SG Market (15 Jun 17)

MARKET OVERVIEW
- The market could be in for some turbulence after the Fed lifted interest rates and signalled the beginning of its balance sheet taper this year even as economists raised Singapore's growth forecast.
- Local technology and oil names could come under pressure on a continued US tech sell-off, while crude prices tanked following a bearish US oil inventory buildup and IEA report that global oil output will expand faster than demand in 2018.
- Technically, the STI is capped at topside resistance of 3,275 in near term, with underlying support at 3,228.

MACRO/SECTOR NEWS
*Economy
o Economists are more upbeat about Singapore's economy as global outlook brightens.
o 2017 GDP growth forecast raised to 2.5% from 2.3% in previous MAS survey.
o But pick-up is not broad-based. Trade-related industries, especially electronics manufacturing are enjoying a boost from stronger global demand but domestic-oriented sectors such as construction and F&B are not out of the woods.
o MKE retains its growth estimate of 3% for 2017.

POSITIVE NEWS
*OKP
- Won a 10-month project from JTV for $11.7m which entails the construction of new roads and drains, trunk sewers and junction improvement works in the northern part of Singapore.
- The contract will lift its net order book to $317.8m (1Q17: $306.1m), extending visibility till 2019.

*Kimly
- Acquiring a coffee shop in Bedok for $0.85m via issue of 1.7m shares at $0.50 apiece.
- Also taking over a F&B business within an industrial canteen in Woodlands for $0.65m via issue of 1.3m shares at $0.50 apiece.
- Consideration shares are priced 22.5% higher than average price of $0.4081 on 13 Jun '17.

*Sanli Environmental
- Private equity firm ICH Gemini became a substantial shareholder after acquiring 0.6m shares at $0.34 each in open market, raising its stake to 5.062% from 4.838%.
- Current price of $0.34 implies FY3/16 P/E of 15.5x.

*TLV Holdings
- 70% owned Taka HK Venture made its first foray into the China retail jewellery market with a 49:51 JV with China's Maoming LiuTao ZhuBao Chuangyi Chanye, one of Guangdong's biggest jewellery consortiums.
- The proposed JV plans to open a chain of retail stores/counters in the Miaoming area and expand to other parts of China.
- This will depart from its current sale of jewellery to China market on a wholesale basis through its participation in exhibitions and significantly change the risk profile of the group in future.

NEUTRAL NEWS
*Cambridge Industrial Trust
- Proposed to divest 23 Woodlands Terrace for $17.68m or 1x P/B.
- Property is a 4-storey industrial building (124,425 sf) at JTC Woodlands East Industrial estate, with remaining land tenure of 39 years.
- Proceeds will used be for debt repayment, acquisitions, AEIs and/or working capital.

*World Class Global
- Aspial property spin-off saw a good response to its IPO.
- Offer of 136m new and vendor shares at $0.26 each was oversubscribed by 1.1x.
- The group has property development projects in Australia and Malaysia.
- Making its trading debut today with listing market cap of $235.5m and P/B of 2.2x.