SG Market (05 Sep 16)

SG Market: The market could be set for a slight rebound after a soft US job report allayed fears of an interest rate hike later this month.

We remain advocates of consumer, healthcare and defensive names such as Sheng Siong, Best World, mm2, Ascendas REIT and MINT.

Regional markets opened higher in Tokyo (+1.2%), Seoul (+0.9%) and Sydney (+0.8%).

Immediate support for STI is at 2,800, with topside resistance at 2,880.

Stocks to watch:
*CapitaLand: Updated that its Rmb24b ($4.9b) Raffles City Chongqing, Singapore’s largest single development in China, is on track for completion in phases from 2018 onwards.

*Oxley: Entered MOU with Chongqing Liangjiang New Area Administrative Committee to develop a Rmb5b integrated medical hub (Lijia Health City), comprising a general hospital, specialist centres, high-end residences, hotels, service apartments, nursing homes and other-related facilities, on a 533,000 sqm plot in the Lijia CBD of the Chongqing Liangjiang New Area.

*Innovalues: Advised that matters have progressed in relation to a possible buyout but talks are still ongoing. MKE last had a Buy rating on the precision parts maker with TP of $1.15.

*Q&M: Completed the acquisitions of 1) Tooffy for $0.3m, which comes with a five year profit guarantee of $0.2m p.a., and 2) Ho Dental Surgery for $1.7m, with a profit guarantee of $1.2m for 5.5 years. MKE last had a Buy with TP of $1.08.

*Yoma: Acquired the remaining 25% interest in its Balloons over Bagan hot air balloon business in Myanmar via 70% owned Chindwin Holdings for US$1.5m, with intention to restructure and spin-off its tourism assets into a new company.

*Cambridge Industrial Trust: Proposed sale of the remaining leasehold interest in a light industrial building at 2 Ubi View for $10.5m, or a 6% premium to its book value.

*Sunvic: Divesting its stake in loss-making Jiangsu Jurong Petrochemicals to Shenzhen Qianhai Gatway Petrochemical for Rmb388m, and expects to book a gain of Rmb14m.

*Jasper Investments: Reached in-principle understanding with Guangdong Zhuhai City LuYuan Construction Engineering (LuYuan) to project-manage certain parts of the infrastructural projects secured by the Chinese company. In that respect, Jasper has been earmarked for two LuYuan projects in the Pearl River Delta region (marine transportation) and Sanya (reclamation works).

*Delong: Proposed to invest $8.2m and $11.6m in Shunwei Fund and CEG Fund, respectively, as part of its diversification efforts. Shunwei is a $204.2m PE fund which invests in internet, technology, media and telecoms industry in China, while CEG is a US100m PE fund that invests in seed and early stage internet-related and IT companies in the US.

*China Minzhong: Requested for an extension to the trading halt until 5pm on 6 Sep, as it is currently finalising terms for the proposed takeover by PT Indofood Sukses Makmur at $1.20/share.

*Excelpoint: Private placement of 15m shares (12.8% of enlarged share capital) at $0.525 (34.6% premium to last close) to an investment company to raise net proceeds of $7.8m intended for strategic M&As and the development of new technology, applications and R&D.

*Swiber: Interim judicial managers updated that as at 1 Sep, total sum of claims received amounted US$227m.

*Creative: Filed infringement lawsuit against ARM regarding four of its patents.

*Debao Property: Removed from SGX Watch-List after meeting exit criteria.

*Nico Steel: Placed on the SGX Watch-list with effect from 5 Sep 2016.