Singapore shares are likely to consolidate gains from a grossly overbought market. The benchmark STI has surged almost uninterruptedly by 5.8% since mid-Nov and is due for a pause.
Regional bourses in Tokyo (+0.5%), Seoul (+0.3%) and Sydney (+0.5%) opened stronger.Technically, the STI just less than a point shy of the 2,950 resistance, with underlying support at the 2,882 breakaway gap.
Stocks to watch:
*Del Monte: Del Monte. 2QFY17 net profit slumped 57.8% to US$20.2m, missing street estimates, due to the absence of a US$39.4m remeasurement gain. Revenue of US$636.2m (-4.6%) was weighed by lower sales in the US (-9.3%) and Europe (-57.8%), but partially cushioned by strong performance in Asia (+20.9%). Bottomline was further impacted by a US$1.5m one-off charge arising from the closure of its North Carolina plant. NAV/share at US$0.177.
*XMH: 2QFY17 net profit collapsed 96.5% to barely breakeven $0.1m on increased expenses associated with its new factory. Revenue slipped 2.8% to $25.1m on reduced contributions from its project business, which was affected by weak market sentiment, partially offset by improved sales of its distribution business. Amid the shift in revenue mix, gross margin contracted to 21.1% (-3.1ppt). Bottom line was further crushed by lower FX gains of $0.2m (-87.6%). NAV/share at $0.622.
*Swiber: Its chairman and several directors, including the CFO were hauled for questioning by CAD and released on bail for possible breach relating to false and misleading disclosures. Trading of the troubled offshore oil and gas contractor has been suspended and the company is under judicial management.
*Spackman Entertainment: Sold the distribution rights of Master, its crime-action film to 31 countries prior to its initial box office release in Korea. The film is expected to screen on 21 Dec.
*CWG Int’l: Obtained approval from authorities to increase the plot ratio of a land site in Parramata, Sydney to 8:1 from 4:1, with a further 15% uplift to 9.2 through a design excellence bonus mechanism subject to approval. It intends to develop the land site into a residential building which is expected to be completed in 2019.
*Cordlife: Garnered a 92.79% stake in StemLife following its voluntary take-over offer at 54 sen/share.
*Viva Industrial Trust: Requested S&P to withdraw its BB+ credit rating (ie. non-investment grade speculative), after the ratings agency reaffirmed the rating with a stable outlook.
*Olam: Priced its US$175m US private placement debt at a fixed coupon of 3.9% for five years. Proceeds will be used to repay existing bank debt and general corporate purposes.