SG Market (04 Jul 16)

SG Market: Recent risk rally may cool off amid a shortened trading week in US and several regional markets, with traders watching key updates from BoE, Fed and BoJ, as well as economic releases from China (inflation, reserves, Caixin services PMI) and US (non-farm payrolls).

Regional bourses opened mixed in Tokyo (-0.7%), Seoul (+0.1%), and Sydney (-0.5%).

From a chart perspective, underlying support for the STI is at 2,800, with immediate resistance at 2,910.

Stocks to watch:
*Crude oil: Saudi energy minister sees oil market heading toward a balance, with prices beginning to settle.

*Ezra: Divesting FPSO Lewek EMAS to a JV comprising leading PE and energy infrastructure investment firm First Reserve and LSE-listed O&G service provider Petrofac for US$166.3m. Lewek EMAS is currently chartered to Premier Oil Vietnam Offshore for Vietnam’s Chim Sao oil project. Pro forma 2Q16 net gain is estimated to be US$2.8m.

*Innovalues: Updated it is still in discussion with parties on a potential buyout. MKE's last rating was Buy with TP of $1.15.

*Best World: Awarded the long awaited China direct selling licence, subject to the establishment of 8 service centres in Hangzhou within six months from 7 Jun. Management sees the milestone achievement laying the group's growth foundation for the next 5-8 years.

*Centurion: Updated that Brexit vote has minimal impact on the domestic demand for the UK educational sector, and the weaker pound may attract more international students. Disclosed that UK operations accounts for 14% of group's NAV, while FX exposure is hedged with local debt.

*Pteris Global: Buyout offer raised to $0.85 from $0.735 by Sharp Vision Holdings and has turned unconditional. Closing date has been extended to 25 Jul.

*Keppel T&T: Disposing half its stake in wholly owned Keppel DC REIT Management to Keppel Corp for $38m. It is expected to book a divestment gain of $56m on the disposal, and pro forma FY15 NTA/share will be increased to $1.40 from $1.27.

*mm2: Completed the acquisition of three Mega cinemas in Malaysia. This brings its cinema operations portfolio to 43 (+13) screens and 8,010 (+2,721) seats. As part of the deal, Mega has FY17/18 earnings target of RM3.4m.

*ABR Holdings: Acquiring an Australian development site located in Yarraville, Victoria, for A$20m. The 1.5-ha land will be re-developed into residential houses.

*ISEC: Disposing 15% of ISEC Penang for RM0.3m to Dr Adrian Tey. ISEC’s resultant stake will fall to 51%.

*Tai Sin Electric: Purchased the remaining 20.9% stake in subsidiary Cast Laboratories for $3.4m.

*IHC/Healthway Medical: Updated that the proposed acquisition of Healthway Medical by IHC via a scheme of arrangement has lapsed, after failing to meet preconditions of the deal.

*Miyoshi: Swung to a 3QFY16 net loss of $0.4m from $0.8m profit a year ago as revenue tumbled 14% to $11.6m on weaker sales of hard disks and consumer electronics, but partially offset by lower cost of goods sold and other operating expenses. NAV/share at $0.1185.