SG Market (27 Sep 16)

The Singapore market appears to be caught in a limbo as investors brace for the US presidential election, which may have significant implications for trade and investments, as well as a key oil producers meeting this week that could send oil prices either way.

Regional markets opened in the red in Tokyo (-1.4%), Seoul (-0.7%) and Sydney (-1.1%).From a technical perspective, topside resistance for STI is at 2,880, with underlying support at 2,800.

Stocks to watch:
*OCBC/Great Eastern: Reviewing strategic options of their combined 20.5% stake in United Engineers and WBL after exclusive sale talks with Thai tycoon Charoen Sirivadhanabhakdi lapsed last year, but no decision has been reached yet. Assuming a sale at current market price, OCBC could net a divestment gain of $63m for its 4.1% direct stake and reduce its RWAs by $275m, as well as potentially raise its fully-loaded CET1 by 6bps to 12.76%.

*SGX: Baltic Exchange shareholders have approved the resolutions required for the proposed acquisition by SGX via a scheme of arrangement. The completion of the £87m ($153m) deal remains subject to certain conditions, including the court sanctioning and regulatory approvals.

*GLP: Signed leases totalling 66,000 sqm with new customers, global auto makers Fiat, Chrysler and Daimler in Brazil and China.

*Yanlord: Acquiring two prime development sites with total gfa of 106,232 sqm in Suzhou for Rmb3.69b. Management believes Suzhou remains a healthy market, as evidenced by the 94% sale of the 265 units launched at its development Riverbay Gardens during the opening weekend recently.

*SPH: Entered into a 49:51 JV with Wholesale Investor to expand its online investor relations business through ShareInvestor.com, in Australia and New Zealand.

*Cache Logistics Trust: Agreed on a holding arrangement with Schenker, which is in dispute with master lessor C&P on the lease agreement for 51 Alps Avenue. The arrangement allows Cache to collect monthly rental of $0.77 psf for the property, while the dispute is pending court resolution.

*Soilbuild Construction: Constructing five units of two-storey detached dwelling houses with basement and attic along Wilkinson Road in Marina Parade, for a total of $13.1m. The project will commence in 4Q16, and are targeted for completion in 3Q18.*Boustead Projects: Signed an agreement with Guangdong New Co-Op to jointly develop an unspecified number of agricultural logistics network in Guangdong, China.

*Eu Yan Sang: Privatisation offer at $0.60/share by Righteous Crane, a consortium comprising a private equity firm (42%), Temasek Holdings (30%) and founding Eu family (28%) will close on 27 Sep. The offeror has obtained 84.9% of acceptances as at 23 Sep.

*TTJ: FY16 net profit jumped 65.8% to $25.8m on revenue of $136.6m (+45.1%), boosted by strong contribution from the structural steel business (+59.2%) on more project completions, partially pared by lower occupancy for its dormitory business (-6.5%). Gross margin remained stable at 28.9% (-0.3ppt), while order book stood at $48m, of which a substantial amount of work is due for completion in FY17-18. First and final DPS slashed to 1.7¢ (FY15: 8¢).

*Rowsley: Partnering with UK’s National Football Museum to operate more football-themed cafes and hotels which are co-owned by former Manchester United players, Gary Neville and Ryan Giggs. The museum will also loan its collection of football memorabilia to the F&B and hospitality venues.

*Xpress: Proposed issue of 5.7m new shares at $0.70 apiece to six individual investors to raise $4m net proceeds for working capital and business expansion.

*China Environment: Reviewing a letter of demand sent by China Construction Bank, claiming repayment of Rmb85,801 in overdue interest for a working capital loan of Rmb23m.