SG Market (20 May 16)

SG Market: Short term momentum is weak amid expectations of higher interest rates (benefit banks) and tepid corporate earnings. However, oversold conditions could limit the downside.

Regional bourses opened mixed with Tokyo (-0.5%), Seoul (+0.2%) and Sydney (+0.2%).

From a chart perspective, STI is currently sitting on the 2,740 support with the next level at 2,680, while overhead resistance is capped at 2,805.

Stocks to watch:
*City Developments: Eyeing strategic investments in discounted real estate operators under its plan to deploy $3b over the next three years. It had previously earmarked five key overseas markets in Australia, China, Japan, UK, and US for expansion.

*SGX: Introduced a bond seasoning framework that enables retail investors to buy wholesale bonds initially offered to institutions and accredited investors, in denominations as small as $1,000, six months after the bonds are listed on SGX. Last month, SGX saw 45 new bond listings which raised more than $27b in the primary market.

*NOL: CMA CGM has accumulated a 10.6% stake in NOL in the open market since the announcement of its conditional cash offer of $1.30/share. Together with Temasek's undertaking to sell its 67% stake to CMA, the latter now has a more than 77% stake in the shipping line.

*Keppel Corp: Held the topping off session for Junction City, a 40%-owned Grade A office building with NLA of 34,000sqm in Yangon CBD, and opened the 29-storey Inya Wing, an extension that adds 515 rooms to Sedona Hotel Yangon, bringing total rooms at the hotel to 797.

*GLP: Clarified that it has not obtained regulatory approval for the issue of Rmb10b panda bonds and that no final decision has been made on such an issuance, although it concedes that such a move would be consistent with its operational policy of natural hedging.

*Technics O&G: Voided a $70.5m contract awarded by a regional player based in Malaysia, to construct a liftboat, with an option for another similar unit due to non-fulfillment of a clause by the parties within the specific time line. Separately, it is being sued by a former director, for loan repayment of $4.9m. This comes on the heels of legal action from Soilbuild REIT for its default on rental and lease payments, with claims in excess of $14m.

*KSH: Entered into a term contract with NUS for addition and alteration works within the campus for 24 months with an option to extend for a further 12 months to 2019. The price for the works will be based on a fixed schedule of rates.