SG Market (27 Apr 15)

Singapore shares are expected to open higher, taking cue from the positive close in Wall Street last Friday, which saw both the S&P 500 and Nasdaq reaching record highs.

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

Technically, key support/resistance levels for the STI are tipped at 3,485 (20-dma) and 3,550 respectively.

Stocks to watch:
*Property: URA 1Q overall private home price fell 1% q/q, registering its 6th straight quarterly decline as buyers remain side-lined, on concerns of looming supply and interest rate uncertainty. URA's data showed price weakness across all segments of private residential mkt. Amid subdued interest, some developers offered discounts to lure buyers back into mkt. Consultants are expecting 3-5% decline in property prices for 2015, especially with ~19k private residential units scheduled to be completed by this year.

*DBS: 1Q15 results above estimates. Core net profit came in at $1.13b (+10% y/y, +35% q/q) versus consensus estimates of $1.05b. Net interest income was up 14% to $1.7b, driven by loans growth of 11% and improvement in net interest margin to 1.69% (+3bps) on a y/y basis. Non-interest income was up 9% to $1.05b, led by wealth management (+43%) and gains from investment securities (+171%), while other fee segments were generally maintained at the previous year. Provision was up 20% to $181m but NPL ratio remained stable at 0.9% with loan-loss coverage at around historical highs of 161%. Fully-loaded CET1 CAR was stable at 13.4% with Tier 1 CAR at 13.4%. NAV/share of $15.30.

*Raffles medical group: 1Q15 results at the bottom-end of estimates, with net profit inching up 2.8% to $15.1m on revenue of $95.0m (+8.5%). All divisions contributed positively to top-line, with revenue from Healthcare and Hospital Services divisions increasing 13.7% and 6.2% respectively. Bottom-line was however weighed by a 15.2% rise in staff costs to $48.3m, due to the recruitment of more staff for new and expanded operations at RafflesHospital and upcoming new medical centres at Shaw Centre and Raffles Holland V. NAV/share of $0.984.

*CRCT: 1Q15 results in line. DPU rose 10% to 2.64¢, while distributable income increased 13% to $22.2m. Gross revenue rose 13.3% to $54.5m and NPI was up 6.8% to $34.5m, led by rental growth from multi-tenanted malls, and FX gains, partially offset by lower revenue from CapitaMall Wuhu which is undergoing tenancy adjustments. Occupancy dipped 0.8ppt q/q to 95.1%, with WALE of 8.8 years. Aggregate leverage stood at 28.6% with average debt cost of 2.99%. NAV/unit of $1.65

*UIC: 1Q15 net profit jumped 39% to $60.8m, while revenue rose 30% to $193.2m, driven by the progressive sales recognition of V on Shenton, Mon Jervois and Alex Residences. Gross margin fell 5.8ppt to 40.6%. NAV/share of $4.14

*K1 Ventures: 3QFY15 net profit jumped more than 4x to $5.0m on revenue of $3.1m (-3.4%), with bottom-line largely aided by FX gains of $3.9m, which included gains from the revaluation of assets that were distributed upon the voluntary liquidation of K1 Holdings.. The decline in top-line was largely due to a fall in investment income. Operating margin improved to 66.3% from 64.8%. NAV/unit of $0.10.

*Soilbuild Construction: 1Q15 net profit advanced 15% to $4.5m, despite revenue being down 19% to $70.4m, as gross margin improved 3.2ppt to 10.4% as a result of higher profit margin projects undertaken during the quarter, which included projects like Mandai Connection, Yishun HDB, Xin Ming Hua industrial development in Tuas Crescent, Ang Mo Kio HDB, etc. NAV/share of $0.135.

*Rickmers Maritime: 1Q15 net profit fell 29% to US$7m, while revenue slumped 16% to US$28.6m, from reduced charter rates contracted on six vessels. Bottom line slump could not be mitigated despite an exchange gain on MTNs of US$2.4m due to the Trust’s low operating leverage. NAV/share of $0.59.

*SIIC Environment: Sets foot in China's sludge treatment industry via the investment of US$4m in the preference shares of MTI Environment group (MTI), alongside International Finance Corporation which will also invest a similar amount into MTI. MTI is a well-known enterprise in the domestic sludge treatment industry and an engineering, procurement and Ccnstruction contractor in the water treatment industry.

*Sembcorp Industries: Awarded $300m contract to develop and operate a 225-megawatt gas-fired power plant in central Myanmar by the Ministry of Electric Power of Myanmar.

*Nordic Group: Awarded $4m contract to provide labour and materials to perform scaffolding works for a chemical plant at Jurong Island under ExxonMobil Chemical Asia Pacific – Aurora Project. The facilities is expected to be completed in 2017.

*Sarine: Substantial shareholder Fidelity Worldwide Investment has decreased its stake from 9.14% to 8.77%, via the sale of 1.28m shares at an average price of ~$2.10 in the open market.

*Artivision: Signed a three-year exclusive business contract with Walla! Communications, Israel’s leading Internet portal. Artivision is of the view that the Contract will bring substantial value to Israeli advertisers, providing them with an exclusive and effective video advertising solution for programmatic media buying of a premium video advertisement inventory.