Blue chips may track overnight gains on Wall Street on funds inflow as the Trump rally continues, although upside might be capped by an overbought market.
Regional bourses in Tokyo (+1%), Seoul (+1.1%) and Sydney (+0.7%) opened firmer.Technically, the overstretched STI looks poised test the 2,950 topside resistance, while underlying support is seen at the 2,882 breakaway gap.
Stocks to watch:
*UOL: Maybank KE initiates on UOL with Buy and TP of $7.39 (27% upside), implying a 24% discount to RNAV. Risk-averse market will favour its conservative trading portfolio and strong recurring income. Downside supported by its stub value, which is currently at a 42% discount to its underlying assets. Recommend a switch from City Dev (Hold, TP: $8.90) for Singapore property exposure.
*Ascendas REIT: Proposing to acquire DSO National Laboratories buildings and DNV GL Technology Centre for $420m from sponsor Ascendas. Deal will be partially funded by issuance of new units amounting $100m. The acquisition is expected to generate 6% NPI yield in the first year, and would have been accretive to FY3/16 DPU by 0.059¢ to $0.1542 on a proforma basis.
*Super: Flat 3Q16 net profit of $7.4m (-0.1%) missed estimates. Revenue slipped 1.2% to $119.5m due to weaker contributions from food ingredients (-4.8%) but partially cushioned by stable brand consumer sales (+0.7%). Gross margin widened 2ppt to 34.6% from sales mix shift, but bottom line was weighed by 9% increase in admin expenses due to severance expenses related to the consolidation of its non-dairy creamer facilities in Singapore. Maybank KE has Hold call with TP of $1.30.
*Sabana REIT: Divesting 218 Pandan Loop to X Properties Inc for $14.8m. The property has a gfa of 50.374 sf, representing about 1.1% of its portfolio. The industrial trust expects to book a gain of $1.8m from the sale and proceeds will be used to repay borrowings, pursue acquisition opportunities and for working capital purposes.
*8Telecom: Granted a facilities-base operations licence by the IMDA. This would allow it to utilise 1.79-1.8 GHz spectrum to provide dedicated LTE network services to the public transportation, public safety, security, surveillance and other vertical industries.
*Samudera: Expects to record a net loss for 4Q16 and FY16 due to provisions for impairment of its fleet as well as bad debt for Hanjin Shipping, which filed for receivership.
*Pacific Radiance: Executive Director Mok Weng Vai was arrested by CPIB on 2 Dec, on the suspicion of an offence under Section 6(c) of the Prevention of Corruption Act (Cap. 241).*SMJ: Investing US$0.2m in 33:47:20 JVCo, PT Spektrum with Jusuf Wijaya and Gergorious Janus. Spektrum will supply and distribute carpets and other furnishing materials in Indonesia.
*YuuZoo: Launched YuuWallet, an e-wallet that enables secure payments and money transfer without credit cards. *Civmec: Incorporated ForgacsValco with JV partner Valco Group. ForgacsValco will provide repair, overhaul and testing services of valves in the oil & gas, water, mining and defence markets.
*MS Holdings: Profit warning