SG Market (05 Jan 15)

Despite a flattish close on Wall Street last Friday, S’pore shares are likely to open lower today taking cue from regional markets although we may see the January effect taking some hold among the badly beaten down small and mid-caps. The Nikkei and Kospi are down 0.4% and 1.0% respectively, dragged by deflation concerns in the Eurozone, and as oil price entered its third consecutive day of decline. From a chart perspective, technical indicators are overbought. Downside support for the STI could be found at 3,360 (resistance turned support) followed by 3,315 (20-dma), with upside capped at 3,388. Stocks to watch: *Yangzijiang: Entered into 13 new shipbuilding orders in 4Q14, which include nine effective orders worth US$388m and four new options worth US$122m. This bring the group’s total order wins for 2014 to US$1.8b, consisting of 41 vessels. *Unionmet: Proposed to dispose loss-making subsidiary, Liuzhou Union Zinc Industry, group's trading business for ferrous, non-ferrous and precious metals, kaolin and barite and coal and coke products for $4.5m. Upon completion, proforma FYNov13 NTA/share is expected to fall from 5.67¢ to 5.05¢ (-11%), while loss per share is expected to narrow from 0.51¢ to 0.49¢. *Pacific Healthcare: Proposed to dispose wholly-owned Pacific Cancer Centre, its underperforming business which provides imaging and/or radiology services, for $5m. Post-disposal proforma FY13 NTA/share is expected to spike from 0.08¢ to 0.75¢, while loss per share is expected to narrow from 1.84¢ to 0.69¢. *PCI/ Amtek Engineering: PCI will be acquiring a 7,688.7 sqm industrial site at 35 Pioneer Road North, from Amtek Engineering at market value of $22.5m (US$17.3m). The acquisition will include an automatic storage and retrieval system installed in the warehouse of the building, and has a lease until 30 Apr 2023, with a covenant by JTC to grant a further 30-year lease renewal till May 2053. Amtek will recognize a gain on disposal of US$8.6m from the sale. *Keppel Land: Acquired Array Real Estate, a retail property manager, for $4.5m or 3x NAV. *Maxi-Cash: Mr Ng Leok Cheng will replace Mdm Koh Lee Hwee as CEO.