Monday, January 22, 2018

SG Market (22 Jan 18)

- The market could consolidate at current levels as the 4Q corporate results season gets underway with REITs and Keppel units in focus, while investors look to Dec industrial production data for fresh direction.
- Technically, the STI could face some short term hurdle at the 3,550 resistance area, before heading for the next objective at 3,640, while downside support lies at 3,470.

- Flat 2QFY18 net profit of $88.4m (+0.1%) met street estimates.
- Revenue grew 2.7% to $205m as a decline in equities and fixed income (-4%) business was offset by increased derivatives (+11%) and market data and connectivity (+4%) fees.
- Securities average daily traded value rose 4% to $1.14b on total value of $71.6b (+3%).
- Operating margin narrowed to 50.1% (-1.2ppt) on higher staff costs (+9.4%) and technology expenses (+8.9%).
- Interim DPS maintained at 5¢.
- Plans to introduce dual-class shares to attract new tech IPOs, with first listing after Jun.
- Last traded at 23.1x forward P/E.

*ST Engineering
- Electronic unit clinched new contracts worth $742m in 4Q17 (3Q17: $585m).
- These comprise contracts such as rail electronics & intelligent transportation, satellite & broadband communications, as well as advanced electronics and ICT solutions.
- This brought FY17 new electronics orders to $2.24b (FY16: $2.33b).
- Trading at 21.3x forward P/E and offers 4.5% dividend yield.

- Entered conditional agreement to purchase residential project Kismis View for $102.8m via a 60:40 JV with Tong Eng Group.
- Pricing for the 99-year 90,863 sf residential site translates to $855 psf ppr.
- Trades at 1.31x P/B.

*Food Empire
- Expected to incur a 4Q17 loss due to a US$10m write down on 22.8% owned Caffe Bene.
- Coffee Bene is currently in the midst of court proceedings to secure a corporate rehabilitation process due to excessive debts.
- Last traded at 15x forward P/E.

*Cogent/ Cosco Shipping
- Cash offer of $1.02/share by Cosco Shipping has attained 98.31% of total acceptances.
- A compulsory acquisition for Cogent's remaining shares will be made by Cosco.

*Rotary Eng
- Joint cash offer of $0.46/share by its controlling family and the Oman government has attained 86.3% in total acceptances as at 19 Jan.
- The offer will close on 24 Jan, 5.30pm.

- Issued 706,432 new shares in relation to a warrant exercise at US$1.09 each.
- 18.2m outstanding warrants remains, which expires on 29 Jan 2018.

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