Friday, January 8, 2016

SG Market (08 Jan 16)

Singapore market: Momentum on the capitulation of the Singapore market is likely to continue, following the blood bath in Wall Street overnight. STI heavyweights Keppel Corp and Sembcorp Marine may see substantial headwinds after media articles cited that major customer Sete Brasil is mulling a bankruptcy filing.

At the macro front, investors will be anticipating the release of non-farm payrolls and unemployment data in the US this evening.

Regional bourses all opened lower in Japan (-0.9%), Korea (-0.8%) and Australia (-0.6%).

From a chart perspective, the STI looks to be headed for its immediate support at 2,700, with upside resistance at 2,840 (20-dma).

Stocks to watch
*Noble Group: US rating agency S&P downgraded Noble's credit rating to junk status on weakened liquidity, despite the recent sale of its agri arm. S&P cited that Noble's credit standing with lenders has weakened, reflected in its depressed securities prices, and may be complicated by the despondent commodity markets. Separately, another credit rating agency Fitch cited that it is still monitoring the group's liquidity position.

*SGX. Dec trading data deteriorated further, with total securities turnover of $17b (-21% y/y; -12% m/m) and daily average traded value of $774m (-21% y/y; -20% m/m). A mainboard listing raised $276m, while $9.3b was raised through 20 new bonds. Derivatives volume totalled 14.4m (-17% y/y; +6% m/m), while commodities derivatives volume soared to 1.1m (+163% y/y; +8% m/m).

*Triyards: 1QFY16 net profit fell 25% y/y to US$6.2m, dragged by negative operating leverage. Revenue rose 38% to US$78.1m from contributions of four self-elevating units, two multi-purpose support vessels and other fabrication projects. Gross margin slipped 4.3ppt to 18.7% from different project mix. NAV/share at US$0.662.

*Ascendas Hospitality: Media cite that recent talks of interested parties keen on a buy out of the REIT include private equity investors Blackstone and Gaw Capital Partners. Market observers are eyeing a market value of $860m for the REIT, 2.6% above its current market cap.

*Starhill Global REIT: Divested its Roppongi Terzo property in Tokyo for ¥2.5b ($29.9m), translating into a yield of 4.4%. The property accounted for 32.8% of its Japanese portfolio and 0.9% of its total portfolio by asset value. The REIT is expected to record a gain of ¥60m ($0.7m). It intends to use the proceeds to repay JPY loans, decreasing its gearing to 35.1% from 35.7%.

*HTL International: Manufacturer and trading company for leather furniture gets initial offer of $1/share from Shanghai-listed Guangdong Yihua Timber Industry, via a proposed scheme of arrangement.

*Global Yellow Pages: 50:50 collaboration with Aimers to jointly develop the group's F&B retail business, Wendy's, as well as the fried chicken retailer Gang Ti.

*CNMC Goldmine: Produced a record 31,205.85 oz of fine gold for FY15.

*Abterra: Reprimanded by the SGX for failing to act in shareholders' interest on the acquisition of a 22.8% stake in Zuoquan Xinrui Metallurgy Mine. The case has been referred to relevant authorities and SGX has directed the company to appoint a compliance advisor.

*Koh Brothers Eco Engineering: To acquire a group's subsidiary for $19m via the issuance of 369.1m new shares at 5.15¢ each, as part of a restructuring exercise. The subsidiary is involved in building and civil engineering construction.

*Advanced Integrated Manufacturing: Acquired a minimart in Yishun for $0.1m.

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