SG Market: Oil-related counters are likely to continue its downward draft, on the back of the plunge in crude oil below the 40-handle, while safe haven sectors like consumer and telecoms may stay in favour.
Supermarket group Sheng Siong (Buy, TP: $1.13) could extend its upward momentum, while rig builder Sembcorp Marine (Sell, TP $1.00) could see further downside pressure, particularly after the dismal 2Q results last week.
Regional bourses opened lower in Tokyo (-1%), Seoul (-0.5%) and Sydney (-0.3%). Trading in the Hong Kong market will be halted till further notice due to Typhoon Nida signal 8 warning.
From a chart perspective, immediate resistance for the STI is seen at 2,900, with underlying support at 2,830.
Stocks to watch:
*Ascendas REIT: Private placement of 64m new units at $2.417 each to raise $155m, to fund 1) acquisition of two properties (business park, logistics property) in Australia and 2) conversion of a Singapore hi-spec property into a single-tenant building from multi-tenant one. Placement units will not be entitled to advance distribution of ~5.8¢. Post-placement leverage expected to drop 0.9ppt to 36.1%.
*OUE Hospitality Trust: 2Q16 results missed; DPU of 0.92¢ (-39.5% y/y) was dragged by a post rights unit base. Otherwise, DPU declined 19.1% on lower revenue and NPI of $26.9m (-9.2%) and $23.2m (-10.2%) from its hotel (reduced rates) and retail (lower occupancy) properties, as well as higher financing costs (+20%). 2H16 will benefit from Crowne Plaza Changi Airport Extension and store openings by Michael Kors and Victoria's Secret. Aggregate leverage fell to 31.2% (-11 ppt q/q) as it used rights proceeds to repay loans. Average cost of debt stood at 2.7% with debt tenor of 2.6 years. NAV/share at $0.79.
*Genting HK: Guided a 1H16 net loss of US$60-75m (1H15: US$2.1b profit), excluding the share of results of Travellers Int'l. The weak results were due to the absence of one-off gains, start-up and marketing costs for the launch of its luxury cruise line and increased SG&A expenses from recently acquired businesses.
*OKP: 2Q16 net profit tumbled 15.6% to $2.5m, on a weaker revenue of $24m (-11.6%), amid lower contribution from both construction (-1.4%) and maintenance (-44.1%) segments. Gross margin expanded 1.7ppt to 17.1% due to lower sub-contracting cost amid less specialised projects, and lower material costs. Proposed a special DPS of 0.5¢ (1H15: 0.1¢). NTA/share at $0.3379.
*Keppel Corp: Keppel Land opens Saigon Centre retail mall in Ho Chi Minh City, anchored by the city’s first Takashimaya department store. The mall is part of Saigon Centre Phase Two, which when fully completed in end-17, will comprise 44,000 sqm of Grade A office space, 55,000 sqm of retail area, and 195 luxury serviced apartments.
*Sino Grandness: In response to SGX's trading query after the counter's sharp fall yesterday, the group alluded to a a Chinese media article and surmised that some investors may have misunderstood that some of its products failed a quality test in China.
*AusGroup: CFO Phillip Lodewikus Coetzer resigned, effective 1 Aug '16, and will be replaced by Christian Andrew Robin Johnstone.
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