Monday, December 14, 2015

SG Market (14 Dec 15)

Singapore shares are likely to open lower today, tracking steep Friday losses in the US and regional opening losses, as crude oil prices slumped to its lowest level since Feb ‘09.

Investors’ sentiment will likely continue to be fragile with the underlying trend still pointing to the downside and as investors look towards a highly anticipated US interest rate hike.

Regional bourses opened sharply lower today in Tokyo (-2.4%), Seoul (-1.1%), and Sydney (-1.5%).

From a chart perspective, the STI is now looking to test its 2,800 support with the next level of support at 2,780. Immediate resistance is seen at 2,885 level (20-dma).

Stocks to watch:
*COSCO: Proposed merger between the shipping businesses of its Chinese parent, China Ocean Shipping, and China Shipping Group has been granted the regulatory green light to proceed. The reorganisation of its parent will not involve the company for the time being. Trading in its share will resume this morning.

*Marco Polo Marine: Group financial controller Ho Kian Teck resigned, and will be replaced by group finance manager Grace Khaw Siaw Geit, with effect from 11 Dec.

*UOL/UIC: Awarded a tender for the residential site at Clementi Ave 1 at a tender price of $302.1m. The 99-year leasehold site has a total area of 13,037.8 sqm with a gross plot ratio of 3.5. Both UOL and UIC will jointly develop the site on a 50:50 basis.

*IPCO: 2QFY16 earnings returned back to positive territory with net profit of $5.1m (2QFY15 loss of $0.4m) as revenue soared 76.7% y/y to $15.6m on a jump in semiconductor sales (+156.9%) as well as increasing gas consumption in China (+50.6%). Bottom line was buttressed by FX gains (+96%) as well as a decrease in fair value losses (-81.1%). NAV/share of $0.02.

*OCBC: Established a wealth management company, BOS Wealth Management in the UK to serve European customers and is currently awaiting approval from UK regulators to commence business.

*Sim Lian: To acquire two retail properties, Woolworths Shopping Centre, and Masters Home Improvement Everton Park located at Queensland, Australia for AU$70m compared to an open market valuation of AU$70.1m. The two sites measure a total of 55,730 sqm. The group intends to fund the acquisition through internal funds and bank borrowings.

*Blue Sky Power: To acquire Fox Smart for HK$136m in a part cash, debt, and shares deal. Fox Smart is engaged in the trading of LNG as well as the investment of LNG refuelling stations for vehicles and vessels in China.

*Eucon: Conditionally agreed to issue up to 5.2b shares at 1.8¢/share for an aggregate amount of $93.7m to Oriental Straits Fund III and Mr Wen Yao-Long

*Ryobi Kiso: Secured new contracts worth $26.4m, bringing total contract value secured this year to $114.7m.

*USP: Proposing to expand into trading of marine equipment and industrial machinery equipment via the acquisition of Supratechnic for $12.3m cash and $2.5m new share issuance. The proposed transaction is priced at 0.8x P/NTA

*Global Yellow Pages: Ceasing the Singapore River Water Taxis project on 31 Dec, and it's 50%-owned subsidiary Singapore River Explorer, incorporated for the project is still owing the group up to $7.15m, which it may not be able to repay amid the project closure, and could materially impact the group financials in FY6/16.

*GP Batteries Int'l: Entered into 80:20 JV with 30% owned associate, Hanoi Battery Joint Stock, with both contributing a total US$6m ($8.4m) to manufacture and sell battery products in Vietnam.

*ST Engineering: Injected US$5m into subsidiary Keystone Holdings for the expansion of its aircraft leasing business through the purchase of an Airbus A320 aircraft currently on lease to a European airline.

*A-Sonic: Acquired 51% stake in a UK-based logistics company for £0.07m ($0.15m) to serve as a gateway for its e-fulfilment logistics business to Europe and UK.

*Asiaphos: Applied to renew its mining rights at its Mianzhu Norwest Mine 1. Although seen as procedural in nature, should the application not be granted, the group’s mining output and financial performance should not be affected although its estimated resource would decrease by 2.9m tonnes.

*Rex Int'l: Divested 16.67% stake in Rexonic AG to Ogsonic AG for $1.9m, thereby reducing its stake in Rexonic to 50%.

*PS Group: Issued profit warning for FY15.

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