Monday, March 14, 2016

SG Market (14 Mar 16)

SG: Investors are likely to take risks on following solid Wall Street gains and higher crude prices.

Regional bourses opened firmer in Japan (+1.3%), Seoul (+0.2%) and Sydney (+0.8%).

From a chart perspective, topside resistance for STI is capped at 2,890 with support at 2,770.

Stocks to watch
*Macro: Market watchers expect more companies to consider divesting non-core assets to improve valuations and bolster balance sheets amid the current economic gloom.

*Del Monte. 3QFY16 beat on profit turnaround to US$0.6m (3QFY15: US$2.2m loss), largely due to FX gain and losses credited to minority interests. Revenue sagged 6.8% due to weaker US sales, partially offset by stronger APAC performance. Gross margin fattened to 18% (+0.4ppt) due to the absence of a one-time adjustment to inventory costs of US$6.2m. NAV/share at US$0.186.

*Keppel/Cosco: A new proposal for a re-tender of the anchor production structure for BP’s US$10b Mad Dog 2 field development in the US Gulf of Mexico is understood to include a call for contest to be opened up to China and Singapore yards, including Keppel Fels and Cosco Shipyard.

*CapitaLand: 268-unit residential development, Cairnhill Nine, has sold 134 of its 200 units released over the weekend

*Straits Trading: 89.5% owned Straits Real Estate is seeking to deploy the remaining one-third of its initial $950m capital commitment into real-estate opportunities in markets such as Australia, Japan, South Korea and China.

*Yongnam: Swung to FY15 net profit of $5.8m, as revenue jumped to $280.6m (+32.3%) from higher contribution of structural steelwork projects. Gross margin fattened to 10.9% compared to gross loss in FY14, while bottom line gains were pared by the absence of a disposal gain (FY14: $34.4m). NAV/share at $0.9677.

*SBI Offshore: Terminated a US$24m contract with a consortium of six Middle East-Chinese parties. The contract termination has been provided for in its FY15 financial report with no further revenue to be recognised from the contract.

*SMJ International: To receive $16,000 from De Palmco as settlement of a previous lawsuit.

*China Sky Chemical Fibre: Responded to SGX trading activity query regarding its volume movements on 11 Mar, that it had on 19 Jan '16 entered into MOU with ARC Resorts, a leisure and gaming property developer and owner, to commence negotiation for a 10% interest in the latter. No consideration and definite terms have been agreed yet.

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