S'pore market is likely to take a breather from the selldown on oversold technicals, as well as positive spillover from the overnight rally on Wall Street but upside will be capped by the lack of any real catalyst.
Banks are seen to benefit from prospects of higher interest rates, while REITs and high-yield counters will face renewed downward pressure.
Regional bourses are trading higher this morning in Tokyo (+0.1%), Sydney (+1.3%) and Seoul (+0.6%).
From a chart perspective, technical indicators are in oversold. Near term resistance is tipped at its 50-dma at 2,940, with underlying support at 2,850.
Stocks to watch:
*Banks: The Business Times highlighted that OCBC has topped DBS in 3Q bancassurance with a 34% market share, although DBS guides that its 9MFY15 performance still makes it the market leader with ~34% market share.
*CapitaLand: Maybank-KE visited six CapitaLand projects in Shanghai, Hangzhou and Suzhou, and opines that the group’s developments demonstrate its ability to develop projects across a range of sub-asset classes. CapitaLand expects a record year of sales of 8,000 homes in China valued at Rmb14b. Maybank-KE maintains Buy with TP of $3.88.
*Sembcorp Marine: Clinched a contract to design and build a new floating, storage and offloading (FSO) vessel for MODEC, scheduled for delivery in 1Q18.
*Citic Envirotech: In advanced negotiations for water treatment projects valued at >Rmb1b (~$225m).
*HTL International: In exclusive talks with Shanghai-listed Guangdong Yihua Timber Industry for a potential corporate transaction aimed at realising value for all shareholders of the Company. A definitive transaction agreement is expected to be entered by 5 Jan '16.
*Sabana REIT: Divesting 3 Kallang Way 2A, Fong Tat Building, to existing tenant, Fong Tat Motor for $16.6m as part of its capital recycling strategy. The divestment is expected to have minimal impact on NAV, distributable income and aggregate leverage for FY15-16.
*Yamada Green: To relocate its food processing facilities to Fuzhou City, Fujian Province with its former premises used for warehousing and storage. The group will also commence sales of processed food products as one of its principal businesses. As part of its sales and marketing strategy, it will also launch online sales of its products to capitalise on demand.
*Engro Corporation: Wuhan Wuxin Materials, the group's 33/67 JV with Wuhan Iron and Steel, has obtained approval for listing on the New Third Board in China.
*Jacks International: Mandatory offer by Creative Elite has closed, with acceptances of 19.3%, bringing Creative Elite’s resulting shareholdings to 85.4% of total issued shares.
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