SG Market (08 Mar 16)

Singapore shares may power higher despite being grossly overbought. This came after the STI capped its best week (+7.1%) since Oct amid stronger oil prices and funds rolling back extreme risk off fears especially in the most shorted stocks.

Regional bourses opened mixed, with Tokyo (-0.2%) opening lower, Seoul (+0.2%), and Sydney (+0.9%).

From a chart perspective, topside resistance of the STI is now pegged at 2,890, while downside support at 2,730.

Stocks to watch:
*OSIM: Chairman and CEO Ron Sim (69.2% stake) made an unconditional cash offer to privatise OSIM at $1.32/share, or 18.9% premium to the last available unaffected price. The deal prices the massage chair maker at 17x FY16e consensus P/E and 2.6x P/B.

*SGX: Feb total securities turnover reached $24.1b (+14% y/y, +4% m/m). Derivatives volume totalled 13.9m contracts (+43% y/y, -22% m/m), while commodities derivatives volume was 1.2m (+194% y/y, -6% m/m). 17 new bond listings raised $3.7b.

*Tigerair: SIA now controls more than 90% of total shares, resulting in less than 10% free float, which triggered a mandatory trading suspension. Dissenting shareholders will receive a letter on compulsory acquisition in due course.

*TEE Land/Lian Beng/Oxley: TEE Land is divesting its 10% stake in JVC, KAP Holdings to Oxley China and Lian Beng for $10. At the same time, the $3.9m shareholder loan granted by TEE Land to KAP will be novated and repaid in cash.

*Lian Beng/KSH/KOP: Expected to book a gain of $4.9m/$4.3m/$3.8m from the sale of a 32%/28%/25%-owned associate, Epic Land for $15.5m.

*Sakae: Proposing to acquire 51% of Cocosa Export, a Chilean frozen seafood production and trading company, for US$3m.

*Perennial Real Estate: Acquired an additional 3.68% effective interest in Chinatown Point for $5.8m, raising its stake to 5.15%.

*Falcon Energy: Acquired a 51% stake in vessel-owner, Otira for US$3m.

*Thai Beverage: Assigned a corporate credit rating of Baa3 with positive outlook by Moody’s (prior: Baa3 with stable outlook).