Wednesday, December 21, 2016

SG Market (21 Dec 16)

The Singapore could trade with a mild upside bias after the BoJ upgraded its assessment of the Japanese economy and US equity markets continued to tread new highs. But upside will be capped by fears of capital flight from Asia due to the strong dollar.

Regional bourses opened higher in Tokyo (+0.4%), Seoul (+0.5%) and Sydney (+0.5%).Immediate resistance for STI remains at 2,953, while underlying support is at the 2,882 breakaway gap.

Stocks to watch:
*ComfortDelGro: Acquiring the remaining 49% stake in ComfortDelGro Cabcharge for A$186m, valuing the Australian JV at 4.6 times 2015 EBITDA. The JV is one of the largest private bus operators in New South Wales and Victoria, and the deal is subject to Australian government’s approval. MKE has Hold on CDG with TP of $2.63.

*Cosco Corp: Disclosed that parent China Cosco Shipping Corp will be restructuring its shipyard businesses to centralise operations and management, which will affect the group. Pending the finalisation of the restructuring plans, the group is uncertain whether there will be material impact to the trading of its stock, and thereby requested for trading suspension.

*Sembcorp Industries: Group President and CEO Tan Kin Fei will be succeeded by board director Neil McGregor, who is also Head of Energy & Resources at Temasek Int’l, wef on 1 Apr ’17. Tan will remain as advisor and non-executive director until 31 May ’17.

*Ezra: 40%-owned associate EMAS Chiyoda Subsea (ECS) has initiated discussions on its financial obligations with various parties, with some of these obligations guaranteed by the group. The remaining stake in ECS is owned by Chiyoda Corp (35%), and Nippon Yusen Kabushiki Kaisha (25%).

*SIIC Environment: 75.5%-owned subsidiary, SIIC Environment (Yiyang North City) Wastewater Treatment has been awarded Phase 2 of the Yiyang North City Wastewater Treatment project, as well as a BOT upgrade project by the Housing and Urban Development Bureau in Yiyang North City, China. The project entails the construction and operation of a wastewater treatment plant with capacity of 40,000-80,000 tpd for a concessionary period of 30 years.

*Huationg Global: Secured new civil engineering projects worth a total of $87.1m, comprising earthworks, surcharging works, car park improvement, road extension and bus stop construction across Singapore. The new projects are expected to be completed in phases over the next 2-3 years. This will raise the total value of new projects in FY16 to $113.7m.

*Singapore Myanmar Investco: Received notice from JV partner Golden Infrastructure Group (GIG) alleging that the group is in breach of their JV agreement after it proposed to dispose its 97% stake in the JV Myanmar Infrastructure Group to Shining Star Int'l Holdings. GIG alleged that the group has disregarded its right of first refusal and call options on the JV Co.

*QT Vascular: Signed an agreement with Healthtrust Purchasing, which will expand its customer base for Chocolate and Glider products in the US to over 1,400 hospitals, as well as members in more than 22,600 other locations.

*Addvalue: Its Inter-Satellite Data Relay System has completed a one-year on-orbit testing with all primary objectives met. It hopes to further improve its system’s design to support space mission in a commercial satellite operation..

*Sabana REIT: Undertaking a 42:100 rights issue at $0.0258 each to raise gross proceeds of $80.2m, which will be used to partially finance its acquisition of three properties. Sponsor, Vibrant Group, Singapore Enterprises, and two individuals have undertaken to fully subscribe to the rights issue. (~12.1% of rights issue). In addition, Vibrant will subscribe up to 25.9m excess rights (~8.4% of rights issue).

*Trendlines: Signed a definitive agreement after a non-binding MOU in 8 Sep ’16 with German pharma firm B.Braun Melsungen AG to invest and incubate early-stage healthcare companies in Singapore and the region. Braun will hold a 20.74% stake in the invest co., while the group takes up the remaining 79.26% with a $2.5m investment, funded by its IPO proceeds.

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