Thursday, December 17, 2015

SG Market (17 Dec 15)

Singapore equities are likely to open in positive territory as investors see the first US interest rate hike in a decade as a vote of confidence in the world’s largest economy.

However, sentiment is likely to be dampened by an overnight selloff in crude oil with WTI slumping to US$35.52/bbl on a surge in US petroleum stockpiles.

Regional bourses opened higher today with Tokyo (+1.8%%), Seoul (+0.4%), and Sydney (+1.6%) extending the Fed-bounce.

From a chart perspective, the STI is likely to test its immediate resistance of 2,873 (20 dma) with the next meaningful level of resistance at 2,948 (50 dma). Support is currently at the 2,800 level.

Stocks to watch:
*Banks: Fitch reiterates its stable outlook for the three local banks as well as the overall sector, citing that the banks’ diversification and selective lending in China will help stymie a potential sag in earnings growth.

*DBS: Among final bidders for RBS' India assets, with deal reportedly worth US$200m. RBS India has an asset base of S$4b and loan book of S$2.4b, forming 0.9% and 0.8% of DBS' assets and loans. Move is in line with plans to expand footprint and scale up its corporate banking business in India.

*Yangzijiang: Aiming for higher-value orders for specialised vessels in niche markets to tide over downturn, and has benefited from a steady stream of commercial shipbuilding orders backed by new international regulations coming into force from 2016.

*AusGroup: Won contract awards and extensions for clients within the energy and industrial sectors totaling A$100m since Oct ‘15.

*Roxy-Pacific: Aquiring a development property in Australia for A$27.5m, financed through internal funds and bank borrowings. The property sits on a 930sqm site, which has approval for the construction of 46 residential units and one retail unit with a total gfa of 3,581sqm.

*Emas Offshore: Ezra undertakes to buy from EMAS its 12.13% stake in Perisai Petroleum Teknologi for US$56m, about a 500% premium to current prices. The price was determined based on EMAS’ investment, and the transaction is to consolidate Perisai in a single entity at Ezra’s level.

*Vibropower: Its power plant in Shanxi, China is now fully operational and will contribute positively to its financial performance in FY16.

*Ntegrator: Clinched three contracts totalling $9m, two of which are equipment supply contracts from Myanmar's government and Vietnam's largest mobile network operator, while the third is a pipeline installation and maintenance services contract in Singapore.

*Trendlines Group : Subsidiary Trendlines Medical renewed its incubator franchise for another eight years.

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