SG Market (16 Jan 15)

STI: Singapore shares are expected to open lower, after Wall Street saw its fifth straight day of decline, weighed by weaker than expected corporate earnings, namely the banks, and after Switzerland’s central bank abandoned the euro cap, which sent the Swiss franc soaring. Asian markets are trading lower this morning, with Tokyo (-2.0%), Seoul (-1.0%) and Sydney (-0.5%). From a chart perspective, technical signals appear to be losing momentum, as confirmed by both the RSI and Stochastics indicators. Near-term support is tipped at its 20-dma at 3,320, while the recent high of 3,370 would be the key resistance level. Stocks to watch *Cambridge Industrial: 4Q14 DPU remained stable at 1.252¢ (+0.1%) despite the absence of a 0.1¢ capital gains distribution in 4Q13, as distributable income improved 2.7% to $15.9m. Gross revenue increased to $26.2m (+12.6%) due to contributions from four recent acquisitions and a newly developed property, while NPI grew at a slower pace to $19.5m (+3.0%), mainly weighed by provision for doubtful debts of $0.7m on overdue accounts, as well as increased utilities costs and facility management expenses. Portfolio occupancy remained healthy at 96.0%, while weighted average lease expiry increased from 3.6 years to 4.0 years. Aggregate leverage at 34.8%, with all-in cost at 3.68% and debt term of 2.2 years. Nav/unit at 68.1¢. *First REIT: 4Q14 DPU was at 2.04¢ (+3.6%), taking FY14 DPU to 8.05¢ (+7.0%). Gross revenue for the quarter rose 4.6% to $23.5m, led by contributions from Siloam Hospitals Purwakarta, a hospital building in West Java which was acquired in May ‘14, and increased turnover from its Indonesia and Singapore properties. Net property income rose 8.6% to $23.5m, as property operating expenses fell 68.3% to $376k, due to lower expenses incurred for Sarang Hospital. Portfolio occupancy is at 100%, while aggregate leverage at 33.1%. Nav/unit at $1.02. *First Resources: Operating statistics for Dec ’14 - CPO production grew 2.4% y/y to 51,142 tons, as extraction rate remained stable at 23.1%. Palm kernel production dipped 0.9% to 11,828 tons, with extraction rate at 5.3% (-0.2 ppt). For FY14, CPO production was 630,988 tons (+7.2%), while that for palm kernel was 145,811 tons (+7.6%). *Keppel Corp: Secured a $265m contract from Luxembourg-based Maritime Construction Services, for an ice-class multi-purpose vessel. The vessel is scheduled for completion in mid-2017. *OLS: Terminating the proposed RTO of Straits Construction. Both parties opined that the outcome of the acquisition may not be achievable, given the weakening sentiments in the property and construction sector in Singapore. *Q&M Dental: Selling two businesses, namely the Digestive and Liver Specialist Centre and the Lung Specialist Centre for $31.6k each. This is at a 34.3% premium to their combined value. Separately, Q&M has bought New Dental Centre, a dental clinic in Singapore with $1 book value, for $1. *ST Engineering: Electronics arm secured $509m worth of contracts in 4Q14. Works are in areas of rail electronics and intelligent transportation, satellite and broadband communication, and advanced electronics and ICT solutions. *Chiwayland: Established a 60:40 JV with Australian property developer, Roseville Uptown, for a property development project in Sydney, Australia. Chiwayland will make an initial contribution of A$20.8m (equivalent to $22.6m). The project has a land size of ~13,693 sqm and a plot ratio of 1.3 : 1, and will consists of six blocks of five storeys, comprising a total of 226 housing units and 297 car park lots. *Olam: Issues 4% US$50m of 5 year Senior Notes due 2020 in a private placement under the US$5b Euro MTN program. *Tritech: Engaged Beijing Hua Xia Dao He’s services to help Tritech secure financing for its water and environment business and to assist the business secure new contracts in developing markets for up to five years. *Aspial: Proposing to spin off its property business in Australia and Malaysia, which will be listed on the Catalist board. SGX has advised that it does not object to the proposed spin-off.