Thursday, September 10, 2015

SG Market (10 Sept 15)

Singapore shares may take a pause, tracking the slump on Wall Street as investors fretted over a potential rate hike, lower oil prices and underwhelming reception to Aplle’s upgraded products.

Regional bourses reversed gains this morning in Tokyo (-3.2%), Seoul (-0.6%) and Sydney (-2.4%).

From a chart perspective, nearterm resistance for the STI is tipped at 2,950, with support at 2,750.

Stocks to watch:
*Strategy: Renowned Technical Analyst Tom DeMark, who successfully predicted last month’s sell-off in Chinese equities, highlighted that the Shanghai Composite could rise more than 4% in the near-term before resuming its decline.

*Economy: Moody’s downgraded Singapore’s 2015 growth forecast from 3% to 1.7% due to weaker trade and financial flows from China’s slowdown.

*Economy: SBF-DP SME Index shows business sentiments of S’pore SMEs falling to a three-year low at 51.9, with all sectors expecting a decline in both turnover and profitability in 4Q15. The three largest sectors - construction/engineering, manufacturing, and commerce/trading - all reported a drop in optimism for the next two quarters.

*CDL Hospitality REIT: Marked its maiden entry into European hospitality with the acquisition of the 198 room Cambridge City Hotel in the United Kingdom for £62.5m. The property is currently on a 125-year lease with an option for an additional 50 year lease extension. The hotel's 1H15 RevPAR stood at £101, a 28.6% y/y growth. On a pro forma basis, the hotel's income yield is expected to be 5.6%, translating to a 1H15 DPS accretion of 1.9%.

*Global Logistics Properties: Signed new lease agreements totalling 90,000 sqm with five industry leaders in China, four of whom are repeat customers.

*Blumont: 10.7% owned Kidman Resources has received planning approval for production at its Burbanks gold project. Mining will commence immediately and is expected to yield 4,552 oz at 4.32g per ton. The all-in cost of mining is forecast to be about A$875/oz.

*Singapore Medical: Will divest its 49% stake in MindChamps Medical for $100,000. The group is expected to record a gain of $22,000 in FY15.

*Food Empire: A fatal accident has occurred at its manufacturing facility in India, although there are no updates as yet on the assessment of damages.

*China Kunda Technology: Terminated MOU for a strategic business cooperation with Yang Jincheng.

*China Sky Chemical: Has requested trading resumption of its shares from Thur (10 Sep), with the company highlighting that it has fulfilled the necessary conditions set by SGX to resume trading.

*IHC: SGX advised caution against trading in the shares of International Healthway (IHC) after its review of trades showed that a handful of individuals were behind over 60% of trading volume. IHC recently announced the proposed acquisition of Healthway Medical on 19 Jun.

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