SG Market (08 Jan 18)

MARKET OVERVIEW
- Market rally could take a short pause to digest the sharp gains since start of the year, with only US and China inflation data due this week, although sentiment remains largely supportive.
- Technically, the STI has extended into overbought territory with short-term support at 3,470 and topside resistance at 3,550.

CORPORATE RESULTS
*SPH REIT
- Stable 1QFY18 DPU of 1.34¢ met expectations.
- Gross revenue of $53.5m (+1.7%) and NPI of $42.2m (+1.9%) were buoyed by higher rental income from Paragon and The Clementi Mall.
- While both properties continued to enjoy full occupancy, negative rental reversions were recorded at Paragon (-10.6%) and The Clementi Mall (-9.8%) for new and renewed lease, representing 3.7% of portfolio NLA.
- WALE ast at Nov '17 was 2.1 years, with 13.3% of NLA due for expiry in FY18.
- Aggregate leverage stayed at 25.4% with average tenor of 1.8 years.
- Trades at an annualised 1QFY18 yield of 5% and 1.14x P/B.

POSITIVE NEWS
*Mapletree Logistics Trust
- Acquiring the remaining 38% stake in HK logistics property, Shatin No 3 for HK$677m.
- The property, with NLA of 39,125 sqm, will be enhanced and re-positioned to generate higher yield and capital value.
- Post-completion, MLT's aggregate leverage is expected to rise to 39% (2QFY18: 33.7%).
- MKE has a Hold with TP of $1.25.

*NetLink Trust
- DBS raised its stake to 27.18% from 26.9% after acquiring 11m shares via the open market at an average price of $0.83.
- Trades at FY18 indicative yield of 5.3% and 1.04x P/B.

*Vard
- Secured a construction contract for one car-and passenger ferry for Boreal for an undisclosed sum.
- Boreal is a leading nationwide public transport provider in Norway.
- The hull will be built by Vard Braila in Romania and slated for delivery in 3Q19.
- Trades at 0.8x P/B.

NEGATIVE NEWS
*TEE Int'l/ TEE Land
- TEE Int'l issued profit warning of 2QFY18 and 1HFY18 loss on impairment losses totalling $8m stemming from the proposed disposal of TEE Land's 31.9% owned Thai associate, Chewathai, as well as unsold units at TEE Land's The Peak @ Cairnhill I.

*Alliance Mineral
- Updated that it has not received a loan advance of A$4.8m from HK-listed Burwill on 31 Dec '17 under a binding term sheet and letter of variation signed in Oct '17.
- Discussions with Burwill are ongoing since mid-Dec '17 over the timing and terms of the loan.
- Does not expect the matter to results in any material impact on its operations.

NEUTRAL NEWS
*BRC Asia
- Proposed private placement of 37m new shares (19.49% existing share capital) to 15 investors at $1.27 apiece.
- Net proceeds of $46.9m earmarked for strategic investments and working capital.

*Hyflux
- Filed a Notice of Arbitration to commence proceedings against Mitsubishi Heavy Industries Environmental & Chemical Engineering in relation to a waste-to-energy plant sub-contract dispute.
- Trades at 0.53x P/B.

*Raffles Education
- To transfer its Hong Kong listing from GEM to the mainboard.

*Vallianz
- Exercised its right to defer distribution for its US$22.5m 4% senior perpetual securities, of which the payment was due on 5 Jan '18.