SG Market (09 Jan 15)

S’pore shares are expected to open higher on positive spillover effects after Wall Street extended its rally overnight, on speculation that central banks will continue supporting growth. In the region, the Nikkei and Kospi are trading 1.6% and 0.6% higher, respectively this morning. From a chart perspective, the STI has rebounded strongly from its 200-dma with both ADX and MACD beginning to hook upwards, pointing to further upside. The index has just broken above its 20-dma at 3,315, with its next resistance level being tipped at the recent high of 3,370. Stocks to watch: *Ezra: 1QFY15 net profit rose more than 8x to US$54.4m, due largely to a US$67.5m contribution from other income, as a result of one-off gain on bargain purchase from the acquisition of subsidiaries and an FX gain, barring which core profit after tax was at US$5.2m (-40%). Revenue fell 6% to US$321m, dragged by lower contributions from the Subsea Services and Offshore Support and Production Services Division, offset by higher revenue from the Marine Services Division. Gross margin fell 2.7ppt to 12.2%, due to weakness in the shallow water PSV segment. Bottom-line was aided by a 12% rise in associate contributions to US$3.8m. Order backlog stands at ~US$2.5b. BVPS at US$1.39. *Hotels: Property consultant Cushman & Wakefield guides that the overall outlook for Singapore’s hotel sector in 2015 appears positive, with momentum particularly in the luxury segment expected to be strong. This comes as Singapore celebrates its golden jubilee year and host the 2015 Asean games, with market watchers touting for a 4 to 5% rise in tourist numbers. *RH Petrogas: Completed drilling of 15 development wells in Yongping Oilfield in Fuyu 1 Block (Jilin, China). Of which, 14 showed encouraging results with producible pays. Wells are currently suspended to move into production once the winter season is over. For 2015, group targets to drill another 40 to 100 shallow development wells in 2015. *Oriental Group: To receive $5.5m from the issue of 3-year unsecured convertible loans to eight lenders, to be used to support its steel trading operations in Singapore, as well as to provide liquidity for business expansion. Notes have a conversion price between $0.13-$0.16, depending on the year of conversion. *Frasers Centrepoint: Hospitality arm, Frasers Hospitality, strengthened foothold in China with the addition of 10 more serviced residences in China’s second-tier cities and two in Shanghai and Shenzhen. This adds 2,400 new apartment units, which will almost double its China portfolio to 5,900 units. *Courts Asia: Bukit Timah store is adding 33,700 sf of retail space. It will take over the four-storey building beside its current premise, which was recently vacated by Da Vinci Home. *Fragrance Group: Issued $85m 3.75% notes due 2017. *China Aviation Oil: Group expects a difficult, though profitable 4Q14 and FY14 amid a difficult oil trading environment. *Olam: Changing fiscal year from 30 Jun to 31 Dec. The current fiscal year which began in 1 Jul ’14 will end on 31 Dec ’15, and follow a Jan – Dec fiscal year thereafter. *Singapore eDevelopment: Expects to launch HotApp mobile application in Singapore, Malaysia, China and Australia in 1Q15. *Swiber: Nil-paid rights under its 1-for-2 rights issue at $0.15 will trade from 13 to 21 Jan; Expected issue date on 4 Feb.