Monday, April 13, 2015

SG Market (13 Apr 15)

Singapore shares are likely to continue its positive momentum this week, buoyed by the two-week consecutive gains in US, as well as the massive outperformance in Hong Kong last week, driven by easing restrictions which allowed China funds to invest in Hong Kong stocks.

Regionally bourses are trading higher this morning in Seoul (+0.2%) and Sydney (+0.3%), although Japan is trading flat.

Technically, the STI looks poised to test the 3,500 levels, with downside support at around the 3,420 levels.

Stocks to watch:
*Economy: The street remains divided on MAS' policy announcement due tomorrow, whether it will indicate a downward recentring; widening; or no change to SGD NEER band. Part of the uncertainty stems from Jan's surprise MAS off-cycle policy statement - decreasing slope of its SGD NEER band, while maintaining policy of modest and gradual SGD appreciation. Most economists do not see MAS easing, but could see a widening of SGD NEER band to accommodate increased economic uncertainty and market volatility.

*Sarine Technologies: Negative profit guidance for 1Q15 due to negative sentiment in the diamond midstream industry, weighed by inventory overhang and tight liquidity conditions. Group anticipates to more or less break even in the quarter, and expects the underlying industry conditions to linger for a few more months.

*LHN: Trading debut today for the space resource optimisation company. Placement offer of 73.9m shares at $0.23/share.

*UOL: Issued $175m worth in notes due 2018, priced at 2.5%, under its $1b multi currency medium term note programme.

*CNA: In discussions with Dongying Economic Development Zone Management Committee to transfer the waste water treatment plant to a third party, to enable the group to refocus on its core business.

*Trek2000: To issue 6m new Racer shares to racer’s CEO Willy Koh, resulting in a dilution of stake from 47.5% to 19.0%, with a two-year option to regain its 47.5% equity interest in Racer. The deal is structured to defer deploying its cash reserves towards Racer’s capital call, while retaining the potential to reap business synergies and economies of scale with Racer in the future.

*Stamford Land: Received A$265m term loan facility for the construction of its Macquarie Park Village project.

*Mercator Lines: Appointed an independent financial advisor to assess its financial position from the impact of the recent sharp deterioration of dry bulk shipping freight rates and erosion of asset values.

*Sino Construction: Convertible bond subscription agreement with Dealson, with principal amount of $16m, has lapsed.

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