SG Market (21 Oct 15)

Singapore shares are likely to trade within a narrow range following the tepid close on Wall Street as investors lie low before the release of 3Q results by SGX today and heavyweights Keppel Corp and Sembcorp Marine tomorrow.

Regional bourses are trading lower this morning in Tokyo (-0.1%) and Sydney (-0.3%) but slightly firmer in Seoul (+0.1%).

From a chart perspective, technical upside for the STI is capped at 3,050 with near-term support at 2,980.

Stocks to watch:
*Mapletree Industrial Trust: 2QFY16 results above estimates, with DPU up 7.3% to 2.79¢ on distributable income of $48.9m (+7.7%). Gross revenue and NPI advanced 6.2% and 8.6% respectively to $82.7m and $61.0m, due mainly to the contribution from the build-to-suit project for Equinix Singapore, as well as higher occupancies and higher rental rates achieved. Aggregate leverage stood at 29.7% with average debt cost of 2.3%. Portfolio occupancy inched up 0.3% q/q to 93.8%. NAV/unit at $1.33.

*Keppel T&T: 3Q15 net profit tumbled 17.1% y/y to $15.3m on weaker revenue of $50.9m (-5.1%), largely due to absence of revenue from two data centres divested to Keppel DC REIT in Dec '14. Operating margin narrowed 6.6ppt to 14.6% on lower investment and sundry income. Bottom line was further hit by higher taxes (+36.5%). Net gearing edged up to 0.38x from 0.25x in Dec '14. NAV/share at $1.20.

*Wilmar: In response to a trading query, group disclosed that majority shareholder Archer Daniels Midland, which controls 18.3% in Wilmar, had purchased shares in the market yesterday, comprising ~22% of total volume.

*Citic Envirotech: Awarded a Rmb400m ($88m) EPC contract to construct a 80,000 cubic meters/day waste water treatment plant in Tianshui City, Gansu Province, China. The project will commence immediately and is expected to complete in 18 months.

*ST Engineering: Land systems division, ST Kinetics injected 5.8m real ($2.6m) into Technicae Projetos e Servicos Automotivos as working capital for its operations in Brazil, mainly involving MRO services for armoured vehicles of the Brazilian army. Total investment in the latter was lifted to 13.05m real ($6.6m), and shareholding increased to 94.36% from 90%.

*UOB: Brunei branch divested its retail banking business to Baiduri Bank for a gross consideration of $65m, in an attempt to cut costs and remain focus on the wholesale banking segment in Brunei.

*Noble Group. Moody's warned that it may downgrade Noble Group's Baa3 investment grade rating if the group's leverage position does not improve in the next 1-2 quarters.

*Boustead Projects: Clinched two individual contracts totalling $59m in value, to deliver an integrated production and office facility to JEP Precision Engineering and Markono Print Media respectively, by 4Q16, thereby lifting order book to $273m.

*Rex Int'l: Terminated an agreement with MEO Australia for the acquisition of a 30% participating interest in an offshore license in Western Australia, incurring a cash compensation of US$53,500.

*Food Empire: Entered into a 49:51 JV with an Italian partner to produce and market capsules for coffee and other beverages with a total investment of US$109k.

*SunMoon Food: Reached a settlement of $2.3m regarding nTan Corporate Advisory’s Apr ‘14 claim for services it provided. The settlement may have a significant impact on its FY15 financial performance.

*Weiye: Seeking a dual primary on Stock Exchange of Hong Kong.

*Broadway Industrial: Issued profit warning for a net loss in 3Q15.

*TA Corp.: Issued profit warning for a net loss in 3Q15 and full-year 2015.