Thursday, September 28, 2017

SG Market (28 Sep 17)

- Positive spillover from the overnight jump in US on a sweeping Trump tax plan could drive the market higher, with banks and property counters to benefit from the reflation trade.
- Technically, the STI could test its 50-dma at 3,275, with near-term support at 3,210.

- Awarded several contracts by Jemena Northern Gas Pipeline at the Phillip Creek Compressor Station in Northern Territory, Australia for an undisclosed sum.
- The scope of work includes camp setup, site civil, structural steel fabrication and installation works and will be completed in Aug 2018.
- This project will lift its order book to $640m.
- Last traded at 34.9x trailing P/E.

*Geo Energy
- Received strong demand for its US$300m 8% 5-year notes.
- The offering saw an oversubscription in excess of 3x with a total order book over US$1.2b.
- Proceeds will be used to redeem the outstanding $100m 7.0% medium term notes, full repayment of advances received from Engelhart Commodities Trading, potential acquisitions of coal mining assets and general working capital.

*KLW Holdings
- Entered agreement with PT Karya Bintang Utara (affiliate of PT Codefin) to set up 65:35 JV, PT Ambertree Development Jakarta, with total initial capital of US$21.8m.
- JVCo will be acquiring a prime land in South Jakarta for Rp285b from an affiliate of PT Codefin, to develop a mixed used residential development with retail and commercial components.

- Signed MOU with Pahtama Group, one of Myanmar's largest and fastest growing distribution companies in fast moving consumer goods, to incorporate a 60:40 JV in Myanmar.
- The proposed JVCo will provide marketing services in the retail and consumer goods industries in Myanmar.
- Trades at 14.6x trailing P/E.

*Ocean Sky
- Proposed disposal of a parcel of freehold land in Phnom Penh, Cambodia, for US$22m.
- Post-sale, the group expects to record a pretax gain of US$9.2m, with net proceeds used for future JVs and working capital.
- Notably, the sale price will bring the group into a net cash position of US$26.8m ($36.4m), or $0.112/share.
- This compares to the group's market cap of $19.5m based on the last close of $0.06/share.

*CapitaLand Commercial Trust (CCT)
- Credit ratings downgraded by Moody's to Baa2 from A3 with stable outlook.
- CCT's financial profile is expected to weaken following CCT's debt-funded $2.1b acquisition of Asia Square Tower 2, and during the four-year redevelopment of Golden Shoe car park.
- Trading at 5.3% yield and 0.93x P/B.

*Cheung Woh Tech
- Expected to report 2QFY18 loss due to damages suffered from Typhoon Sato, as well as the failure of its baseplates to meet customer's specifications.
- Slated to release results on or before 13 Oct.

*ST Engineering
- JV between ST Marine (40%) and Tuas Power (60%) has been selected to design, build, own and operate a seawater desalination plant in Jurong Island for a concession period of 25 years commencing 2020.
- The plant is expected to have a design capacity of 137,000 cubic metres/day.
- Last traded at 21.7x forward P/E.

*Roxy Pacific
- Refuted media reports that it had demolished much of the historic facade of The Hensley in Sydney, Australia without the approval of authorities.
- Mentioned that works currently being carried out on site are in accordance with development approval.
- Termed the "high-handed" developer who smashed down protected 1912 Edwardian facade by Australian media source Domain, the report cited Roxy could face maximum fines of A$5m.
- Trades at 15.2x trailing P/E and 1.23x P/B.

*Raffles Education
- Proposed placement of up to 95m new shares at $0.30 apiece to placement agent RHB Securities.
- Estimated gross proceeds of $28.5m will be used for debt repayment (70-80%) and general working capital (20-30%).

*Mary Chia
- Offeror Suki Sushi has received valid acceptances that take its ownership to 90.1%.
- Amid the loss of minimum public float, the offeror has no intention of maintaining the listing of the group.
- The cash offer remains open until 6 Oct '17.

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