SG Market (19 Jun 15)

Singapore shares are expected to open higher today, after US stocks rallied overnight, amid a wave of conflicting headlines on Greece and the comfort of Fed not aggressively raising rates.

Regional bourses are trading higher this morning in Tokyo (+0.9%), Seoul (+0.2%) and Sydney (+1.2%).

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

Stocks to watch:
*Jardine C&C: Proposed renounceable underwritten 1-for-9 rights issue of up to 39.5m new shares at $26.00 each, to raise net proceeds of $1.0b, which will be used to repay term loans (82%), certain short-term indebtedness of the group (6%) and for general corporate purposes including strategic investments and acquisitions (12%).

*SIA: In talks with Airbus and Boeing on developing a plane with new technology that would allow it to fly non-stop to US profitably. CEO highlights SIA “wants this as soon as possible” to revive its non-stop flights to US. Analysts guide that reviving the non-stop flights to US will help SIA fill a gap in its network that is benefiting rivals like Cathay Pacific and Qantas.

*First Resources: Operating statistics for May ’15 - CPO production jumped 22.8% y/y to 52,224 tons, while extraction rate grew to 22.6% from 22.1%. Palm kernel production also rose 25.7% to 12,506 tons, with extraction rate at 5.4% (-0.2 ppt). For 5M15, CPO production was 249,623 tons (+14.5%), while that for palm kernel was 58,031 tons (+13.1%).

*Super: Subsidiary OWL has been appointed sole distributor of Italian coffee brand Caffè Cagliari’s products in Asia. The product suite ranges from staples like whole beans to newer products like capsule coffees and machines. OWL will also open the first Caffe Cagliari flagship outlet in Asia, and push the products to business consumers like cafes, hotels and restaurants.

*KrisEnergy: Spuds first oil at Nong Yao field in Gulf of Thailand, with initial production rate at 2,500 barrels of oil per day (bpd) from three wells. The development will comprise up to 23 wells, a wellhead processing platform and a minimum facility wellhead platform with the export of crude via a FSO vessel. The facilities have a production capacity of up to 15,000 bpd and a processing capacity of 30,000 barrels of fluids per day. KrisEnergy holds a 22.5% working interest in the field.

*Riverstone: Awarded contract to a company for the construction of a new glove factory building (under Phase 3) at Taiping, Perak, Malaysia, worth ~RM15.8m (exclusive of 6% GST). Construction of the new glove factory building is expected to be completed by 2Q16 and can potentially increase production capacity by ~1.0b gloves.

*Union Steel: Entered conditional sales and purchase agreement to purchase 85.2% stake in Gee Sheng Machinery & Engineering for US$5.1m. The acquisition will be funded by internal resources and bank borrowings, and is in line with the group’s plans to diversify and expand into the business areas of civil engineering and manufacturing.

*Ley Choon: Won $24.8m contract to resurface Changi Airport taxiways. The contract involves laying new-developed asphalt premix which will better withstand deformation due to the harsher tropical climate condition.

*First Sponsor: Acquired 2 hotels in Amsterdam - a Holiday Inn and a Holiday Inn Express - with 509 carpark lots for €54.6m (S$82.9m) from IVG Institutional Funds.

*SunMoon: Acquiring 51% stake in Harvest Season Spore for $3.1m via issue of 60m new shares at $0.0518 each, representing 18.82% of current issued share capital. Harvest Season currently operates 6 fruit stores under Harvest Season Group in and around Shanghai.