SG market: Positive sentiment looks to spill over to the Singapore market from stabilisation in crude prices, while concerns of a Fed rate hike sooner than later are expected to limit upside gains.
Regional bourses opened lacklustre this morning in Tokyo (-0.7%), Seoul (+0.1%) and Sydney (-0.1%).
From a chart perspective, the STI may test its overhead resistance at 2,805, with immediate support at 2,755.
Stocks to watch:
*M&A: BusinessTimes article highlighted potential privatisation names that include F&N, Keppel T&T, Genting Hong Kong, Guocoland, NSL, Chip Eng Seng and Boustead Singapore. Smaller firms touted are Challenger, Soo Kee Group, Design Studio Group, and Cheung Woh Technologies.
*SATS: 4QFY16 results in line; net profit slipped 1.7% to SGD50.7m, in tandem with a drop in revenue to $417.6m (-1.7%), due mainly to the transfer of its food distribution business to JVCo SATS BRF Food in Jun ‘15. Otherwise, revenue would have grown at a resilient 6.6%. EBIT margin widened to 11.9% (+1.4ppt), thanks to cheaper raw material costs (-25.2%), although partially offset by higher staff expenses (+9.8%). Final DPS raised to 10¢, bringing FY16 total to 15¢ (FY15: 14¢).
*CapitaLand/ CCT: CCT proposed to exercise its call option to acquire the balance 60% of MSO Trust, which owns commercial building CapitaGreen, for $393m. If completed, aggregate leverage for CCT is expected to rise 7.6ppt to 37.7%, while pro forma 1Q16 DPU would have risen 1.4% to 2.2¢. CapitaLand owns 50% of MSO.
*Boustead Projects: 4QFY16 net profit fell 31% to $5.4m, mainly dragged by lower margin projects. Revenue grew 22% to $59.4m on full contribution from a recently completed design-and-build project as well as the normalisation of leasing revenue from three properties.
*OSIM: Voluntary offer of $1.39/share has closed, with valid acceptances of 96.03% share capital. The offeror will be exercising its right of compulsory acquisition.
*STE: Writ of summon against ST Engineering, by families of passengers for an ill-fated AirAsia flight from Indonesia to Singapore on 28 Dec '14, has been dropped.
*Hafary: To purchase a shophouse in Balestier Road for $4.1m, to further establish its presence in the area.
*Yangzijiang: Acquiring the 40% remaining stake in CS Marine Technology (NAV at US$1.7m on 31 Mar '16), which specializes in marine consulting, and engineering for ship building and offshore, for US$1.
*Eindec Corp: Issuing 71.8m free warrants, each exercisable within three years for one ordinary share at $0.12, on the basis of two warrants for every three shares held. This will raise net proceeds of $8.57m upon fully exercised, and proceeds will be used for investments, repayment of debt and working capital.
*Suntec REIT/ARA Asset Management: ARA has become a substantial shareholder after purchasing 1.6m units at $1.626 apiece on 19 May, lifting its stake to 5.02% from 4.96%.
*CSC: To invest RM8m ($2.7m) in a JV 40:40:20 with two other entities to acquire and develop a plot of freehold land in Seremban, Malaysia.
*ISR Capital: Signed MOU with REO Magnetic, which holds a stake in a Madagascar rare earth concession.
*Profit warning:
- Chasen Holdings
- CFM Holdings
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