From a chart perspective, the STI is struggling near its 2,850 support with the next line of defence at 2,800. Immediate resistance is seen at 2,890 level (20-dma).
Stocks to watch:
*Strategy: Goldman Sachs is upgrading the Singapore market to “market weight” with a 12-month STI target of 3,100, highlighting that valuations for the MSCI Singapore are undemanding. The firm expects the Singapore market to register a total USD return of 7% over the next year.
*Office: Office rents could ease until 2016, with some analysts forecasting the slide to possibly continue to 2018, on back of a surge in supply in 2016. CBRE adds that the downturn in the energy and commodity sectors, as well as continued challenges in the financial sector have also impacted office space demand.
*SingPost: CEO Wolfgang Baier abruptly resigned, sparking speculation that he could have been poached by a global firm in a similar space. The key question now is how long will SingPost be able to hunt for a new CEO, given that it took one and a half years to appoint a suitable CEO the previous round. Baier will stay on for another six months to ensure a smooth handover.
*GLP: Acquired 15.5% stake in China Materials Storage and Transportation Development (CMSTD) for Rmb2b (US$311m). GLP will also set up a 49/50 JV with CMSTD which is expected to invest more than Rmb3.6b (US$562m) to develop 1.3m sqm across China. In light of the acquisition, GLP has become CMSTD's priority partner for redevelopment of the latter's existing land and facilities, and the JV has the right of first look for all future logistic land sourced by CMSTD.
*UMS: Signed MOU with All Star Fortress (ASF) to invest RM0.1m and extend US$7.5m in secured convertible loans to the latter for business development. ASF will also relocate its manufacturing operations to UMS' Penang premises.
*Tigerair: Nov operating statistics in Singapore recorded a 0.3% y/y increase in passenger traffic, with passengers carried up 3.7%, while capacity shrank 2.8%. Consequently, passenger load factor was lifted by 2.6ppt to 83.1%.
*Challenger: Despite the closure of its flagship megastore at Funan Mall, its opening of outlets across the island will help to mitigate any loss of income. Coupled with a mobile-first revamp due to start in early 2016, the company is looking to achieve top line performance of $1b in five years time.
*Vibropower: Its power plant in Shanxi, China has successfully synchronised with the state grid and is expected to contribute positively to its financial performance in FY16.
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