SG Market (18 Jun 15)

Regional bourses are trading lower this morning in Tokyo (-0.3%) and Sydney (-0.7%), while Seoul is up 0.5%.

From a chart perspective, the STI is capped below the 200-dma at 3,360, with downside support at 3,268.

Stocks to watch:
*DBS: From 22 Jun, DBS will begin a global roadshow to sell US$10b covered bonds programme in Asia, Europe, US. DBS will be the first Spore bank to test the strength of demand for high-grade debt backed by mortgage loans out of Spore. The covered bonds are expected to be rated triple-A, and will be issued in euros or USD. It will qualify as high-quality liquid assets needed to meet liquidity coverage ratios. Issuance of covered bonds is expected to lower DBS' overall funding cost.

*UOB: Sets up new RMB solutions unit to help firms manage cross-border business in yuan, and tap on yuan's ongoing internationalisation amid weakening overall demand for trade finance. The unit will give firms advice on the internationalisation of the yuan and its impact on their businesses, as well as provide financial solutions in cash management, FX, investment and hedging.

*ST Engineering: ST Aerospace signed agreement with Airbus Defense and Space and Elbe Flugzeugwerke (EFW) for a collaboration to launch the A320/A321 passenger-to-freighter conversion programme. Consequently, ST Aerospace will be issued new shares in EFW worth €99m ($146.3m), comprising €3m cash and €96m in A320/A321P2F engineering development work. Following the proposed transaction, ST Aerospace’s shareholding in EFW will increase to 55% from 35%, with the remaining 45% held by Airbus.

*Singpost: Acquired a 30% stake in Australian e-commerce firm Hubbed Holdings for ~A$4.3m or $4.45m. If certain agreed performance benchmarks are met, the group will pay an additional A$1m to Hubbed, otherwise Singpost would subscribe for another 5% stake in Hubbed.

*Frasers Centrepoint: Acquired boutique hotel operator MHDV in UK for £363.4m ($759.5m), 2.3% above market value. MHDV owns and operates two upscale boutique lifestyle brands, namely Malmaison and Hotel du Vin, comprising 29 boutique lifestyle hotels with 2,082 keys located across 25 cities in UK. This doubles group's offerings in Europe to ~4,000 keys.

*Tat Hong: Entered into contract with Ashover Investment for the sale and leaseback of the property at 14 Ashover Road, Rocklea, Queensland, Australia for a cash consideration of A$6.25m (~S$6.46m), which will see Tat Hong realise a net gain of A$3.5m (S$3.62m).

*Ezion: Atlantic Marine Services (AMS) has withdrawn the court proceedings against Ezion, and agreed to release the group from all claims that had been alleged in the suit. AMS also informed Ezion of its management changes and its intentions to cooperate and work closely with the Ezion to support the operational requirements of Maersk Oil in the North Sea for three of its service rigs.

*Logistics Holdings: Awarded $13.8m contract by Design International Architects, which involves proposed addition and alteration works to six units of conserved buildings and infrastructure works at Park Lane, The Oval and Hyde Park Gate at Seletar Aerospace Park. The works are scheduled to commence on 22 Jun '15 and are expected to complete by 21 Mar '16, and takes the group's orderbook to $278.9m.

*Geo Energy Resources: MOU with PT Bukit Makmur Mandiri Utama for coal mining services which includes overburden removal, coal hauling and rental of heavy equipment, in Geo Energy's mine located in South Kalimantan, Indonesia.

*Great Group: Proposed renounceable non-underwritten rights issue of up to 2.1b new shares at an issue price of $0.005 each, on the basis of seven rights shares for every one share held. Net proceeds of $9.6m raised will be used for general working capital.

*Cordlife: To end exclusive hospital, baby-fair agreements after anti-trust probe.