SG Market (10 Dec 15)

Singapore shares face downside risks today on the unrelenting oil rout and economists cutting S’pore’s 2015 GDP growth estimate from 2.2% to 1.9% amid the ongoing manufacturing weakness and a regional slowdown. For 2016, the street is forecasting the economy to expand by 2.2%, down from 2.8% previously.

Fed watchers are now expecting a 25bps rate hike to 0.25%-0.5%, to be announced following the FOMC meeting to be held on 15-16 Dec.

Regional bourses are generally down today in Tokyo (-1.2%), Seoul (+0.1%) and Sydney (-0.7).

From a chart perspective, the STI is pinned below 2,895 (20-dma), with immediate support at the 2,850, followed by 2,800 level.

Stocks to watch:
*Property: Rental rates for both private and HDB flats continue to weaken further in Nov, with rents down 1.1% and 0.5% m/m respectively. R’ST Research cautions that with substantial private residential properties completed in 2015 and 2016, average non-landed private residential rents will likely decline by ~5% both in 2015 and 2016, which will continue to weigh down on the HDB rental market.

*DBS. Invests Rmb1.55b ($340m) for less than a 1% stake in Postal Savings Bank of China, the sixth-largest lender in China, prior to its planned 2016 IPO in Hong Kong.

*Ascendas REIT: Acquiring One@Changi City for $420m from its sponsor, based on a 5.9% net property income yield. 50% of the funding will paid via an issue of new units and the balance in cash. Reit also plans to raise $408m, comprising 90m new placement units at $2.223-2.290 each, and a pro-rata and non-renounceable preferential offering of 93.8m new units on a 3-for-80 basis.

*CapitaLand Mall Trust. To redevelop Funan DigitaLife Mall for an undisclosed amount. The project will unlock untapped GFA of 388,000 sf and will turn into an integrated development.

*SGX: "Trade with caution" alerts to be more detailed and targeted on a case-by-case basis, instead of the automatic slaps previously.

*SingTel: Teams up with GrabTaxi to offer Southeast Asian commuters a mobile wallet option to pay for their rides.

*Frasers Centrepoint: Selling its 19% stake in the JV, Gemshine Investment for $80.3m to its JV partner, a fund owned by Prudential. The JV owns the Compass Point in Sengkang. FCT is expected to record a gain of $19.6m as a result of the sale.

*Spackman: Completes the filming of Life Risking Romance, starring Korean actress Ha Ji-won, Korean actor Chun Jung-myung, and Taiwanese actor Chen Bolin. The movie is expected to be released in theatres in 1H16. The film is presented and co-produced by its 51%-owned subsidiary Novus Mediacorp and co-presented and distributed by indirect wholly-owned subsidiary Opus Pictures.

*Chaswood: Proposed placement of 23.8m new shares at 5.1¢ each to two substantial shareholders, Posh Corridor (17.5m) and Andrew Roach Reddy (6.3m). Net proceeds of $1.2m is intended for working capital.

*China Environment: Received approval-in-principle letter from Citic Bank for its application for refinancing a Rmb30m loan. Upon successful completion, the credit record of the company in the China Credit Bureau System will be back to normal status. The new loan will be guaranteed by the group's Executive Chairman Huang Min and his spouse.

*Boustead Singapore: Updated that its rival bidder, PT Enso Asia has revised its acquisition offer for a gas field in Aceh, Indonesia. PT Enso Asia is now offering a deal up to US$39.9m, which is higher than a joint offer of US$32.4m tabled by the group and its consortium partners.

*KSH: 45% owned associate to raise its stake in JV Co Sino-Singapore KAP Construction for Rmb8.3m, bringing its stake from 18% to 22.5%. Subsequently, further injection of Rmb36.9m will be made into the JV Co.

*Hengxin Technology: Won tenders for its leaky coaxial cable range worth Rmb110m in 2015, marking its maiden foray into the subway and rail infrastructure and telco sectors. Separately, it entered into a patent licensing agreement with an antenna manufacturer on a connector type.

*The Trendlines Group: Partners Boston-based private investor Saviva Capital, to jointly bid for Israeli government incubator franchise focused on agriculture and food technologies. Saviva has committed to invest $9.2m.

*Cosco Corp.: Issued profit warning for 4Q15 and FY15 due to significant inventory write-downs and provisions for impairment of trade receivables.