SG Market (21 May 15)

Investors will be looking ahead to a Fri speech by Fed chief Janet Yellen for new clues on the economic outlook and direction of interest rates.

Singapore shares are likely to open weaker today, following the mixed close on Wall Street, which had FOMC minutes showing most Fed officials view a June rate hike as being unlikely.

Regional bourses are also trading without much direction this morning in Tokyo (+0.1%), Seoul (-0.2%) and Sydney (+0.2%).

From a chart perspective, the STI has just breached its 50-dma at 3,454, with its next support tipped at the recent low of 3,425, with immediate resistance at 3,466. Looking at technical indicators, the RSI has turned weaker, while the MACD is invalidating a possible bullish crossover.

Stocks to watch:
*Informatics: FY15 net loss was at $4.9m versus a net profit of $0.2m on revenue of $15.9m (-33%). The drop in revenue was largely due to lower students enrolled in Singapore and UK operations. The UK business has been affected by the Ebola outbreak in Africa during the financial year. Bottom-line was further weighed by higher employee expenses (+7%), but partially mitigated by lower depreciation (-34%) and other operating expenses (-26%). NAV/share at $1.23.

*Rex: Acquired 30% participating interest in offshore WA-488-P licence in Western Australia, located in the Petrel Sub-basin between the producing Blacktip gas field and the undeveloped Turtle and Barnett oil discoveries. The 4,074 sq km Beehive prospect has been identified to be a potential giant oilfield, with total gross unrisked prospective recoverable resources of 926m stock tank barrels.

*Genting HK: Proposed to sell 10m shares (4.4% stake) in Norwegian Cruise Lines (NCL) for a net consideration of US$546.1m. Group expects to realise a gain of US$389.3m (US$0.048/share) from the disposal, as well as a fair value gain of US$1,688.5m (US$0.21/share). Upon completion, Genting HK's stake in NCL will fall from 22.0% to 17.7%.

*Biosensors: First study to demonstrate rapid early healing for BioFreedom, was presented at
EuroPCR 2015. Results in the first 12 months demonstrate rapid strut coverage, suggesting an early healing profile for patients using BioFreedom.

*Singapore Windsor: Secured an exclusive five-year franchise agreement with European car hire company, Europcar, to provide vehicle rental and limousine services throughout Myanmar. The agreement is effective from 1 Apr ‘15 and is renewable for a further five years.

*China Kunda Technology: Expects to record a net profit for FY15 compared to a net loss of HK$85.1m for FY14, mainly attributed to: i) disposal and FX translation gains ii) higher gross profit from automobile component segment; iii) absence of significant impairment losses; iv) write back of prior years’ provision for taxation and v) decrease in loss from discontinued operations.