SG Market (25 Jun 15)

Shares in Singapore are likely to retreat at the open, taking cue from the negative close overnight at Wall Street, as Greece and its creditors made little progress in its debt negotiation.

Regional bourses are trading lower this morning in Tokyo (-0.32%), Seoul (-0.24%) and Sydney (-0.54%).

From a chart perspective, the STI faces a near-term resistance at its 200-dma at 3,360, with downside risk at 3,320. Technical indicators are in neutral territory.

Stocks to watch:
*SGX: Reprimanded by MAS for lapses in two trading outages in Nov and Dec '14. In relation, SGX will invest $20m to improve its network and recovery systems, bringing capex on tech to $70-75m in FY16 and FY17, compared to $40-45m in previous years. Also, SGX will not raise equities and derivatives market fees until MAS is satisfied with its remedial actions.

*Noble: Roped in Patrick Yu Xubo, president of China's state-owned food-processing company Cofco Corporation, as its non-executive director. Yu reportedly played a key role in the formation of Noble Agri, the JV between Cofco and Noble. Also announced further share buyback on 23 Jun, with 14m shares purchased at $0.69445 apiece for $9.8m. Noble's six market purchases to-date has totalled 119.7m shares (1.78% share capital) at average $0.694/share ($83.1m).

*Ascott REIT/ CapitaLand: Ascott REIT proposed to acquire three serviced residence properties in Australia and Japan, as well as a portfolio of four rental housing properties in Japan, from its sponsor CapitaLand. The total consideration of $246m is based on pro forma FY14 EBITDA yield of 5.1% and is expected to result in a 2.9% increase in DPU to 8.44¢. Post-completion, Ascott REIT's portfolio will enlarge from $4.12b to $4.43b, with number of apartment units boosted to 11,368 (+8.3%) in 95 properties across 13 countries.

*Vard Holdings: 51%-owned Seaonics AS acquired ICD Software, a automation and control system software provider for the O&M sector, for NOK91.3m (7.4x P/B). The acquisition is intended to expand Vard's business in deck handling equipment and automation technology and drive systems for development of new products.

*Trek 2000/ OSIM: Proposed placement of new shares with OSIM International (24m) and placement agent, RHB Securities (2m), at $0.4365 each. In addition, OSIM purchased 1m treasury shares at the same price. Post-placement, OSIM’s stake will increase from 1.14% to 8.75%. Net proceed of $11.6m is intended for R&D (50%) and general working capital (50%).

*mDR: In a reply to a trading query issued by SGX after a large number of shares changed hands yesterday, mDR has disclosed that the group is currently in discussions over a potential material acquisition.

*Ryobi Kiso: Secured twelve contracts worth $55.9m year-to-date, expected to be delivered in FYJun16.

*IPCO: Expects to report a loss before tax for AprFY15, due to unrealised fair value loss on financial assets, allowance for impairment of Available-for-sale financial assets; and allowance for impairment of property, plant and equipment.

*Straits Trading/ Singhaiyi: Straits Trading and Singhaiyi subscribed for 25% and 40% interests in ARA Harmony FUND III at 1x P/B, for a consideration of RM120m ($45m) and RM192.3m ($72.8m), respectively. The fund holds five commercial properties located in Malaysia's Kuala Lumpur, Selangor, Ipoh and Malacca.

*Hi-P: Credit facilities with DBS increased to US$130m (previously US$80m), which the group intends to apply for working capital purposes.