SG Market (26 Jan 16)

SG Market: Previous two-day respite likely to be short lived as the market takes cue from the renewed sell-off in oil.

Regional bourses opened mixed today in Tokyo (-2.1%), Seoul (-1.2%) and Sydney (+1.8%).

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

Stocks to watch
*Economy: Market watchers highlight increasing signs of policy easing by MAS in Apr meeting given the absence of domestic inflation. Official forecasts for headline and core inflation maintained at -0.5%-0.5% and 0.5%-1.5%, respectively.

*SMRT: 3QFY16 beat with net profit of $36.9m (+ 64% y/y), taking 9MFY16 earnings of $82.7m (+18%) to 97% of street’s FY16 forecast. Revenue climbed 4.6% to $324.6m on stronger contribution across all fronts, mainly from rail (+5.1%) and bus (+6.3%) on higher ridership and average fares. Operating profit in rail of $8.2m (+242%) and bus of $3.4m (3QFY15: -$0.5m) was boosted by government grants and cheaper fuel. Non-fare EBIT also improved (+20.3%), led by taxi and rental segments. NAV/share at $0.5832.

*Cache Logistic Trust: 4Q15 exceeded expectations despite a fall in DPU to 2.07¢ (-3.4% y/y) stemming from an enlarged unit base due to a fund raising, while distributable income was boosted by a post-divestment distribution ($2.1m). Gross revenue surged to $24m (+16.6%) on incremental revenue from Australian acquisitions, but NPI slipped to $19.2m (-1%) on increased property expenses at newly converted multi-tenanted properties. Portfolio occupancy ceded 0.3ppt q/q to 94.9%, with WALE of 4.4 years. Aggregate leverage edged up 1.5ppt to 39.8%, while average debt cost eased to 3.25% (-0.15ppt) with debt tenor of 3.1 years. NAV/unit at $0.88.

*OUEHT: 4Q15 results in line with DPU and distributable income of 1.70¢ (-4.5% y/y) and $22.8m (-3.3%), respectively, on lower contributions from Mandarin Orchard and Mandarin Gallery. Revenue climbed 8.6% to $33m, while NPI expanded 7% to $28.8m, boosted by the addition of Crowne Plaza Changi. Committed occupancy at Mandarin Gallery was 94%, with WALE of 3 years. Aggregate leverage stood at 42% (-0.1ppt) with average cost of debt of 2.7%. NAV/unit at $0.90.

*Mapletree Logistics Trust: In line 3QFY16 with DPU of 1.87¢ (flat), weighed by a surge in borrowing costs (+45%), while distributable income inched 0.6% to $46.5m. Gross revenue climbed 7.3% to $88.9m, while NPI rose 6.7% $74.1m from the full contribution of properties acquired in FY15-16, offset by converted multi-tenanted buildings. Occupancy remained at 96.9%, with WALE of 4.8 years, while aggregate leverage inched 0.2ppt q/q to 39%, with weighted average interest rate of 2.4%. NAV/unit at $1.02.

*Ascott REIT: 4Q15 results above expectations although DPU slipped 4% y/y to 2.07¢, as revenue surged 26% to $119.2m due to new acquisitions made in 4Q14 and 3Q15, partially offset by the divestment of six rental housing properties. Same store RevPAU improved 2% to $145 on stronger performances from China, Indonesia and Vietnam due to appreciating currencies. Aggregate leverage and debt cost remained stable at 39.3% (-0.7ppt q/q) and 2.9%, respectively. NAV/unit at $1.41.

*Petra Foods: Substantial shareholder Aberdeen Asset Management raised its stake on 21 Jan, purchasing 1.4m shares on the market at $2.20 apiece, lifting its stake to 8.15% from 7.92%.

*Nera Telecommunications: Secured a $10m contract to supply turnkey TV transmission systems for a South East Asian TV network.

*NSL: Received indicative interest to purchase its dry mix business, with operations in Hong Kong, China, Singapore and Malaysia.

*Cogent: Appointed new crane specialist Konecranes to undertake crane system construction works for Cogent 1 Logistics Hub. The building is expected to complete by 4Q16.