Thursday, March 24, 2016

SG Market (24 Mar 16)

SG Market: The overbought market may shed some gains today, taking cue from the drop in US equity and oil prices as investors keep another eye on the Singapore 2016 Budget.

Regional bourses opened weaker in Tokyo (-0.5%), Seoul (-0.6%) and Sydney (-1%).

From a chart perspective, the STI appears overextended with immediate resistance at 2,900 and downside support at 2,830.

Stocks to watch:
*Singapore Budget 2016: Expect a pro-business budget to balance economic restructuring, growth and job creation. Focus will likely be on infrastructure, rail and bus spending. Corporate goodies may come in the form of delayed foreign worker levy hikes and incentives for local companies to expand overseas.

*REITs: Cambridge Industrial Trust CEO surmises that S-REITs are set to consolidate following tightened regulations that could raise costs and lower revenue, making mergers the most viable option to thrive.

*Select Group: Privatisation offer of $0.525 per share by consortium led by Temasek's Dymon Asia Private Equity values the company at 10.5x earnings and 23.5% premium over last done price. Consortium also includes co-founders Tan Chor Khoon and Tan Choh Peng.

*Hotel Properties: 50%-owned JV VN NH Holdings is acquiring American Indochina Resorts, which owns a five-star beachfront resort in Vietnam, for US$65m.

*Perennial Real Estate: Acquiring a 20% stake in Aidigong Modern Maternal and Child Health Management for Rmb135.4m. This complements its objective of creating a new asset class to meet growing demand for medical and healthcare space in China.

*Singapore Medical Group: Acquiring 70.6% effective stake in Novena Radiology, valuing the latter at $0.55m. The target operates diagnostic imaging services through two premises, Novena Specialist Centre and Novena Medical Centre.

*Croesus Retail Trust: Private placement of up to 70m units at $0.745-$0.77 per unit to raise gross proceeds of up to $53.9m to fund potential acquisitions of retail assets in Japan.

*Koh Brothers: Looking for more hotel assets in Singapore and UK as well as M&A targets to beef up its construction business. Mid to long-term target is to have construction, building materials and property each contribute 30% of group revenue, and 10% from leisure and hospitality segment. Currently construction and building materials make up 70% of revenue, with leisure and hospitality delivering 1%.

*Ascott REIT: Issued $120m of 4% fixed rate note due 22 Mar 2024 to refinance existing borrowings and finance general corporate purposes.

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