SG Market

SG Market: Spore shares likely to trade sideways with no firm lead from the US, which was closed for a holiday on Mon while European markets were flattish as traders await the outcome of a euro-zone finance ministers meeting on the sovereign debt crisis. Domestic corporate news are uninspiring.

SGX is unlikely to break out of its tight trading range after reporting 2Q11 earnings of $74.2m (incl $7.5m transaction costs related to proposed ASX merger), which missed expectations of $85m. SIA will also be watched after its Dec load factors slipped for the 2nd month as capacity growth outstrips pax demand due to lower fare promotion traffic & weather-related disruptions in Europe.

Market is expected to continue focusing on low P/E S-chips & food/agri plays such as Qingmei, Sunvic, UMS, Sino Grandness, Yamada, China Minzhong. News of Chalco’s expected profit turnaround in 2010 may give a lift to fellow aluminum player XinRen. SembMarine shares will also be supported by 1st order wins for 2011 - 1 newbuilding & 3 upgrading jobs worth $215m. STI support still lies around 3220 with 3280 as a cap.

Stock ratings:
*Suntec downgraded to U/PF from Hold at Daiwa but TP raised to $1.49 from $1.46
*Ascendas Reit downgraded to Neutral from O/PF at Credit Suisse


Stock highlights:
* SGX: no major surprises in 2QFYJun11 results. Stock may remain rangebound.
* SIA: Dec operating data. Passenger traffic weaker but likely expected, cargo traffic up.
* SembMarine: wins 1 newbuild and 3 major upgrading contracts worth $215m in total.
* Courage Marine: proposes HK dual-listing
* Renewable Energy: KE reiterates Buy call, but lowers target to $0.35 from $0.40.
* A-Reit: Deutsche maintains at Buy with $2.33 target, following 3Q11 results.
* CNA: Mitsubishi Electric confirms strategic investment. Buys 14.8% of its enlarged share capital at $0.19/sh.