Monday, April 18, 2016

SG Market (18 Apr 16)

SG Market: Singapore shares are likely to lose steam after major crude producers failed to agree on a much anticipated output freeze deal. Oil-related counters, including Keppel Corp (1Q results today) and Sembcorp Marine, are expected to lead the sell down after oil prices tanked more than 5% in early Asian trades.

Regional bourses opened in the red in Tokyo (-0.4%), Seoul (-0.5%) and Sydney (-0.7%).

From a chart perspective, topside resistance for STI lies at 2,960 fibonacci level, with support at 2,840.

Stocks to watch:
*Property: Mar private home sales surged 178% y/y to 843 units, as developers launched more units. Notably, two projects that sold well included Cairnhill Nine (CapitaLand) and The Wisteria (BBR Holdings JV).

*CapitaLand Mall Trust: 1Q16 DPU of 2.73¢ (+1.9% y/y) came in line, against higher distributable income of $96.7m (+4.2%) due to an increase in retained income. Revenue and NPI improved to $179.8m (+7.4%) and $127.9m (+8.6%) respectively, bolstered by acquisition of Bedok Mall, completion of AEI at IMM Building and positive overall rental reversion (+1.4%). Portfolio occupancy inched up 97.7% (+0.1ppt q/q), with WALE of 2 years. Aggregate leverage remained stable at 35.5% (-0.1ppt) with average debt cost of 3.2% (-0.1ppt) and debt tenure at 5.3 years. NAV/unit at $1.88.

*Ascott REIT: 1Q16 DPU of 1.75¢ (-1% y/y) missed due to an enlarged unit base and higher dividends to perps holders. Revenue of $105.5m (+17%) was supported by several acquisitions across Australia, Japan and US made in 2015, while gross profit rose 13% to $48.6m. Aggregate leverage was 38.9% (-0.4ppt q/q) with effective borrowing rate of 2.5% (-0.3ppt) and average debt tenure of 5.1 years. NAV/unit at $1.34.

*SIA: Mar PLF rose 1.2 ppt to 77.8% on improved loads factors across all routes except Americas and SW Pacific. Passenger traffic improved 4.2% against a 1.8% increase in capacity expansion. All three subsidiary carriers, SilkAir (+3.2ppt to 71.5%), Scoot (+2.3ppt to 86.9%), and TigerAir (+5ppt to 84.4%) enjoyed better load factors. Overall cargo load factor continued to deteriorate, sliding 3.8ppt to 64% as capacity swelled 7.2% outstripping cargo traffic’s 1.1% growth.

*OSIM: Independent financial adviser PwC views the $1.39/share, or 17.3x FY15 P/E, privatisation offer as fair and reasonable, and recommends shareholders to accept the offer.

*Olam: To form a 30:70 JV with Mitsubishi Corp to import and distribute coffee, cocoa, sesame, edible nuts, spices, vegetable ingredients and tomato products in the Japanese market.

*Wilmar: Reiterated its stance against illegal deforestation and declares that a breach of its policy will lead to a possible discontinuation of business relationship with offending supplier.

*Tritech: Secured a $3.5m contract together with Black & Veatch (SEA) from PUB to conduct a feasibility study of the underground drainage and reservoir system. The group’s share of the contract is $1.4m.

*Cogent: Awarded the contract for the construction of Phase 2 of its depot facilities in Port Klang, Malaysia to Shui Xing Ventures for $8.9m. Phase 2 will involve the construction of a warehouse on 419,000 sf of land and is expected to be completed by Apr ‘17 with a built-up area of 270,000 sf.

*Acromec: IPO of 27m new shares at $0.22/share 5.3x subscribed. Parties allotted under the placement tranche (25.5m shares) include Asdew Acquisitions (Alan Wang). Trading for the specialist engineering services provider to commence at 9am today.

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