Profit taking is likely to take hold after MAS narrowed its 2016 GDP growth estimate to 1-1.5% from 1-2% previously, given weak conditions in the external environment.
Regional bourses opened slightly higher today in Tokyo (+0.3%), Seoul (+0.1%) and Sydney (+0.2%).Technically, the STI is range-bound between its topside resistance at 2,860 and support at 2,835.
Stocks to watch:
*Banks: UOB and DBS may face renewed pressure on additional impairments to their loan books, after court documents filed by beleaguered Swissco showed sums of US$167.1m and US$68.3m, owed respectively. A remaining US$38m is owed to seven other financial institutions including CIMB, Credit Suisse, OCBC and RHB. MKE remains Negative on the sector, with UOB its preferred pick (Hold, TP of $18.36).
*IHH: 3Q16 net profit of RM173.3m (+46%) was lifted by a 57% reduction in FX translation losses, bringing 9M16 earnings of RM954.9m (+26%) to meet 67% of street estimate. Revenue rose 18% to RM2.44b, driven by increased contribution from Parkway Pantai operations in Singapore, Malaysia and India, as well as Turkey's Acibadem Holdings. However, EBITDA margin narrowed 0.7ppt to 22.3% due to higher start-up costs for new hospitals. MKE last had a Hold with TP of RM6.52.
*Sarine: Disclosed that it has no significant exposure to India's largest diamond cutting firm Shrenuj & Co, after its supply arrangement with De Beers has been suspended due to continued pressure on the former's liquidity position.
*KrisEnergy: Reiterated that terms and conditions of its ongoing consent solicitation exercise for its $500m MTN programme are final. Group opines that the current debt restructuring is the only option for stakeholders to preserve value and concedes that failing which, on 9 Dec, will cause the risk of multiple defaults.
*BRC Asia: FY16 net profit almost halved to $8.3m (-46%), on a swing into net FX loss of $4.3m (FY15: $4.3m gain). Revenue slipped to $346.8m (-9.9%) from lower ASPs, arising from intense competition and lower steel prices, despite a higher volume sold. Gross margin stood pat at 8.3%. FY16 DPS reduced to 2.4¢ (FY15: 2.5¢), implying a 4.6% yield. NAV/share at $0.92.
*Cosco Corp: 51% owned Cosco Shipyard is acquiring the remaining 40% in JVCo Cosco Shipyard Total Automation, from its JV partner Wartsila Singapore, for Rmb6.67m. The target engages in automation system design, installation, commissioning, and repair services for the O&M sector.
*Rickmers Maritime: Became the latest victim in the distressed O&M sector to default, after failing to service interest payments for its $100m 8.45% notes due 2017.
*Geo Energy: Acquired 100% stake in PT Surya Tanbang Tolindo (STT), which owns a 4,600 ha concession area that has 20 years lease term (from 2012) at East Kalimantan, Indonesia. STT is still in pre-production stage and is estimated to hold 0.8m metric tonne coal reserves on a strip ratio of 17.
*Advanced Integrated Manufacturing: Privatisation offer by founder Tan Kim Yong at $0.21/share (22.8% above last close). Together with his family, Tan owns 88.24% of the group.
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