Wednesday, September 2, 2015

SG Market (02 Sept 15)

Singapore stocks are likely to be weak, after Wall Street entered a risk-off mode with key indices tumbling close to 3%, following China’s negative PMI figures which stoked concerns about slowing global growth.

Regional bourses are trading lower this morning in Tokyo (-1.1%), Seoul (-0.7%) and Sydney (-1.0%).

From a chart perspective, the STI has broken below its 2,950 support-turned-resistance and appears headed towards the next objective at 2,750 and 2,680.

Stocks to watch:
*Bonds: S’pore Savings Bond maiden issue has been officially launched, with applications opening on Tue (1 Sep) at 6 pm, and will close on 25 Sep at 9 pm. Interest rate steps up are gradually in line with holding period, starting from 0.96% at the end of first year. The effective return per year on a five year compounded basis will be 2.01% and 2.63% on a 10 year compounded basis. The issuance size is $1.2b. Interest payments will be made every six months. MAS guides that a new savings bond will be issued every month over the next five years, as such investors need not rush-in for the first issue.

*Interra Resources: Announced that its 60:40 JV company, Goldpetrol has commenced drilling on a development well at the Yenangyaung oil field in Myanmar. The Yenangyaung oil field had previously been producing oil before being shut down due to the onset of war. Interra anticipates that the results of the drilling and completion will be available in six week time.

*Chosen Holdings: Voluntary conditional cash offer at $0.24/share (21% above last close) by private equity fund Shaw Kwei & Partners. Upon valid acceptances is obtained from undertaking shareholders which represent 50.99% of share capital, offer will be declared unconditional. The offeror does not intend to preserve the listing status of the company.

*China New Town Development: Entered into a strategic cooperation framework agreement with Shenzen Venture Capital Group (SVCG) to explore industrial development. The first cooperation project sees the company acquiring 13.9% of Jiangsu Hong-tu Software Venture Capital Investment, an indirect subsidiary of SVCG for $8.3m to jointly develop a land parcel in Yuhuatai District Software Valley in Nanjing.

*Jaya Holdings: Terminated the non-binding term sheet on a proposed acquisition. Company's cash shell status will expire on 3 Dec ‘15.

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