Monday, July 20, 2015

SG Market (20 Jul 15)

The Singapore market is expected to continue tepid trading activity as investors eye corporate results in the absence of any major market catalyst.

From a chart perspective, the STI faces strong resistance at its 3,360 triple-top, which coincides with both the 50 and 200 DMA. Downside support at 3,320.

Stock to watch:

*Hospitality: Visitor arrivals in May rose 1.1% y/y to 1.2m, the first monthly increase since Feb 2014.

*Sabana REIT: 2Q15 DPU fell 3.2% to 1.8¢, dragged by larger unit base from partial consideration of manager’s fees, while distributable income inched higher by 1.2% to $13.2m. Both gross revenue and NPI held firm at $25.4m (+0.2%) and $18.4m (+0.5%), respectively, boosted marginally by new contribution from a new property at 10 Changi South Street 2, acquired in Dec ’14. Occupancy held at 90.9% (+0.3ppt q/q) with WALE of 2 years. Aggregate leverage stood at 37.9%, with average debt tenor of 2.5 years and all-in financing costs of 4.2%. NAV/unit at $1.06.

*Vallianz: Inked new contracts worth up to US$458m, boosting order book to US$968m with time charters stretching up to 2022. The replacement contracts are for 15 AHTS and four PSVs, currently deployed to an existing Middle Eastern national oil company, which now stretches until Jun '18, with a two-year option for extension.

*Lifebrandz: $100m RTO transaction with Healthtrends Medical Investments, comprising 10b new shares issued at 1¢ apiece, valuing Healthtrends at 16.6x P/E. Healthtrends is a holding company in the healthcare and wellness lifestyle domain, which has existing shareholdings and planned acquisitions in four separate healthcare companies which offers a range of medical aesthetics, cosmetic surgery and specialist services through 12 medical clinics in Singapore, Malaysia and Hong Kong and Vietnam.

*China Environmental Resources: Proposed 1-for-2 fully underwritten rights issue at HK$0.29 apiece, with XE on 5 Aug. Net proceeds of HK$131.9m is intended for repayment of a promissory note (HK$60m), expansion of money lending business (HK$62m) and working capital.

*Ezion: Franklin Resources raised its stakes from 4.94% to 5.01%, after it acquired 1.1m shares at $0.9579 average from the open market on 14 Jul.

*NOL: In relation to news articles which cited it is up for sale by Temasek (65% stake), group disclosed its duty to consider options to maximize shareholder value and has not made any decision on a potential sale.

*Genting HK: Guided for 1H15 net profit above US$2.1b (+14.8x y/y) due to a one-off accounting gain of US$1.57b from completion of a secondary offering of Norwegian Cruise Lines’ shares and a related disposal gain of US$599.6m.

*Cosco Corp: Profit warning for 2Q15 due to low crude oil prices, which resulted in an adverse impact on the global offshore marine industry, as well as the languid dry bulk shipping market and a slump in the shipbuilding market.

*CFM Holdings: Expects material impact on FY15 earnings after Building and Construction Authority refused time extension to vacate occupation at its new factory, as no TOP has been issued. Meanwhile, group is in the midst of sourcing for a new operating facility.

*ST Engineering: President and CEO Tan Pheng Hock on 4-week medical leave of absence after a stroke.

*Ying Li: COO Lui Pang Hung Louis resigned in the midst of group's strategic roll out of Ying Li 3.0.

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