SG Market (26 May 16)

SG Market (26 May): Taking cue from the global rally overnight as crude hits 2016 highs, the Singapore market may see continued upside in the near term.

Regionally, bourses in Tokyo (+1.2%), Seoul (+0.3%), and Sydney (+0.4%) marched on forward.

From a chart perspective, the STI looks to test the immediate resistance at 2,780, followed by 2,805, while downside support is seen at 2,710.

Stocks to watch:
*Macro: While MTI is keeping 2016 growth forecasts unchanged at 1-3%, economists see downside revision risk amid the softer global economy.

*SGX: In exclusive talks to buy London Baltic Exchange, which would help to diversify its income stream if completed.

*SATS: To subscribe for 897,297 Series D shares (20% of the enlarged share capital) in Indonesian in-flight catering services provider Purantara Mitra Angkasa Dua for Rp112b ($11.3m).

*mm2 Asia: Agreed to collaborate with a China-based production company, Man Mar Er, on a 35-episode TV series “My Love, Farewell”, with estimated production budget of Rmb70m.

*Accordia Golf Trust: 4QFY16 DPU slipped 1.7% to 1.76¢, bringing FY16 total DPU to 6.63¢ (+5.7%), ahead of estimates. Revenue for the quarter climbed 6.5% to ¥10.4b due to increased visitors and operating days, while operating loss narrowed to ¥622m (4QFY15: ¥1.1b loss). Golf course utilization rate at 77.9% (4QFY15: 67%; 3QFY16: 80.2%), while loan-to-value ratio held steady at 28.8%. NAV/unit at $0.89.

*Religare Health Trust: 4QFY16 DPU was flattish at 1.913¢, while distributable income climbed 1.4% to $15.3m. Revenue slipped 2% to $34.9m, but would have been 3.3% higher in rupee terms, contributed from Fortis, as well as the contractual 3% increase in base fee. Occupancy slipped 2ppt q/q to 73%. Gearing stood at 21.9% (+0.1ppt q/q). NAV/unit at $0.927.

*Metro: 4QFY16 net profit crashed 85% to $1.2m, mainly dragged by FX loss of $2.8m (4QFY15: $4.1m gain). Revenue slumped 22% to $32.6m, on absence of contribution from a disposed Japanese office property, a weaker RMB, as well as lower sales from the retail division (-21%) on store closures. NAV/share at $1.66.

*Trek 2000: Disclosed that CFO and Executive Director Gurcharan Singh is being investigated by CAD on a possible offence for fraudulent inducement in relation to an asset.

*Technics Oil & Gas/Soilbuild REIT: Failed to prevent Soilbuild’s attempt to call on its bank guarantee by UOB for $11.8m. This is with regards to 18 months worth of rentals of its premises at 72 Loyang Way.

*Foreland Fabrictech: External auditors found that the company may have breached SGX listing rules as it failed to put in place sufficient internal controls to address financial, operational, and compliance risks. It recommends the company to seek legal advice.

*GRP/Starland: Both companies applied for an extension for Starland to meet minimum free float requirements. GRP currently owns 99.5% of Starland.

*Blumont: Acquired an additional 22.3% stake in PT Rel-ion from NDI for Rp30.6b, bringing its total stake in Rel-ion to 55.4%.