Thursday, July 2, 2015

SG Market (02 Jul 15)

Singapore stocks are expected to open higher, taking cue from the positive close on Wall Street, with no clear signs of resolution in the Greek crisis, although stronger-than-expected jobs and construction data gave some support to US stocks.

Regional bourses are trading higher this morning in Tokyo (+0.9%), Seoul (+0.2%) and Sydney (+0.6%).

From a chart perspective, resistance for the STI is testing its 20-dma at 3.324 and an upside breach may take the index to the stiffer resistance at 3,360. Downside support is seen at the 2015 low of 3,268.

Stocks to watch:
*Property: URA 2Q flash data saw private home prices fell 0.9% q/q versus -1% in 1Q, representing its seventh straight quarterly decline. Consultants cautioned that it is still too early to conclude that property prices have stabilised, given the large number of unsold units in launched and unlaunched projects, buyers staying highly selective and developers pacing out their launches. Overall, analysts are expecting more downward pressures in property prices and transactions, and forecasts HDB resale prices to fall by up to 5% and private home prices to slip by up to 6% this year.

*REITs: Morgan Stanley believes that Singapore REITs are due for consolidation in the next 12-24 months, as the sector attempts to realise cost synergies in light of a tougher fee income environment as new rules from MAS kicks in. The house believes that consolidation is unavoidable and necessary for domestics REITs to develop sufficient scale and stock liquidity to compete effectively with global peers.

*Ascott Residence Trust: To acquire a hotel in New York known as Element New York Times Square West for US$163.5m ($220.7m), 6.6% below market valuation. The 411-unit property located in Times Square West has a remaining lease of 97 years to 2112, with a historical occupancy rate over 90% since 2012. Post-acquisition, pro forma FY14 DPU is expected to increase by 0.8% to 8.51¢. Deal financing will be done via debt and proceeds from the recent issuance of $250m perpetual securities.

*Tiong Seng: Won $227.3m contract by JTC for the construction of JTC Space @ Tuas, a first-of-its-kind integrated industrial facility, comprising a multiuser industrial facility, amenity centre, heavy vehicle parking facilities and workers dormitory at Tuas Avenue 1. The new contract win brings Tiong Seng’s order book to ~$1.5b extending revenue visibility to 2020.

*Figtree: Won $65m contract to design and build a state-of-the-art logistics hub in Singapore at Jalan Buroh. The facility, to be built for Hankyu Hanshin has GFA of more than 500,000 sf, consisting 9 levels of ramp-up warehousing space, value-added processing areas and ancillary offices.

*ST Engineering: Two ex ST Marine senior executives, Han Yew Kwang and Tan Mong Seng, have been charged with corruption.

*SGX: Clueless on unusual trading activity on counter yesterday, following a query by MAS, which issued a reprimand to the company two weeks back.

No comments:

Post a Comment