SG Market (15 Jan 16)

The Singapore market could see a technical rebound on selected bargain hunting, particularly in property counters, while the O&M sector is expected to remain weak till the 21 Jan D-Day when investors meet to decide on Sete Brasil's fate.

Regional bourses opened in positive territory on the final day of trading for the week, with Tokyo (+1.6%), Seoul (+0.5%) and Sydney (+0.6%).

From a chart perspective, the STI has breached the key fibonacci support at 2,680 yesterday. The next line of defence is at 2,600.

Stocks to watch
*Economy. Credit rating firm Moody's warns global speculative-grade default rate has risen to 3.4% at end-2015, and will continue to rise due to volatility in O&G and metals-and-mining sectors, along with slowing growth in China. Agency predicts global speculative-grade default rate will rise to 3.9% at end'16, but still below 4.2% historical average since 1983.

*Keppel DC REIT. 4Q15 and FY15 DPU of 1.64¢ and 6.84¢ came in 1.9% above IPO forecasts, but missed street estimates due to lower-than-expected occupancies. On a pro forma basis, gross revenue dropped 8.1% y/y to $24.8m amid lower rental income from Singapore properties and unfavourable FX movements. NAV/unit at $0.921.

*GKE Corp: Swung to 1HFY16 net profit of $258k (1HFY15: -$570k), boosted mainly by a $1.2m disposal gain of an associate. Revenue fell 10.5% to $16.9m from a slowdown in the logistics industry due to macro uncertainties. Gross margins slipped 0.5ppt to 24.8%.

*Midas. Negative comments from a Chinese government audit on train maker and customer, China Railway Corp, citing that actual investment in projects are lower than stated, and that state funds were not used according to plans. This may cast a pall over the railway sector.

*Noble: Fitch affirmed credit rating at BBB- with a stable outlook amid improved balance sheet and liquidity position. This came after the disposal of the remaining 49% stake in Noble Agri, as well as its commitment to reduce working capital in its metal business, on-going cash flow generation from operations, and ability to retain access to bank facilities.

*Perennial Real Estate: Setting up a 40:20:20 JV with Shanghai Summit Property Development and Shanghai RST Chinese Medicine, to operate a premium eldercare and retirement home at Chengdu East High Speed Railway Integrated Development Plot D2. Total investment sum for JV is close to Rmb150m ($39.6m).

*Keppel Corp: Infrastructure arm handed over a substantial part of the Doha North Sewage Treatment Works project to its client on 10 Dec 2015. Group will continue to support operations and maintenance for ten years.

*Jumbo: Opened its third Jumbo Seafood outlet at Shanghai International Finance Centre. The group intends to establish at least three more outlets in China and/or Singapore within the next three years.

*GLP: Secured three new lease agreements totalling 35,000 sqm of logistic facilities in Greater Tokyo and Osaka.

*First Sponsor: Disposed non-core properties in Netherlands for an effective €10.6m ($16.6m). Group is expected to recognise a €4.3m ($6.7m) gain on disposal upon completion, scheduled for end-Feb 2016.

*MFS Technology: Proposed capital reduction of $0.10733/share, following the sale of subsidiaries in 2014 and 2015.

*Nutryfarm International: To acquire the remaining 45% stake in NutryFarm Biomedicine for Rmb64m in cash.

*Advanced Integrated Manufacturing: Acquired a minimart in Bukit Panjang for $0.24m.