SG Market (03 Oct 16)

Singapore market could get a slight lift in sentiment from the expansion in China's Sep factory activity, news that Deutsche Bank was near a settlement with US regulators as well as continued advance in oil prices following last week's OPEC agreement.

Regional markets opened higher in Tokyo (+0.7%) and Sydney (+0.9%). Korea market is closed for a public holiday.Technically, topside resistance for STI is reset to 2,880, with underlying support at 2,800.

Stocks to watch:
*Keppel Corp: After vehement denials since Feb 2015, the group has admitted that certain Brazilian transactions associated with its former commercial agent Zwi Skornicki in relation to the Petrobras graft scandal may be suspicious. MKE believes that uncertainties over the Brazilian rig contracts are far from over and past provisions of $230m may be inadequate. Sell with TP of $4.54.

*Ezra: Noteholders of associate, KLSE-listed Perisai Petroleum have served an accelerated notice of payment for the its $125m 6.875% notes due today, effectively rejecting the waivers and 4-month extension sought. This would weigh on cash-strapped parent Ezra, which holds an effective 22.5% stake in Perisai.

*Keppel T&T: In response to the SGX trading query over "recent unusual price movements", Keppel T&T cited the release of positive research reports by two brokers in Jul and Sep to explain the increased trading activity and share price performance.

*Innovalues: Disclosed that talks wrt a potential buyout remain ongoing. MKE last had a Buy with TP of $1.15.

*CSC: Secured $178m worth of contracts since Apr 2016, including foundation works for three MRT stations along the East Coast stretch of the Thomson-East Coast Line, land preparation works for airfields at Changi East, and foundation works for the refinery and petrochemical integrated development project in Johor, Malaysia. At end-Sep, group's order book stood at ~$200m.

*UOL/UIC: 50:50 JV between UOL and UIC, United Venture Investments, will be acquiring a freehold 9-storey mixed use building in Midtown, London, for £229.6m. The 113,256 sf site area has a net lettable area of 349,088 sf, comprising office (56.5%) and retail (43.5%), and will be held for investment purposes.

*Heeton: Exiting its investment in Heeton Residence, which owns the residential property iLiv@Grange for $21m, due to competitive market conditions.*Sino Grandness: Proposed renounceable underwritten 1-for-3 rights issue at $0.31 each. Net proceeds of $72.4m are intended for capex for the non-beverage business (60%) and expansion of its distribution network (40%). Separately, the group disclosed that the proposed spin-off of Garden Fresh remains ongoing; approval for the listing on HKSE has not been obtained.

*Charisma Energy: Repositioning towards the renewable energy segment, and will team up with local strategic partners across emerging markets in Asia. Separately, it proposed a renounceable non-underwritten 1-for-10 rights issue of warrants at 0.20¢ apiece, with an exercise price of 0.20¢ each, as well as a placement of up to 1b new listed warrants to existing holders of the W161103 warrants. Estimated net proceeds of $9.4m are intended to fund general corporate activities.

*Secura: Expands its homeland security product suite with a collaboration agreement with Israel-based Cellebrite. Secura will be the only preferred reseller of Cellebrite’s products in Singapore, Cambodia and Laos for a three-year period commencing Sep 2016.

*Zhongmin Baihui: Officially opened its new store in Quangang, Quanzhou City in Fujian province. The 16,884 sqm gfa store will lift the total gfa of self-owned stores in Quanzhou City to 149,000 sqm, or 178,000 sqm, including managed stores.

*Cosco Corp: Re-extending delivery of a harsh environment semi-submersible accommodation rig for 15 months, from Jul 2016 to Aug 2017.

*SMRT: Completed the sale of operating assets under the New Rail Financing Framework.

*Saizen REIT: Framework agreement for the proposed acquisition of industrial properties in Australia has lapsed. However, discussions between the manager and relevant parties Sime Darby and Hastings Deering are still in ongoing.

*Jason Holdings: Distressed timber flooring maker received more claims from creditors, as letters of demand came from ANZ Bank and ShareInvestor for $1.7m and $5,900, respectively. The claims are expected to have a material adverse impact on its financial position. Counter remains suspended since Jan 2016.*Otto Marine: Cash offer by Chairman Yaw closed with final acceptances amounting 90.74% on 30 Sep. Offeror intends to exercise right of compulsory acquisition.