SG Market (02 Feb 16)

Regional bourses opened in negative territory in Tokyo (-0.7%), Seoul (-0.6%) and Sydney (-0.5%).

From a chart perspective, the STI sees immediate resistance at 2,670, with downside support at the recent low of 2,530.

Stocks to watch:
*Strategy: The Street is advocating companies with sound balance sheets that could weather the downturn, which include the telcos, healthcare and data centre REITs, as well as consumer-related plays Sheng Siong and FCT.

*Commodity/ Energy: Moody's polled the commodity and energy sectors as the most bearish in 2016 in terms of credit quality, mainly weighed by the mix of declining prices, weakening demand and prolonged oversupply.

*SIA Engineering: 3QFY16 slightly beat estimates. Net profit climbed to $49.4m (+ 6.7% y/y), on revenue of $275.2m (+3.7%), lifted by increased fleet management and line maintenance services. Operating margin expanded to 10.5% (+1.3ppt) on lower other expenses, while bottom line was also bolstered by higher contributions from associates and JVs due to one-time gains and increased activity at engine repair and overhaul centres.

*CH Offshore: 2QFY16 net profit plunged to US$1m (-80.8% y/y), on a drop in revenue to US$5.6m (-36.5%), on lower vessel utilisation and charter rate reduction. Gross profit fell to 40.6% (-23.8ppt) on increased direct depreciation of a new vessel. Interim DPS of 2.5¢ (2QFY15: nil). NAV/share at US24.18¢.

*ST Engineering: Land systems arm injected $10.3m into Indian subsidiary, LeeBoy India Construction Equipment, which manufactures road construction equipment, for working capital.

*Cordlife: Invested $8.4m in CellResearch Corporation to accelerate the clinical development of its advanced wound healing technology.

*Vard: Awarded a €4m contract to design an Antarctic icebreaking vessel for the Chilean Navy.

*IPS Securex: Secured a five year exclusive reseller agreement with UnderSea Sensor Systems, to market and sell its Hyperspike products across 16 countries in the region.

*Civmec: Proposed to acquire an Australian engineering and shipbuilding firm Forgacs for A$20.8m ($20.9m). The deal is intended to provide the group with a strong presence in the country's east coast and exposure to the defence market.

*Yanlord: Aberdeen Asset Management disposed 2.4m shares @ $1.015 apiece on 29 Jan over the market, reducing its stake from 5.035% to 4.912%.

*Viva Industrial Trust: Obtained $330m of senior secured transferable loan facilities.