Thursday, July 7, 2016

SG Market (07 Jul 16)

Regional bourses opened mixed in Tokyo (-0.2%), Seoul (+1.1%), and Sydney (+0.6%).

From a chart perspective, STI may attempt to test its resistance at 2,880, with support sitting comfortable at 2,810.

Stocks to watch:
*Wing Tai/City Dev: Wing Tai sold its entire 50% stake in the 156-unit luxury residential development Nouvel 18 to JV partner City Dev for $411m to avoid QC extension charges on unsold units of $38.2m in Nov ’16. City Dev is exploring ways to optimize and unlock the value of Nouvel 18, including bulk sales or a capital market transaction. MKE last had Hold ratings on Wing Tai (TP of $1.93) and City Dev (TP: $9.17).

*SIIC Environment: Taking a 75% stake in Henan Zhonghui Lianhe Investment for Rmb225m (4.3x P/B), which owns two sludge treatment BOT projects in Xinxiang (300tpd) and Nanyang (200tpd), as well as 65% interest in a BOT waste water treatment project in Nanyang (100,000tpd).

*Nordic: Clinched $4.2m worth of contracts from repeat customers, for the supply of valve remote control and tank gauging systems, insulation works and maintenance works.

*Wilmar: 45:45:10 JV with US-listed Bunge and Vietnam's Quang Dong is expanding its business in the domestic oil and feed markets in Vietnam.

*Venture: Acquired a 30.57-acre, 60-year leasehold land in Penang, Malaysia, for RM33.3m ($11.2m) for business operations.

*TIH: Investing US$9.9m in a 49.5% stake in CHF II Fund, which has a focus on special situation investments, particularly in companies that are adversely affected by market shocks.

*Saizen REIT: Received a proposal regarding a possible transaction, following the recent disposal of all its assets. The cash shell currently has about $28m in cash after the expiry of its liability claim period.

*Sarine Technologies: Delivered a record 20 Galaxy inclusion mapping systems in 2Q16 (1Q16: 18 systems), bringing installed base to 253 units. It expects 2Q16 revenue to hit US$20m (+39% y/y, +29% q/q) with continued improvement to its profitability. MKE’s last call was a Buy with TP of $1.94.

*Global Invacom: Disclosed that the weaker GBP will have a favourable impact on its financial performance in the near to medium term, as significant operational and R&D expenses are booked in GBP, while revenue is mostly denominated in USD. As a gauge, the group reported US$0.2m of FX gains in 1Q16 (1Q15: US$0.4m).

*Frasers Centrepoint Trust: Renewed the appointment of Frasers Centrepoint Property Management Services as property manager of five out of its six retail properties in Singapore for five years. The renewal comes with fees that hinge on gross revenue (2%), and NPI (~2.5%). MKE’s last had a Sell rating with TP of $1.78.

*United Global: IPO of 42.8m new shares priced at $0.25 apiece has been successfully placed out. Net proceeds of $9.2m will mainly be used for expanding its lubricant business via M&A and general working capital. Trading debut on 8 Jul.

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