SG Market (29 Jun 15)

Singapore stocks are expected to open lower, on concerns of a “Grexit”, after Greece announced capital controls to close their banks on Monday, as they enter into a last-ditch attempt to reach a settlement with its creditors, just before the deadline of its €1.5b loan repayment to the IMF on Tue.

Weekend talks between Greece and its creditors came to an abrupt halt, after EU finance ministers rejected Greece requested for an extension of loan repayments to 5 Jul, to let the country hold a referendum and decide on whether it would accede to the austerity demands of its creditors.

Regional bourses are trading lower this morning in Tokyo (-1.9%), Seoul (-1.3%) and Sydney (-1.9%).

From a chart perspective, the STI is hovering below its 200-dma at 3,360, with downside support seen at the recent low of 3,290.

Stocks to watch:
*Property: The Business Times report that Singaporeans move from housing to non-residential market appears to be tapering out as purchases of industrial and commercial properties continue to plunge this yr. Property consultants highlight that the government’s measures have effectively crippled the purchasing power of Singaporean buyers who obtain onshore loans for properties.

*Otto Marine: Secured US$131m new contracts year-to-date, primarily contributed by its chartering business. In addition, utilization rate for the group’s chartering business has improved for 2Q15 versus previous quarters.

*Lippo Malls Indo Retail Trust (LMIR): To acquire two malls, Lippo Plaza Batu (LPB) and Palembang Icon, for an aggregate $110.8m. Occupancy rate as at 30 Mar for LPB and Palembang stood at 100% and 99%, respectively. The consideration will be paid via cash ($81.8m) and new units ($25m) issued at $0.37 apiece. Pro forma FY14 DPU is expected to increase by 1.1% to $0.0279.

*Xyec Holdings: MOU with RJEN Innovative IT Solutions to form a JV to develop its engineering business in Philippines, which includes the development of software for automobile electronic control units.

*Yamada Green Resources: Terminated a number of lease agreements to its eucalyptus plantations and shiitake mushroom cultivation bases in Zhangping City, China, to scale back output of less lucrative products. Subsequently, Yamada's total eucalyptus plantations are expected to reduce from 39,735 mu to 38,334 mu (-3.5%) and shiitake mushroom cultivation bases to 1,184 mu (-65%). Separately, Yamada proposed to acquire a 10-year lease for a moso bamboo plantation situated in Fujian, China, for Rmb48.5m.

*Mewah: Sold and transferred 7.4% shares of MOI International (Australia) to minority shareholders, Trupps Family Trust and Larry Chew Family Trust for A$0.7m. The consideration was based on 1.29x P/B and the amount shall be received over four years. This reduces Mewah's stake in MOI to 76%.

*SIA Engineering: Renewed a 5-year services agreement with SilkAir for $197m, which covers a broad spectrum of MRO and fleet management services for SilkAir’s fleet of A319/A320 aircraft.

*mm2 Asia: Proposed to issue up to $2.9m of convertible notes, which bear 1.5% interest rate and due 30 Jun 2017, for investment or acquisition purposes.