SG Market (16 Apr 15)

Singapore shares are expected to open higher, following the positive close in Wall Street overnight, which was led by a rebound in oil prices and on Intel’s strong optimism for 2Q15.

Regional bourses are trading higher this morning in Tokyo (+0.1%), Seoul (+0.6%) and Sydney (+0.8%).

From a chart perspective, the STI recently breached past the psychological resistance level of 3,500 yesterday to close at a seven-year high at 3,540. We caution however that technical indicators are looking overbought, as indicated by both the RSI and Stochastics. Topside resistance is at 3,620, while support lies at 3,465.

Stocks to watch:
*Property: Developers' Mar private home sales 613 units (+57% m/m, +28% y/y), was the highest in 5 months units, driven by Kingsford Waterbay in Upper Serangoon View which sold 155 units at ASP $1,111/psf, and Sims Urban Oasis which sold 107 units at ASP $1,401/psf. The 2 projects accounted for 43% of Mar primary market private home sales. The street expects April's numbers to be good as well on back of brisk sales at North Park Residences in Yishun (413 sold of 600 released) and Botanique at Bartley (>200 sold of 797 released).

*Keppel Land: 1Q15 net profit fell 17.2% to $72.6m, while revenue dipped 2.3% to $278.4m from the absence of revenue from The Lakefront Residences, and lower revenue from Plot 2-2 of The Springdale in Shanghai which was completed in March. These were mitigated by increases in revenues from The Luxurie in Singapore and Phases 4 and 5 of 8 Park Avenue Shanghai, and new revenue streams from Phase 1 of Seasons Residence in Shanghai and Phase 1 of Park Avenue Heights in Chengdu, both completed in Dec’14. Gross margin improved 0.6ppt to 31.4%. Bottom line was weighed by increased admin and interest expenses, and a dip in associates’ and JV’s contributions from the absence of contributions from Equity Plaza and MBFC T3 following their divestments. NAV/share at $5.11.

*SGX: In relation to market rumour on a possible stock trading link along the lines of the Shanghai-Hong Kong Stock Connect, SGX disclosed that group is not currently in the process of establishing such a link, but remains open to future collaborations.

*SIA: Mar systemwide passenger carriage grew 1.2% y/y, against a 1% capacity fall. Consequently, passenger load factor improved 1.6ppt to 76.6%. PLF for South West Pacific and West Asia/Africa improved on demand growth and capacity reduction, while East Asia routes load factor fell as capacity growth outstripped demand. SilkAir’s PLF grew 12.8% y/y, versus a 13.2% increase in capacity. Consequently PLF fell 0.2ppt to 68.3%. Cargo load factor was 0.2ppt at 67.8% lower as traffic dropped 1.8% against a capacity reduction of 1.6%.

*ST Engineering: ST Electronics secured $382.5m worth of contracts in 1Q15 for Rail Electronics & Intelligent Transportation, Satellite & Broadband Communications, as well as Advanced Electronics & Information Communications Technologies (ICT) solutions.

*SIA Engineering: Clinched renewed contract with SIA to provide comprehensive services, including maintenance, repair and overhaul as well as fleet management support services, for 3 years, with options to renew for 3 years and a further period of 2 years. The total 8-year term is expected to yield $2.6-2.9b revenue.

*SATS: Announced partnerships with international and local stakeholders to enhance cargo handling productivity, by building the capabilities of cold-chain professionals locally and regionally and transforming Changi Airport’s cargo acceptance process.

SMRT: Partnering OMG to bid for the fourth wireless telco license. OMG is a company set up by Consistel to bid for said license.

*Sembcorp Industries: Expanding renewable energy business in Hebei by developing two wind farms, via 49%-owned JV with Guohua Energy Investment. SCI’s equity share of investments is Rmb0.2b, which will be funded through a mix if internal and external borrowings. Separately, the group has completed the sale of UK subsidiary, Sembcorp Bournemouth Water Investment, and expects to mark a net gain of £25m (~S$50m) for FY15.

*Ezion: Substantial shareholder, Templeton International, disposed 3.7m shares via the open market at an average $1.08 on 7 Apr, lowering its stake from 6% to 5.8%.

*Ezra: Clinched multiple new awards from various companies worth US$55m. Work has commenced for several projects, with the others slated for offshore execution from 3QFY2015 onwards. Orderbook of US$2.3b is expected to be executed over the next 24 months.

*OUE: Issued S$300m 3.80% unsecured fixed rate notes due 2020 under its $3b multicurrency debt issuance programme.