SG Market (16 Jun 15)

Regional bourses are trading lower this morning in Tokyo (-0.2%) and Seoul (-0.3%), while Sydney is stronger (+0.6%).

From a chart perspective, the STI has failed to break above the 200-dma at 3,360, and appears headed towards downside support at 3,268.

Stocks to watch:
*Property: Consultants expect developers' sales to be more subdued in June, with no new project launches scheduled to take place. Data released by the URA showed that May sales were tepid with 638 (-45% m/m) private residential units (excluding ECs) sold, as developers released fewer residential units. With affordability still a crucial factor for buyers constrained by lending curbs, 3/4 of total private home sales in May was in the suburban region (outside central region).

*O&M: The Business Times highlighted that analysts are expecting more cash calls from smaller O&M firms with high debt levels, as funds dry up amid a crude oil slump and OSV oversupply, and bond yields remain prohibitively high, with Otto Marine, Swiber and Marco Polo Marine being touted as potential candidates.

*SIA: May ’15 system wide passenger carriage fell 4.2% y/y, against a 2.6% reduction in capacity. Consequently, passenger load factor dropped 1.3ppt to 73.6%. PLF improved for East Asia from stronger demand, whereas that for South West Pacific improved on capacity consolidation. Meanwhile PLF for Americas and Europe routes fell on lower demand. SilkAir’s carriage grew 10.3% y/y, while capacity increased 6.8%. As a result, PLF improved 2.2% to 68.6%. Cargo load factor fell 1.3ppt to 61.6%, on the back of a 1% decrease in traffic and a 1% growth in capacity.

*KrisEnergy: Proposed to raise $169.5m from a 42-for-100 rights issue at $0.385/share, 12.5% discount from last close. Proceeds raised will be used to support the group’s strategy to grow oil and gas production in existing fields and near-term development projects. Second largest shareholder Keppel Corp has undertaken to subscribe for its full entitlement, while largest shareholder, private equity energy specialist First Reserve, will undertake just 43.9% of its entitlement. The remaining rights shares will be underwritten by Merrill Lynch, while Keppel Corp will be the sub-underwriter, taking up to 50% interest in the company.

*JEP: Exploring possibility of acquiring a trading company that markets cutting tools including indexable carbide inserts, tool holders, milling cutters, boring bars and drill bits to the aerospace, mould & die and oil & gas industries. The parties are currently in the process of preliminary due diligence and negotiations on the terms of the proposed acquisition.

*Cosco Corporation: Secured a Rmb129m contract for a research vessel from an Asian buyer, expected for delivery in 4Q17.

*Midas: 32.5% owned JV Nanjing SR Puzhen Rail Transport secured Rmb2.1b worth of metro train and tram contracts. Delivery is scheduled between 2016-17.

*Mercator Lines: Secured long term charter for its gearless Kamsarmax, an 82,459 DWT bulk carrier to Clearlake Shipping for a period of 12-16 months for US$7,050/day, or 23% over the current 4 TC Baltic Panamax spot index rate. Up to US$3.4m gross revenue will be generated from this charter.

*Full Apex: To acquired 13.6% stake in ÎñÎÎ"ÞÆÍÛÉ ÄÅÐÐÈÊ" (南德里克有限公司), an oil explorer and producer which owns the rights for the Malisu III site located in the Kyrgyz Republic. Consideration of $8.4m (2.5x P/B) will be paid via a 140.7m new share issue at $0.06/share.

*Joyas: Completed placement of 50m new shares at $0.032.