Tuesday, March 7, 2017

SG Market (07 Mar 17)

Continued profit taking is likely to occur ahead of the jobs report this Fri and Fed meeting next week on increased fears of a Mar rate hike, coupled with rising geopolitical tensions in the region.

Regional bourses opened mostly flattish in Tokyo (-0.2%), Seoul (+0.1%) and Sydney (unch).The STI still remains in consolidation within its uptrend channel between 3,110 and 3,170.

Stocks to watch:
*Ascott REIT: Proposed renounceable fully underwritten 29-for-100 rights issue at $0.919 apiece to raise net proceeds of $437.6m, used to finance the acquisition of Ascott Orchard Singapore and two serviced residence properties in Germany. Post-acquisitions, pro forma FY16 DPU (including rights issue) is expected to increase 2.2% to 7.43¢, implying a 6.4% yield. The REIT will go ex on 10 Mar.

*SingPost: Marcelo Wesseler, chief of the eCommerce division that has been a drag to the group, has resigned. He will be replaced in the interim by Paul Demirdjian, President and CEO of Jagged Peak. MKE last warned of a looming impairment risk due to structural issues and has a Hold on the company with TP of $1.34.

*SGX: Two new indexes launched by FTSE Russell will now track consumer goods and services firms. Constituents of the FTSE ST Consumer Goods & Services Index comprise companies within the GICS sector and within the FTSE ST All-Share Index, while the FTSE ST Consumer Goods & Services Liquid 20 Index comprises 20 of the most liquid stocks in the sector.

*Noble: Disclosed that an issue of US$750m 8.75% notes due 2022 has been fully placed out. The commodity trader's liquidity has improved over the past two years and management expects capital constraints on businesses to moderate in 2017. Last traded at 0.53x P/B.

*China Everbright Water: Recently secured three waste water treatment upgrading projects, involving a total investment of about Rmb210m in Shandong and Liaoning.

*Lian Beng: Clinched its biggest ever construction contract worth $435m, awarded by the HDB, to build a high-rise multi-user industrial complex in the Defu South area. Construction will begin in 2Q17 and is slated for completion in 2Q20. The contract win will bolster its order book to $644m.

*Vard: Secured a NOK48m four-year framework agreement to provide ship maintenance and corrective maintenance to five Coast Guard vessels of the Norwegian Defence Logistics Organisation.

*Ezra: A civil action has been lodged in US by VT Halter Marine, against Ezra's 40% owned EMAS Chiyoda Subsea.

*YuuZoo: To launch its new platform YuuVillage with its Indian franchisee, iComp Digital Media in India. The platform will offer social networking services and access to products from the private and government sector.

*Libra: Received arbitration proceedings from a sub-contractor seeking $5.7m for alleged breaches in a sub-sub contract agreement for an air-conditioning and mechanical ventilation system.

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