Friday, December 23, 2016

SG Market (23 Dec 16)

Expect lacklustre trading following the pullback on Wall Street and as investors wind down positions ahead of the year-end holiday season in absence of fresh catalysts.

Regional bourses in Seoul (-0.03%) and Sydney (-0.01%) were muted in early trading, while Japanese markets are closed for public holiday. From a technical perspective, a breakdown of the 2,882 level could send the STI to the next support at 2,860 (20-dma). Topside resistance remains at 2,953.

Stocks to watch:
*Keppel Corp: Invested $26m for a 50% stake in PT Metropolitan Permata Development, which is developing 450 landed homes on a 12-ha site in Tangerang, West Jakarta. MKE has a Sell with TP of $4.57.

*SIA Engineering: Established a 49:51 JV with Moog to provide component repair services to customers in the Asia Pacific and beyond for new-generation aircraft such as the Boeing 787 and Airbus A350. MKE last had a Hold with TP of $3.70.

*ParkwayLife REIT: Divesting four nursing homes in Japan for $48.9m and expects to reap disposal gain of $5.2m. Proceeds will be used to strengthen balance sheet and seize other investment opportunities.

*Sheng Siong: Lease of its outlet at The Verge will not be renewed after 30 Apr ’17. The outlet contributed about 3.3% to its 9M16 revenue. MKE has a Sell with TP of $0.88.

*Chip Eng Seng: Acquiring a 14,730 sqm leasehold industrial property at 11 Tuas Basin Close for $6.4m from Mencast. Lease of the property will expire on 15 Mar '21, but there is an option to extend until 31 Dec '21 for $0.5m. Mencast is expected to record a net disposal loss of $0.2m or gain of $0.4m, depending on whether the lease extension is obtained.

*Spackman Entertainment: Its film, Master, opened at the #1 spot of the Korean box office, reaping gross receipts of US$2.6m, and marking the highest Dec opening in Korea. Master is expected to screen in Singapore in Jan '17.

*Pacific Radiance: Transferring its operations and assets in Mexico to a 51:49 JVCo with Navigatis, Navigatis Radiance, to improve cost efficiencies and strengthen its position in anticipation of an upturn in offshore activity in the Gulf of Mexico. Navigatis will invest up to US$40m in the JV.

*Nam Cheong: Received a letter of demand from Petra Offshore claiming for a refund of a US$8.4m deposit.*A-Smart: 80:20 JV with Pair International to sell, lease, service and maintain green technology systems manufactured by Pair in Southeast Asia.

*Ipco: Terminated the placement agreement for 265m new shares at 0.18¢/share to Woo Fong Eng. The placement would have raised $0.5m in gross proceeds.

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