Singapore stocks are likely to open higher, after US stocks rebounded sharply following several days of muted gains, with sentiment partly spurred by reports that Germany is considering a staggered aid deal for Greece.
Regional bourses are trading mixed this morning in Tokyo (-0.3%), Seoul (+0.4%) and Sydney (+0.8%).
From a chart perspective, the STI is trading below its 200-dma at 3,360, with further downside risk at 3,268. But technical indicators are grossly oversold, suggesting that the market is poised for a short term turnaround.
Stocks to watch:
*OUE/OUE Commercial REIT: OUE C-REIT is acquiring an effective stake 61.1%- 67.9% stake in One Raffles Place for $1-$1.1b from sponsor OUE. The sale price works out to $2,382 psf of NLA and will be funded by both debt and equity. As OUE C-REIT is a subsidiary of OUE, OUE will not record any gain or loss from the proposed disposal. Meanwhile, OUE C-REIT's assets under management will more than double from $1.6b to $3.4b.
*GLP: Reportedly in talks to acquire US$4.5b of storage space in the US, totaling almost 58m sf. A deal would cement GLP's standing as the No. 2 operator of US warehouse properties, after Prologis.
*Ley Choon: Swung to 1Q15 net loss of $3.3m (1Q14 profit: $1m), while revenue slumped 35.2% y/y to $29.1m from lower percentage completion of current projects and lower sales of construction materials. Lower margin projects caused gross margin to slip 3.3ppt to 10.4%. Bottom line was also dragged by a 48.1% increase in admin expenses from depreciation of its new office, increase administrative staff costs, professional fees and office overheads. NAV/share at 11.46¢.
*Starburst: Received LOI with total contract value of ~$16.1m, which will see Starburst design, supply and install ballistic protection works for firearm shooting training facilities in the Middle East. Work on these projects is scheduled to commence in 3Q15, with completion expected by Dec '16.
*Otto Marine: Secured a long term bareboat charter contract worth US$27m for a work maintenance vessel to be deployed in the South East Asia region. The vessel is expected to be delivered in 3Q15 and contribute positively to earnings for FY15.
*YuuZoo: Will expand from B2B to B2B2C and embark on a major marketing campaign over the next few months to significantly grow its monthly active user base, a key factor in growing e-commerce and advertising revenue.
*EMAS Offshore: Secured contract worth US$30m, including options, from an oil major in West Africa. Scope of work includes provision of accommodation, anchor handling, towing, supplying and other support services, and expected to commence in 4QFYAug15.
*iFAST Corporation: Proposed acquisition of Winfield Securities, a Hong Kong securities trading and brokerage firm, for an estimated HK$14.7m (1.5x P/B). The acquisition is intended to expand the range of investment products available on iFAST's investment platform.
*Petra Foods: Ceasing distribution businesses in Singapore to focus to on key markets. The group is also looking towards the novation of its agency brands and the sale of inventory related to these agency brands to Auric Pacific.
*TalkMed: Agreed with Asian Cancer Centres to invest in an oncology centre in Hong Kong for US$8.4m. This will be funded via IPO proceeds
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