SG Market (07 Oct 16)

The Singapore market may wade into wait-and-see mode amid light profit taking ahead of the US jobs report this Fri and IMF meeting this weekend.

Regional markets slipped in early trading in Tokyo (-0.2%), Seoul (-0.2%) and Sydney (-0.3%).Technically, STI is hovering near its immediate support at 2,880, with topside resistance at 2,910.

Stocks to watch:
*SPH REIT: 4Q16 DPU of 1.41¢ (+1.4%) was in line with estimates. Revenue ($52.2m, +2.7%) and NPI ($40.2m, +5.3%) rose on higher rental income from Paragon and The Clementi Mall, as well as lower operating expenses. Full occupancy in its malls was maintained, with WALE of 2.3 years, while aggregate leverage remains steady q/q at 25.7%, with weighted average maturity term of 3.1 years. NAV/unit at $0.94.

*Keppel DC REIT: Acquired a data centre in Cardiff, Wales, for £34m.The data centre is currently leased to one of the largest global cloud service providers for a period of 15 years beginning Jun ’16. Pro forma FY15 DPU is expected to be lifted by 4.3% to 6.8¢ post deal, translating to an indicative 5.6% yield.*Keppel DC REIT: Substanstial shareholder Temasek raised its stake from 36.99% to 37.02%, after independently managed Fullerton Fund Management acquired 294,200 shares on the open market at $1.2189 apiece on 30 Sep.

*SATS: 50:50 JV with Air India has commenced trial operations of India’s first integrated on-airport perishable cargo handling centre, AISATS COOLPORT, at Kempegowda International Airport in Bengaluru. Official inauguration for the 11,000 sqm centre, which is designed to handle 40,000 tonnes of cargo per year, is slated for end-2016.

*Frasers Centrepoint: Acquired a 15.19 ha site in Sydney’s Chullora industrial area for an undisclosed sum and intends to deliver a mix of pre-committed and development space with GDV of A$55m. The site comprises a 6-ha parcel that is available for immediate development and an investment component on the adjoining 9.2-ha plot that will be subject to a 20-year triple net lease to SUEZ Recycling & Recovery. This follows recent acquisition of sites in Sydney and Melbourne totalling 45.72 ha to expand its industrial footprint.

*SGX: Securities turnover stood pat in Sep on a m/m basis but fell 8% y/y to $20.7b, with daily average turnover value of $984m (+5% m/m, -13% y/y). Derivatives volume dipped to 13.4m contracts (-3% m/m, -8% y/y), weighed by reduced trading in China A50 index futures (-16% m/m, -14% y/y).

*Oxley: Launched its first development project in Ireland, its second flagship project outside Asia, following the overwhelming reception for London's Royal Wharf. Located in the prime business district, the 2.35-ha site will be developed into a mixed-use project called Dublin Landings, comprising 700,000 sf of flexible Grade A office and retail space, as well as 273 luxury apartments, and scheduled for completion by 2020.

*Vard: Awarded contracts to design and construct two luxury expedition cruise vessels for Hapag-Lloyd Cruises, with delivery scheduled in 1Q19 and 4Q19.*Chip Eng Seng: Entered into a 70% JV to acquire Kodhipparu Island Resort in Maldives for US$65m. The resort consists of 120 villas and is a 15-min speedboat ride from Male International Airport and is expected to open in 2Q17.

*AEM: Order book stood at $38.3m as at 5 Oct, comprising of equipment orders and kits to be delivered within the next 12 months.

*Swiber: Granted court approval to be placed under judicial management.

*MMP Resources: Intends to contest winding up action brought upon by Edward Lee for failure to settle a $5.2m demand. The High Court will hear the application on 28 Oct. Meanwhile, the group would undertake a forensic audit into its 2014 and 2015 activities.