BUY: Merrill Lynch - Feb 20, 2006 (ST)

BackFeb 20, 2006

Brokers' Take

BUY: Merrill Lynch

Merrill says SPH to gain more from ad spending

Feb 20, 2006
The Straits Times


MERRILL Lynch reinstated its coverage of Singapore Press Holdings (SPH) with a 'buy' rating and price target of $4.90, or a total return of 19 per cent over a 12-month period.

It said it saw SPH 'as the main beneficiary of advertising spending increases in finance, property and retail' on the back of robust economic growth this year.

Companies in these sectors tend to advertise more in newspapers than in other media, according to ACNielsen, it noted.

Merill Lynch said it believed that the market was 'overly concerned' about the potential loss of advertising market share from SPH to other media and that it 'does not believe the tabloid Today and the Internet will significantly threaten SPH's print franchise in the near term'.

'With greater advertising budgets as the advertising market picks up, many advertisers are willing to pay premiums for The Straits Times' better readership profiles and broader reach.'


Rating: BUY