SG Market (16 Jun 16)

SG Market: The market could get a slight lift as the Fed pared its expectations for future rate hikes amid a more uncertain economic outlook but any upside gains may be capped by the upcoming Brexit vote on 23 Jun.

Regional bourses opened mixed this morning in Tokyo (-0.4%), Seoul (-0.1%) and Sydney (+0.9%).

From a chart perspective, downside support for the STI is seen at 2,720 with immediate resistance at 2,830.

Stocks to watch:
*Economy: Economists have pared Singapore's 2016 growth estimate to 1.8%, the fifth consecutive downward revision in five quarters, on sluggish external conditions and bank lending contraction. Market observers have warned more cuts may be in store the next quarter.

*Noble Group: Credit rating cut to B+ from BB- by S&P with negative outlook, reflecting the group's weakened liquidity, despite completion of financing and the proposed rights issue.

*SIA: May passenger load factor declined 0.9ppt to 72.7%, as traffic slipped at a faster pace of 2.9% from all routes except East Asia, amid a 1.6% reduction in capacity. Apart from SilkAir (+0.9ppt to 69.5%), its other subsidiary carriers Scoot (-1.6ppt to 78.1%) and Tigerair (-1.1ppt to 81.9%) suffered deterioration in load factors, while cargo load factor improved 0.7ppt to 62.3%.

*F&N: Acquiring 100% of Warburg's vending business for $29m. The target has been a partner of the group since 2011 and the deal will increase the group's vending network by three-fold and raise brand visibility.

*GLP: Syndicating a further 9.09% stake in its US industrial assets portfolio to New Western Holdings for US$181.7m, taking the total syndicated so far to 84.7%. GLP intends to ultimately retain ~10% stake in the US portfolio. Separately, it leased a 340,000 sf facility in Northern New Jersey, US to a repeat customer, a leading global logistics firm.

*CapitaLand: Disposed Indian subsidiary Citadines Hitec City Aparthotel, which owns a land parcel in Hyderabad with no development activities, for Rp401.3m ($8.3m).

*SATS: Divested 17.8% stake in a dormant company International Airport Cleaning for ¥16.8m ($0.2m) to streamline performance.

*mm2 Asia: Partnering with FOX Networks Group Asia to co-produce two Taiwanese films, following the success of two recent co-productions including Ah Boys to Men 3:Frogmen and 1965.

*Tat Hong: Updated that it is still in discussions on a potential buyout, since its initial announcement on 15 Mar.

*Low Keng Huat: 1QFY17 net profit fell 13% to $3.3m, while revenue shrank 41% to $15.8m, mainly due to the absence of construction revenue, offset by the sale of an office unit at Paya Lebar Square. Gross margin expanded to 59.3% (+11ppt), while bottom line was cushioned by the absence of provisions. NAV/share at $0.86.