Tuesday, November 24, 2015

SG Market (24 Nov 15)

Singapore shares are expected to face a lacklustre opening, with latest data showing that economy remains stuck in deflationary mode after CPI continued to descend in Oct (-0.8%) vs -0.6% in Sep.

Regional bourses are trading mixed this morning, with Seoul up 0.1%, Sydney down 0.3% and Tokyo flat.

The STI appears locked within a tight trading range between 2,885 and 2,940.

Stocks to watch:
*Economy: Both headline and core inflation in Singapore moderated further in Oct ‘15 at -0.8% y/y and +0.3% y/y respectively. Food prices remain as the largest contributor to inflation, attributed to higher cost for non-cooked food. Maybank-KE expects headline inflation in Singapore to average -0.5% in 2015 and +0.5% in 2016.

*Transport: LTA has awarded the second bus package has been awarded to UK-based Go-Ahead Group. Maybank-KE expects limited impact to ComfortDelGro and SMRT, as the incumbents were not expected to win the first three packages.

*Healthcare: Stocks continue to show resilience, with the SGX Healthcare Index generating 4.9% dividend-exclusive year-to-date return, and taking its three-year return to 46.2%.

*Noble: Standard & Poor’s cautioned that the commodity trader’s rating may be cut to junk, citing concerns on the company’s liquidity.

*GLP: Signed leases totalling 69,000sqm with three existing Chinese customers, namely JD.com, Best Logistics, and STO Express, which will utilise the space to cater for growing domestic consumption in China.

*SIA Engineering: Restructuring its engine JVs with Rolls-Royce (RR) and HAECO. In essence, SIAEC is divesting its 10% stake in HAESL and a 2% effective stake in SAESL for $201.9m in cash. It will book a net gain of $186.8m.

*Midas: Secured four contracts totalling Rmb72.5m from Changchun Railway Vehicles to supply aluminium alloy extrusion profiles for metro and airport rail trains, with deliveries expected in 2015 and 2016. Three of the contracts are for China's Lanzhou Metro (Rmb31.9m), Nanchang Metro Line 2 (Rmb20m), and Wuhan Metro Line 2 (Rmb11m), while the last contract (Rmb9.6m) is for Malaysia's KLIA Ekspres and KLIA Transit trains.

*KLW: CAD has begun probe into KLW, and have already interviewed its consultant and senior executive for an alleged offence under the Securities and Futures Act.

*E2-Capital: Completed the reverse takeover by Astaka Holdings, a Malaysian-based integrated property developer in the Iskandar Region of Johor, which injected assets with an economic interest of $428m. Current projects of the group include The Astaka 1 @ Bukit Senyum, which comprises two towers of service apartments, each being 65 and 70-storey respectively, and The Astaka 2, a freehold integrated development that is undergoing architectural and infrastructure planning.

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