SG Market (17 Oct 13)

In latest news, the US Senate has passed a vote to halt the 16-day government shutdown and raise the US debt limit, with the House poised to follow later tonight. With the US’ borrowing authority set to lapse today, markets may mount a relief rally given the positive steps finally being made to avert a US default. Japan indices are up more than 1% at the open this morning, and will likely set the pace for the rest of the Asian markets that open later today. Buoyed by the positive macro news flow, the STI may make a bid to test the 200-day moving average of 3,238 in the near term. Stocks to watch for: *Keppel Land: 3Q13 net profit of $126m (+32% q/q, +70% y/y) came in at the higher end of street estimates, boosted by more project completions in China (1,800 homes), stronger progressive recognition from Singapore projects, as well as increased contribution from property investment and fund management. *Ascendas Reit: 2QFYMar14 DPU grew 2% y/y to 3.6¢, in line with street forecasts. Net property income rose 4.1% to $107.1m, mainly driven by positive rental reversion (10.8%) across all segments. Portfolio occupancy remained firm at 93.9%, excluding the new completions of A-REIT City@Jinqiao and Nexus@one-north, which achieved 25.3% and 73.9% pre-commitment, respectively. A-Reit’s balance sheet remains strong with stable aggregate leverage of 29.7%, and weighted term of debt of 3.5 years at an average cost of 2.74%. *Keppel T&T: 3Q13 revenue rose 18% y/y to $40.4m primarily due to higher revenue from Data Centre and Logistics Divisions. While operating profit fell 10.5% to $5.1m due to lower contributions from the Logistics operations, a 14.6% increase in contributions from associates to $15.6m, helped improve net profit by 4% to $14.1m. *Jubilee: Announced plans to acquire a 60% stake in a development project, Viridea @ Medini Lakeside in Iskandar for RM150m. As consideration, Jubilee will issue 272.7m new shares (~53.7% of enlarged share base) at $0.22 each, which would effectively result in a reverse takeover transaction. The deal includes a RM180m profit guarantee from its vendor. *Osim: Becomes the 53.7% majority owner of TWG Tea, after acquiring an additional 8.7% stake for US$7.2m. There will be no change in the management team of TWG Tea, which remains committed to the future development and growth of TWG Tea. The transaction is expected to be earnings accretive for Osim for FY13. *SIA: Sep systemwide passenger carriage grew 1.8% y/y against a 2.6% growth in capacity. Consequently, load factor (PLF) fell by 0.7 ppt to 79.9%. Load factors decreased in all regions except Americas and East Asia from earlier Hari Raya holidays in August. Cargo data remains weak, as traffic decreased 6.7% y/y, while cargo capacity decreased by 5.1% *Midas: Has secured contract wins worth a combined Rmb221.8m to supply aluminium alloy extrusion profiles and certain fabricated parts for two major train projects in Europe (€17.7m contract value) and for major PRC metro projects (Rmb75.9m). The contracts are expected to contribute positively to the group's financials over FY13-17. *CNA: Secured over $8.5m worth of new projects, which include i) an integrated building management system for Tanjong Pagar Centre, ii) upgrading SCADA systems at Jurong Water Reclamation Plant, and iii) its second airport project win in Laos. *GLP: Signed 5 new leases totaling 55,000 sqm across China, comprising i) 15,000 sqm leased to Grainger, a leading global retailer of industrial products, ii) 12,000 sqm leased to one of the world’s largest health and beauty retail chains, and iii) 28,000 sqm leased to leading third-party logistics providers including Haier Logistics.