Wednesday, January 13, 2016

SG Market (13 Jan 15)

Singapore market may get a slight respite today, following the late-session rally in Wall Street on some yuan stability and technical buying. However, investors remain on edge on the upcoming 4Q results.

Regional bourses all opened positive today in Tokyo (+2%), Seoul (+1%) and Sydney (+0.6%).

From a chart perspective, downside support for the STI is seen at 2,680, with resistance at 2,830.

Stocks to watch
*Property. Market watchers warned that Singapore is half-way through the residential downcycle. Estimates for another 7-10% decline in private home prices over the next two years, compounded by prospects of rising interest rates, softer job market and slower immigration growth.

*SPH. 1QFY16 net profit of $81.3m (+17.3% y/y) was above estimates, boosted mainly by gains from sale of investments. Meanwhile, revenue slipped 1.9% after its core media business continue to dwindle (-8.7%), but was partially mitigated by higher contributions from property (+16%) and others (+20.2%). Operating margin slid to 32.5% (-0.5 ppts) on higher costs on premises (+2.1%) and other operating expenses (+14.9%).

*Tee International: 2QFY16 net profit soared from a low base to $2.7m (+75.3% y/y), on revenue of $60.7m (+41.3%) from ongoing engineering projects, but was partially offset by lower contributions from real estate projects. Interim DPS lowered to 0.15¢ (1HFY15: 0.18¢).

*Tee Land: 2QFY16 net profit tumbled 39% y/y to $1.5m, as revenue narrowed to $9.8m (-34.9%) on lower progressive recognition from development properties. Interim DPS halved to 0.22¢ (1HFY15: 0.44¢).

*Halcyon Agri. Media reports of a possible takeover by Chinese SOE Sinochem Group, with plans for an asset injection of its controlling stake in rubber producer GMG Global.

*Ezion: To jointly market two service rigs being built by a Chinese SOE to support the offshore windfarm, oil and gas activities in the sector. Ezion will provide technical expertise for the operations and deployment of the two rigs and has been granted the option to purchase the rigs.

*Nordic: Renewed maintenance contracts worth $7.7m with several repeat customers.

*Biosensors: Appointed Evercore Asia (Singapore) as the independent financial adviser on the proposed amalgamation between Biosensors and CB Medical Holdings.

*China Sports: OSIM acquired 31.6m shares over the market at an average 1.78¢ on 8 Jan, which raised its stake from 14.16% to 17.45%.

*Forise International (former Great Group): Considering to diversify into corporate advisory and management consulting services, from its undergarment manufacturing business.

*Advanced Integrated Manufacturing: Acquired two minimarts at Bukit Batok and Woodlands Circle for an aggregate $393k.

*Jason Holdings: Requested for suspension after its trading halt period expired, as the group is still pending the release of an announcement.

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