SG Market (01 Nov 16)

Sharp reversal in crude prices and heightened uncertainty over the US presidential campaign will likely keep investors on edge.

Regional bourses slumped in early trading in Tokyo (-0.5%), Seoul (-0.8%) and Sydney (-0.7).Technically, STI is expected to hover near the lower bound of its 2,800-2,880 trading band.

Stocks to watch:
*OUE Hospitality Trust: 3Q16 results in line even though DPU was diluted to 1.23¢ (-28.5%) on an enlarged unit base (+34%) post-rights issue in Apr. Gross revenue of $33.3m (+2%) and NPI $29.4m (+2.4%) were buttressed by income support for Crown Plaza Changi Airport hotel, which more than offset weakness at Mandarin Orchard Singapore and Mandarin Gallery. Retail occupancy rose 9.9ppt q/q to 89%, with WALE of 2.8 years. Aggregate leverage jumped 6.1ppt q/q to 37.3%, with average debt cost of 2.5% and tenor of 2.7 years. NAV/unit at $0.80.

*Rickmers Trust: Dived to 3Q16 net loss of US$74.7m compared to net profit of US$9m a year earlier after incurring an impairment of US$69.1m for 15 vessels. Revenue tanked 43% to US$15.6m in a depressed charter market as it decommissioned three idling vessels in Aug and tow more in Sep to reduce vessel operating costs and management fees. But still, fleet utilisation sank to 85.3% from 99.9% in 3Q15. Total bank debt was reduced to US$276.9m from US$313.4m as at end 2015, of which US$179.7m is due in Mar '17. Separately, shareholders have approved a proposed issue of 1.3b new units to noteholders as partial redemption of $60m of its $100m notes due May '17. NAV/unit at US$0.26.

*Baker Tech: Swung to a 3Q16 net loss of $1.5m from $2.7m profit in 3Q15 on reduced FX gains (-81%) and an inventory write-down of $1.1m (3Q15: $0.6m). Revenue declined to 10% $5.6m on continued weakness in the O&G sector. NAV/share at $1.085.

*Hafary: 3Q16 net profit climbed 16.2% to $2.7m on a shift in sales mix towards the more lucrative downstream segment. Revenue of $29.7m (-3.9%) slipped on lower project sales (-20.1%), which offset growth in the general segment (+20.2%). Gross margin widened to 39.8% (+1.7ppt). NAV/share at $0.124.

*Sing Post: Launched its regional ecommerce logistics hub, which features a fully automated parcel sorting and warehousing facility, scalable and upgradeable for future needs.

*Super Group: Pending announcement following its 8% price surge and subsequent trading halt yesterday. Likely scenarios include 1) privatisation by the major shareholders or takeover by third party, 2) sale of businesses or properties, 3) strong upcoming 3Q results on 14 Nov, 4) tussle for control between the major shareholders. MKE last had a Hold with TP of $0.86.

*China Everbright Water: Applied to Shanghai Stock Exchange and the China Securities Regulatory Commission for a proposed issue of corporate bonds worth Rmb2.5b, to replenish the group's working capital and funding for the construction of water treatment projects.

*SGX: Welcomed its first Masala bond via the listing of ECL Finance 9.05%, with tenure of 38 months.

*Hiap Hoe: Expects to record a profit for 3Q16 from the gain of disposal for its property at 380 Lonsdale Street, Melbourne. Results will be released on 11 Nov.

*Geo Energy: Awarded a contract to provide mining project management services to PT Angsana Jaya Energi (AJE) for a mine located adjacent to group’s existing mine. In addition, group secured an exclusive coal off-take agreement with AJE for ~5mt of coal in 2017.

*Aspial Corp: Repurchased another $4.5m of its $80m 4.5% notes due 2017. Outstanding principal amount of the notes is now $71.5m.

*iX Biopharma: Granted a patent in Canada for its WaferiX drug delivery technology.

*Ley Choon: Awarded a $4.8m PUB contract to replace network enhancement of watermains.

*Delong: Production capacity is expected to be reduced by 126,000t (-27.6%) and 42,000t (-7.7%) in 4Q16 and 1Q17, respectively, due to major maintenance works.

*Swiber: Reprimanded by SGX for breach of listing rules. Disclosure for its US$710m project win in West Africa in 2014 was disclosed based on a letter of intent, rather than a binding contract, while the price tag was only an indicative amount and still subjected to various pre-requisite studies at the time of announcement.

*Profit warning:
-Kencana Agri
-CSC Holdings