SG Market (26 Apr 16)

SG Market: Risk off mood is likely to continue as investors stay cautious ahead of Fed and BOJ policy statements and key results from SMM and two local banks (UOB, OCBC) later this week.

Regional bourses opened mixed in Tokyo (-0.3%), Seoul (+0.2%) and Sydney (-0.2%).

From a chart perspective, a breach of the 2,890 support could take the STI to the next downside objective at 2,840. Immediate resistance at 2,960.

Stocks to watch:
*Mapletree Industrial Trust: 4QFY16 results came in at the higher end of estimates with DPU of 2.81¢ (+6% y/y). Gross revenue rose 5.8% to $84m, while NPI expanded at a faster clip to $62m (+7.4%), from higher occupancies, upward rental reversions, new contribution from completed BTS development Equinix Singapore, and slower rise in expenses. Occupancy stayed at 94.6% (-0.1ppt q/q), while aggregate leverage narrowed to 28.2% (-1.1ppt q/q) with all-in funding cost of 2.5%. NAV/unit at $1.37.

*Parkway Life REIT: 1Q16 results in line with DPU of 2.99¢ (-7%) on absence of one off distribution of divestment gain. Otherwise, DPU from recurring operation grew 5.1%, on higher gross revenue and NPI of $26.9m (+8.6%) and $25.1m (+8.5%), respectively, from newly acquired Japanese properties and upward rent revision of Singapore hospitals. Portfolio occupancy remained at 100% with WALE of 9.01 years. Aggregate leverage dipped marginally to 36.4% (+1.1ppt q/q) with average debt cost of 1.5% (-0.1ppt q/q) and tenor of 3.5 years. NAV/share at $1.68.

*SGX: Signed MOU with China Construction Bank to boost the local capital market by encouraging Chinese companies to list, issue yuan bonds, undertake M&A and cross-border fund management in Singapore.

*Sunningdale Tech: 1Q16 net profit slumped 49.3% y/y to $3.6m mainly on FX loss of $3.2m (1Q15: $1.1m gain) due to the weaker USD. Revenue rose 4.4% to $161.3m as a surge in automotive business (+16%) helped offset weakness in its consumer/IT (-3.5%) and healthcare (-2.9%). Gross margin edged higher to 13.4% (+2 bps) on the change in sales mix.

*China Minzhong: 3QFY16 net profit slumped 54.6% to Rmb49.1m, largely due to FX losses of Rmb6.7m (3QFY15: Rmb14.7m gains). Revenue declined 7.1% to Rmb451.4m due to poorer contributions from its processed (-6.6%), cultivation (-0.5%), and branded (-33.8%) segments. Overall gross margins slipped 2 bps to 33.1%, while bottom line was further dragged by a 44.3% plummet in interest income.

*Soilbuild Construction: Awarded a US$95m ($128.7m) contract by a Myanmar developer United GP Development to construct the main building and superstructure works for a proposed serviced apartment and condo in Yangon. Project is expected to start in 2Q16 and complete in 3Q18.

*Heeton/KSH/Lian Beng: 30/30/40 JV to acquire Prospere Hotels in Manchester, UK, which owns a 12-storey hotel, currently being managed by InterContinental Hotels under the Holiday Inn Express brand name.

*FCOT: Credit rating upgraded by Moody's from Baa3 to Baa2 with a stable outlook.

*Nordic: Secured several contracts worth a total of $7.2m from repeated customers in the marine, oil & gas, pharmaceutical and process industries.

*Gallant Venture: Exiting investment in Shanghai's Lao Xi Men project for an aggregate US$330m, due to the delay in completion from 2016/2017 to after 2018, arising from challenging market conditions. Upon disposal, pro forma gearing expected to reduce from 1.4x to 1.14x.

*China Mining Int'l: Entered MOU with two parties for the proposed acquisition of a controlling stake in Aero Wind Properties, a South African company holding the prospecting rights to an iron ore mine in Thabazimbi, which has an estimated 15b tonnes of iron ore.

*Jason Marine: To subscribe to $0.85m worth of 8% convertible preference shares in Sense Infosys, a data analytics provider to maritime, port and logistics companies.