Monday, December 19, 2016

SG Market (19 Dec 16)

The market could trade range bound with a downside bias, taking cues from cautious sentiment on Wall Street last Fri.

Regional bourses opened mixed, with Tokyo (-0.2%) and Seoul (-0.1%) weaker, while Sydney (+0.6%) is trading higher.Technically, immediate resistance for STI is at the 2,953 gap, followed by the 2,960 triple-top. Underlying support for the index remains at the 2,882 breakaway gap.

Stocks to watch:
*SATS: Gateway services and food solutions SATs is a beneficiary of the newly completed Changi Airport Terminal 4, which is expected to be opened in 2H17. However, MKE has a Sell with TP of $3.76, as valuation of 23.2x FY17E P/E is expensive.

*SIA: Likely to see a more challenging 2017 as it faces a double whammy of stiff competition and rising fuel costs (2017: US$65/bbl, 2016: US$52/bbl) according to the IATA. MKE’s last call was a Hold with TP of $9.70.

*Japfa: 51%-owned subsidiary, PT Japfa Combed Indonesia’s credit rating was upgraded by Fitch to AA- from A+ with stable outlook (prior: negative).

*Innovalues: Received approval in-principle from SGX to be delisted if the proposed acquisition by Northstar Advisors via scheme of arrangement goes through.*GS Holdings: Signed a five-year agreement to lease the centralised dishwashing facility at Changi Airport to provide centralised dishwashing services for terminal 1,2,3 and 4. The agreement has an option for another five-year extension.

*Elektromotive: Received shareholder approval to sell its 55% stake in electric vehicle charging business, and to change the company’s name to Arion Entertainment Singapore.

*Yeo Hiap Seng: Coca-Cola Singapore Beverages will be outsourcing its warehouse operations to YHS, as it shuts down its Tuas plant.

*QT Vascular: Met all of FDA safety requirements, and received a full IDE approval for its Chocolate Touch drug-coated balloon. The approval will allow it to enroll up to 585 patients in 50 centres in the US for treatment, with additional patients enrolled at selected centres outside of the US. It plans to start clinical studies in US, Europe and New Zealand.

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