Friday, October 6, 2017

SG Market (06 Oct 17)

- The market could chalk up further upside gains on growing confidence after IMF chief Christine Lagarde siad that the long-awaited global economic recovery is taking hold and urged policy makers to seize the opportunity to create a more inclusive economy and broader, lasting prosperity.
- Technically, the STI is likely to break out of its tight 3,230-3,265 range bounded by the 20 and 50-day moving averages.

- MKE estimates flash 3Q GDP to be near 4%, with strong manufacturing (+20%) leading a broadening recovery in the services sector.
- Full-year GDP growth could well exceed the government's 2-3% and MKE's 3% forecasts, with 8M17 core inflation creeping higher to 1.5%.
- This could prompt the MAS to normalize and tighten its neutral stance at its upcoming semi-annual policy meeting this month.

- Normanton Park has been sold en bloc to Chinese firm Kingsford Huray Development for $830.1m or 4% above its reserve price.
- Inclusive of development charges, this works out to a land price of $969 psf ppr for the 667,368 sf site, which can yield a total gfa of 1.4m sf accommodating 1,200 new homes.
- This is the 12th residential collective sale sealed this year, reflecting the mad scramble among land-hungry developers.
- Top picks are UOL (TP: $9.43), GuocoLand (TP: $2.75) and City Dev (TP: $12.05).

*Soilbuild Construction
- Awarded a contract from Soilbuild Group to erect a 7-storey single-user general industrial factory development for $50.4m.
- Works expected to be completed by 3Q19 and will lift order book to $574.2m.

*Croesus Retail Trust
- Scheme of arrangement to take the Japanese mall landlord private at $1.17/unit has been sanctioned by the Court.
- Last day of trading will be on 10 Oct, with expected payment to unitholders will be no later than 26 Oct. Counter will be delisted on 27 Oct.

- Enlists CIMB Securities to place out 47.5m new shares representing 10% of its existing share capital at $0.255 apiece or 5.6% discount to the last close,
- Net proceeds of $11.9m will be used to for general working capital purposes.
- The steel engineering group is loss-making and trades at 0.44x P/B.

*ABR Holdings
- Acquiring a second land plot, adjacent to its previous purchase, in Kuala Lumpur, Malaysia, for RM4.95m.
- The 99 year-leasehold site has an area of 1,533.5 sqm.
- Last traded at 35.81x trailing P/E.

*United Food
- Proposed acquisition of 80% stake in each of Hebei Xingrun Shengwu Keji Gufen, Chengde Purun Shengwu Zhiyao and Benchmark Trade, for Rmb120m ($24.5m) or 25% below independent valuation.
- The three firms are involved in the development, manufacture and sale of animal feed and related products in China.
- The move will help the group expand and strengthen its foothold in the agribusiness and food industry in China.
- The pig farmer and pork processor has been loss-making for the past two years.

- Signs MOU with Temasek Polytechnic to collaborate on training and R&D, relating to aquaculture and biomedical sciences.

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