best performer on the benchmark Straits Times Index. A consortium including Chinese buyout firm Hopu Investment Management has also held talks about making an offer for GLP, people with knowledge of the matter said in November.

Read full story here. 

The number of property agencies is down 6% as of the start of this year.

As the property market currently undergoes major headwinds, smaller property agencies have decided to raise the white flag, with property agents leaving the industry for good.

According to the latest data by Council for Estate Agencies, there were 1,286 licensed property agencies and 28,397 registered property agents as at January 2017. These numbers were significantly down from last year's number. The number of property agencies was down 6% from 1,369, while the number of property agents declined 3% from 29,262.

Commenting on the overall decline in the number of property agents, CEA director, policy & licensing Heng Whoo Kiat said this could point to a slight consolidation of the industry given the current property market sentiments.

"CEA also recognises that the real estate agency industry landscape is evolving. For example, with technological innovations, consumers’ lifestyles and preferences in handling their property transactions are changing, and this could shift demand for real estate agency services,” Heng noted.

A total of 95 property agency licences and 3,200 property agent registrations lapsed after December 2016. The Council for Estate Agencies (CEA) issued 40 new property agency licences and 1,189 new property agent registrations throughout 2016.

Loan growth may sit only between 1% to 2% for the whole year.

Recent banking system data validates analysts' negative view on the sector as system loan growth continued to its 11% month of declining growth and asset quality continues to worsen.

According to analysts from Maybank KimEng, while an improvement across lending in most sectors, overall outlook remains challenging. Based on November data, corporate loan growth is at -1.9%, compared to -3.6% in the previous month; consumer loan growth slid to 0.7% from 1.7%.

"We estimate ~1-2% loan growth in FY17E for Singapore banks as we think lacklustre lending environment and banks are likely to be careful in their lending and will work with customers whom they are familiar with," the research firm said.

Meanwhile, asset quality continues to worsen as of September last year. System NPL ratio was 2.1%, a level not seen since Jun 2010.

"Our credit costs estimate is 39-44bps on average for Singapore banks from FY16-18E. We estimate that for every 10bps decline in credit costs, banks’ FY17-18E net profits will increase by around 6-7%," Maybank explained.

With this, it pointed out that banks will focus on driving revenue and cost containment to offset more provisions that need to be set aside in the face of worsening asset quality.
 

The latter has successfully set up a successful broadband business in Australia.

TPG Telecom's entry as the fourth telco is already posing threats to the mobile segments of the three incumbents, most especially M1, whose entire subscriber base rests on the city-state. But as it turns out, it was StarHub which could face a bigger threat in TPG.

According to RHB Research, TPG could look to replicate its successful fixed broadband business in Australia and therefore potentially thwarting StarHub’s broadband segment.

This would then put StarHub's hubbing strategy into a real test, as it highly depends its customer retention on bundling its mobile services with its payTV and fixed broadband services.

"Over 50% of StarHub’s service revenue and EBITDA are derived from the mobile segment, which renders it susceptible to competition from the budding fourth mobile entrant, TPG, which is slated to unveil attractively priced and innovative plans by 2018," RHB said.

The research firm noted that the group's hubbing scorecard, the number of households taking up two or more services stood at 58.4% in 3Q16, down from 59.9% a year earlier.
With this, where could StarHub expect steady growth, one may ask. RHB said StarHub is already a leader in enterprise solutions for the hospitality sector and holds a 90% share in this segment.

"Enterprise revenue has grown to be the second largest revenue contributor to the group, at 16.8% in 3Q16, overtaking payTV revenue. Enterprise EBITDA margin is comparable – if not superior – to mobile margins, which should provide good earnings uplift in the longer term," RHB pointed.

No boost is expected today.

The Straits Times Index (STI) ended 24.48 points or 0.82% higher to 3006.02 on Tuesday, taking the year-to-date performance to +4.28%.

According to OCBC Investment Research, this came as the Nasdaq Composite notched its fourth record close in a row on Tuesday, representing the longest stretch of record closes for the tech-heavy index since 1999.

The S&P 500 industries ended flat. The best performers were Consumer Discretionary (0.40%) and Financials (0.39%) while the worst performers were Real Estate (-1.29%) and Energy (-0.95%).

"The muted showing on Wall Street overnight is unlikely to provide much in terms of cues to the local bourse this morning," OCBC said.

Meanwhile, the top active stocks today were OCBC Bank, which gained 1.63%, Global Logistic, which gained 3.24%, DBS, which gained 0.78%, Singtel, which gained 0.53% and Ascendas REIT, with a 1.68% advance.

Here's more from the firm:

Technically, RSI has entered the overbought region, suggesting a potential reversal in the near-term.

On the upside, we peg the immediate resistance at 3015, ahead of 3040. On the downside, we peg the immediate base to 3000 resistance-turned-support level, a break of this level could send the STI easing towards 2970.

Overall volume tumbled further, dropping 12.1% to 1.9b units traded, and total value jumped 46.3% to S$1.2b, while average value/unit rose 66.5% to S$0.65.

Over 60% consists of public housing.

There seems to be a good amount supply of residential units this year, mostly consisting of public housing.

This is based on the figures released by DBS Group Research, which pointed out that there are over 40,000 units already in pipeline for this year. Around 25,000 of which are public housing units. Public housing supply remains fairly constant at close to 19,000-25,000 new units completing each year. 

"Looking ahead, we are looking at a more modest rate of increase in new units completing, due to fewer units available for sale as a result of the cuts in land for tenders from the government's land sale program," the firm said. 
 

Firms decided to slow down input buying growth despite signs of higher demand.

The latest Nikkei Singapore Purchasing Managers' Index (PMI) showed a steady improvement in the health of Singapore's private sector despite the slower pace of expansion at 52 in December.

Coming from a 52.8 reading in the previous month, the index still signalled a further improvement in the business conditions of Singaporean private sector companies. However, firms in Singapore decided to slow down growth of input buying at the end of 2016 despite signs of higher demand.

"While still on the rise, purchasing activity decelerated from November, with the rate of increase only fractional overall. A number of panellists pointed towards sufficient stocks as the reason for slower acquisitions of purchased items," a release from IHS Markit said.

Slower purchases of inputs also partially weighed on the levels of pre-production inventories, the firm said.

"The rate of stock depletion in December was the second sharpest in 2016, although there was evidence that the drawdown was largely due to demand outstripping supply," IHS Markit noted.

Meanwhile, better delivery times were reported for the fourth month in a row. A combination of slower purchasing activity and shorter turnaround times helped improved vendor performance.

IHS Markit economist Bernard Aw commented on the improvement of PMI and said signs of rising external demand saw foreign appetite for Singaporean goods and services increase further in December.

"At the same time, pre-production stocks were depleted at a strong rate as demand outstripped supply, based on anecdotal evidence. The rate of job creation also accelerated to a survey high, though increased employment of part-time staff remained the key reason for stronger job growth," he said.

Aw furthered, “Meanwhile, what was also significant was the sharp increase in output charges amid rising costs. If this continues, we may see greater inflationary pressures in the coming months. Although as a whole, we could see business conditions in Singapore strengthen further in 2017, if the trend of improving global demand is sustained.”
 

It came from a low $14.97 to as high as $18.40.

While 2016, for the most part, has been a burden to the local banking sector, its latter part has proven to be a turnaround for the players, piling on strong gains after Trump’s election win in early November.

According to OCBC Investment Research, the index jumped from a low of 740.84 (on 9 Nov 2016) to a recent high of 809.28 (8 Dec 2016), up about 9.2% in one month. The brokerage firm noted that this gain was particularly seen for DBS. Its stock price surged from the low of $14.97 to as high as $18.40 for the same period, up some 23%.

"Understandably, Trump’s perceived pro-business view and expected focus on investment and infrastructure have a positive effect on corporate earnings expectations for 2017. This together with expectation of higher interest rates in 2017 are just some of the factors that led to the optimism and re-rating for the banking sector in some regional markets, Europe and the US. In Singapore, the average price-to-book (PB) ratio moved up from 0.95x in Oct to 1.05x by Dec," the brokerage firm said.

However, it noted that the banking sector is not completely out of the woods yet as the underlying softness for the Singapore economy and selective sectors including oil & gas and property remains.

"For DBS, the 5-year average PB ratio is around 1.15 but with a still mixed outlook for the region, we think that for the near term, the stock will continue to trade at a discount to this level, likely within the 0.95x-1.05x PB band (translating to fair value estimates of S$16.94 to S$18.72). With the recent re-rating of banking stocks, we have moved our valuation peg to 1x book, resulting in a fair value estimate of S$17.83," OCBC said. 

It will manage the shopping mall in La Botanica, a township in Xi'an.

CapitaLand Mall Asia has signed its second management contract within a span of five months, leading to its management of the shopping mall in La Botanica, a township located in Xi’an’s Chan-Ba Ecological District that is being developed by CapitaLand-Henderson (Xi’an) Property Development Co. Ltd.

CapitaLand Mall Asia CEO Jason Leow said the group's asset-light expansion strategy through management contracts will continue to gather momentum with this deal in Xi’an.

“We are fast-tracking the growth of our shopping mall network in western China to capitalise on the region’s favourable economic prospects, which have been boosted by the Chinese government’s Western China Development Programme, One Belt, One Road economic initiative as well as the SinoSingapore Chongqing Connectivity Initiative," Leow noted.

He added that the deal would complement the group's core strategy of developing, owning and managing malls.

"By leveraging the expertise of our experienced team in western China to manage the mall in La Botanica, we will further benefit from the network effect of CapitaLand’s growing mall portfolio in the region and enjoy greater cost efficiencies in mall management.," Leow stated.

Under the contract, CapitaLand will oversee asset planning, pre-opening and retail management for a five-storey shopping mall – four levels above ground and one basement level – with a Gross Floor Area (GFA), excluding car park, of about 50,000 sqm. Expected to commence operations in 2019, the new mall will double CapitaLand’s retail presence in Xi’an, where it currently owns and manages CapitaMall Xindicheng, a 60,000 sq m one-stop shopping mall located near the prime Xiaozhai and Gaoxin areas, about 10km south of La Botanica.

Including the mall in La Botanica, CapitaLand now manages a portfolio of 14 shopping malls in western China with a combined retail GFA of about 1.13m sqm (12.1m sqft). The region is also home to two of CapitaLand’s flagship Raffles City integrated developments – Raffles City Chengdu, which opened in 2012; and Raffles City Chongqing, 2 Singapore’s single largest investment in China at RMB24b (about $5.0b) that will be opening in phases from 2018.
 

It will be buying Penguin's units in Singapore and Malaysia.

Singapore beverage and publishing conglomerate Fraser & Neave is the track to buying the Singapore and Malaysian distribution arms of international book publisher Penguin Random House, a company incorporated in the United Kingdom.

F&N is targeting to buy the two units for $8m, which will be payable in cash and will be funded from internal resources.

After the acquisition, Penguin Singapore and Penguin Malaysia will become indirect wholly-owned subsidiaries of F&N. The two units will also enter into a distribution agreement with Penguin Books Limited, The Random House Group Limited, Dorling Kindersley Limited, and Penguin Random House LLC.

In an announcement, F&N said that as of September 2016, the net asset value attributable to the Penguin Singapore Shares and Penguin Malaysia Shares are approximately $6.99m and $2.96m, respectively
 

The exchange seeks to grab some of India’s $48 billion in offshore banking activities.

According to a report from Bloomberg, Prime Minister Narendra Modi is set to inaugurate an international exchange in Gujarat state’s new finance zone, seeking to grab some of India’s $48 billion in offshore banking activities from Singapore, Dubai and Hong Kong.

The India International Exchange, at the bottom of a 16-storey building that dominates the finance zone, will get Modi’s blessing on Monday and start trading single stock and equity index futures on Jan. 16. It will add gold, silver, copper, oil and the rupee “soon,” Bombay Stock Exchange Chief Executive Officer Ashishkumar Chauhan said in an interview. Ninety-six brokerage firms have registered in the zone, envisaged by Modi when he was chief minister of the state.

Read the rest of the story here.