Friday, September 9, 2016

SG Market (09 Sep 16)

SG Market: The Singapore market could be in a tight situation as a sharp recovery in oil-related counters due to the recent spike in crude oil prices may be pared by profit-taking in the broader market following ECB inaction on additional stimulus.

Regional bourses opened generally lower in Tokyo (+0.4%), Seoul (-1.1%) and Sydney (-0.9%).

Immediate support for STI is at 2,880, with overhead resistance at 2,960.

Stocks to watch:
*Cogent Holdings: Obtained the long awaited approval from JTC to commence development for Phase 1 of its patented integrated logistics hub in Jurong Island, to be completed within three years from Apr '17. When operational, the entire development could add $15.4m to the group's net operating profit in FY19/20, or 55% above FY15's figures.

*Advancer Global: Acquring 76% stake in two real estate management service providers for an aggregate $3m (9.7x P/E and 3.8x P/B), in a bid to grow its facilities management business. Pro forma FY15 EPS is estimated to rise 6.8% to 3.59¢, while NTA/share will be reduced to 1.98¢ (-46%).

*Tat Hong: Ceased discussions on the potential buyout due to the current challenging economic conditions. Counter could slump back towards the $0.40 (-23%) pre-takeover talk level.

*Yoma: Appointed by JC Bamford Excavators, the world's third largest manufacturer of construction equipment, as the exclusive distributor for the Myanmar market.

*The Trendlines Group: Non-binding MOU with German medical device company Braun Melsungen AG, for investment and incubation of early-stage healthcare companies in Singapore and the region. Braun intends to hold a minority stake in the entity and will support the development of portfolio companies with its expertise in the medical technology field.

*Mermaid Maritime: Awarded two subsea contracts in SE Asia worth a total of US$5.1m, for charter of a dive support vessel with heavy duty work-class ROVs for a 30-day period, as well as inspection services to a third party diving vessel for 45 days. Additionally, group announced a one month work extension valued at US$1.8m, by a major EPC contractor in the Middle East for a dive support vessel.

*Civmec: Setting up a 88:12 JV with Mala to provide construction and engineering services to O&G, metals, minerals, and infrastructure industries in Papua New Guinea.

*Oceanus: Signed binding term-sheet with two key creditors, Ocean Wonder Int'l , and BW Investment, to covert $54.2m out of total $71.9m outstanding debt into new Oceanus shares at price ranging between 0.3¢ and 2.17¢ apiece. The expiry date for the remaining debt of $17.7m will also be extended to end-2018 from end-2016, and will also cease to accrue interest from Jul '16 onwards.

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