SG Market (01 Jul 16)

SG Market: The market could continue to be swept up by the post-Brexit recovery, bolstered by Singapore’s safe haven status.

Regional bourses are up in Tokyo (+1%), Seoul (+0.7%), and Sydney (+0.6%).

From a chart perspective, rising momentum indicators look to extend STI's upside towards recent high of 2,910, with support at 2,800.

Stocks to watch:
*Banks: Total bank lending remained sluggish, contracting for its 8th straight month in May. System loan growth slipped 0.7% y/y, dragged by a 3.1% decline in business lending, while consumer loans improved 2.8% despite the gloomy economic outlook. MKE remains negative on Singapore banks on challenging growth environment and risk of rising NPLs from oil rout. UOB is the top sector pick (Hold, TP: $16.96).

*Frasers Logistics & Industrial Trust: Completed a 74,546 sqm property in Victoria, Australia, ahead of target completion date in Jul 2016 with occupancy fully pre-committed by CEVA Logistics, and the tenancy to commence on 30 Jun.

*Yanlord Land: Partnering China Merchants Property Development and Poly Real Estate in 33% owned JVC to develop a 170,000 sqm site in Nanjing, China, which was acquired for Rmb4.82b.

*Ezion: Established JVCo in China with Sinotrans and CSC, to participate in the offshore wind farm energy market. Ezion expects to deploy two service rigs for an initial project by end-2016. To recap, Ezion is still suffering from lower contract prices for its charters, as reflected by the sharp contraction in its 1Q16 gross margin

*Chiwayland: Acquired a 114,270 sqm land parcel in Sydney, Australia, for A$40m. The group will invest A$320m to develop 400 apartments and 364 townhouses, with sales launch expected in 2H17 and 2H18, for apartments and townhouses, respectively.

*Sim Lian: Acquiring Dalyellup Shopping Centre in Western Australia, for A$31.6m. The property has gross lettable area of 6,446 sqm, of which 68% is anchored by Woolworths Supermarket, one of largest supermarket chains in Australia.

*SMRT: Acquiring a 20% stake in a Dutch automated vehicle firm 2 Getthere for €4m, to market, install and operate raid transit systems in Singapore and Asia Pacific.

*China Merchants Pacific: Exit offer of $1.02/share has been declared unconditional, after the offeror received valid acceptances of 97% of the maximum potential issued share capital. Closing date for the offer is on 11 Jul.

*Wing Tai: Disposed 100% stake in Japanese fast food chain Yoshinoya for $4.5m.

*Yeo Hiap Seng: Exclusive bottling agreement for Pepsi products in Singapore has ceased on 30 Jun, but will be extended for four-months to facilitate disengagement. FY17 earnings is expected to be impacted.

*Longcheer: Proposing a special dividend payout of US$18.2m (S$0.70/share), subject to the completion of its 21.9% stake disposal in electronics manufacturer Mentech Investment.

*Natural Cool: Terminated its proposed disposal in Cougar Paint, after failing to meet the pre-conditions set.

*TalkMed: Approached by an undisclosed party for a potential collaboration.

*Xpress: Extended the deadline for completion of its proposed disposal of Xpress Print (Shenzhen) and Shenzhen Jiaxingda Printing, to 29 Jul ‘16.