SG Market (21 Apr 16)

SG Market: The market is poised for a short term consolidation following the late pullback on Wall Street ahead of ECB's policy statement today and uncertainty over the success of Greece's bailout.

Regional bourses opened positive in Tokyo (+2%), Seoul (+0.5%) and Sydney (+1%).

From a chart perspective, STI faces immediate resistance at 2,960, with support at 2,840.

Stocks to watch:
SGX: 3QFY16 net profit of $89.2m (+1.1%) missed street estimates, mainly from lower clearing fees. Operating revenue remained firm at $102m (+3.3%), from higher securities (+3.5%) and derivatives (+3.2), amid heightened market activities arising from anticipated changes in interest rates and volatile commodity prices. Operating margin slipped 1.7ppt to 50%, while bottom line was boosted by higher interest income of $3.1m (3QFY15: $1.2m). Interim DPS raised to $0.05 (3QFY15: $0.04).

*Genting Singapore: Negative read-through from Marina Bay Sands 1Q results, which suffered a steep drop in adjusted EBITDA to US$274.9m (-33.8% y/y, -18.7% q/q), hurt by the impact of the stronger USD and weak VIP segment.

*Frasers Commercial Trust: 1QFY16 results met expectations. Distributable income surged 20% y/y to $19.3m, while DPU rose at a slower pace to 2.45¢ (+3%) on a post-placement unit base. Gross revenue and NPI jumped 12% and 17% to $39m and $28.8m, respectively, lifted by higher rental rates at Alexandra Technopark and increased occupancy at 357 Collins Street. Portfolio occupancy remained at 92.6% (-0.3ppt q/q) with WALE of 3.3 years, while aggregate leverage stood at 36.2% with average interest cost maintained at 3.07%. NAV/share at $1.53.

*STE: Secured $505m worth of contracts in 1Q16, split across advanced electronics & ICT solutions ($373m), satellite & broadband communications ($91m) and rail electronics & intelligent transportation ($41m).

*SATS: Operating metrics improved in 4QFY3/15; number of flights handled grew 18.8% y/y, while unit services increased by 14.5%. Cargo throughput improved 4.8%. Pax handled jumped 21.2% to 11.7m. Gross and unit meals climbed 5.6% and 5.1% to 6.8m and 5.4m, respectively.

*First Resources: Mar FFB harvest tumbled 25.2% y/y to 162,118 tonnes amid lower FFB yield of 1.0 tonnes/ha (Mar '15: 1.5 tonnes/ha). CPO production slid 24.2% to 41,345 tonnes despite a slightly higher extraction rate of 23.4% (+0.4ppt).

*Hyflux: Substantial shareholder Mathhews International disposed 2.2m shares at $0.6438 apiece via the market, paring its stake from 5.12% to 4.84%.

*Far East Orchard: 1Q16 net profit quadrupled y/y to $16.9m (1Q15: $3.8m), mainly from a jump in JV contribution to $20.9m (1Q15: $1.9m) stemming from a disposal gain booked by its Australia hospitality JV. However, revenue sank to $51.1m (-50.8%) on poorer contributions in property development and hospitality businesses, while gross margin widened to 33% (+14.1 ppt) on a shift in sales mix. NAV/share at $2.90.

*Perennial Real Estate: Offering up to $200m of four-year retail bonds due 2020, carrying a fixed rate of 4.55% p.a. Offer period between 21 and 27 Apr '16. The offer can be expanded to $300m if oversubscribed.

*Seroja Investments: Secured four-year coal transportation contract with PT Adaro Energy to transport ~7m MT of coal per year from 2016 to 2019. The contract is estimated to generate total revenue of US$48m.