SG Market (30 May 16)

SG Market (30 May): The market is likely to carry on its momentum, taking cue from the positive close in Wall Street as US growth remains on track.

Regional bourses opened mix this morning, with Tokyo (+0.5%), Seoul (-0.5%) and Sydney (flat).

From a chart perspective, resistance for the STI is now seen at 2,830, with downside support at 2,780.

Stocks to watch:
*Noble: Disclosed that CEO Yusuf Alireza has resigned. Group appointed Jeff Frase and William Randall as Co-CEOs.

*Ascendas REIT: To sell a business park property Ascendas Z-Link in Beijing, China, for Rmb760m ($160m), or 1.55x P/B.

*Mapletree Logistics Trust: Proposed to acquire an accretive portfolio of four dry warehouse facilities in Sydney, Australia, for A$85m ($84.4m), or NPI yield of 7.1%.

*SMM: Delivered high-spec jack-up rig to Maersk, which will be deployed in the Culzean Field Development, located in the UK sector of the North Sea.

*ISEC: To acquire four general medical clinics in Singapore for $13.9m (12x P/E), paid via cash ($7m) and 27.9m new shares at $0.25 apiece. The shares will have a five year moratorium and the deal will come with a profit guarantee of $1.1m per year up to five years.

*Tat Hong: 4QFY16 net loss deepened to $39.8m (4QFY15: $17.1m loss), as gross margin narrowed to 26% (-6ppts) due to lower utilisation rates, goodwill and asset impairment charges of $32.6m (+5.8%), and $12.7m swing to FX losses of $7.7m. Revenue slipped 7% y/y to $126.7m on lower crane rental (-3%), general equipment rental (-11%), distribution (-15%) contributions, partially mitigated tower crane rental (+4%) business. NAV/share at $0.93.

*Mermaid Maritime: Deferred date to take delivery from China Merchants Industry of two performance class tender assist drilling rigs, MTR-3 and MTR-4, to 31 Dec '16, and one support vessel Mermaid Ausana, to 30 Jun '17. Separately, it secured seven subsea contracts in the Middle East worth a total of US$11m, a one-year contract extension for its support vessel in Thailand, while its associate Asia Offshore Drilling secured a three-month extension for jack-up rig AOD-1 to Jul '16 at a day rate of US$125,000.

*SoilBuild REIT: S&P’s withdrew its rating of “BBB-” long term rating with stable outlook for the REIT, at the manager’s request. The REIT continues to retain Moody’s ratings with its current rating of “Baa3” with stable outlook.

*Viva Industrial Trust (VIT’s): Viva Investment Management, the holding company of VIT’s managers, now fully owns VIT’s managers, after acquiring the remaining 10% stake from United Engineers Developments.
*Chew’s Group: Entered into an agreement with the government for a new 30-year lease site for its poultry farm following the sale of its current farm back to the government for $38.7m. The new farm will double capacity to 1m eggs/day. Relocation to be completed by Jun ‘19.

*Xpress: Investing US$1m to form a 10/60/30 JV with Sheng Shiong and Kunming LuChen, to operate supermarkets in China.

*Chew’s Group: Entered into an agreement with the government for a new 30-year lease site for its poultry farm following the sale of its current farm back to the government for $38.7m. The new farm will double capacity to 1m eggs/day. Relocation to be completed by Jun ‘19.