SG Market (08 Jul 15)

Regional bourses are trading lower this morning in Tokyo (-0.9%) and Sydney (-0.6%), while Seoul is up 0.1%.

From a chart perspective, downside support for the STI remains at its recent low of 3,268, with overhead resistance at the 3,360 triple-top.

Stocks to watch:
*Economy: Temasek reported shareholder returns of 19.2% for MarFY15. The year saw Temasek investing $30b and divesting a record $19b, with the top three sectors for investments being consumer, financial services and life sciences and agriculture. Singapore continues to form the largest share of Temasek’s underlying assets, at 28% of total portfolio, followed by China at 27% and Australia at 9%.

*SPH REIT: 3Q15 results in line, with DPU at 1.35c (flat y/y) taking 9MFY15 DPU to 4.08¢ (+1%). Gross revenue for the quarter advanced 2.1% to $154.3m (+2.1%), led by higher rental income achieved by both Paragon and The Clementi Mall, while NPI advanced 4.3% to $39.3m, largely due to lower maintenance, utilities and marketing cost. Portfolio occupancy was at 99.8% after an unexpected lease termination of an office unit in Paragon, however, Paragon is now fully committed, with WALE by NLA of 2.1 years. Net gearing stood at 26% with average cost of debt of 2.55% and tenor of 3.2 years. NAV/share at $0.93.

*SingPost: Alibaba will invest $92m for a 34% stake in SingPost's subsidiary, Quantium Solutions, and will ramp up development of its e-commerce logistics infrastructure and services. Further, Alibaba proposed to purchase 107.6m new shares for $187.1m ($1.74/share), raising its stake from 10.2% to 14.5%. The duo structured a joint strategic business development framework to further improve efficiency and integration of e-commerce logistics solutions, where both parties will share their respective knowledge and leverage each other’s strengths to scale across the e-commerce logistics value chain.

*Noble: Appointed PwC to conduct an assurance review of Noble’s MTM models, valuations, and governance framework. On completion of the PwC’s review, a summary of the review will be released.

*Kris Energy: Proposed renounceable underwritten rights issue of 440.1m new shares at an issue price of $0.385 per share on a 42-for-100 basis. Net proceeds of $165.6m raised will be used for capital expenditure (85%) and general working capital (15%).

*SMRT: Two major train lines, namely the North-South and East-West lines, were disrupted for about 3.5 hours on Tue evening, following multiple power trips. Investigations are still on-going to determine the exact cause of the disruption.

*Equation Summit: Proposed renounceable non-underwritten rights issue of up to 5.0b warrants at an issue price of $0.001 for each warrant on a 9-for-10 basis, with each warrant carrying the right to subscribe for one new share in the company at an exercise price of $0.007 per share. Assuming that all warrants issued are exercised, the estimated proceeds raised will be between $6.1m and S$35.0m.

*TalkMed Group: Will lease an additional 2,174 sf space at Mount Elizabeth Medical Centre from its CEO Dr Ang Peng Tiam, as existing utilisation of treatment facilities is operating at close to full capacity. The three-year contract is signed at $25 psf compared to the indicative open market rental range of $22-$28.

*Singapore Windsor: Entered two-year sales partnership agreement with Ooredoo Myanmar to provide telco services, technologies and solutions, distribution of SIM cards, handsets and other related hardware and software to the small and medium enterprise business segment in Yangon and Mandalay.

*KSH Holdings: Won its third public project in 2015 with a $34.8m design and build project, to construct a steel structure, electrical intake station and ancillary works. This lifts construction order book to $400m and is expected to contribute to top line from FY16 to FY17.

*GCCP Resources: To supply crushed calcium carbonate to Lhoist Group, a global producer of lime, dolime and minerals. The 13-month contract will comprise a total of 60,000 metric tons of precipitated calcium carbonate grade calcium carbonate.

*Spackman Entertainment Group: Completed filming for mystery-thriller movie "THE PRIESTS" and is currently in post-production stage. Top stars Gang Dong-won and Kim Yun-seok are anticipated to increase support and strong interest from international buyers for distribution rights ahead of its release.

*Sysma: Won contract to build a 2-storey bungalow for $8.7m at Holland Road for a period of 18 months.

*KS Energy: Terminated a jack-up drilling rig contract worth US$7.2m awarded in Mar, after negotiations with the buyer for deferment failed to materialize.

*Compact Metal Industries: 60:40 JV with a Kazakhstan national Nurzhan Shakirov to construct and own a cement plant with a production capacity of 3,200 tons/day in Almaty, Kazakhstan.