SG Market (15 Apr 15)

Singapore shares could open higher, following the positive close in Wall Street overnight, despite mixed corporate earnings.

Regional bourses are trading mixed this morning, in Seoul (+0.1%), Sydney (flat) and Tokyo (-0.2%).

From a chart perspective, the STI breached past the psychological resistance level of 3,500 yesterday to close at a 7-year high at 3,521. We caution however that technical indicators are looking overbought, as indicated by both the RSI and Stochastic.

Stocks to watch:
*Economy: MAS surprised the market and kept the SGD on "modest and gradual" appreciating path, with no changes made to the S$NEER band. Highlighted that neither its growth nor inflation forecasts have changed since its off-cycle slope-reduction on 28 Jan. The central bank still sees GDP on track to grow 2-4% in 2015, with full-year headline and core inflation forecasts of -0.5 to 0.5% and 0.5 to 1.5% respectively.

*Palm oil: The Australia Burea of Meterological has raised the probability of an El Nino occurring in 2015 to a 70% from 50%. The return on an El Niño could bring below-average rainfall to this region, impacting yield but offset by higher CPO price.

*SPH: 2QFY15 results missed estimates, with net profit down 14.4% y/y to $69.6m, largely due to the absence of divestment gains from the previous year. Operating revenue fell 3% to $270.3m, with revenue for media segment (S202.8m) down 7.1% as advertisement and circulation revenue fell, while the property ($60.6m) segment jumped 17.2% mostly due to maiden contribution ($8.1m) from Seletar Mall. Operating margin improved to 25.2% from 19.2%, as a result of lower materials, production and distribution costs (-17%), staff costs (-6.3%) and other operating expenses (-21.6%). Interim dividend maintained at 7¢. NAV/share at $2.27.

*First REIT: 1Q15 DPU rose 3.5% to 2.06¢, diluted by new units issued to fund the balance of the Siloam Sriwijaya acquisition, while distributable income increased 7.4% to $15.3m. Gross revenue grew 10.1% to $24.7m, while NPI gained 9.3% in tandem to $24.2m, supported by maiden contribution from the newly acquired Siloam Sriwijaya in Indonesia. NAV/unit at $1.02.

*Keppel T&T: 1Q15 net profit climbed 2.3% to $15.8m, while revenue dipped 1.6% to $47.9m, as lower revenue from Data Centre division was offset by higher revenue from Logistics Division. Operating margin narrowed 2.1%, from the absence of contribution from the two data centers disposed in Dec, partly offset by fixed asset disposal gains. Bottom-line was aided by a 9.4% rise in associate and JV contributions. NAV/share at $1.31.

*QT Vascular: FDA approved the second generation of the Chocolate PTCA balloon catheter. The device is designed to dilate diseased coronary vessels in a less traumatic way than convential balloon angioplasty

*ST Engineering: Secured contracts worth $298m in 1Q15, involving projects ranging from aircraft maintenance and cabin interior modification, to engine wash and pilot training.

*Swiber: Secured a US$133m EPIC contract from a Indian national oil company for the design and installation of six pipelines totaling to 60km, scheduled for completion by 2Q16. This brings group's order book to almost US$2b.

*Nordic Group: Acquiring Austin Energy (Asia) Pte Ltd for $26m. Austin Energy is a construction services provider that specializes in thermal insulation in the petrochemical, pharmaceutical and offshore industries. The acquisition is intended to expand group's service offering.

*Mapletree Commercial Trust: Following the completion of AEI at VivoCity, MCT expects to launch its new 15,000 sf retail space today, with nine retailers including US apparels brand, American Eagle Outfitters, and Weekends, a multi-brand lifestyle retailer.

*Frasers Hospitality Trusts: Launched its urban-inspired, designed-led hotel residence brand “Capri by Fraser” in Brisbane. This is FHT’s fourth property in Australia.

*Sarine Technologies: Substantial shareholder, Alan Wang, has disposed 1.6m shares at $1.958 average on 13 Apr, lowering his stake from 6.3% to 5.6%.

*Otto Marine: Completed construction of two units of Harbour Tug and two units of Anchor Handling Tug Supply for PT Pertamina Trans Kontinental.

*Albedo: Disclosed that the group has been approached to explore a potential acquisition of shares in another company.