SG Market (17 Aug 16)

SG Market: The Singapore market may tilt towards risk-off sentiment, taking cue from the retreat on Wall Street following hawkish comments from several Fed officials that voiced support for at least one interest rate hike this year.

Yields plays such as REITs and telcos could face some selling pressure after a recent run-up since late Jun.

Regional bourses opened mixed, with Tokyo (+0.1%) higher, but Seoul (-0.1%) and Sydney (-0.3%) weaker.

From a chart perspective, STI could pull back to lower end of 2,830-2,900 range.

Stocks to watch:
*Economy: Singapore Jul non-oil domestic exports fell 10.6% amid an uncertain economic landscape, dragged by a 12.9% contraction in electronics exports following a 1.7% decline in the previous month. With the exception of EU (+3%), exports to all major markets sagged, with Indonesia (-22.6%), US (-19.1%) and China (16.6%) dropping the most.

*Singtel: Reportedly interested to acquire part of Temasek's 40.5% stake in Thailand's Intouch Holdings, worth US$2.4b. Intouch owns 40.5% of Advanced Iinfo Services, Thailand's biggest telco and the deal would increase Singtel's current 23.3% holding in AIS. This appears at odds with faster growth opportunities in other regional markets such as Indonesia/India and its recent investments in the digital space.

*GLP: Selling 4 Japan properties to GLP J-REIT for ¥42.7b, representing 3% premium to internal valuation in Jun and a weighted average cap rate of 4.8%. Net sales proceeds will be used for reinvestment in Japan.

*Chip Eng Seng: Acquired SPP System, a private modular building construction company, for $1.8m.

*Otto Marine: Successfully defended itself against a US$8.9m claim. At the same time, it had initiated proceedings against Grupo Evya, claiming US$10.5m of unpaid hire with interest due.

*Serrano: Received a writ of summon filed by Maxcon Enterprise, which is suing the group for $0.7m plus interest for outstanding trade payables due in 2015 and 2016. The group is currently seeking professional advice and will update upon new developments.

*Lion Asiapac: Expects to book a 4QFY16 and FY16 net loss due to a plummet in turnover on declining demand as well as impairment losses on outstanding trade receivables.