SG Market (22 Apr 15)

Regional bourses are trading mixed this morning in Tokyo (+0.4%), Seoul (+0.4%) and Sydney (-0.3%).

Technically, STI is still trading in upward trend channel, with key support-resistance levels tipped at 3,468 and 3,561 respectively. Momentum indicators are also correcting from overbought territory.

Stocks to watch:
*Cambridge Industrial Trust: 1Q15 DPU slipped 2.1% y/y to 1.225¢, while distributable income improved 0.6% to $15.7m, which included income support of $1.1m for properties undergoing asset repositioning. The drag came from higher property expenses and lower capital gain distribution gains shaved bottom line. Meanwhile, gross revenue shot 16.7% to $27.5m, while NPI spiked 11.9% to $21.2m, from full contribution of five recently-acquired properties. Portfolio occupancy dipped to 95% (4Q14 at 96%), while leverage climbed 1.6 ppts q/q to 36.4%, with average debt cost of 3.6% and tenor of 2.3 years. At NAV/unit at $0.68.

*CapitaCommercial Trust: 1Q15 results in line, as DPU and distributable income improved 3.9% y/y and 4.7% to 2.12¢ and $62.7m respectively. Gross revenue and NPI rose 6.5% and 6.4% to $68.2m and $54m, mainly driven by higher rents and occupancy. Portfolio occupancy (excluding CapitaGreen) improved to 99.7% (4Q14 at 99.5%) with WALE of 7.9 years, while aggregate leverage is maintained at 29.9%, with average cost of 2.4%. NAV/unit at $1.70.

*Mapletree Industrial Trust: 4QFY15 results ahead of estimates, with DPU up 5.6% y/y to 2.65¢, bringing FY15 DPU 5.1% higher to 10.4¢, representing a 6.5% yield. Gross revenue rose 5.6% to $79.4m, led by higher rental rates and occupancies in hi-tech buildings, business parks and light industrial buildings, as well as new contribution from 2A Changi North Street 2 and the completion of build-to-suit project for Equinix. NPI advanced 8.4% to $57.8m, aided by electricity bulk purchasing and lower electricity tariffs. Portfolio occupancy dipped 0.6ppt q/q to 90.2% due to progressive relocation of tenants at Telok Blangah Cluster that is due for redevelopment, tenant retention at 55.9%, WALE of 3.1 years. Aggregate leverage fell to 30.6%, with average cost of debt of 2.3% and tenor of 3.7 years. NAV/unit at $1.32.

*NOL: Orient Overseas International (OOIL) chairman highlights that a merger with NOL is unlikely despite consolidation in shipping industry as integrating the two large companies would be too challenging. However, he expects more M&A deals among smaller firms seeking economies of scale, which would find integration easier due to their size.

*Noble: Investing in 3 companies which together will form a fuel storage, supply and distribution network in Indonesia's Sumatra and Java regions to meet demand from palm oil, power, and mining industries. Accordingly, Noble will acquire 51% stake in PT Sriwijaya Inti Daya and 49% each in PT Sriwijaya Multi Terminal and PT Karimata Baru Terminal for total US$7.5m.

*Straits Trading: Sets up unit, SRE Capital, to form and manage funds invested in REITs, asset-backed trusts and corporate securities in Asia-Pacific's real estate and infrastructure sectors. The group will commit $130m initial seed capital to the fund, with plans to raise capital from accredited investors including HNWIs, institutions and family offices globally. Straits Trading expects the fund to yield 8-10% returns versus the 5-6% yield that REITSs are typically offering.

*Sembcorp Marine: Secured a relatively small contract, the first for the year, worth $56m from Teekay Offshore, for the conversion of a shuttle tanker into an FSO to be deployed in the North Sea. Works are expected at Jurong Shipyard in Jun 15 for 11 months.

*Sembcorp Industries: JV Vietnam Singapore Industrial Park and Township Development Joint Stock company (VSIP) has agreed to purchase an industrial park in northern Vietnam. The site, which is secured with land use right certificates, provides access to 110 ha of industrial land, thereby enabling VSIP to further meet the demands of customers in northern Vietnam.

*China New Town Development: Controlling shareholder, China Development Bank Capital Corporation, provided an unconditional guarantee for a five-year Rmb260m loan from ICBC, with interest rate no higher than the benchmark PBOC rate (currently at 5.75%). Proceeds of the loan will be used to fund primary land development and for general working capital.

*Grand Banks: Announced that its order book is currently at a six-year high of $31.6m, lifted by five boat orders secured in 1Q. Orders from the US make up about 75% of the group’s total order book.

*Perennial Real Estate: Entered into 50:50 JV with IJM Land to acquire and develop 1.4m sf freehold waterfront site into a large-scale integrated mixed-use development in Gelugor, Penang. The total development cost is expected to be over RM3b.

*Ezion: Substantial shareholder, Franklin Resources, disposed 2m shares at an average of $1.2267/share on 16 Apr, which lowered its stake from 5.05% to 4.93%.

*Karin: Secured distributorship in Hong Kong for IT products by Huawei, including servers, storage systems, cloud computing products, and data center solutions.

*Geo Energy Resources: To issue 28m new shares (2.4% enlarged share capital) at $0.18 apiece to EVA Capital SP, a closed-ended fund. Net proceeds of $4.9m is intended for general working capital.

*OEL: In relation to its arbitration proceedings against BW Marine (Cyprus), OEL is required to pay a total of $203k to BW Marine.

*China Sunsine: Positive profit guidance for 1Q15, buoyed by an increase in gross profits due to higher sales volume and lower cost of raw materials. Results will be released on 27 Apr.

*Asia Enterprises: Negative guidance for 1Q15, dragged by the significant slowdown for steel products, mainly from the marine and offshore segment. Group expects to report of loss of less than $1m compared to a profit in 1Q14. Results will be released in the week of 4 May.