Singapore shares may find it hard to sustain yesterday’s rebound frollowuing the dramatic turn of the tide on Wall Street which ended in its sixth day of losses. Investors will be keeping close tabs on the Chinese trading session for greater clarity after the PBOC moved to cut benchmark interest rates.
Regional bourses opened weaker this morning in Tokyo (-0.3%) and Sydney (-0.6%), but higher in Seoul (+0.7%).
From a chart perspective, technical indicators remain oversold, with immediate resistance tipped at 2,950, and baseline support at 2,680, representing the 50% Fibonacci retracement of the 2008/09 descent.
Stocks to watch:
*Strategy: Renowned technical analyst, Tom DeMark, who successfully predicted this month’s selloff in Chinese stocks cautions that the Shanghai Composite may fall by another 13%, should it fail to close above the 3,200 level today, which could pave the way for a move to 2,590.
*Property: CapitaLand and Keppel Land are among bidders for BlackRock’s Asia Square Tower 1 in Singapore’s CBD which could be valued at more than $3.5bn. BlackRock may also look to sell Asia Square Tower 2. Norway's sovereign wealth fund is also bidding for Asia Square Tower 1 according to people familiar with the deal. According to Cushman & Wakefield, Singapore’s office rents peaked in 1Q15 as economic growth tapered, and the group is forecasting that Grade-A office rents in the CBD could slide 14% over next 2 yrs to $9.12/psf from $10.60/psf currently.
*Croesus Retail Trust: 4QFY15 distributable income gained 23.9% y/y to ¥877m, while DPU inched 1% to 2.02¢, due to an enlarged unit base. This brought FY15 total DPU to 8.08¢ (-10%). For the quarter, gross revenue jumped 25.5% to ¥1,989m, while NPI rose 18.2% to ¥1,205.6m, from new contribution of One's Mall acquired in Oct '14 and positive rent reversion at Mallage Shobu. Portfolio occupancy eased to 99.3% (-0.7ppt), while aggregate leverage reduced to 47.3% (-3.1ppt), with average debt cost at 2.02% and term to maturity at 2.9 years. NAV/unit at ¥83.95.
*Eu Yan Sang: Swung to 4Q15 net loss of $3.6m versus a net profit of $1.6m the previous year, dragging FY15 net profit to $4.6m (-70%). Revenue for the quarter fell 15% to $72.3m, largely due to macro challenges in Hong Kong and Malaysia. Gross margin held steady at 49%. First and final DPS of 0.5¢ (FY14: 2.2¢). NAV/share at $0.358.
*Silverlake Axis: Retorted the short sell report published on 20 Aug was baseless and will take necessary action to defend its interest. In relation, the group will engage Deloitte to undertake an independent review of the allegations and provide its findings and conclusions on the report's veracity, which will be published in due course. Counter will resume trading today.
*Blumont: Associate, ASX-listed Kidman Resources (10.7% stake), announced that it has established that its Burbank gold mine has a potential of yielding 99k oz of gold at a rate of 5.6g per ton, in accordance with the JORC code. Gold mining will commence in Sep as planned. The company has also commenced RC and diamond drilling programmes which aims to see if the mine has the potential for mining of other resources.
*Tritech: Entered investment framework with Zhong Xu Kang Yi, where the latter will inject $26.4m in exchange for a 60% stake in subsidiary Tritech Vavie. Tritech Vavie will then be a subsidiary of Zhong Xu.
*Linair Technologies: Clinched a $14.7m contract from Takenaka Corp, to provide air conditioning mechanical ventilation system services for the proposed development of Terminal 1 Extension at Changi Airport.
*Cordlife: EGM to obtain shareholders' approval on its proposed disposal of shares in China Cord Blood Corp is set on 14 Sep at 3pm.