Monday, July 11, 2016

SG Market (11 Jul 16)

SG Market: Positive sentiment is expected to spill over to the local market following the blowout US jobs report last Fri. China looms large in the calendar for the week ahead, with 2Q GDP and Jun industrial output, trade and credit data, as well as 2Q GDP data in Singapore.

The relief rally should benefit the broad market today, with outperformance from beaten down sectors such as basic materials, industrials and financials.

Regional bourses opened positive this morning in Tokyo (+1.8%), Seoul (+1%), and Sydney (+1.7%).

From a chart perspective, STI may attempt to test its minor double top resistance at 2,880, with support at 2,810.

Stocks to watch:
*Macro: Economists do not expect MAS to adjust its exchange rate policy despite the SGD strengthening 10-15% against the sterling pound since the Brexit vote, given the influx of safe haven funds.

*SIA: EU Commission has approved a JV between SIA and Airbus to undetake MRO services, with a focus on heavy and line maintenance to commercial airlines operating Airbus aircraft in the Asia-Pacific region. MKE last had a Hold rating on SIA and TP of $10.00.

*Halcyon Agri: Shareholders have met all pre-conditions relating to the proposed acquisition of a 30.1% stake by Sinochem, which will trigger a mandatory buyout offer at $0.75 each.

*Spackman Entertainment: Revised its proposed sale consideration of loss-making Opus Pictures (100%) and UAA Korea (51.5%) from US$1.9m via selective share buyback of 14.2m shares to US$1m cash. It expects to book a net gain of US$1.4m and will use the proceeds to fund working capital requirements and/or investment opportunities.

*Datapulse Technology: Divesting seven Taipei commercial/office units to GSiMedia for NT$144.5m ($6m), and expects to realise a net gain of $5.6m.

*Swiber: Disclosed that it has outstanding letters of demand for an aggregate US$4.8m of trade claims. The group is currently seeking legal advice and is confident that it has sufficient resources to satisfy all claims. Separately, AMTC has delayed its proposed subscription of preference shares in Swiber for US$200m. prompting the latter to issue a letter of demand.

*Advancer Global: Trading debut for the domestic worker and facilities management provider on SGX Catalist board today. IPO is priced at $0.22/share, which works out to FY15 P/E of 7.2x, based on an enlarged share base.

*Asiaphos: Renewed exploration rights to its 14.43 sq km Feng Tai mine till 12 Dec ’17.

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