Industry Outlook Shipyards

Transcription

1 Refer to important disclaimers at the end of this report DBS Group Research Asian Insights Office 23 August 217 Overall Outlook Singapore shipyards await offshore orders The dip in oil prices in 2Q dampened overall sentiment Coupled with tight liquidity, not many offshore orders concluded YTD (Keppel S$38m; Sembcorp Marine S$75m) and it appears that the bulk of the new order pipeline may slip into 218 On a positive note, oil prices have recovered from the US$45/bbl level and we believe it is set for a moderate recovery, averaging US$5-55/bbl in 2H17 We maintain our stance that newbuild rig orders would be few and far between, despite utilisation improvement in view of the supply glut We remain hopeful on contracting of production-related platforms such as floating production storage and offloading vessels (FPSOs), and liquefied natural gas (LNG) solutions like floating liquefied natural gas (FLNG) vessels, floating storage and regasification units (FSRUs), to drive order replenishment of Singapore shipyards Rig utilisation for semi-submersibles / drillships / jackups has been stabilising at 35% / 45% / 5%, respectively, over the past few months Utilisation could start to inch up gradually as oil price stabilises above US$5/bbl Rig charter rates, which remained depressed at around 35% of peak levels, could also be due for an upward revision from current unsustainable loss-making levels It will probably recover back to accounting breakeven prices (depreciation generally accounts for 2-25% of revenue) from current cash breakeven given the abundant supply Rig fleet - Drillships, jackups, and semi-submersibles Drillship Jackup Semi-submersible New Retired End YoY chg New Retired End YoY chg New Retired End YoY chg % % % 22 4 % % % 23 4 % % % % % % % % % % % % % % 167 % % % % % % % % % % % % % % % % % % % % % % % % % % % % 217F % % % 218F % % % 219F % % % 1 Order book-to-fleet ratios for Drill ships/jackups/semisubmersibles are 3%/18%/11% 2 The pace of rig retirement remains fairly slow Source: Riglogix, Clarksons, DBS Bank Shipbuilders seeing light at the end of tunnel, at least The Baltic Dry Index (BDI) has broadly been trending up after hitting its record low of 29 points in February 216, reaching 1,26 points currently The trend looks set to continue as the shipping market is seeing more favourable supply/demand dynamics ahead On the supply front, the global Page 1

2 Jan-5 Jul-5 Jan-6 Jul-6 Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Nov-1 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 May-17 Industry Outlook order book-to-fleet ratio has dropped to a low of less than 1%, implying low single-digit supply growth in the next two years Furthermore, demolition of old vessels may accelerate, driven by the new Ballast Water Management Convention rule that will take effect in September 217 This is expected to drive a recovery in the shipping market, led by the dry bulk segment, which would then boost newbuild demand Freight indices Freight rates for bulkers are much more volatile than containerships 2 BDI is typically driven by Capesize vessels BDI has recovered to 1,26 points after touching a record low of 29 in mid- February 216 Baltic Dry Index China (Export) Containerized Freight Index Source: Bloomberg Finance LP, DBS Bank Rising newbuild demand Against the backdrop of a recovering shipping market, newbuild orders for commercial vessels have seen a strong rebound YTD Globally, a total of 49 vessels with a combined 314m deadweight tons (dwt) were ordered in 7M17, surpassing FY16 orders of 37m dwt This has been supported primarily by investment in the tanker sector, while bulk carrier and containership ordering remained relatively benign We expect ordering, especially for bulk carriers, to accelerate in 218 as the current order book-to-fleet ratio is very low (less than 1%), supported by an anticipated recovery in the shipping market Key beneficiaries are likely to be the top Korean and Chinese shipyards, which have better credit access, and are more cost-efficient Yangzijiang Shipbuilding s management believes industry consolidation will continue, with the top 2% of shipyards receiving 8% of the orders World newbuilding orders m dwt Two mini-cycles post- GFC: and In 216, world contracting for commercial vessels plunged 73% y-o-y to 37m dwt For 7M17, a combined 314m dwt were ordered, surpassing FY16 s orders Source: Clarkson Research, DBS Bank Page 2

3 Key Industry Trends Rig builders 1) Higher oil prices could incentivise rig deliveries and orders for production-related facilities, but newbuild demand for rigs is likely to remain sluggish Gradual recovery Brent crude has averaged around US$528/bbl YTD, up from the 216 average of US$451/bbl, as prices held around the US$5-55/bbl mark in the early months of 217 We expect oil price to move from the recent low of US$45/bbl toward the US$55/bbl-mark by the end of 217, thus implying an average of between US$5-55/bbl for FY17We expect prices to average between US$55-6/bbl in 218, with the mild y-o-y recovery in oil prices driven by accelerated inventory drawdowns as we move into another year where demand will continue to outstrip supply Our long-term oil price forecast of US$6-65/bbl remains unchanged and is based on a marginal cost curve analysis OPEC extends production cuts till March 218 In its most recent general meeting in Vienna in May 217, OPEC members decided to extend the previously agreed upon production cuts for nine more months from July 217 to March 218 Rebalancing taking place We believe 217 production should see similar production growth of around 4 million barrels per day (mmbpd) similar to 216 with the roles of OPEC and the US reversed compared to 216, whereby OPEC production cuts are offset, to an extent, by a rebound in US shale production On the demand side, we expect oil consumption to grow by 13mmbpd and 14mmbpdin 217 and 218, respectively Given steady demand growth projections, we should see the demand-supply equation finally reaching some sort of balance over the course of 217 and some inventory drawdowns to start in 2H17, and extend into 218 Capex reversal expected in 217, largely for onshore Oil majors had cut capital expenditure (capex) in 215 and 216 by 2-3% and 1-2% y-o-y, respectively While we might be seeing a reversal in overall capex this year, a big chunk goes to onshore exploration and production (E&P) The upstream exploration budget, especially for the offshore segment, saw the largest cut which led to around a 6% plunge in rig count from the end of 214 Adding to supply woes and further plaguing the rig-building sector, around 15 newbuild rigs are expected to come on-stream largely in the next 2-3 years Earlier expected offshore orders might be deferred to next year Singapore rig builders won about S$5b worth of new contracts in 215 (Keppel: S$18b; Sembcorp Marine: S$32b), and S$82m in 216 (Keppel: S$5m; Sembcorp Marine: S$32m), largely from non-rig orders such as FLNG vessels, semi-submersible crane vessels, specialised vessels, and conversion works Globally, only eight newbuild jackup rig orders were contracted since 215, which were in the Middle East, China, and Russia for local deployment YTD order wins remain fairly slow with Keppel securing a dismal S$38m in new orders while Sembcorp Marine logged S$75m We believe the improving oil price outlook will drive demand for non-drilling solutions, such as FPSOs, and modularised LNG platforms, into 218 Page 3

4 Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Industry Outlook Oil price trend since January 29 US$ per bbl Brent hit a high of US$115/bbl on 19-Jun-14 before collapsing 1 Brent hit a high of US$115/bbl in June 214 before collapsing DBS' forecast for Brent: 217 average US$5-55/bbl 218 average US$55-6/bbl 2 Averaged US$99/bbl in 214 and US$54/bbl in Recent low in June 217 of US$45/bbl 2 Long-term price US$6-65/bbl Brent WTI Brent has been hovering around US$45-5/bbl levels lately, dow n from early-217 peak of US$57/bbl 4 Currently around US$5/bbl level; averaging US$52/bbl YTD Source: Bloomberg Finance LP, DBS Bank Rig orders since January 215 Ordered Manager Sub Type Apr 215 Jul 215 Aug 216 National Drilling Alliance Offshore Drilling National Iranian Oil Company Source: Riglogix, DBS Bank (< 25' IC) (3'+ IC) (3'+ IC) Units Delivery Const Cost 1 Jun Dec 217 / Jun Jun 218 Jan 219 Rig Builder/ Shipyard Yard origin Rig type US$183m Lamprell UAE Jackup - CSSC Guangzhou Huangpu US$2m each Krasnye Barrikady China Russia Jackup Jackup 1 There have been very few rig orders since 215 three jackup contracts won by Middle Eastern, Chinese, and Russian shipyards Page 4

5 Jan 214 Mar 214 May 214 Jul 214 Sep 214 Nov 214 Jan 215 Mar 215 May 215 Jul 215 Sep 215 Nov 215 Jan 216 Mar 216 May 216 Jul 216 Sep 216 Nov 216 Jan 217 Mar 217 May 217 Jul 217 Industry Outlook 2) Declining rig utilisation, charter rates, and asset prices As a result of the rig supply glut from dated deliveries and lack of demand due to capex cuts rig utilisation and day rates have fallen sharply Rig utilisation has slid from around 9% prior to the oil crisis to about 5% for jackups and 4% for floaters Charter rates have also plunged by an average of 6% We have seen some signs of recovery with rig count inching up over the past six months While there is a lack of data points on newbuild or second-hand rig prices, we estimate that asset prices for newbuild rig have dropped 2-3% in this oil crisis Jackup rigs contracted to Chinese yards are particularly vulnerable as these are orders received from speculators or newer players, and have only marginal down payment terms of 5-1% with no back-to-back charter contracts If the ship-owners decide to walk away from these contracts, we might see fire sales as the Chinese shipyards struggle to recoup construction costs Rig count trend since January Post the Global Financial Crisis, global rig count fell 6% from the peak of 3,557 in September 28 to a low of less than 2, in May 29 (just eight months) 2 During the recent oil crisis, world rig count fell 61% from 3,67 units in November 214 to around 1,45 units in June 216, before inching up to 2,11 units in July The supply glut would persist for a while, leading to lacklustre newbuild orders Total Intl Canada US Source: Bloomberg Finance LP, Baker Hughes, DBS Bank Rig utilisation Drillships, semi-submersibles, and jackups Utilisation of competitive rigs has fallen from 9-95% in mid- 214 to 35-5% currently Source: IHS Petrodata, DBS Bank Jackups Semisubs Drillships Page 5

6 3) Asset write-down and provisions Prolonged low oil prices and idling fleet are pressurising rig operators to recognise asset impairments according to the value-in-use methodology And with the asset deflation, newbuild prices are set to fall have taken proactive measures to make provisions for delivery deferments and potential cancellations of riskier projects However, the possibility of more provisions cannot be ruled out In April 216, Ocean Rig announced its bargain purchase of a distressed asset the sixth generation ultra-deepwater drillship Cerrado following the bankruptcy declaration by its owner Brazil-based Schahin Group, for only one-tenth of its construction cost of US$65m This raises concerns that Singapore rig builders may face the same fate in the event of cancellations for rigs that are under construction While we do not think the discount would be as steep as that of Cerrado, a significant 3-4% cut may be possible We are comforted by a more recent deal between Transocean and Borr Drilling in March 217, where Transocean sold its jackup fleet (consists of 1 high-specification jackups and five jackups under construction at Keppel FELS) to Borr Drilling for a total consideration of approximately US$135b Newbuild prices for the five units under construction at Keppel are largely unchanged Shipbuilders: 1) Shipping and shipbuilding seeing signs of recovery While lower oil prices have reduced shippers bunker costs, the savings were passed through to end-customers In fact, cheaper bunker fuel had brought fuel-inefficient vessels back to life, worsening the oversupply situation Since the shipping super-boom in 26 to 28, both the shipping and shipbuilding sectors have only been seeing mini-cycles at relatively low levels, due to the lack of ordering discipline Beset by slower contract flow and further consolidation on the back of the weak global economy, 216 was another challenging year Nevertheless, we believe the worst is over The moderated supply growth and potentially stronger-than-expected economic growth could, at last, drive a recovery in the shipping sector and shipbuilding demand into 218 2) Shipyard consolidation in advance stage More than 95% of Chinese shipyards have closed (by number of yards) after the Global Financial Crisis During the shipping industry's super-boom of 26 to 28, China had more than 3, big and small yards spread across the country Since the crisis in 28, China's shipbuilding industry has undergone drastic consolidation as orders have dried up Uncompetitive small yards were phased out while the bigger yards were either merged or acquired There are now probably fewer than 1 shipyards with active day-to-day operations in China, from 4 in mid-214 China is likely to be left with around 2 shipbuilding companies with active operations when the severe, ongoing consolidation of the industry is completed over the next few years 3) Newbuild orders and prices for commercial vessels to pick up The global order book stood at 2,579 vessels or 1764 million dwt as of end-july 217 This is equivalent to 96% of the fleet, an all-time low level, representing 2-percentage-point decline from early 217 Of this, slightly more than half is expected to be delivered in 217 For 7M17, total new orders surged to a combined 314m dwt, surpassing 216 s orders of 37m dwt This translates to an average of 44 million dwt per month, still a relatively low ordering level, similar to the Global Financial Crisis-low of 47 million dwt per month in 29 We expect the rising trend to continue into 218, followed by newbuild price increase eventually, partly driven by higher material cost are barely profitable at current low prices and, thus, downside risk should be low, supported by the improving shipping outlook and cost inflation Page 6

7 Dec- Jun-1 Dec-1 Jun-2 Dec-2 Jun-3 Dec-3 Jun-4 Dec-4 Jun-5 Dec-5 Jun-6 Dec-6 Jun-7 Dec-7 Jun-8 Dec-8 Jun-9 Dec-9 Jun-1 Dec-1 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 CNY / USD Jan-3 Jan-4 Jan-5 Jan-6 Jan-7 Jan-8 Jan-9 Jan-1 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Rmb / tonne Jan-97 Dec-97 Nov-98 Oct-99 Sep- Aug-1 Jul-2 Jun-3 May-4 Apr-5 Mar-6 Feb-7 Jan-8 Dec-8 Nov-9 Oct-1 Sep-11 Aug-12 Jul-13 Jun-14 May-15 Apr-16 Mar-17 Industry Outlook Newbuilding price index (Base = January 1997) In 216, newbuild prices for bulker carrier declined around 6% and 1% for containerships and oil tankers 2 Some signs of price increase seen in Shipbuilding margins could be lifted by a strong USD Source: Clarkson Research, DBS Bank Bulk Carrier Containership Oil Tanker Rising steel cost Rising steel cost could put pressure on shipbuilding margins as the material typically accounts for around 2% of cost of goods sold or COGS Source: Bloomberg Finance LP, DBS Bank Strengthening USD against CNY CNY devaluation benefits Chinese shipbuilders in general Source: Bloomberg Finance LP, DBS Bank Page 7

8 Risks Rig builders 1) Sustained low oil prices It will be extremely challenging for smaller oil and gas-related players to operate at oil prices below US$4/bbl We can expect further capex cuts if oil prices remain below US$5/bbl, and if the global economy dives into an unexpected recession US energy policy is another key development to watch However, we believe that if suppression of oil prices and oil and gas investments goes on for longer, it could eventually lead to a steeper spike in oil prices At our base case oil price forecast of US$5-55 a barrel in 217, we could see a revival in oil and gas activities, but rig builders may only see a significant recovery on the deepwater front when oil prices cross US$6 a barrel Singapore rig builders stock prices are highly correlated to oil prices (8-9x) 2) Rig deferments and cancellations Globally, we estimate that about 7% of newbuild jackup rigs that were scheduled for delivery in have been pushed back to 218 onwards in view of low oil prices and utilisation As a result, Keppel and Sembcorp Marine continue to sit on 17 and seven jackup rigs respectively on their order books, which are mostly at advanced stages of construction Our model factors in the pushing back of Petrobras deliveries of semisubmersibles and drillships to 219 onwards, a consequence of the construction slowdown created by Sete Brasil s financing issues Among Sembcorp Marine s customers, Marco Polo was the first to make a cancellation while Perisai and Oro Negro are facing financial difficulties in taking delivery of the five remaining rigs As for Keppel, eight out of the 17 undelivered jackups for Grupo R, Clearwater, Falcon, Fecon might be of higher deferment/cancellation risks as well, in our view Nevertheless, Singapore rig builders are still better positioned compared to their Chinese peers given their blue-chip clientele and better payment terms For instance, Keppel managed to enter into a settlement agreement with Parden s guarantor for the failure to take delivery of the rig and purchase of the vessel by guarantor, by paying the remaining 8% of contract value upon delivery Another Keppel customer, Transocean sold its jackup fleet, including five jackup rigs under construction, to Borr Drilling at largely intact newbuild prices Chinese yards are particularly vulnerable given their tail end-loaded payment terms and opportunistic client base Page 8

9 Shipbuilders 1) Rising steel cost and currency volatility Newbuild prices for commercial vessels have slid 5-1% in 216 to barely breakeven levels for most shipyards while steel prices (which account for approximately 2% of COGS) have doubled The mitigating factor was a strengthening USD Further increase in steel cost, though we think upside seem limited at current levels, will dampen profitability of shipyards 2) Persisting oversupply in shipbuilding capacity Despite the slew of shipyard closures following the Global Financial Crisis, ample capacity remains Further consolidation is required to drive profitability in the sector Hence, we believe upside of newbuild prices might be capped in the near term, largely to reflect higher material costs World fleets and order books Fleet as at 1 Order book August 217 No m dwt No m dwt % of fleet Delivery Schedule Crude Tankers 2, % Order book-to-fleet ratio for the global cargo fleet stood at a very low 96% Products 8, % Tankers Chemical 3, % Tankers Other Tankers % Bulkers 11, % Combos % LPG Carriers 1, % LNG Carriers % Containerships 5, % Multi-purpose 3, % General Cargo 15, % Ro-Ro 1, % Car Carriers % Reefers 1, % 1 Offshore (AHTS/PSV) World Cargo Fleet 5, % 6 3 6,2 1,8312 2, % Source: Clarkson Research, DBS Bank Page 9

10 We Cover Cosco Corporation Keppel Corporation Sembcorp Industries Sembcorp Marine Yangzijiang Our In-House Expert Pei Hwa HO Please note that DBS Bank Ltd may have research coverage in the companies mentioned in this industry report, that have been produced prior to or subsequent to its publication Please refer to the links below for the latest specific equity research reports published on below-mentioned companies and the accompanying disclaimer/disclosure of DBS interest in the companies mentioned in the respective reports GENERAL DISCLOSURE/DISCLAIMER The information herein is published by DBS Bank Ltd (the Company ) It is based on information obtained from sources believed to be reliable, but the Company does not make any representation or warranty, express or implied, as to its accuracy, completeness, timeliness or correctness for any particular purpose Opinions expressed are subject to change without notice Any recommendation contained herein does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee The information herein is published for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate legal or financial advice The Company, or any of its related companies or any individuals connected with the group accepts no liability for any direct, special, indirect, consequential, incidental damages or any other loss or damages of any kind arising from any use of the information herein (including any error, omission or misstatement herein, negligent or otherwise) or further communication thereof, even if the Company or any other person has been advised of the possibility thereof The information herein is not to be construed as an offer or a solicitation of an offer to buy or sell any securities, futures, options or other financial instruments or to provide any investment advice or services The Company and its associates, their directors, officers and/or employees may have positions or other interests in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking or financial services for these companies The information herein is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation RESTRICTIONS ON DISTRIBUTION General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation Page 1

11 Australia Hong Kong Indonesia Malaysia This report is being distributed in Australia by DBS Bank Ltd ( DBS ) or DBS Vickers Securities (Singapore) Pte Ltd ( DBSVS ), both of which are exempted from the requirement to hold an Australian Financial Services Licence under the Corporation Act 21 ( CA ) in respect of financial services provided to the recipients Both DBS and DBSVS are regulated by the Monetary Authority of Singapore under the laws of Singapore, which differ from Australian laws Distribution of this report is intended only for wholesale investors within the meaning of the CA This report is being distributed in Hong Kong by DBS Vickers (Hong Kong) Limited which is licensed and regulated by the Hong Kong Securities and Futures Commission and/or by DBS Bank (Hong Kong) Limited which is regulated by the Hong Kong Monetary Authority and the Securities and Futures Commission Where this publication relates to a research report, unless otherwise stated in the research report(s), DBS Bank (Hong Kong) Limited is not the issuer of the research report(s) This publication including any research report(s) is/are distributed on the express understanding that, whilst the information contained within is believed to be reliable, the information has not been independently verified by DBS Bank (Hong Kong) Limited This report is intended for distribution in Hong Kong only to professional investors (as defined in the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and any rules promulgated thereunder) This report is being distributed in Indonesia by PT DBS Vickers Securities Indonesia This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR") Recipients of this report, received from ADBSR are to contact the undersigned at in respect of any matters arising from or in connection with this report In addition to the General Disclosure/Disclaimer found at the preceding page, recipients of this report are advised that ADBSR (the preparer of this report), its holding company Alliance Investment Bank Berhad, their respective connected and associated corporations, affiliates, their directors, officers, employees, agents and parties related or associated with any of them may have positions in, and may effect transactions in the securities mentioned herein and may also perform or seek to perform broking, investment banking/corporate advisory and other services for the subject companies They may also have received compensation and/or seek to obtain compensation for broking, investment banking/corporate advisory and other services from the subject companies Wong Ming Tek, Executive Director, ADBSR Singapore Thailand United Kingdom Dubai United States Other jurisdictions This report is distributed in Singapore by DBS Bank Ltd (Company Regn No E) or DBSVS (Company Regn No G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law Singapore recipients should contact DBS Bank Ltd at for matters arising from, or in connection with the report This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd Research reports distributed are only intended for institutional clients only and no other person may act upon it This report is being distributed in the UK by DBS Vickers Securities (UK) Ltd, who is an authorised person in the meaning of the Financial Services and Markets Act and is regulated by The Financial Conduct Authority Research distributed in the UK is intended only for institutional clients This research report is being distributed in The Dubai International Financial Centre ( DIFC ) by DBS Bank Ltd, (DIFC Branch) having its office at PO Box 56538, 3 rd Floor, Building 3, East Wing, Gate Precinct, Dubai International Financial Centre (DIFC), Dubai, United Arab Emirates DBS Bank Ltd, (DIFC Branch) is regulated by The Dubai Financial Services Authority This research report is intended only for professional clients (as defined in the DFSA rulebook) and no other person may act upon it This report was prepared by DBS Bank Ltd DBSVUSA did not participate in its preparation The research analyst(s) named on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA The research analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company, public appearances and trading securities held by a research analyst This report is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents This report may only be distributed to Major US Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may authorize Any US person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBSVUSA directly and not its affiliate In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions DBS Bank Ltd 12 Marina Boulevard, Marina Bay Financial Centre Tower 3 Singapore Tel Company Regn No E Page 11