Tuesday, October 3, 2017

SG Market (03 Oct 17)

- Market is off to a good start in 3Q with positive momentum supported by a robust showing in Sep factory activity. Focus will be on banks, property and technology counters.
- However, oil-related firms could see some minor profit-taking after recent outperformance, as the stronger greenback weighs on crude prices.
- The STI has broken out of its downtrend channel and looks to test the 50-dma at 3,270, underpinned by rising momentum indicators. Downside support at 3,190.

- Manufacturing continued to expand in Sep, with the PMI hitting a new high of 52.0 (Aug: 51.8) for the 13th straight month
- This came on the back of strong performance in the electronics sector, which posted its highest reading of 53.6 (+0.4ppt MoM) since Jul '10.
- The latest data should push 3Q17 GDP growth to 3.8% and lift full year forecast above 3%.

- Received licence from the State Bank of Vietnam to establish a foreign owned subsidiary bank in Vietnam.
- UOB (BUY, TP $26.40) remains as MKE's preferred pick for its better pricing discipline and sensitivity to re-pricing intervals.
- Last traded at 1.22x P/B.

- Completed second informal meeting to update holders of $425m Series 3-8 notes and $150m 7% perpetual securities on its refinancing proposals.
- - The group has met with several interested funds and strategic investors. A strategic investor is keen to work with the group but would like to see the refinancing of lenders and MTN completed first.
- It is awaiting final approval for a 6-year refinancing deal that include additional working capital line of up to US$100m.
- Currently, it is actively engaging noteholders and has appointed SIAS to lead an informal steering committee for security holders.
- The group is looking to complete refinancing discussions with lenders before Nov 2017.

- Independent financial advisor Ernst & Young Corporate Finance are of the view that the $2.33/share offer price from HNA Group is fair and reasonable.
- Accordingly, shareholders are advised to accept the offer.
- Closing date for the offer is on 2 Nov 2017.

- Acquiring freehold residential sites at Guillemard Lane for $33.5m.
- The sites have a total land area of 14,030 sf with an existing gross plot ratio of 2.8.
- Together with earlier acquisitions, its combined site at Guillemard Lane (2, 6, 12 and 14) now encompasses 25,601 sf.
- Last traded at 15.6x trailing P/E and 1.27x P/B.

*Rotary Engineering
- Proposed exit offer of $0.46/share by Orochem (64.7% owned by controlling China family, 34.3% by Oman Investment Fund) to delist its shares from SGX.
- The offeror has received irrevocable undertaking to accept the offer and vote in favour of the delisting resolution from several shareholders representing 60.63% of share capital.
- The exit price is at 21% premium over the last traded price prior to day of trading halt and 62% premium to its NAV/share.
- Orochem does not intend to revise the exit offer price.

*SUTL Enterprise
- Fulfilment of conditions under the 60:40 JV agreement with UEM Land has been extended to 31 Dec 2017.
- To recap, the agreement is for the development of an existing marina in Puteri Harbour into a private yacht club.
- Last traded at 16.6x forward P/E.

- Entered into a 70:30 JV with Silver Bullion to retail and trade previous metals.
- No further financial details were disclosed.
- Last traded at 1.53x P/B.

- Expanded its board and senior management team with an addition of two board members and five top management members.
- The move is to strengthen corporate governance and to establish Yuuzoo's business, technology, distribution and partnership platforms.
- Yuuzoo is also in a midst of searching for a new CEO.

- Terminated the proposed acquisition via RTO of Heduru Moni.
- An extension of time has not been given by SGX to comply with listing rules, and the group will need to provide an exit offer no later than 1 Nov.
- Currently trading above its NAV/share of 2.78¢.

*Changjiang Fertilizer
- To acquire a 2.23 ha plot of vacant land in Johor, Malaysia for RM12m (3.9m).
- It intends to develop the land into fourteen units of 2.5-storey detached light industrial units with total saleable floor area of 147,830 sf.
- Acquisition is part of its strategy to expand into real estate development.

- Expanding its existing HQ located on 16A Joo Koon Circle to the adjacent plot on a land area of 3,672 sqm.
- The new 20-year lease from JTC will require a committed investment of at least $5m on fixed assets.

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