SG Market (02 Mar 16)

Singapore shares are likely to see positive spillover form the strong rally in Wall Street overnight, with encouraging US economic data, China and ECB stimulus hopes, and firmer crude prices renewing risk appetite.

Regional bourses surged, with Tokyo (+2.5%), Seoul (+1.4%) and Sydney (+1.3%) markedly performing in the open.

From a chart perspective, STI is may test the near-term resistance at 2,740, while immediate support is at 2,680 (50-dma).

Stocks to watch:
*Macro: FY15 was a year of weaker earnings (-22.7%) based on a sample of 433 listcos. Notable drags were impairments from rigbuilders Keppel Corp and Sembcorp Marine, provisions by banks, and impairments by property developers.

*Sembcorp Marine: One of its customer Noble Corp reported that a newbuild jackup rig, currently in final stages of construction, is damaged after a shipyard crane boom collapsed near the rig. The potential impact on SMM is if it needs bear any damages if the rig cannot be delayed on time and also the additional cost to repair the damages.

*SingPost: Issued legal notice to SIAS, to ascertain whether the shareholder activist group had shared an anonymous shareholder letter with other parties. The letter is deemed defamatory.

*Otto Marine: Secured contract worth up to A$94.8m, to charter OSVs to a renowned international E&P company, for FPSO infield support in a gas field in Australia.

*KS Energy: Renewed contract with Belayim Petroleum for its jack-up rig to continue drilling in Egypt. The contract, worth US$6m, is expected to last till Jul ‘16

*Jason: Was awarded 10 contracts worth an aggregate $7.2m to-date, for the supply and installation of flooring.

*Sing Post: Held topping out ceremony for its regional e-commerce logistic hub, a three storey 553,000sf integrated facility, which has two warehousing floors, 150 loading bays, an office block, and fully automated end-to-end parcel sorting facility.

*China Fishery: Fitch Ratings downgraded the group’s issuer default rating to “restricted default” from “C”, citing the group’s non-payment of a scheduled coupon which was due 30 Jan ’16, even after a 30-day grace period.

*SIA: Receiving its first of 11 A350s to be delivered this year. The airline has 67 A350s on order, of which seven are the new A350-900ULR for its direct flights to the US beginning 2018.

*Blue Sky Power Holdings: Expects FY15 to return to black, due to gains from disposal of interest subsidiaries, and increased gas sales. Results to be announced before the end of Mar '16.