SG Market (20 Jul 16)

SG Market: The overbought market is likely to see some profit taking pending 2Q results releases by some heavyweights this week.

Regional bourses in Tokyo (-0.7%), Seoul (-0.4%) and Sydney (flat) are mostly seeing profit taking in place.

From a chart perspective, underlying support for STI is at 2,880, with upside resistance at 2,964.

Stocks to watch:
*Wilmar: Warns of a 2Q16 net loss of US$230m (1Q16: US$239m profit) on challenging operating conditions within its oilseeds and grains, and sugar segments. The shock profit warning could drag its 1H16 earnings down to ~US$9m, well below its full year estimate of US$1.2b. Results to be released on 11 Aug.

*Keppel REIT: 2Q16 DPU of 1.61¢ (-6.4% y/y) was in line. Revenue and NPI slipped 5.6% and 6.4% to $40.6m and $32.5m, respectively, following the divestment of Sydney office 77 King Street in 1Q16. Portfolio occupancy rose to 99.7% (+0.3ppt) with WALE of 6 years, while aggregate leverage remained at 39% with average cost of debt at 2.55%. Trades at 6% annualised yield and 0.77x P/B. MKE rates it as Hold and raises TP to $1.05 from $0.97.

*Capitaland Commercial Trust: 2Q16 results in line with DPU of 2.2¢ (+0.5% y/y) as higher JV contribution from the commencement of leases at CapitaGreen helped buffer gross revenue of $67.6m (-2.2%), due to lower portfolio occupancy of 97.2% (-0.9ppt). Trades at 5.6% annualised yield and 0.89x P/B.

*Procurri: IPO of 68.8m new shares at $0.56 apiece was 1.9x subscribed, of which the public tranche of 6.9m shares was 10x subscribed. Notable investors include Temasek, NTUC Income, Eastspring Investments, Havenport Asset Management and Pheim Asset Management. Valued at 17.8x FY15 P/E and 1.3x P/B, the networking equipment supplier will debut today.

*IREIT Global: Adjacent property owner of IREIT’s Darmstadt Campus Carpark (DCC) is trying to claim public access to a portion of space, which IREIT intends to defend. Outcome not expected to be material given that the contested assets contribute just 1% to gross rent.

*Lifebrandz: Signed non-binding term sheet to issue $20m of two-year convertible senior notes at 6% p.a. in four tranches to US investment firm Crede Capital Group. Net proceeds will be used to fund the proposed acquisition of Tolukuma Gold Mines.

*China Fibretech: Trading is suspended after three customers are claiming a total of Rmb466m in compensation, as they alleged that group's product failed to meet requirement and de-coloured, resulting in substantial financial losses.