SG Market (16 Sep 16)

Market could get a much-needed reprieve from the recent selldown following the bounce on Wall Street, which was uplifted by Apple and diminished expectations of a near term Fed rate hike.

Regional markets climbed in early trade in Tokyo (+0.3%) and Sydney (+0.8%). Seoul market is closed for public holiday.Immediate backstop for STI is at 2,800 (200-dma), with topside resistance at 2,880.

Stocks to watch:
*Keppel Corp: Subsidiaries Keppel Land and Alpha Investment Partners are divesting their combined 80% stake Sparkle Bright Holdings, which owns Life Hub @ Jinqiao, a mixed-use development in Shanghai, for US$516.9m. The sale will reap a gain of $73m and add $0.04/share to its NAV of $6.07. MKE opines that more divestments could be in the pipeline as the group seeks more cash to fund its existing businesses. Last call was a Sell with TP of $4.50.

*SIA: Aug pax load factor slumped 5.2ppts to 79.7%, on declining traffic (-2.9%) and higher capacity (+3.6%), while cargo load factor improved 1ppt to 60.5% due to strong carriage (+8.6%). Load factors declined in all its regions, particularly Europe (-8ppts to 80.8%) and across its subsidiary carriers with SilkAir (-5.2ppts to 71%) taking the biggest hit along with Scoot (-4.8ppts to 80.4%) and TigerAir (-2.9ppts to 82.2%). MKE last had a Hold with TP of $10.00.

*ST Engineering: President & CEO, Tan Pheng Hock will relinquish his current roles and be re-appointed as advisor to the incoming President & CEO, Vincent Chong from Oct. Chong was previously Deputy CEO in charge of corporate development.

*Low Keng Huat: 2QFY17 net profit surged 436% to $43.1m, boosted by disposal gain of $51.5m from sale of Duxton Hotel Saigon in May '16. However, revenue slumped 58% to $8.6m on the absence of development revenue and significantly reduced sales at construction (-96%) and hotel & F&B (-58%) segments. Gross margin tumbled to 22.2% (-58.2ppts) on the shift in revenue mix. NAV/share at $0.87.

*Rotary Engineering: Awarded $64m worth of new contracts between Jun and Sep, including the extension of a chemical storage and handling facility in UAE, as well as fabrication works of O&G production-related modules in Thailand.

*Nordic: Clinched contracts worth an aggregate $4.8m from repeat customers, of which $4m was for flow control systems, and $0.8m for ad-hoc scaffolding projects. The contracts are expected to be completed by 4Q16 and 2017, respectively.

*Choo Chiang: Disposing 50% stake in electrical fittings assembler Neiken Switchgear for $1.4m. Apart from a $0.3m gain, the group expects to recover $1m of inter-company loans upon divestment. Sale proceeds of $1.5m will be earmarked to acquire an investment property located at 9 Tagore Lane, which is expected to complement its existing portfolio of properties located in the same area.

*IHC: Lenders Westpac and National Australia Bank have appointed receivers for three Australian properties to safeguard their interests and procure their fair-value sale, as a direct consequence of the ongoing dispute with the group's creditors over the winding down of IHC Medical Re and IHC Management, which own the assets.

*SBI Offshore: Lodged report with CAD on possible breaches of securities laws related to the purchase and sale of 35% stake in Jiangyin Neptune Marine Appliance Co. A special investigation committee was also formed to investigate the independent PwC findings on the transactions and other connected matters.

*Resources Prima: Commenced production at new mine, IPPKH2, ahead of schedule. As at 31 Aug, it has mined about 88,200 tonnes of coal at the new 897.56 ha site.*Avi-Tech: Removed from the SGX watch-list with effect from 16 Sep.