Thursday, December 29, 2016

SG Market (29 Dec 16)

Market will be swayed by profit-taking and window dressing although swings will be amplified by the dearth of trading volumes in the last week of the year.

Regional bourses opened weaker in Tokyo (-0.6%), Seoul (-0.4%) and Sydney (-0.4%).Technically, the STI is 2 points shy of the 2,900 resistance level, with next objective at 2,910. Bottom side support is at 2,865 (50 dma).

Stocks to watch:
*Macro: A Business Times article highlights export-oriented Singapore may not benefit from the improved global outlook in 2017. This is because of the structural shifts in key trade partners, such as onshoring in the US, and China’s shift towards being a consumer-led economy.

*REITs: Another Business Time feature cites economic and labour market uncertainties, exacerbated by e-commerce disruption poses a quandary for retail malls in 2017, with landlords likely to lower rents to fill space.

*Keppel Corp: Keppel Land China is divesting is 49.7% effective stake in Cityone Development for Rmb619m ($127m) to Tianhonglixin Real Estate. Cityone owns and develops Central Park City, Wuxi China. The group is expected to reap a net divestment gain of Rmb190m. MKE has Sell with TP of $4.57

*HPH Trust: Acquired an 80% stake in Huizhou International Container Terminals in Guangdong, China from its sponsor, Hutchison Port Holdings through its 51.64%-owned subsidiaries for US$86.3m. The terminals cover 60ha of land with three container berths.

*ComfortDelGro: Competitor Trans-Cab has joined SMRT to slash rental fees in a bid to attract more drivers and reduce costs for existing hirers, possibly triggering a price war amongst taxi operators. MKE last had a Hold and TP of $2.63.

*APTT: Lu Fang Ming, chairman of Asia Pacific Telecom, which is proposing to acquire APTT, was called before Taiwan commissioners to answer questions about funding, and how it plans to increase service level of Taiwan Broadcasting Corp (APTT’s seed asset). Lu will face more questions at a later administrative hearing.

*AIMS AMP REIT: Completed redevelopment of two buildings in Tuas, raising its value to $60.7m from $14.1m. The redeveloped property was transformed into a five-storey ramp-up warehouse, doubling GFA from 159,717 sf to 288,663 sf, with increased plot ratio of 2.07 (from 1.15)

*Spackman: Film MASTER clocked in gross box office revenue of US$25.3m in 8 days, with 3.8m tickets sold, exceeding the film’s breakeven point.*China Jishan: Disposing Shao Xing Yue Sheng Real Estate Property Development to Shanghai Jintumu Real Estate for Rmb785.8m. It intends to use the net proceeds for repayment of debt as well as working capital and expects to report a disposal gain of Rmb222.1m.

*GP Batteries: Divesting its industrial complex in Dongguan, China to a Chinese party for Rmb105m ($21.9m). The sale is expected to yield a disposal gain of $15.5m. *KLW: Disposing its property at 301 Flinders Lane, Melbourne, Australia to Mill Place Investments for A$34.2m (~$36.5m). It intends to use proceeds to fund other investment opportunities and expects to net a disposal gain of A$5.6m ($6m).

*Mencast: Sued by LQS Construction for $3.3m for an alleged balance payment related to the construction of an office building. Mencast is refuting the claim.

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