Friday, September 4, 2015

SG Market (04 Sept 15)

Singapore shares are expected to turn in an insipid opening after a mixed performance on Wall Street ahead of a crucial jobs report that could determine the timing and pace of Fed’s interest rate policy.

Regional bourses are trading lower this morning in Tokyo (-0.1%), Seoul (-0.3%) and Sydney (-0.3%).

From a chart perspective, the STI has broken below its 2,950 support-turned-resistance, with its next support tipped at 2,750, followed by 2,680.

Stocks to watch:
*STI: From 21 Sep, UOL, Yangzijiang and SATS will replace Jardine Matheson, Jardine Strategic and Olam as constituents on the STI, following a semi-annual review by SPH, SGX and FTSE Russell, in a bid to enhance liquidity requirements. Companies on the STI reserve list now include CapitaLand Commercial Trust, Singapore Post, Suntec REIT, Keppel REIT, and M1.

*Property: HDB resale prices climbed 0.3% m/m, while resale transactions fell 6.8% to 1,447 units in Aug, as some buyers withheld purchases until the Hungry Ghost Festival is over. Going forward, analysts expect to see resale volumes increase in future, especially in light of the new housing policies announced during the National Day Rally, Property consultant ERA projects HDB resale volumes to possibly hit 19,000 to 21,000 for 2015, although the house do not expect a huge increase in resale prices, as loan curbs and cooling measures are still in place, while buyers are more prudent nowadays in their price negotiations.

*Del Monte Pacific: 1QFY16 net loss narrowed 45.1% y/y to US$12.0m, despite revenue growing 6.1% to US$472.8m. Overall gross margin expanded to 19.8% from 15.9%. The net loss was attributed to US subsidiary, Del Monte Foods’ (DMFI) first quarter being seasonally the weakest, in addition to expenses from the SAP implementation. Meanwhile, The El NiƱo weather pattern also caused reduced pineapple supply in the group’s plantation in the Philippines leading to lower exports. NAV/share at US$0.16.

*Noble: Expands S’pore oil team to focus on growing regional demand. Hired 3 middle distillates traders from BP to join 2 existing traders for jet fuel and gasoil, and also added 3 crude traders to start trading physical cargoes in Asia. The group believes that it is uniquely positioned to capture local opportunities as various economies increasingly open up their oil industries.

*Ascott REIT: Divesting six Japanese properties to a third party for JPY4.5b ($52.6m) with an estimated net gain of JPY288.9m ($3.4m) as the properties are more than 10 years old and are located in Japanese cities with limited upside potential.

*PACC Offshore: Served by a legal claim with Kensteel Engineering involving $7.1m, ~9.4% of FY14 net profit, in relation to a sale and purchase agreement for a property in Singapore.

*Oceanus: Seeking to undertake a transfer of its listing from the SGX mainboard to the Catalist Board.

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