SG Market (20 Jan 16)

Singapore shares are likely to enjoy a day or two of relief rally from oversold levels although upside gains may be capped by the continued slide in crude prices.

Investors will be anticipating the US crude inventories data this evening, which is likely to give an indication on the near-term direction for the beleaguered prices for the commodity.

Regional bourses opened mixed in Tokyo (-0.6%), Seoul (-0.7%) and Sydney (flat).

From a chart perspective, immediate resistance for the STI is seen at the mini gap at 2,670, with underlying support at 2,580.

Stocks to watch
*CapitaCommercial Trust: 4Q15 beat estimates as DPU rose to 2.17¢ (+0.9% y/y), bringing full year DPU to 8.62¢ (+1.9%). Gross revenue and NPI grew to $67.6m (+1.9%) and $52.3m (+3.2%), due to higher rents (+3.4%), but partially offset by increased property tax. Overall portfolio occupancy improved to 97.1% (+0.7ppt q/q), with WALE of 7.5 years. Aggregate leverage narrowed to 29.5% (-0.6ppt q/q) with average cost maintained at 2.5%. NAV/unit at $1.73.

*Keppel T&T: 4Q15 results beat, albeit with only one estimate, despite a plunge in net profit to $44.5m (-77.6% y/y), mainly from the absence of divestment gain ($186.4m) in 4Q14. Otherwise, EBIT surged 189%, boosted by fair value gains on investment properties and higher contribution from associates and JVs. Meanwhile, revenue tumbled to $52.6m (-26%) on the two divested data centres and absence of management fees received from Keppel DC REIT’s IPO. Net gearing crept up to 0.4x from 0.25x q/q. NAV/share at $1.30.

*First REIT: 4Q15 results in line as DPU climbed to 2.09¢ (+2.5% y/y) on a firmer distributable income of $15.7m (+5%). Revenue and NPI rose to $25.7m (+7.4%) and $25.4m (+7.9m) respectively, mainly due to contributions from Siloam Sriwijaya and maiden contributions from Siloam Hospitals Kupang & Lippo Plaza Kupang, which was acquired in Dec ’15. NAV/unit at $1.0388.

*SCI/ SMM: The Business Times cite that SCI may privatize or inject funds into SMM. SCI owns 61% of SMM and could also benefit from selling SMM and focusing on its profitable utilities business. KEP could be a natural buyer and merger candidate. SCI, SMM, KEP, and Temasek declined to comment.

*Ascendas Hospitality Trust: Property investment firm Starwood Capital and Chinese party Fosun Int’l said to weigh bids on the REIT. Market watchers expect a potential deal pricing at ~1.1x P/B, which translates to $0.792/unit, or 7% yield.

*ST Engineering: Its aerospace arm secured new contracts worth $415m (+33.9% y/y) in 4Q15 with projects ranging from airframe maintenance and cabin interior reconfiguration, to engine wash and land gear overhaul.

*SingPost: Appointed PwC as special auditors to investigate issues surrounding independent director Keith Tay Ah Kee's interests in relation to interested party acquisitions.

*Keong Hong: Awarded a tender to a 19,309.6 sqm land parcel at Siglap Road with a joint bid of $624.2m with partners, Sekisui House, and FCL Topaz. The leasehold site will be developed into a residential condominium.

*CSE Global: Acquired assets in C C American Group for US$6.1m, with another $0.8m conditional on specific performance targets. The additional assets will help bolster its midstream processing business.

*Swiber: Acquiring 38% equity interest in offshore services provider Deltatek Offshore for 9.5m naira (~US$47.7m).

*Vallianz: Disclosed it is in final stages of discussions with several strategic investors on a possible fund raising exercise. Counter will be remain halted until further notice.

*GKE: Commenced trial production at its automated ready-mix cement manufacturing plant.

*Oriental Group: Established an independent committee to investigate unauthorised guarantees to bank loans totalling Rmb50m between Nov ’13 and Jan ’14.

*Jiutian Chemical: Expects to report a net loss for FY15 due to worsening sales volumes and average selling prices of its products.