Singapore stocks are likely to continue its downward slide following the overnight drop on Wall Street as investors continue to fret the impact of China’s slowdown and uncertainty over Fed interest rate hike in Sep.
Investors will be eyeing China’s PMI data scheduled to be released this morning, with estimates forecasting manufacturing activity to hit a three-year low at 49.7.
Regional bourses are trading lower in Tokyo (-1.2%), Seoul (-0.4%) and Sydney (-0.7%).
From a chart perspective, the STI broke below its 2,950 support-turned-resistance and appears headed towards the next objective at 2,750 and 2,680.
Stocks to watch:
*Banks: MAS data showed that S’pore Jul bank lending came in at $610b (+2.2% y/y, +0.6% m/m). Business loans rose 0.6% m/m to $370b versus the 2.3% rise in Jun, as construction lending had grew by a record 11.7% the previous month. Meanwhile, consumer loans rose 0.6% m/m to $240b, growing at the same pace in Jun.
*Property: S’pore government is leaving the development charge (DC) rates for commercial, landed and non-landed residential, hotel/hospital uses unchanged, but cutting industrial use rate, applicable from 1 Sep '15 to 29 Feb '16. Rates for industrial use will be cut by 3-4% for 87 out of 118 sectors. The cuts were due to weak fundamentals in the industrial segment, with rents, take-up and land bids all heading southwards.
*Sembcorp Marine: Secured EPC contract worth over US$1b from Maersk Oil, to build three topsides for a project in North Sea.
*Chasen Holdings: Secured contracts worth $44.5m for FY16, comprising of relocation projects ($28.2m), technical and engineering works for building construction projects ($14.3m) as well as transportation and warehousing business ($2m).
*ST Engineering: Terminated JV, WingStar, previously set up to acquire mid-to-end-life aircraft for lease, conversion or part out, due to differing views on strategic focus from Wings Capital Partners. Instead, STE has incorporated Keystone Holdings as a holding company for aircraft leasing investments and plans to set up more subsidiaries in different geographies to support projected purchase of aircraft leased to global airlines.
*Saizen REIT: Acquired Strasse Nanokawa, a 42-unit residential property in Minami Ward of Fukuoka, Japan from an independent party for JPY513m ($6m). With 83% occupancy, the property’s current NPI yield is 4.2%, but expected to rise till 5% on normalised occupancy of 94%.
*Libra: Awarded two sub-contracts worth an aggregate $14.4m for the supply and installation of air-conditioning and mechanical ventilation works at Selarang and Union Street, expected for completion in Oct '16 and Aug '16, respectively. Separately, group updated that a $13m contract awarded previously in Mar '15 has been terminated and has received $0.4m in compensation.
*P99: Proposing to acquire 95.95% of Barito for US$163.1m, via the issuance of 970.5m new consolidated shares at $0.2356 (post-consolidation), resulting in an RTO. Barito owns 46km of commodities hauling road in Kalimantan and a licensed public port where the road ends.
*Chinese Global Investors: Proposed to dispose its entire stake in waterproofing specialist Hitchins International at $3.3m. Completion of the disposal is expected to result in a book gain of ~$2.3m. Post-disposal, the group will cease to have any operating business and deemed as a cash company, and intends to focus on developing its financial and investment services business.
*Asiatic: MOU with Shunfeng Investments to establish a framework to pursue opportunities in Southeast Asia for solar photovoltaic power farm projects.