SG Market (13 Sep 16)

Volatility is expected to hit the market as investors tackle mixed signals from Fed officials on the US rate hike. We remain advocates on consumer and yield plays for their defensive nature, with counters such as Sheng Siong, AREIT and MINT.Regional markets opened higher in Tokyo (+0.5%), Seoul (+0.9%) and Sydney (+1%).

STI has broken below the 2,880 support, with the next at 2,800. Overhead resistance is now reset at 2,880.

Stocks to watch:
*GLP: To acquire its second portfolio of industrial assets in US comprising a total ~15m sf gfa for ~US$1.1b. GLP intends to seek syndication for the stake and ultimately retain ~10% in the portfolio. Separately, 50:50 JV with Canada Pension Plan Investment Board has commenced development of a modern logistics property GLP Neyagawa worth ¥5b (US$49m), a 27,000 sqm project in Osaka targeted for completion in 1QFY19.

*Ascendas REIT: Acquired two industrial properties in Australia for A$168.2m, comprising a business park in Sydney (A$143.4m) and a logistics property in Melbourne (A$24.8m). The new assets are expected to add 6.5% to overall NPI in the first year, with the leases embedded with rental escalation of between 3.5%-4% per annum. Pro forma FY3/16 DPU is estimated to rise by 0.1% to 15.374¢. MKE last had a BUY with TP of $2.70.

*CWT: Granted full capital markets services license by the MAS, which allows for the offering of financial and commodity derivatives. Separately, CWT updated that controlling shareholder C&P is still in negotiations over a potential buyout.

*Vard: Secured a new contract for an equipment and electrical installation package to Cochin Shipyard for an undisclosed sum, for a vessel under construction for the Indian Government.

*SBS Transit: Discovered hairline cracks on the bogie frame of 11 Sengkang-Punggol LRT trains during a planned fleet-wide inspection. Six of the trains have been restored, and the remaining five will be reinstated in Oct '16. Management disclosed that services have not been affected and costs will be borne by the manufacturer, Mitsubishi Heavy Industry.

*Serial System: Investing US$0.45m for a 45:55 JV in Hong Kong with South Korean-listed Unitrontech, in which the group holds a 8.2% interest. The JV Unitrontech China will engage in marketing and distribution of Micron memory products, with a focus on automotive market in China.

*ISDN: Appointed Shenwan Hongyuan Capital as its compliance adviser for its proposed dual primary listing in Hong Kong.

*China New Town: Entered strategic cooperation framework agreement with Danyang Municipal Government for investment, development and operation in the education industry. In relation, the group injected Rmb300m into Danyang Education for a 27.3% stake, to develop the Zhongbei College project, and obtain a guaranteed 9.8% return during the one-year investment period.

*Secura: Secured its first Chinese contract in Chongqing, for security consultancy services at upcoming integrated development Raffles City Chongqing, by CapitaLand. It hopes to use the contract as an entry point into the Chinese security services market.