SG Market (27 May 16)

SG Market (27 May): The Singapore market may see some profit taking following the three-day rally, as investors tread cautiously ahead of Fed Chair Janet Yellen's speech this evening.

Regional bourses opened stronger in Tokyo (+0.3%), Seoul (+0.1%) and Sydney (+0.6%).

From a chart perspective, support for the STI is seen at 2,710, with topside resistance at 2,780.

Stocks to watch:
*Macro: Economists see rising oil prices and foreign worker levies possibly bringing an end to negative headline inflation in the coming months.

*Banks: Positive move by MAS to ease the maximum LTV ratios and loan tenure allowed for motor vehicle loans. While the impact should be marginal for now, MKE sees it as a first step to grow loan demand.

*City Dev: Attempts its third profit participation securities structure, involving a portfolio of prime residential units worth $350m.

*IHH Healthcare: 1Q16 core net profit of RM238.3m (+4.8% y/y) slightly missed, on higher financing costs due to the acquisition of Global Hospitals in Dec ’15. Revenue surged 24% to RM4.48b from healthy growth across all segments, while EBITDA margin remained stable at 24.9% (-0.3 ppt). NAV/share at RM2.61. MKE maintains Hold with TP of RM6.13.

*Courts Asia: 4Q net profit of SGD4.2m (-36.2%) missed expectations, dragged by weaker sales in S’pore (-3.2%) and Malaysia (-16.4%) on the challenging retail landscape. Gross margin compressed to 32.1% (-1.6ppt). Maintained first and final DPS of 1.29¢. NAV/share at 55.8¢.

*Yanlord Land: Acquired 51% stake in Nanjing Daji Real Estate Development that owns a 327,000 sqm gfa residential development site for Rmb1.26b.

*GP Batteries: 4QFY16 net loss deepened to $10.8m (4QFY15: -$2.3m) due to FX loss of $9.3m and impairment losses. Revenue slipped to $169.7m (-0.4%) on weaker sales of primary (-0.2%) and rechargeable (-1.9%) batteries, with lower contribution from Asia (-5.9%) although offset by improvements in Europe (+11.9%).

*Fu Yu: Acquired the remaining 20% of ultra-precision manufacturer NanoTechnology Manufacturing for a nominal sum.

*iX Biopharma: Exercised call option to acquire Arrow Property Trust and Kaizen Manufacturing for A$1.1m.