SG Market (10 Jan 17)

Some profit taking could set in on simmering tensions with China over the Terrex issue and uncertainty ahead of the Trump presidency on 20 Jan.

Regional bourses opened in negative territory in Tokyo (-0.3%), Seoul (-0.3%) and Sydney (-0.7%).Technically, a sustained move above the 2,968 triple-top could take the index higher to the next resistance at 3,040, with near term support at 2,920.

Stocks to watch:
*SGX: Dec securities turnover totalled $20.9b (+23% y/y, -29% m/m), with average daily value of $996m (+29% y/y, -25% m/m), while derivatives volume shrank to 13.3m contracts (-8% y/y, -20% m/m) on weaker trades in equity indexes (-9% y/y, -13% m/m) and FX futures (-30% y/y, -20% m/m).

*Capitaland: Inked its second mall management contract in five months and crossed the 12m sf retail gfa mark in western China. The group will manage a 50,000 sqm shopping mall in La Botanica, a township located in Xi’an’s Chan-Ba Ecological District that is being developed by a JV between CapitaLand and Hong Kong's Henderson Land.

*Citic Envirotech: Secured first river restoration project in Yixing, Jiangsu in China, worth Rmb650m. A 90/10 JV with Yixing Industrial Park for Environmental Science & Technology Management Committee will undertake the build-lease-transfer project. Construction is expected to take two years with lease period of eight years.

*Hyflux: Egyptian Ain Sokhna Integrated Water and Power Project has been changed to a BOT/BOO structure instead of the initial EPC contract that was worth US$500m, with new terms currently being discussed.

*ISOTeam: Awarded $22.65m worth in contracts, including solar leasing of grid-tied solar photovoltaic system, repair and redecoration works for public housing and addition and alteration works. Contracts scheduled to be completed between Jan '17 and Jun '18.

*Yanlord Land: Acquired the remaining 25% stake in Shenzhen Hengming Commercial for Rmb1.125b or 0.56x P/B.

*F&N: Acquiring the Singapore and Malaysian distribution arms of book publisher Penguin Random House for $8m.

*Innovalues: Date for the $1.01/share buyout by Northstar Private Equity via a scheme of arrangement is set on 25 Jan. MKE had previously advised to await further developments prior to the court meeting.

*CWT: Updated that the potential transaction relating to controlling shareholder C&P is still in progress, since 16 May 2016.

*CEFC: Updated that the successful acquisition of a downstream distribution network, CEFC Assets Management & Equity Investment (HK), advances the group's penetration into Europe’s energy market, its key strategic market.

*Cheung Woh Tech: 3QFY17 net profit dived 83.2% to $0.3m on softer revenue of $20.4m (-18.6%), dragged by lower sales in HDD components (-24.7%), although partially offset by stronger precision metal stamping components (+22.7%). Gross margin contracted to 16.7% (-5.1ppts) as it grappled with higher labour and overhead costs. NAV/share at $0.369.