Tuesday, July 5, 2016

SG Market (05 Jul 16)

SG Market: Activity is expected to be muted ahead of the midweek break, with US closed for Independence Day holiday and European markets losing steam.

Regional bourses opened mixed in Tokyo (-0.5%), Seoul (-0.3%), and Sydney (-0.5%).

From a chart perspective, STI would likely trade between its 2,800 support and resistance at 2,880.

Stocks to watch:
*Economy: Jun manufacturing PMI of 49.6 fell short of expectations (49.8), weighed by weak new and export orders and marking its 12th consecutive month of contraction.

*Mapletree Commercial Trust: Proposed acquisition of Mapletree Business City (Phase 1) for $1.78b or $1,042 psf NLA, comprising an office tower and three business park blocks totaling 1.71m sf, which will be funded via $920m debt and 795m new units (37% of existing unit base) at ~$1.181 each. The property enjoys occupancy of 97.8% with WALE of 3.5 years and forecast NPI yield of 5.6%. Pro forma FY3/16 NPI will increase by 45% to $320.2m, while aggregate leverage is expected rise from 35.1% to 38.4%.

*SingPost: Independent consulting firm Heidrick & Struggles released a string of recommendations on management succession, conflicts of interest and disclosures, processes for M&A and market disclosures following recent corporate governance lapses and spate of resignations. The group intends to adopt the recommendations within three months.

*Cityneon: Entered non-binding term sheet with Taiwanese media firm Beast Kingdom, to host and operate the Marvel's Avengers touring exhibition in Taiwan. The exhibition is expected to be opened before 15 Jun 2017, and would positively contribute to earnings.

*Ezion: Adjusting down the exercise price of its outstanding bonus warrants issued on 25 Apr 2016 from $0.50 to $0.45 in relation to its proposed 3-for-10 rights issue. The group is also revising down the redemption price of its preference shares from $1.5136 to $1.3591.

*First Resources: May FFB harvest tumbled 18.1% y/y to 169,629 tonnes, on lower yield of 1.1 tonnes/ha (May '15: 1.4 tonnes/ha). CPO production slid 23.5% to 39,957 tonnes, although extraction rate was slightly higher at 22.7% (+0.1ppt). Maybank-KE’s last had a Hold rating with TP of $1.70.

*Tiong Seng: Awarded contract from Ministry of Home Affairs for the development and construction of Selarang Park Complex in Singapore for an undisclosed sum.

*CNMC Goldmine: Produced 9,807.4 oz (+34.9% q/q) of gold in 2Q16, the highest quarterly output on record. For 6M16, CNMC has produced 17,078.7 oz of gold, or 54.7% of FY15’s production of 31,205.85 oz.

*Tat Hong: Called off the proposed spin-off for its China business on Taiwan Stock Exchange, due to concerns on weak valuation amid turmoil in global economy and equity markets.

*CapitaLand Commercial Trust: Issued $75m of medium-term notes at a fixed rate of 2.77% due 2022.

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