Thursday, March 3, 2016

SG Market (03 Mar 16)

Singapore shares are likely to consolidate nearly 5% gains in the past five days on China and Europe stimulus hopes and improving oil prices as investors reassess if risk-reward justifies further purchases.

Regional bourses marched forward another day, with Tokyo (+0.6%), Seoul (+0.2%) and Sydney (+0.8%) opening stronger.

From a chart perspective, the STI could pull back to try and to close the 2,680 gap from overbought position. Overhead resistance for the index sits at 2,740.

Stocks to watch:
*Strategy: The CPPCC meeting commences today till 14 Mar. Counters which may come into focus from policy tailwinds include water treatment stocks China Everbright Water, SIIC Environment and Citic Envirotech, as well as railway parts manufacturer Midas.

*Market: SGX has placed 41 Mainboard-listed companies on Watch-list for failing to meet the minimum trading price rule.

*Keppel Corp: Investing US$93.9m in a 40% owned JV, which will develop a 14.6ha mixed-used waterfront development in Ho Chi Minh City, comprising residential apartments as well as an 86-storey integrated mixed-use tower complex.

*China Everbright Water: Partnering Zhangqiu municipal government, via a 95% owned JV, to operate two wastewater treatment plants of which a combined capacity will reach 90,000m3/day. Total investment is Rmb160m with concession of 30 years.

*Frasers Centrepoint: Acquired additional 142m shares in Thai-listed Golden Land Property Development at 6.50bt/share in the open market, increasing its stake to 35.6% (+6.1ppt).

*Sim Lian Group: Announced a $755 psf average price for its Wandervale Executive Condominium, located near the Choa Chu Kang MRT station. During the 11-day e-application period, subscription rate was 1.47x.

*Chiwayland: Appointed a fund manager to manage its collateralized debt investment program, which pays an expected 9.8%-11% per annum to third-party investors. Funds raised to-date is ~Rmb130.9m, and the group intends to use raised funds for its development projects.

*Asia Fashion: To acquire 70% stake in media and entertainment investment company Boya Lianli (Beijing) for $11.2m, or ~26x trailing P/E. In relation, UOB Kay Hian was appointed as a placement agent to raise up net proceeds up to $19.2m via an issue of 62.5m new shares (54.2% enlarged share capital) at $0.32 apiece.

*Europtronic: Received notification from SGX to delist after not meeting the requirements to exit the Watch-List. Trading in the counter will cease after 1 Apr and will remain suspended until completion of an exit offer. An exit offer proposal is to be notified to SGX no later than one month after 2 Mar.

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