SG Market (16 Mar 15)

Singapore stocks are expected to open on the downside following the negative close on Wall Street last Fri, dragged by a weak economic data, dollar strength and lower oil prices.

Traders are also likely to be more cautious ahead of the Fed’s FOMC meeting this week with many investors anticipating any shift in the Fed’s guidance that would send clearer signals when the first rate hike would occur – in Jun or later.

Other key economic data-points due this week include Singapore’s Feb non-oil domestic exports, to gauge if there is a looming 1Q contraction and BoJ monetary statement.

Regional bourses are mostly trading lower this morning in Tokyo (-0.1%) and Sydney (-0.6%), with Seoul relatively flat (+0.1%).

From a chart perspective, the STI is likely to test its doenside support at 3,355 with immediate resistance at 3,388. Below 3,355, the next line f defence lies at 3,320, which is represented by its 200-dma.

Stocks to watch:
*Vard: Terminated contracts of two PSVs after customer E.R. Offshore filed for bankruptcy. The vessels are being constructed in Vietnam and are due for delivery in 3Q15 and 2Q16. Vard will not be repaying the prepayments received, and expects to sell the vessels at prices that can cover the construction costs.

*Sino Grandness: Plans to start selling its Garden Fresh fruit juices in Thailand by 2H15 and hopes to leverage on its Thai partners, Thoresen Thai Agencies and PM Group’s distribution network in Thailand and the region. The group remains bullish on growth potential in China, citing the country’s huge population, higher spending power and rising health awareness.

*Serial Systems: Proposed purchase of Swift Value, which is in the distribution of printer accessories such as ink cartridges and toners, for $13m, based on Swift Value’s NTA plus a premium of $10m. The acquisition will be funded by internal resources and/or bank borrowings.

*Sarine Technologies: Launched Sarine Profile in US, its customizable solution for wholesale and retail trade players in the polished diamonds industry. Clients are able to use the tool to present diamond characteristics on their trade platforms and websites.

*SPH: Invests $2m for a 20% stake in DC Frontiers, which owns and operates Handshakes, a data analysis platform that mines and searches for relational information about companies and its shareholders.

*Lifebrandz: Shut doors to its entertainment outlets in Clarke Quay, comprising Hopdog, Mulligan's Irish Pub, Aquanova, Fenix Room and Playhouse. Group is being investigated by Manpower Ministry for salary claims of more than 70 staff at its outlets.

*Genting Hong Kong: Reassigning all its rights and obligations for the hotel management arrangement for Genting Grand Hotel in Hebei Province to Guangzhou Liyunhui Consulting and Management Services (GZL), from Star Cruises China (SCC). Both GZL and SCC are wholly-owned subsidiaries.

*Ipco: 3QFY15 net profit crashed, down 96.5% y/y to $1.5m, mostly due to absence of one-off income. Revenue climbed 24.5% to $10.4m, the result of 48.2% increase in turnover by ESA Electronics, additional contribution from Asian Plan and 11.7% higher turnover to $6.0m in Excellent Empire. However, operating margin halved from 34.6% to 15.7%. NAV/share at $0.02.

*Vibrant: 3QFY15 net profit decreased 14.8% y/y to $7.8m, against 1.1% increase in revenue to $51.8m, as higher financing lease income was partially offset by weaker demand for logistics services. Bottom line weighed by fair value losses on marketable securities and higher operating expenses from property development. NAV/share at $0.14.