Singapore shares are likely to open lower this morning, with Wall Street ending its session with the biggest losses in four years, taking cue from the Asian market sell-off yesterday.
Regional bourses are trading lower this morning in Tokyo (-2.8%), Seoul (-0.8%) and Sydney (-0.6%).
From a chart perspective, the STI yesterday broke below its key support levels of 2,950 (Feb ’14 low) and 2,920. The next support level is tipped at 2,680, representing the 50% Fibonacci retracement of the 2008/09 descent.
Stocks to watch:
*Economy: Singapore consumer prices fell marginally to 0.4% y/y in Jul, (Jun 2015: -0.3% y/y), marking its ninth straight month in negative territory, although core inflation (CPI ex accommodation and private road transport) edged higher to +0.4% y/y (Jun 2015: +0.2% y/y), highlighting that underlying cost pressures still remain. The rise in core inflation was largely attributable to moderate decline in electricity tariffs and higher services inflation. For 2015 MAS is projecting core inflation and headline inflation to come in at the range of 0.5-1.5% and -0.5-0.5% respectively.
*Strategy: Aberdeen Asset Management highlighted that it could top up its equity holdings despite the current market sell-off, adding that lower valuations might prompt some fund managers with excess cash to buying shares rather than selling them. Having gone through the 1987 crash and the Asian crisis, the house notes that the recent mark sell-off appears “comparatively small”.
*Silverlake Axis: FY15 results below estimates, with 4QFY15 net profit inching up 1% y/y to RM74.7m, taking FY15 net profit to RM282.7m. Revenue for the quarter dipped 8% to RM126.4m, as a 23% increase in maintenance and enhancement revenue were offset by a decrease in software licensing, and an absence of software and hardware sales. Gross margin fell 5ppt to 61% from lower mix of higher margin software licensing sales. Other income jumped ~7.5x to RM24.3m on the back of an accounting gain for associate Global InfoTech post IPO, and FX gains. Final DPS of 1.2¢ (4Q14 final and special DPS: 1.8¢). NAV/share at 28.48sen.
*800 Super: FY15 net profit leapt 95.9% y/y to $17.6m partially due to a $5.4m one-time gain on disposal of property. New contracts and higher priced revised projects helped boost revenue by 22% to $140.3m. Bottom-line was slightly pressured by a 24.7% increase in other expenses to $20.1m as well as a 28% increase in employee benefits to $68.5m. Both increases were largely due to an increase in headcount, higher foreign worker levies, and the upkeep of motor vehicles associated with increased contracts. Final dividend of $0.02 (FY14: $0.01). NAV/share at $0.32.
*Kingsmen: Acquiring 5,251 sqm vacant leasehold land in Changi Business Park for $7.1m, where the company intends to build its new headquarters.
*Hong Leong Asia: Buys remaining 40% stake in Chinese JV Yunnan Yuchai Machinery Industry Company for Rmb18.2m.
*New Toyo International: Entered into a JV (50:50) MOU with Lum Chang to develop a mixed-use commercial development in Petaling Jaya, Malaysia. It owns the land on a 99-year lease with a residue of about 44 years.
*HLH Group: Acquired a 22,064sqm freehold land for mix property development in Sihanouk, Cambodia at US$7.9m, which will funded by a combination of borrowings and internal funds.
- United Food