SG Market (20 Jan 15)

Singapore shares might continue to see dull trading with Wall Street closed for Martin Luther Jr Day and after SGX’s move to reduce board lot size failed to excite investors. Total turnover value traded shrank 20% from last week to $897m, 15% below 2014’s average as declining issues outnumber advancing ones 1.32 to 1 on the SGX. Over in Europe, stocks advanced to reach thier highest level since 2008, amid expectations that the ECB will announce its quantitiative easing plan this week. Asian markets are mostly trading higher this morning, with Tokyo (+0.5%) and Seoul (+0.4%) both up but Sydney dipped 0.3%. From a chart perspective, technical signals appear to be losing momentum, with Stochastics, ADX, RSI and MACD all trending lower. Critical support for STI is tipped at its 200-dma at 3,288, with topside resistance seen at its 20-dma at 3,330. Stocks to watch: *Land Transport: 11 operators have submittied bids for the first tender under Singapore’s new bus contracting model, including incumbents SBS Transit and SMRT. The other bids came from Woodlands Transport (Singapore’s largest private bus operator), Aedge Holdings (operates premium bus and City Direct services), China’s Jiaoyun Group (joint bid with Travel GSH) and Jinan Public Transport, Australia’s Busways Group, UK’s Go-Ahead and Tower Transit and France’s Keolis and RATP Dev Transdev. This is for the Bulim package, comprising 26 bus services, operating from three bus interchanges – Bukit Batok, Jurong East and Clementi, and is expected to be awarded in 2Q15. *M1: 4Q14 results was a slight beat as net profit rose 9.9% y/y to $44.5m taking FY14 earnings to a record $175.8m (+9.7%). 4Q revenue climbed 24.3% to $346.4m, driven by a 5.3% increase in mobile services to $172m and an 89% jump in handset sales to $135.1m. EBITDA margin improved to 40.9% from 38.2% in 4Q14 and 40.8% in 3Q14. Bottom line was underpinned by strong growth in post-paid and fixed customer base and higher mobile data usage. Final DPS of 11.9¢ proposed, bringing full year payout to 18.9¢ (FY13: 21¢). NAV/share at $0.424. *Keppel REIT: 4Q14 DPU fell 23.4% y/y to 1.51¢ taking FY14 DPU to 7.23¢ (-8.2%). The quarter saw gross revenue at $42.3m (-10.9%) and NPI at $34.3m (-8.3%), due to the absence of contribution from Prudential Tower divested last year, while MBFC Tower 3 only contributed two-weeks of income. Occupancy stood at 99.3%, with a portfolio WALE of 6.1 years. Aggregate leverage was at 43.3% with an average interest cost of 2.23%. NAV/unit at $1.41 *Mapletree Logistics Trust: 3QFY15 DPU rose 1.6% to 1.87¢ on revenue of $82.9m (+6.2%). Top-line was led by contributions from six new properties and higher revenue from existing assets, offset by lower occupancy in several recently converted buildings in Singapore, absence of revenue from 5B Toh Guan Road East and weaker Yen FX rate. NPI rose 3.1% to $69.5m, weighed by a 25.7% rise in property expenses at $13.4m. Occupancy declined 1.5ppt to 96.9% versus the previous year, while aggregate leverage was at 34.6% with an average interest cost of 2.1%. NAV/unit at $0.98. *Keppel Infrastructure Trust: FY14 DPU kept unchanged at 7.82¢ despite FY14 profit slipping 10.4% to $12.7m. Revenue was down 2.5% to $65.5m, as a result of lower service concession receivables and lower production of NEWater, offset by higher output in waste-to-energy plants. Operating margin inched 1.9 ppt down to 20.0%, as lower production and cost savings from solar photovoltaic system were offset by costs incurred on Merlimau and CitySpring transactions. NAV/unit at $0.94 *China Everbright: Proposed private share placement to International Finance Corporation (49.7m shares) and RRJ Capital (71m shares), at $0.94 apiece (9.2% discount from last close). The additional shares will boost share capital by 4.85% and raise gross proceeds of $113.4m (US$85m), intended as working capital to fund growth and expansion. * Union Steel: Lim Wen Heng Construction has filed a Defence and Counterclaim, in response to a claim brought by Union Steel with the High Court of the Republic of Singapore for damages suffered as a result of the defendant’s failure to take delivery of the agreed quantity of reinforcement bars under the various contracts entered into between the parties. *Courage Marine: Expects to record a greater net loss for FY14 as compared to the previous year, due to 1) low turnover, low freight and low utilisation rate; and 2) the continuing challenging operating environment for cargo shipment. *Chuan Hup: Increased shareholdings in CH Offshore by 0.9% (or 6.4m) via open market purchases at average price of $0.5035. *GLP: Signed new agreements totalling 37,000 sqm with two leading third-party logistic providers in China, which are already existing customers. *Sino Grandness: Incorporated Garden Fresh Group in Hong Kong. *mm2 Asia: Signed co-production agreement with Fox International for four film projects due for release in 2015 and 2016, to be licensed, marketed and distributed to the international market.