SG Market

SG Market: Spore shares may trade with a negative bias after mixed US earnings reports produced a flattish session on Wall Street while domestic market indicators & price action appears weak. The benchmark STI slipped 0.1% yday masking a poorer market breadth with decliners trumping gainers 3 to 1. The policy risk of higher interest rates in China & recent correlation of the commodity market could continue to hamper Asian markets today.

There are signs that funds may be flowing out of Asia back to the US. Having pierced beneath the 3193 50-day MA, momentum for the STI seems to be on the downside with base support seen at 3120. Resistance is at the 3200 psychological level.

KepCorp will be in focus after its 4Q blowout earnings beat estimates with most houses remaining bullish about its improving offshore prospects. SIA Engrg is unlikely to react to its 4Q results, which is in line to slightly below expectations. Spice i2i should draw some attention after acquiring Indonesia's Affinity Group for US$175m. New listing XMH makes debut today; IPO is 3.3x oversubscribed, stock expected to open at a small premium (grey: +4¢) to IPO price of $0.25.

Stock highlights:
* Keppel Corp: record FY10 results beat Street expectations, with net profit +12% yoy to $1.4b. Market likely to react positively, as the Street reiterates the Buy ratings, lift target prices. Deutsche (TP: $13.50 to $14.20). Citi (TP $12.88 ). KE (TP $12.30 to $13.05).
* Mapletree Industrial Trust: FY10 results beat expectations, with DPU (for period 21 Oct - 31 Dec ’10) of 1.52cts vs 1.34cts guidance. Citi raises target to $1.25 from $1.21. Stock trades at 6.5% FY11E yield.
* SIA Engrg: 3QFY11 results below expectations, due to higher costs. This marks the 3rd consecutive quarter of sequential earnings decline. Upside may remain capped due to lower growth. BNP, KE rate at Hold with $4.69, $4.50 targets r’ptively.
* CDL Hospitality Trust: FY10 results generally in line. 4Q DPU of 2.78cts and FY 10.2cts. DMG has a Buy rating with $2.39 target (under review).
* CapitaRetail China Trust: FY10 results relatively stable. Net property income Rmb 382m +5.8%, DPU S8.36cts +2.7%. Stock trades at 6.7% yield.
* Fortune Reit: FY10 results. 2H10 DPU of HK12.08 cts slightly disappointing, ~5% below consensus. However occupancy and rentals continued to register improvement. Macquarie keeps Outperform rating with HK$4.36 target, 6.5% FY11E yield estimate. Both JPM, Daiwa reiterate O/P with HK$4.90 target.
* Orchard Parade Hotel / City Dev: OPH may see trading interest, as City Dev’s bid for Tanglin Shopping Centre's (TSC) collective sale tender revives hopes of revaluation gains in OPH. Our back-of-envelope RNAV/sh estimate is $4.20 vs 3Q10 NAV/sh of $2.56.
* Spice i2i: Launches S$151m Rights Issue @ 5.5cts/sh, acquires Affinity Group's cellular business For US$175m.
* Mun Siong: fined $100k by MOM for failing to ensure the safety of 3 workers who died from injuries sustained in a fire at the ExxonMobil oil refinery on Jurong Island in 2007.

* IPO debuts:
XMH (3.3x oversubscribed, Offer Price $0.25),
Harrys (placement only, Offer Price $0.22)