Tuesday, March 31, 2015

SG Market (31 Mar 15)

Singapore shares are expected to track the positive close on Wall Street, spuured by talk of further stimulus action from China and a string of M&A deals in the US healthcare sector.

Regional bourses are all trading higher this morning in Tokyo (+0.9%), Seoul (+0.6%) and Sydney (+1.4%).

From a chart perspective, an upside break of the 3,460 resistance on the STI could pave the way for the next objective at 3,565 over the mid-term. Downside support sits at 3,400.

Stocks to watch:
*Banks: Industry observers highlight that the launch of Spore Savings Bonds in 2H15 could be a win for retail investors but loss for banks' fixed deposits. Proposed 10 year bonds offers a combination of features - redeemable at any time; coupon step up every year so that to-date average interest at any time will match a Spore Government Security bought at the start of the bond and that matures in current year. Investors are therefore incentivised to hold the bonds for as long as possible, but are not punished for early redemptions. Only individual investors may buy the non-tradable bonds, which will be sold in $500 denominations.

*Keppel Land: Parent Keppel Corp has obtained 93.9% control of its property arm. Closing date for the voluntary unconditional cash offer is today at 5.30pm.

*Sembcorp Marine: Secures exclusive Letter of Intent (LOI) with Heerema Offshore Services to engineer and construct a new semi-submersible crane vessel. The LOI is not expected to have any material impact on the net tangible assets and earnings per share of Sembcorp Marine for FY15.

*GLP: Signed three new lease agreements totalling 50,000 sqm in Greater Tokyo, being Ricoh Logistics System (23,000 sqm), Fuji Logitec (16,000 sqm), and a major food wholesaler (11,000 sqm).

*Sinarmas Land: Formally disclosed the re-launch of its proposed spin-off for 49.4%-owned Indonesian industrial property unit, PT Puradelta Lestari.

*AREIT: Acquired six-storey multi-tenanted The Kendall at Singapore Science Park with 20,190 GFA and 16,824sqm NLA for $112m from its sponsor. Estimated initial NPI yield of 6.8% is expected to be DPU-accretive by 0.063 cents per unit, based on the group’s MarFY14 financials.

*Rotary Engineering: Awarded $25m contract from an oil major to construct lubricant plant in Jurong, which is expected to be completed by Apr ‘16.

*IPC Corp: In negotiations with a party for the sale of the group’s remaining seven hotels in Japan, for ~$150m.

*Bumitama: Postpones announcement of final dividends to 10 Apr to coincide with announcement of AGM details. AGM to be held on 27 Apr.

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