Monday, September 26, 2016

SG Market (26 Sep 16)

Trading this week is expected to be volatile, as markets anticipate the OPEC/Russia oil talks, the first of three US presidential debates, a heavy dosage of central bank speeches and economic releases from US and China, as well as quarter-end window dressing. Stick to defensives such as consumer, healthcare and yield stocks.

Regional markets opened weaker in Tokyo (-0.3%), Seoul (-0.1%) and Sydney (-0.2%).From a technical perspective, topside resistance for STI is at 2,880, with underlying support at 2,800.

Stocks to watch:*SMRT: Its consortium with PT T-Files Indon submitted bid to participate in the public tender for the construction of rail-based public transport facilities in Bandung, Indonesia. Parent Temasek Holdings is seeking to privatise SMRT and MKE is recommending shareholders to accept the $1.68 buyout offer.

*Mapletree Logistics Trust: Acquiring Mapletree Logistics Park Phase 2 in Vietnam for VND339.2b ($20.6m). The 66,300 sqm gfa property is fully occupied and is expected to generate NPI yield of 9.9%.

*Wilmar: Launching its Olenex JV with Archer Daniels Midland, which is in the European oils and fats business, in the coming weeks, after obtaining all required competition approvals.

*Starhill Global: Pricing its $70m notes due 2026 at 3.14% with coupons paid semi-annually in arrears. Post-issuance, average debt tenor will increase from 3.1 years to 3.6 years, with higher aggregate leverage of 35.3% (+0.3ppts), assuming $55m of proceeds is used to pay off debt.

*GMG Global: Independent financial advisor RHB opines that the Halcyon Agri swap offer (0.9333 new Halcyon shares for each GMG share) is not fair but is reasonable, on the basis that the offer value is below GMG’s NAV but at the same time, it gives shareholders the opportunity to participate in the prospects and future growth of an enlarged Halcyon group. Hence, shareholders are advised to accept the offer if they believe in the competitive strengths of the enlarged group.

*Sunright: FY16 net profit slumped 55.9% to $1.4m on higher profit share of minority interests (+56.9%), although the group incurred lower expenses (-7.1%) due to absence of FV losses and changes in inventories. Revenue slipped 5.5% to $129.4m on lower distribution and weaker MYR, which impacted its burn-in, testing and electronic manufacturing services segment. Maintained first and final DPS of 0.2¢ (FY15: Final 0.2¢ + 0.2¢ special DPS). NAV/share at $0.573.

*Otto Marine: Counter will cease trading today, prior to closing date of exit offer on 30 Sep, after the offer was declared unconditional in all respects and delisting proposal conditions were fulfilled.

*Ley Choon: Creditors agree to a debt restructuring agreement as Ley Choon seeks to divest its non-core assets. Instead of a charge over project proceeds previously, the new agreement will allow for an interest-only regular repayment scheme, with the principal amount to be paid as a lump sum on 31 Mar 2021.

*Swissco: US-based contractor, X-Drill, has commenced legal proceedings for claims of $1.8m. Swissco is currently consulting its legal advisers on the claims.

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