Singapore shares are likely to see some positive follow-through momentum following the sharp rebound on Wall Street on potential stimulus plans by ECB and BOJ, as well as the sharp recovery in crude prices. However, gains may be kept in check by the ongoing lacklustre earnings season.
Regional bourses opened higher in Tokyo (+0.6%), Seoul (+0.6%) and Sydney (+1.2%).
From a chart perspective, topside resistance for the STI remains pegged at 2,670, with downside risk at 5-year low of 2,520.
Stocks to watch
*Ascendas REIT: 3QFY16 results came slightly ahead of street expectations on DPU of 3.95¢ (+9.9% y/y). Revenue and NPI jumped to $193.8m (+12.9%) and $142.2m (+24.1%), respectively, contributed by newly acquired properties in S’pore and Australia, AEI completion and positive rental reversion (+7.3%). Portfolio occupancy inched to 89.2% (+0.2ppt q/q) with WALE of 3.7 years, while aggregate leverage edged up to 37.3% (+2.7ppt) with average borrowing cost maintained at 2.72% and debt tenor of 3.5 years. NAV/unit at $2.06.
*Tigerair: 3QFY16 net profit soared to $6.8m (+209.2% y/y), boosted by cheaper fuel (-25.2%). Revenue rose to $187.4m (+1.5%) on higher lease and ancillary income, while passenger revenue slipped 3.3% on lower yields (-1.4%) but higher load factor of 83.1% (+1.1ppt). Operating margins improved to 5.4% (+3.2ppt), as lower fuel costs was partially eroded by higher aircraft maintenance (+34%), aircraft rentals (+51%) and FX loss (+61%). NAV/share at $0.0807.
*Guocoland: 2QFY16 results beat estimates, although net profit fell 8% y/y to $39m on weaker revenue of $239.5m (-32.7%), following the sale of an office tower in Shanghai in the previous corresponding quarter. Bottom line was buttressed by lower admin expenses and fair value losses on FX hedges. NAV/share at $2.99.
*Keppel Corp: Plans to consolidate its business trust management, REIT management and fund management businesses under Keppel Capital, with aggregate $26b of assets, as a newly defined business segment of the group.
*Wilmar: Investing Rmb173m in two JVs with SATS to supply food in China.
*Ascendas Hospitality Trust: Disclosed that management remains in discussions with interested parties on a potential takeover of the REIT.
*Creative Technology: Settled a patent infringement lawsuit with Samsung. The Korean manufacturer will take a license for a patent and is expected to contribute ~US$0.14 EPS in the current quarter.
*Pacific Andes/China Fishery: Seeking legal advice to a potential default following exercise of put options by various bondholders. Counters will remain suspended until further notice.
*Hi-P: Proposed 50:50 JV with Rompa (Hong Kong) to undertake packaging solutions to the consumer electronics industry.
*Advanced Integrated Manufacturing: Acquired a minimart in Potong Pasir for $0.3m.
*Dairy Farm: Substantial shareholder Templeton Asset Management reduced its stake in the company from 7.25% to below 5% on 20 Jan.
*Sapphire: Veteran Chinese private equity investor Li Xianbo acquired 100.8m shares (10.3% stake) at $0.097/share via an off-market transaction, taking over the entire stake of substantial shareholder Shi Yin Jun.
*China Yongsheng: In discussions with interested parties to delist the company.
*Sin Heng: Expects to incur a 2QFY16 net loss due to a one-time disposal loss of an associat, as well as lower revenue from the region.
*CFM: Expects a higher net loss for 1HFY16 due to increased provisions and lower sales from its metal stamping operations.
*Santak: Expects a slimmer loss in 1HFY16 due to expansion expenses, which rose quicker than revenue growth.
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