SG Market (04 Jan 18)

MARKET OVERVIEW
- The market could extend its 5-day winning streak as investors cheer strong US and Singapore manufacturing data, higher oil prices and continued strength in technology shares.
- Technically, the STI could test the upside resistance at 3,470, with the next objective at 3,550 set in Apr 2015. Downside support lies at 3,380.

MACRO WATCH
*Economy
- Dec PMI came in at 52.8 (Nov: 52.9) marking its 16th consecutive month of expansion and capping a year of strong growth for the manufacturing sector.
- The marginally lower reading from a near 8-year high in Nov due to slower pace of expansion in new orders, exports, factory output and inventory, particularly for the electronics sector.

POSITIVE NEWS
*Venture Corp
- Joining the benchmark STI tomorrow, replacing GLP following its privatisation.
- Trades at prospective 17.5x FY18e P/E.
- The street is outright bullish on the electronics contract manufacturer with 7 straight buy calls and consensus TP of $23.60.

*Perennial Real Estate/BreadTalk/ Wilmar
- Established a 45%-owned JV, Perennial HC Holdings, with first close of US$500m and target fund size of up to US$1.2b.
- The JVCo will acquire and develop large-scale healthcare integrated mixed-used developments which are linked to high speed railway stations in China.
- Remaining stakes in the JVCo are held by Shun Tak Holdings (30%), Bangkok Bank (10%), BreadTalk (5%), Kuok Khoon Hong (4%), S1F (4%) and Wilmar (2%).
- Separately, Perennial reached a settlement agreement with Chesham Properties (owned by Pontiac Land's Kwee family), either party to purchase the other partner's joint stake in the The Capitol Singapore commercial project within 19 weeks.

*The Trendlines
- Portfolio company S.T Stent has received regulatory clearance from the US FDA to market its composite sinus stent.
- The product is targeted at patients suffering from chronic sinusitis, and could also be used for nose job failures, chronic allergic rhinitis and an alternative to sinuplasty.
- Last traded at 12.9x forward P/E and 0.75x P/B.

NEGATIVE NEWS
*Cheung Woh Technologies
- Issued profit warning for a 3QFY17 net loss on missed production targets.
- The miss was due to machinery down-time and repairs, as well as production disruptions caused by Typhoon Hato, which damaged some machines.
- Results slated to be released on or before 12 Jan.

NEUTRAL NEWS
*Ziwo
- Changed its name to "BM Mobility".
- To recap, the company intends to exit its loss-making raw material production business in China, and pursue more green-energy projects in China and Southeast Asia.

*Olam
- Issued 2.97m new shares in relation to a warrant exercise at US$1.09 each.
- Outstanding 47.1m warrants expires on 29 Jan 2018.