SG Market (12 Jun 15)

Singapore shares could inch higher at the open, taking cue from the positive close on Wall Street, as solid retail sales data buoyed the economic outlook but gains could be limited by the increasingly precarious Greek debt situation.

Regional bourses are trading mixed this morning in Tokyo (flat), Seoul (+0.6%) and Sydney (-0.2%).

From a chart perspective, the STI is still hovering below its 200-dma at 3,360, with further downside risk at 3,268. A convincing move above the 3.360 resistance would be needed to invalidate the downtrend.

Stocks to watch:
*Property: S’pore government continues to cut private residential land supply in 2H15, with consultants highlighting this is an indication that the government expects further cooling in the property market and that a turnaround in the residential sector is not imminent. Only 7,825 private residential units (including ECs) across 17 confirmed and reserve list sites were introduced this time, -11% h/h, and the lowest since 1H07. URA highlighted that a large pipeline supply of ~84k private residential units including ECs will be coming on stream over the next few years, and this is not helped by the overall slow absorption at new launches.

*Noble: In a letter to shareholders and employees, Noble Chairman Richard Elman called for shareholders and employees to have a little confidence and patience in the group, adding that Noble will “right the damage” and use all its best efforts to recover its share value. Elman added that the group has been working vigorously behind the scenes to protect its shareholder interests and is starting to make progress.

*Albedo: Proposed to acquire a 51%-stake in China iMyth Company (CiC), a newly formed entity between vendor Dato Dr. Choo Yeow Ming, and Dr. Chung Yih-Chen, who leads an amalgamation of doctors from the previous iMyth Aesthetic Medical Group, a medical practice in Taiwan. CiC operates its flagship specialist health and beauty clinic in Taoyuan, Taipei, as well as orthopedic surgery hospitals in Guangzhou and Shanghai. The consideration of $18.9m will be paid via cash of $12m and new share issue of 550m shares at 1.25¢ apiece. In relation, Albedo will issue 100m free non-renounceable and non-transferrable warrants to deal introducer Mdm Oei Siu Hoa, with an exercise price for each warrant of 1.125¢. Additionally, Albedo will issue 840m non-renounceable and non-transferable warrants to four new investors at 0.1¢ each, with an exercise price for each warrant of 1.125¢.

*Yanlord: Moody’s maintained Ba3 rating with stable outlook, citing the group’s adjusted sales execution to meet mass-market demand, an improving land bank distribution, and good access to debt and capital markets. Rating also reflects strong brand and high-quality properties, which allows the company to generate above-industry-average margins. Moody’s however flagged that Yanlord's 2014 credit metrics were weak for its Ba3 ratings, mainly due to high level of debt leverage, weak interest coverage, and greater-than-expected drop in gross margin.

*Oceanus: Entered MOU with BioValence to set up JV (40% owned) to distribute shrimps in China.

*Singapore eDev: Expecting loss for 1H15 due lower revenue for properties under development, and the absence of revenue from HotApp, which beta version has just been launched in China.