SG Market (04 Jun 15)

Singapore shares could open higher, after US stocks held on to their gains, in a session which saw German bunds and US bonds being sold off, and ECB President vowing to keep QE running until Sep ’16.

Regional bourses are trading higher this morning in Tokyo (+0.3%) and Seoul (+0.4%), although Sydney is down 0.6%.

From a chart perspective, the STI is trading below its 200-dma at 3,360, with next level support now tipped at 3,268. Technical indicators are grossly oversold and due for a slight rebound.

Stocks to watch:
*Singapore O&G: Trading debut today with IPO price at $0.25 and total issued shares of 218m. Public (2.2m) and placement (41.4m) tranche of 43.6m new shares were more than 17x subscribed. Under the placement tranche, 7m shares were allotted to Havenport Asset Management which sub-manages Legg Mason Asian funds.

*Q&M Dental: Signed MOU to acquiring a 60% stake in Panjin City Dental Clinics for Rmb10.4m and a 60% stake in Gaizhou City Dental for Rmb2.0m. The acquisition comes with guarantees over a 12-year period that the profit of the Panjin City Dental Clinics shall not be less than Rmb20.3m and dividends paid will be not less than Rmb12.2m; and that the profit of Gaizhou City Dental Clinic shall not be less than Rmb520k and dividends paid will be not less than Rmb312k. Separately, Q&M proposed to enter into a partnership with Liaoning Medical University (LMU) to privatise LMU Stomatology Hospital No.2.

*YuuZoo: SGX reprimands YuuZoo for misusing SGXNET, following the group's recent official release on SGX's website in regards to a positive third-party research report on the group. SGX warned that SGXNET is not a platform for rendering investment advice based on third party expectations. Separately, YuuZoo announced that it has formed a JV in China with XG AMA, a leading provider and organizer of e-sport events and gaming activities. Under the agreement, XG is committed to deliver 5m minimum active paying users and a minimum profit of Rmb1.5m in the first year of operations.

*DBS: Granted approval to conduct institutional banking activities in Australia, which will see the bank open its first branch in Sydney later this month. With the latest entry into Australia, DBS will have a presence in 18 countries globally.

*Serial Systems: Entered into agreement with Ryosan Company, for the sale of the distribution rights of products manufactured by On-Semiconductor in Japan, and customer assignments and business backlogs relating to the products of On-Semi in Japan, for a total consideration of US$3.2m. Assuming the transaction was completed on 31st Dec ‘14, NTA would have risen to 12.84¢ from 12.59¢ and EPS would have risen to US2.04¢ from US1.80¢.

*Raffles Medical Group: Aberdeen Asset Management has ceased to become a substantial shareholder, following the sale of 677,400 shares at an average price of $4.49 per share via open market transaction, reducing its stake to 4.96% from 5.08%.

*Noble: Chairman Richard Elman bought back another 2m shares at $0.7183 share apiece, raising his total stake to 21.09% from 21.06%. Separately, Eastspring Investments has risen its stake to 7.20% from 6.99%, via the purchase of 14.5m shares at an average price of $0.787.