SG Market (22 Jan 16)

Singapore market is likely to see a slight respite from oversold conditions following the rebound in oil prices and Wall Street.

Regional bourses opened higher in Tokyo (+3.2%), Seoul (+1.9%) and Sydney (+1.3%).

From a chart perspective, topside resistance for the STI is pegged at 2,670, with downside risk at 5-year low of 2,520.

Stocks to watch
*Keppel Corp: 4Q15 net profit slumped 44% to $404.8m but still beat lowered estimates. Performance was dragged by O&M weakness, hurt by a $250m provision for Sete Brazil contracts, but propped up by strong property sales in China and Vietnam. Final DPS cut, bringing FY15 DPS to 34¢ (FY14: 48¢). Orderbook declined 10% q/q to $9b; warns of long winter. MKE maintains Sell with TP of $4.24.

*CapitaLand Mall Trust: 4Q15 results largely in line with DPU of 2.88¢ (+0.7% y/y), despite the absence of a one-off distribution. Gross revenue and NPI rose 9.2% and 18.6% to $180.4m and $125.7m, respectively, mainly due to new contribution of recently-acquired Bedok Mall. Portfolio occupancy improved to 97.6% (+0.8ppt), while aggregate leverage crept up to 35.4% (+1.6ppt), with average debt cost maintained at 3.3% and tenor of 5.3 years. NAV/unit at $1.89.

*Frasers Centrepoint Trust. 1QFY16 in line as DPU climbed to 2.87¢ (+4.4% y/y), in tandem with a 4.2% rise in distributable income to $27.7m. Revenue dipped 0.2% to $47.1m on lower occupancy and average rent at Bedok Mall (-16.3%), while NPI rose 2% to $33.5m amid lower utility and maintenance expenses. Portfolio occupancy slipped to 94.5% (-1.5ppt q/q), with WALE of 1.6 years. Aggregate leverage held steady at 28.3%, with average borrowing cost of 2.36%. NAV/unit at $1.91.

*Fortune REIT: FY15 results in line as DPU rose 12.5% y/y to HK46.88¢, in tandem with higher distributable income of HK$884.6m (+13.3%). Revenue and NPI surged to HK$1.9b (+13.7%) and HK$1.3b (+14%), respectively, on income from newly-acquired Laguna Plaza and strong rental reversion (+20.3%). Portfolio occupancy inched to 98.8% (+0.1ppt q/q), while aggregate leverage held steady at 30.1% (-0.3ppt) with average debt cost of 2.15%. NAV/unit at HK$12.76.

*Soilbuild REIT: 4Q15 beat expectations. Distributable income grew to $15.1m (+17.1%), while DPU grew at a slow pace to 1.614¢ (+1.8% y/y) from an enlarged unit base. Gross revenue and NPI surged to $20.4m (+15.6%) and $17.5m (+17.1%), due to contributions from three newly-acquired properties in 3Q14. Portfolio occupancy dipped 1.9 ppt to 96.8% with WALE of 4.8 years. Aggregate leverage stood at 36%, with average interest cost of 3.21%. NAV/unit at $0.80.

*Bumitama Agri: 4Q15 CPO production hit an all-time high of 222,129 MT (+27.4%), while palm kernel production was up 29.6% to 43,243 MT, driven by a 30% jump in FFB harvest. MKE believes the strong output should restore confidence in the counter and believes the recent sell-down is overdone. House maintains Buy and TP of $0.85.

*SATS: To inject $11.4m into a 50:50 travel retail JV with DFASS to provide inflight sales, mail order and pre-order sales in Singapore.

*COSCO: 51%-owned COSCO Shipyard delivered two vessels, a PSV and a livestock carrier to its European buyer.

*Regal International: Entered into a project management cum construction agreement to develop a 21.6 acres plot of land into various residential, retail, and commercial developments in Malaysia. The project has an estimated gross development value of over RM$100m, to be completed over a 3-4 year timeline.

*Advanced Integrated Manufacturing: Acquired a minimart at Jalan Tenteram for $0.1m.