SG Market (03 Jun 15)

Singapore shares could open weaker, following the weaker close on Wall Street as the street remained cautious ahead of Fri’s jobs report and a looming deadline for Greece and its lenders to find a solution to the debt crisis.

Regional bourses are trading lower this morning in Tokyo (-0.6%) and Sydney (-0.4%), while Seoul is up 0.1%.

Index stocks Jardine Matheson and Jardine Strategic could continue to be weighed by FTSE Russell’s new liquidity rules, which could potentially exclude both Jardine companies from the STI in the Sep index review.

Stocks on the STI reserve list, UOL, CCT, Suntec REIT and Yangzijiang may see interest on the back of potential inclusion into the benchmark index.

From a chart perspective, the STI yesterday broke its 200-dma at 3,360, with next level support now tipped at 3,268.

Stocks to watch:
*Economy: S’pore May PMI came in at 50.2 versus 49.4 in Apr, representing its first expansion for the first time in 6 months, led by growth in new domestic orders, production output and inventory. Economists highlight that the turnaround is not convincing, with electronics contracting further and weak manufacturing and exports performance across Asia raising questions over global demand. Another month of data is needed to confirm the turnaround.

*Economy: S’pore new Manpower Minister, Lim Swee Say, does not intend to relax foreign-worker policies to let in more foreign workers, nor reduce the foreign-worker levy. Instead the minister wants businesses to work with the government and unions to make the economy manpower-lean, boost S’pore core in the workforce and upgrade existing pool of foreign workers.

*Global Invacom: Buying US satellite terminal manufacturer Skyware Global for up to US$11.6m to position the company as a world leader in satellite communications equipment. Skyware develops designs and manufactures very small aperture terminals and will add to the company's manufacturing presence in China, Israel, M’sia and UK. While Skyware is loss-making, Global Invacom is confident of returning it to profitability through synergies, cross-selling and increasing efficiencies. Global Invacom will issue 28.0m treasury shares worth US$6.6m treasury shares to the vendor at $0.3185/share, representing 9.9% of its issued share capital. The 2nd part of the consideration will be made in cash through an earn-out model.

*Lian Beng: Entered into agreement with 247 Collins Investments, for the proposed acquisition of property units at Collin Street, for A$24.9m. The freehold property has a total site area of ~478 sqm and building area of ~2084.4 sqm. Lian Beng views the purchase of the property as an investment opportunity for both potential long-term capital appreciation and rental yield.

*Bukit Sembawang: Aberdeen Asset Management has ceased to become a substantial shareholder, following the sale of 1m shares at an average price of $3.97, via a married deal, paring its stake down to 4.81% from 5.2%.

*GLP: Signed new lease agreements totalling 146,000 sqm with six leading third-party logistics providers in China, of which five were with repeated customers. As of Mar ’15, GLP’s US$28b property portfolio consists of 41m sqm of logistics facilities across China, Japan, Brazil and the US.