SG Market (16 Jul 15)

Singapore shares are likely to get a slight lift from after Greek lawmakers backed the bailout package early this morning, paving the way towards securing much need funds to avert a debt default.

Regional bourses are all up this morning in Tokyo (+0.44%), Seoul (+0.09%) and Sydney (+0.96%).

From a chart perspective, key resistance for STI remains capped at its 3,360 triple-top, with underlying support at 3,200.

Stocks to watch:

*Keppel DC Reit: 2Q15 results beat estimates; DPU and distributable income topped management forecast by 1.9% at 1.62¢ and $14.3m, respectively. Gross revenue exceeded forecasts by 4% at $26.0m, while NPI came ahead by 3.4% at $21.9m, due to initial recognition for straight-lining of rental income at Citadel and higher variable income from Singapore properties. Portfolio occupancy picked up by 0.4ppt q/q to 94.0%, with WALE of 7.2 years. Aggregate leverage stood at 26.4%, with average cost of debt at 2.5% and average debt tenor of 3.9 years. NAV/unit at $0.88.

*SIA: Jun systemwide passenger carriage slipped 3.5% y/y against a 1.5% reduction in capacity. Consequently, passenger load factor (PLF) fell 1.6ppt to 79.9%. PLF for Europe, West Asia and Africa and America routes declined due to weaker demand and competition, while demand to East Asia was affected by MERS. PLF for South West Pacific improved on capacity consolidation. SilkAir’s carriage fell 3.4% against a 1.5% reduction in capacity. Consequently, PLF was shaven 0.4ppt to 72.3%. Cargo load factor declined 2.4ppt to 60.3% as cargo traffic fell 1.9% against capacity growth of 2.1%

*Oxley: Acquiring 20% stake in UK property developer Galliard Group for £50m, in an attempt to strengthen its foothold in London. The deal, fully funded by debt, is expected to allow the group to help lift its London portfolio performance as well as profitability.

*CapitaLand: Exploring options to boost value for Funan DigitaLife Mall, which includes a disposal or redevelopment works.

*Golden Agri: Reported a fire accident at a production facility in Indonesia. Total losses are still being estimated for the assets that are covered by fire insurance, while revenue is not likely to be affected as damaged production lines contribute <1% of total sales volume.

*JEP Holdings: Acquiring JEP Industrades (JEPI), a trading company which markets cutting tools, for $6m, paid via an issuance of 120m new shares (12.9% of enlarged share capital) at 5¢ each. The deal includes earn out payments for vendors of JEPI over FY16-18, comprising earnings above $1m per year and not more than $4m in aggregate over the three years.

*Duty Free International: Contemplating to seek dual primary listing on SEHK to tap on additional opportunities and widen investor base.

*Tianjin Zhong Xin Pharmaceutical: Placed out 29.6m new A-shares to China investors at issue price of Rmb28.28 (US$4.55) per share, higher than the previously-guided floor of Rmb12.83.

*ISDN: Received in-principle approval to develop a 20MW hydropower plant in Central Sulawesi, Indonesia. To recap, the plant will be jointly developed by ISDN (90%) and its local partner PT Teasia Energi (10%), and is expected to take 40 months to complete with an estimated cost of US$40m. Group expects the project to rake in revenue of ~US$10m/annum.