SG Market (03 May 16)

SG Market: Expect a muted opening as investors await the release of China's Caixin manufacturing PMI this morning.

Regional bourses opened in positive territory today in Seoul (+0.4%) and Sydney (+0.4%). Tokyo markets remain closed for Constitution Memorial Day.

From a chart perspective, STI appears bounded by the convergence of 20, 50 and 200-dmas between 2,820 and 2,890.

Stocks to watch:
*DBS: 1Q core net profit of $1.2b (+6% y/y, +20% q/q) came in above estimates. Net interest income rose to $1.83b (+8% y/y, -1% q/q) on wider NIM of 1.85% (+16bps y/y, +1bps q/q) although customer loans contracted (-2% y/y, -3% q/q). Non-interest income dropped to $1.03b (-2% y/y, +30% q/q) on lower trading fees and investment banking activities, partially offset by growth in cards and wealth management. Provisions narrowed (-6% y/y, -31% q/q) as no general allowances were taken, while NPL ratio inched up to 1.0% (1Q15: 0.9%, 4Q15: 0.9%). Fully-loaded CET1 at 13.2% (4Q15: 12.4%, 1Q15: 12.2%), largely on the back of lower RWAs due to slower lending. NAV/share rose 3.6% q/q to $16.39.

*Mapletree Logistics Trust: 4QFY16 results at lower end of estimates with DPU of 1.8¢ (-2.7% y/y), weighed by higher borrowing costs (+34.5%). Gross revenue and NPI grew 4.4% and 3.3% to $88.4m and $72.6m from contribution of new properties and strong showing from Hong Kong properties, offset by multi-tenanted building conversions, absence of contributions from three local properties and weaker MYR. Occupancy held steady at 96.2% with WALE of 4.5 years, while aggregate leverage inched up to 39.6% (+0.6ppt q/q), with average debt cost at 2.3%. NAV/unit at $1.02.

*SingPost: Disclosed that the special audit report expected to be released in Apr has been delayed and is pending final clarifications and will be made public when available.

*Keppel Corp: Disclosed that its ex-Brazilian agent Zwi Skornicki, who was involved in contracts entered between Keppel and Petrobras and/or Sete Brasil, has been charged with corruption.

*Wilmar: Acquired 50% stakes in two companies Erca Poland and Erca Home & Personal Care for an aggregate €8.3m. The companies are engaged in manufacturing, distribution, and marketing of chemical products for the home and personal care market.

*ThaiBev: 70/30 JV in Thailand with Mei Xin (International) to delve into the bakery business.

*Centurion: Proposed acquisition of four student accommodation developments comprising an aggregate 519 beds for £20.1m ($38.9m). The assets have long leases from 104 to 118 years remaining, located across Bristol, Manchester and Newcastle in UK. Pro forma FY15 EPS is expected to improve 6.2% to 4.8¢.

*Frasers Centrepoint: Announced plans to launch 10 more properties in China’s key cities as part of plans to ultimately own 30 properties with 7,000 units in China alone.

*Tianjin Zhongxin: 1Q16 net profit slid 7.9% y/y to Rmb115.3m, boosted by government subsidies as well as other investment returns. Revenue grew slightly to Rmb1.64b (+1.4%), while gross margin narrowed to 32% (-2 ppt). NAV at Rmb5.24.

*Rickmers Maritime: 1Q16 swung into net loss of US$1.4m (1Q15: US$7m profit), weighed by absence of deferred income from charter contracts and FX loss of US$1.7m (1Q15: US$2.4m gain). Revenue tumbled to US$21.3m (-26% y/y), on reduced charter rates and lower utilisation of 92.3% (-6.5 ppt). NAV/unit at US$0.41.

*KS Energy: Soliciting and considering offers for the proposed disposal of its distribution business.

*Positive profit alert:
- Hiap Hoe

*Profit Warning:
- Sin Heng Heavy Machinery
- Delong
- China International
- Marco Polo Marine
- Aztech Group