The market could tick higher on GDP and NODX growth upgrades for 2017 and after Wall Street reacted favourably to dovish Fed minutes that it could raise interest rates next month and start to unwind its massive balance sheet.
Regional markets opened mixed in Tokyo (-0.03%), Sydney (-0.3%) and Seoul higher (+0.3%).Technically, the STI is likely to trade with an upward bias within the 3,190-3,275 range.
Stocks to watch:
*Economy: Singapore final 1Q17 GDP growth was revised to 2.7% from earlier flash estimate of 2.5%. While MTI kept its 2017 growth forecast at 1-3%, it foresees the economy will expand more than 2% this year as exports continue to strengthen. 1Q17 NODX surged 15.2%, on the back of a recovery in electronic shipments. On that front, IE Singapore raised its growth estimate for exports from 4% to 6%.
*Keppel Corp: Won $103m contract to build two LNG carrier vessels for Stolt-Nielsen Gas, with completion in 2Q/3Q19. The deal comes with options for three additional vessels, with 6/12/18 months expiry from the contract date. Latest order brings the total contracts secured this year to just $279m, well off peak of $10b in 2011 and $0.5b in 2016.
*SIA Engineering: Setting up wholly-owned subsidiary in Japan to provide line maintenance services at airports in Japan. It will commence operations at Kansai Int'l Airport and subsequently expand to other Japanese airports. This will brings SIE’s maintenance network to 37 airports across eight markets.
*SATS: Launched a technology innovation centre, TechnIC@SATS, which will roll out technological solutions to boost productivity. The centre will be supported and co-funded by the CIAS and the EDB to the tune of $110m.
*Valuetronics: FY17 net profit jumped 27.9% to HK$154.1m, beating estimates, as it was partially helped by a positive HK$5.1m FX swing. Revenue climbed 16.5% to HK$2.27b, with improvement in industrial & commercial electronics (+14.1%), as well as consumer electronics (+19.7%) segments. Gross margin was relatively stable at 15% (FY16: 15.2%). Cash pile ballooned to HK$752.9m (FY16: HK$689.3m), accounting for 40% of market cap. Maintained final and special DPS of HK$0.20. Trading at 12x FY17 trailing P/E, and 7.1x ex-cash P/E.
*Cityneon: Officially opened its maiden Avengers S.T.A.T.I.O.N travelling exhibition in Beijing, China. After Beijing, the set will move on to other cities within China over the next two years. *Secura: Entered two-year strategic alliance with ComfortDelGro to offer cyber security related consultancy, products and services to the latter’s customers.
*Vallianz: Converting net payables to Swiber of US$36.6m, as well as Rawabi’s shareholder advances of US$102.1m into equity in its own capital, via the 1-for-1 proposed rights cum warrants issue first announced in Sep ’16.
*Sinwa: Won supply agreements of A$8m for the Prelude FLNG Project in Western Australia. Scope of services include the supply of provisions, stores and logistics to vessels involved in the project.