Wednesday, April 6, 2016

SG Market (06 Apr 16)

SG Market: Risk-off mood is likely to continue as investors take profit amid the uncertain global economic picture and an anticipated bleak corporate earnings season in the coming weeks.

Regional bourses opened in mixed today in Tokyo (-0.1%), Seoul (+0.3%) and Sydney (+0.4%).

From a chart perspective, immediate support for STI is at 2,760 with overhead resistance at 2,850.

Stocks to watch:
*Property: DTZ highlighted retail rents and occupancy fell islandwide on weak demand in 1Q. Forward rates are likely to be pressured by the relatively large impending supply in 2016. The consultant expects more outlet consolidations amid rising operating costs and weaker in-store sales. Negative for retail REITs.

*Property: MP Christopher de Souza reiterates call for government to ease property cooling measures including the gradual and calibrated approach of removing Additional Buyer's Stamp Duty (ABSD) for Singaporeans, while retaining Total Debt Servicing Ratio for locals and ABSD for foreigners.

*Ascendas Hospitality Trust: Decided not to proceed with proposals relating to the possible acquisition of its assets. Market watchers were previously anticipating a possible buyout offer at ~$0.79/unit.

*GLP: Signed new leases to provide 98,000 sqm of logistics space in China to four companies, including Deppon Logistics and Yonghui Superstores.

*Biosensors: Shareholders have approved the proposed amalgamation with CB Medical, which will be effective 8 Apr. Counter will be delisted subsequently.

*OKH Global/SingHaiyi: OKH proposed to place out 500m new shares (43% enlarged share capital) at $0.10/share to Haiyi Holdings, the controlling shareholder of Singhaiyi, which will have conditional right of first refusal at same price. Haiyi will also extend a $10m loan to OKH. Proceeds will be used to repay an $8m 11% redeemable convertible preference shares held by Zana Investor and other debts.

*Tee Land: 3QFY16 net profit surged 66% y/y to $1.3m, on revenue growth of 10.1% to $9.2m on increased contributions from two Australian hotels and rental income from its corporate building. Gross profit margin widened to 35.2% (+10.5 ppts) on a change in revenue mix. NAV/share of $0.349.

*Oxley: Entered 50:50 JV with Metro Global to to provide hospitality services. Under the agreement, Metro Global will manage the business activities and provide personnel support, while Oxley will provide properties to be operated.

*Swissco: Signed non-binding MOU for the proposed acquisition of VM Marine International, an offshore support vessel operator.

*Next-Generation Satellite Communications: SGX has rejected its 1-for-100 share consolidation exercise as it will not help the company due to its current financial situation.

*Jason Holdings: Received letter of demand for $1.3m for an alleged claim by Radwell for the non-payment of dividends. If payment is not made within 21 days, Radwell shall be entitled to present a winding up application to the court against the company.

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