Monday, October 9, 2017

SG Market (09 Oct 17)

- Attention will likely turn towards Fri's 3Q GDP growth estimates, which could hit a 3-year high of >5%, China's manufacturing and services PMI readings, a slew of US data, FOMC meeting minutes as well as start of US corporate earnings season.
- Technically, the STI has broken clear of its short term downward trend and above its 3,275 resistance and appears headed for the next upside objective at 3,320.

*Sembcorp Marine (SMM)
- Singed agreements to sell nine Pacific Class 400 drilling rigs to Borr Drilling for US$1.3b ($1.77b) plus a market-based fee.
- The rigs include all six rigs from previously-terminated contracts, and will be delivered over a 14-month period from 4Q17 to 1Q19.
- While the transaction will result in a loss of $15m, it will significantly improve SMM's liquidity position.
- Last traded at 45.7x forward P/E.

*Keppel Corp
- Acquiring a 50% stake in the proposed manager of Keppel-KBS US REIT, for US$27.5m.
- The move is in line with its plans to carry out an IPO for its portfolio of US commercial assets on SGX, comprising 11 office assets, with a mandate to invest in a diversified portfolio of income-producing assets in the US.
- Last traded at 14.8x forward P/E and 1x P/B.

*SIA Engineering
- Collaborating with Air India Engineering Services to provide MRO services in India.
- Last traded at 20.9x forward P/E.

- Proposed placement of 221.6m new shares (25% share capital) to prominent investor Sam Goi at 5¢ each.
- Net proceeds of $11m earmarked for business development.

*Sen Yue
- Completed disposal of property at 16 Tuas Avenue 20 to JTC for $3.1m.
- The disposal will result in a disposal gain of $1.6m.
- Last traded at 14.9x trailing P/E.

*AA Group
- Entered into a conditional agreement to dispose loss-making subsidiary, Toko Construction, for $1m.
- The divestment is undertaken as part of a restructuring and will result in a disposal gain of $1m, to be used for working capital.

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