SG Market (10 Oct 16)

SG MarketThin liquidity is expected to persist in Singapore for the earlier part of the week, ahead of the FOMC minutes to be released on Wed. Onward, all eyes will be focused on inflation data in China on Fri, as well as the commencement of the 3Q results season.

Regional bourses opened mixed in Seoul (-0.4%) and Sydney (+0.3%). Japan market is closed for public holiday.Technically, STI sees near-term resistance at 2,880 followed by 2,910, with downside support at 2,800.

Stocks to watch:
*Tourism: STB launched a two-day Singapore Festival in Myanmar, hoping to sustain and raise growth momentum from visitorship, which rose 7.8% as at 7M16. In 2015, Singapore received 105,000 arrivals from Myanmar visitors and STB is looking to double that.

*Noble: Proposed divestment of Noble Americas Energy Solutions to US electricity generator Calpine Corporation for US$1.05b, or 1.6x P/B. If completed, this will result in a net gain of US$386m, and pro forma FY15 NAV/share is estimated to rise to US$0.56 (+12%), while LPS will narrow from US$0.2616 to US$0.2020. Counter could see further uplift in the near-term from its depressed valuation of 0.25x P/B.

*Ezion: Extended the maturity date of its $30m redeemable exchangeable preference shares by three years to Oct 2019. Also, no dividends will accrue and be payable up till the maturity date, which will help relieve the strain on its cash flows amid the O&G downturn. MKE last had a Buy with TP of $0.45.

*Frasers Centrepoint: Potential subscription of 735m new shares in TICON Industrial Connection, for 13.23b baht ($520m). The Thai developer and asset owner currently owns and manages 2.5m sqm of industrial space and is also the sponsor of three listed property funds and a REIT in Thailand, with combined AUM of 32.4b baht ($1.3b).

*OUE: Signed management agreement with Oakwood Asia Pacific to manage 268 serviced residences in OUE Downtown, slated to open by mid-2017.

*Ascendas REIT: Stake held by substantial shareholder Temasek has been reduced from 20.01% to 19.98%, after its associate DBS Bank sold 770,000 units at $2.4774 each on the market on 3 Oct. MKE last had a Buy with TP of $2.70.

*Sino Grandness: Substantial shareholder Asdew Acquisitions sold 709,000 shares at $0.3561 each on 5 Oct, paring its stake from 5.1% to 4.995%.

*SunMoon: Entered a binding term sheet with Shanghai YIGUO E-commerce (Yiguo), a leading fresh food e-commerce player in China, whereby Yiguo will invest $24m via a placement of 333.3m new shares at 4.5¢ apiece, attached with free warrants on the basis of 1-for-2 with an exercise price of 5.4¢ each. Subject to a whitewash waiver, Yiguo will own 51% stake in the enlarged share capital of SunMoon upon completion..

*WE Holdings/ Jubilee Industries: WE Holdings will be extending US$16m in loans to Jubilee Industries. The loan comprises an US$8m loan that is convertible into new shares in Jubilee, as well as an US$8m direct loan, whereby Jubilee has the option to repay WE Holdings via shares in KL-listed EG Industries, which it holds an 11.8% stake in.

*WE Holdings: Proposed diversification into the corporate accretion services sector with a focus on financial technology and education industries. The move entails providing 1) a securities-based crowdfunding avenue where retail investors can have sight of projects in various industries supported by the company, 2) partnering a foreign-based industry leader to provide local merchants with technological and structural support, as well as 3) the construction and acquisition of various educational businesses in Asia.

*Acesian Partners: Currently locked in a $24.4m contract dispute with main-con Takenaka on the proposed development of Changi Airport Terminal 4. If the dispute’s outcome is unfavourable, Acesian expects that its FY16 results will be materially impacted.

*Federal Int’l: 20.7% owned associate Gunanusa Utama Fabricators (PTG) has secured its second contract from PTTEP International worth US$150m to build two wellhead platforms for the Zawtika development project, scheduled for completion in 2Q18. Latest contract will lift group’s order book to $140m.

*Addvalue Technologies: Updated that the proposed disposal of Addvalue Communications for $330m will be delayed as certain conditions remained unfulfilled, more than two years since the deal was first announced. Separately, management disclosed that a few third parties have indicated their intentions to take a significant interest in the company that may result in a change of control.