Sentiment is expected to get a lift from the spike in crude prices following the long awaited OPEC deal to cut production, which would remove much of the excess supply in the global market, but gains could be capped as market technicals approach overbought levels.
Regional bourses opened in the green today, led by Tokyo (+1.5%), Sydney (+0.5%) and Seoul (+0.1%).Technically, STI could head towards its next objective at 2,950, with resistance-turned-support at 2,882 (breakaway gap).
Stocks to watch:
*REITs: Following the 15% ytd slump in office rental rates, CCT's REIT manager believes rents would remain soft and only pick up by end-2017, when new supply is absorbed. MKE's top buys in the sector are CCT (TP: $1.81) and Keppel REIT (TP: $1.81).
*GLP: Selling GLP Narita to a private equity fund for ¥8.2b (US$72m), which equates to a 4.9% cap rate and 12% premium to book value. The transaction of the 51,000 sqm (549,000 sf) property in Greater Tokyo is expected to be completed by end-Dec.
*Q&M Dental: Received approval to list its China manufacturing business Qinhuangdao Aidite on China's New Third Board. This would help streamline the group's business focus and scale its dental operations. MKE last had a Buy with TP of $1.00.
*Cosco Corp: 51% owned Cosco Shipyard delivered module carrier, BIGROLL BAFFIN, to its European buyer.
*Metro: 48/52 JV with real estate private equity fund InfraRed NF China Real Estate Fund II will invest in Chinese real estate debt instruments. The group has committed to invest US$28m ($39.9m) in the JV.
*Starburst: Divesting 6 Tuas West Street for $7m. The 2,308 sqm gfa property used to be its corporate headquarters and fabrication facility. Post-transaction, the group will realise a fair value loss of $0.2m.
*Raffles United: Disposing 60% owned Taiwanese firm Ascend Bearings to minority shareholders for $1m, which is expected to result in a FY16 net loss.
*Sunmart: Buyout offer at 7¢/share (39% below last close) from Executive Chairman and CEO Sun Bingzhong. Sun and his concert parties together control 72.3% stake in the group.