SG Market (20 Oct 16)

Expect some positive spillover activity from steadily rising oil prices, although lacklustre 3Q results from local companies could cap upside gains.Regional bourses opened positive in early trading in Tokyo (+0.3%), Seoul (+0.2%) and Sydney (+0.2%).Technically, STI could test its immediate resistance at 2,850 (50-dma), with next objective at 2,890. Underlying support is at 2,800 (200-dma).

Stocks to watch:
*SGX: 1QFY17 results missed with a 16% drop in net profit to $83.1m as revenue slid 13.1% on lower volume of market activity in both securities trading (-16%) and derivatives (-22%). Securities daily average turnover shrank 19% to $1b despite 8 new IPOs that raised $647m (1QFY16: $103.9m from 7 new listings), while derivatives volume dived 24%, mostly dragged by China A50 and Nikkei 225 futures. Operating margin shrank to 50.9% (-2.5ppts) on higher maintenance for new systems launched. But ongoing acquisition of Baltic Exchange and efforts to draw new listings remain the bright spots. Interim DPS of $0.05 was maintained.

*Keppel T&T: 3Q16 net profit leapt 357% to $69.9m, boosted by a disposal gain of $55.8m from the sale of its 50% stake in Keppel DC REIT Management. Revenue fell 8.7% to $46.5m on lower logistics sales, partly offset by higher contribution from the data centre division, stemming from increased co-location service income. NAV/share at $1.41. Separately, the group is acquiring a 59.6% stake in Courex for $4.6m, a third-party logistics company that uses a crowdsourcing model to tap on a large network of delivery personnel in Singapore. The acquisition is in line with its e-commerce growth plans.

*Frasers Commercial Trust: 4QFY16 results in line. Distributable income rose 4% to $19.5m but DPU slipped to 2.45¢ (-3%) on an enlarged unit base. Gross revenue and NPI climbed to $39.3m (+6%) and $29.3m (+7%) respectively, lifted by newly acquired 357 Collins Street and higher rental rates at Alexandra Technopark. Portfolio occupancy inched up to 93% (-0.3ppt q/q) with WALE of 3 years. Aggregate leverage held steady at 36% (-0.3ppt q/q) with average interest cost maintained at 3%. NAV/share at $1.52.

*First REIT: 3Q16 distributable income rose to $16.3m (+4.7%), but DPU lagged at 2.12¢ (+1.9%) due to an enlarged unit base. Gross revenue and NPI rose in tandem to $26.9m (+6.5%) and $26.6m (+6.3%), respectively, underpinned by new contributions from Siloam Hospitals Kupang and Lippo Plaza Kupang that were acquired in Dec '15. Aggregate leverage reduced to 30% (-4.4ppt q/q). NAV/unit $1.0293.

*mm2 Asia: Acquiring the exclusive rights to produce and broadcast “The Voice”, for Singapore and Malaysia. The global franchise is scheduled to air in 2017.

*Ezra/Emas Offshore: Associate Perisai Petroleum received a notice from noteholders seeking full immediate repayment of its $125m 6.875% notes.

*Acromec: Clinched a $7m contract for fitting out a biosafety level 3 lab for National Centre for Infectious Diseases by 1Q18. The deal also has a $1.8m option for maintenance services within a year from completion. This brings order book to $49m.

*SHS: To supply electric energy to the Bangladeshi government with its future solar power plant, at a tariff of US$0.17/kWh for a 20-year period.

*Global Invacom: Received approval to supply its new generation Low Noise Block products to its largest customer, a leading satellite equipment provider in the US.

*China Taisan Technology: Group's Taiwan Depository Receipts will be delisted from the Taiwan Stock Exchange on 29 Nov.

*China Environment: Receive letter of demand from one of its major shareholders seeking overdue rental of Rmb3.2m to be paid by 20 Oct.