SG Market (03 Jan 17)

The market could trade sideways amid some caution at the start of the year and ahead of anticipated policy changes by the incoming Trump administration in the US.

Regional bourses opened firmer in Seoul (+0.2%) and Sydney (+1%), while Tokyo is closed for a bank holiday.Technically, bottomside support for the STI is seen at 2,865 (50-dma), with immediate resistance at 2,900, followed by 2,910.

Stocks to watch:
*Macro: Most broking houses are eyeing single-digit growth for the STI in 2017, with corporate earnings expected to bottom out, or post a mild recovery depending on cost cutting ability.

*Economy: According to advance MTI estimates, the S'pore economy grew 1.8% in 4Q16 as well as in 2016, above the earlier 1-1.5% forecast, but the difficult environment is likely to persist in 2017. The government's focus now is to strengthen ties with major trade partners, while the Committee on the Future Economy will unveil recommendations on the longer term growth strategies in the coming weeks.

*Keppel Corp. Entered into a settlement agreement with Parden’s guarantor for the resale of a jackup rig to the guarantor’s associate (361 Projects) for US$164.8m, which is the balance 80% unpaid portion of Parden’s contract value. The rig is slated for delivery in 4Q17.

*Oxley: Sold two blocks of its township development project, Royal Wharf for £156.2m to Notting Hill Home Ownership and Notting Hill Housing Trust of London. Upon the sale, it would have sold 89% or 3,000 homes in the UK project.

*Hong Leong Asia: Agreement with Aspen Vision Synergy, an unrelated third party, for the sale of a piece of land in Selangor, Malaysia has lapsed due to failure to obtain regulatory approval for a conversion of land use.

*Mermaid Maritime: Construction contracts with China Merchants Industry Holdings for tender rigs MTR 3 and 4 has been cancelled by mutual agreement. Prepaid instalments and associated costs were already impaired in FY15. Separately, it has extended the charter in of the DP2 multi-purpose support vessel by one year.

*Sapphire: Conditionally agreed to sell an 81% stake in Mancala for HK$63.2m. The deal would have resulted in pro forma FY16 NTA of 23.88¢, up from 23.77¢. Post disposal, Sapphire’s stake in Mancala would be reduced to 19%, and the group will focus on the infrastructure business under subsidiary Ranken.

*Memtech: Disposing two pieces of land in Huzhou City, China for Rmb41m to Zhejiang Add Auto-Parts as part of its strategy to divest under-utilised assets. It expects to record disposal gains of Rmb21.7m.

*TPV Technology: Entered into a new trademark licensing agreement with Philips TV, which grants it exclusive rights and license to develop, assemble and manufacture certain products outside of Hong Kong for sales, marketing and distribution in Hong Kong.

*CSC: Divesting its 49%-stake in Siam CSC Engineering to JV partner, The Pathumthani Concrete for Bt34.5m ($1.4m). It expects to record a gain of about $0.2m.

*Cordlife: Extended the closing date of its RM0.575/share StemLife voluntary offer to 30 Jan (prior: 5 Jan). It currently owns a 97.8% stake in Bursa-listed StemLife.

*Swiber (suspended): Announced it has so far received claims for about US$288.8m, as at 29 Dec ’16.