Tuesday, March 15, 2016

SG Market (15 Mar 16)

SG Market: Singapore shares are likely to face some profit taking as investors take a pause ahead of the FOMC meeting on Tue/Wed.

Regional bourses opened mixed, with Tokyo (-0.2%) and Sydney (-0.5%) weaker, although Seoul (+0.3%) opened higher.

From a chart perspective, topside resistance is seen at 2,890, while bottom support at 2,770.

Stocks to watch:
*O&M: News sources warn that the Sete Brasil saga is "about to get very ugly", with mounting FX losses eroding profits of suppliers, as most contracts were locked in at BRL1.75 to USD1, which has since deteriorated to BRL3.90. Negative for Keppel Corp and Sembcorp Marine.

*Ascott Residence Trust: Acquired 369-unit Sheraton Tribeca New York Hotel for US$158m. The accretive acquisition is expected to raise its distributable income by US$6.6m (DPU: +0.12¢ to 8.11¢). To fund the acquisition, the REIT is intending to raise at least $100m through a private placement at $1.055/unit.

*Swee Hong: Issuing 300m placement shares at 1¢ to raise $3m, up to 100m top up shares, and 500m free warrants (exercise price: 1¢) to KH Foges. Upon exercise of all warrants, the subscriber would own up to 42% of the group’s enlarged capital.

*Manhattan Resources: Entered into an MOU with Energy Resource Investment to acquire an at least 51% stake in PT Kariangau Power, an Indonesian company that operates a coal-fired power plant in Kalimantan.

*Seroja Investment: Secured a five-year coal barging contract from PT Prima Multi Mineral to transport 2.5m to 3.75m tons of coal within Indonesia. The expected contract revenue is approximately US$2.3m, about 5% of FY15 revenue.

*Yoma: In response to a SGX trading query, positive reference is made to the nomination of presidential candidate of Aung San Suu Kyi’s National League for Democracy, as well as the listing of Chairman Serge Pun's company, First Myanmar Investment in Yangon Stock Exchange.

*HTL: Shareholders of offeror Yihua Yimber have approved the proposed acquisition of HTL. The remaining three pre-conditions which include sanction and approvals by Chinese authorities are required to be obtained by 31 Jul.

*Trek 2000: External auditors found documentation deficiencies in relation to certain sale transactions between a subsidiary and a customer. The customer has paid US$2.65m but the auditor raised concerns as to the source and origin of bank transfer notices.

*Innopac: Terminated a JV agreement to distribute clean gasoline and diesel in Shandong, China.

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