Friday, June 17, 2016

SG Market (17 Jun 16)

SG Market: Market could see a slight rebound today, although outsized gains may be capped over the potential fallout of a Brexit vote next week.

Regional bourses opened higher in Tokyo (+1.6%), Seoul (+0.6%) and Sydney (+0.6%).

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

Stocks to watch:
*Noble: Disagrees with S&P's assessment that its liquidity has weakened, citing its US$500m rights issue, intended sale of Noble Americas Energy Solutions and other cost cutting measures.

*SGX: Kazakhstan’s Air Astana reportedly eyeing for an IPO in 2018. The state-owned carrier is considering a secondary listing in in London, Hong Kong, or Singapore.

*CWT: Updated that discussions on a potential transaction are still ongoing. To recap, substantial shareholder C & P is in exclusive negotiations with HNA Group over its 31.9% stake in CWT. Deal touted to be valued at ~US$1b ($1.36b), which would imply a share price of $2.27.

*CDL Hospitality Trust (CDLHT): Extended lease agreement at Grand Millennium Auckland with tenant Millennium & Copthorne for three years, including two renewal terms. CDLHT will receive rent equivalent to the net operating profit of the hotel, subject to an annual base rent of NZ$6m (excluding GST).

*GL: Collaborating with Hard Rock International to convert the existing Cumberland Hotel at Marble Arch on Hyde Park, London, into a 900-room Hard Rock Hotel London. Completion is expected in summer 2018.

*SHS: Secured a NZ$11.2m (US$8.2m) contract to construct an 88-room hotel in Christchurch, New Zealand. In addition, it signed a letter of intent for a US$19m contract, with a major private equity fund that invests in hotel properties for the development of a 200-room hotel in Yangon, Myanmar.

*Chiwayland: Received endorsement from Sydney's city council to more than double floor space ratio at its 75% owned Parramatta residential project, from 4 to 11.5, translating to an enlarged gfa of 32,545 sqm. Prevailing ASP at the upcoming alternative CBD of Sydney is ~A$12,500 psm ppr, implying a gross development value of A$406.8m for the property. Final approval from the state government is expected before Nov 2016.

*First REIT: Secured 20-year lease extension on the land title for Siloam Hospital Kebon Jeruk from the National Land Office of Indonesia.

*PACC Offshore: Tipped to be ahead of the tender for a multi-billion dollar contract to support the installation of Shell’s Prelude FLNG located off-Western Australia. The work is estimated to take six-months, with extension options.

*NauticAWT: Placement of 15m new shares (7.9% of enlarged share capital) at $0.174/share to HARPS Holdings. Net proceeds of $2.6m is intended to boost working capital.

*HTL: Downsizing its Singapore office in stages over the remainder of 2016 and shifting its key manufacturing functions and warehousing activities to China. The restructuring is expected to involve a one-time retrenchment cost of $4.5m–5m, and give rise to annual cost savings of $3.5m-$4m.

*China Environment: Regulatory board Accounting and Corporate Regulatory Authority has directed the company to restate and re-file its FY13 and FY14 financial statements due to various non-compliant issues in its reporting, including its construction contract revenue recognition approach.

*Fabchem China: Disposing 100% stake in loss making and heavily indebted ammonium nitrate manufacturer Hebei Yinguang Chemical, which has a net liability position of Rmb26.8m (after a waiver for Rmb32.7m shareholder loan), for Rmb1. The buyer Wang Jian is the general manager of the company.

*Asiaphos: Ceased exploration activities at one of its two mines, Sichuan Mine 2, after exploration rights expired. Group is still pending regulatory approval for its permit renewal application submitted on 14 Jun.

*Trendlines: In negotiations to sell its 26.5% owned E.T. View Medical for US$16m. If completed, Trendlines expects to receive net proceeds of ~US$3.3m and a divestment gain of ~US$2m before tax.

*Secura: Entered agreement to purchase cybersecurity tech solutions provider Red Sentry for $2.7m. The deal is believed to complement Secura's product offerings and enlarge its market share in Singapore.

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