SG Market (11 Nov 16)

The market could hold steady as investors continue to bottom fish for undervalued counters amid potential takeover bids for GLP and United Engineers.Regional bourses opened higher today in Tokyo (+0.3%), Seoul (+0.5%) and Sydney (+0.4%).Technically, the STI has topped the psychological 3,000 mark for the first time in more than a year and appears headed to the next objective at 3,040, with underlying support now at 2,968.

Stocks to watch:
*GLP: Merged 12 indirect US subsidiaries into two existing entities, simplifying its group structure ahead of a possible takeover. At $2.55, the global logistics asset owner and manager is valued at 0.98x P/B and 17% discount to consensus RNAV/share of $3.06.

*Low Keng Huat: Tendered the top price of $174.1m or $1,001 psf ppr for a 3,848 sqm land parcel at Perumal Road out of 11 bidders. This is 4.4% higher than the next best bid and 27% higher than the nearby Sturdee Residences plot, which was sold for $787 psf ppr in Mar '15, signaling that developers remain hungry for sites. The 99-year leasehold site is near Farrer Road MRT station and can be developed into 200 apartments with estimated sale price of $1,700 psf.

*QAF: Plans to invest a total $21.5m to expand its bread production and distribution business in the Philippines via setting up of a new bread manufacturing plant in Mindanao (completion in 2018) and acquiring a plot of land in Luzon for another bread plant in future. Trades at 10x consensus forward P/E.

*mm2 Asia: Appointed ex-Mediacorp veteran Chang Long Jong as its new CEO, whom will replace Melvin Ang, that was appointed as the group's Executive Chairman on 9 Jan.*Pacific Radiance: Inked multiyear contracts with independent and national oil companies for five of its OSVs to support production in the Arabian Gulf. The contracts are worth over US$68m for vessels that are off-hire.

*Vard: Secures contracts to construct two LNG powered ferries for Torghatten Nord for NOK600m.

*Silverlake Axis: Sold 3m Global Infotech shares on the Shenzhen Stock Exchange. It is expected to book a disposal gain of RM26.2m which it intends to use for general working capital, special dividends, repayment of debt as well as other business opportunities.

*Emas Offshore: 1QFY17 net loss of US$2.2m (1QFY16: US$3.2m), while revenue slipped 15% to US$42.5m on weak chartering services arising from the general weakness in the offshore industry. The bottom line was partially lifted by FX gains of $3m (1QFY16: US$0.5m), from the favourable USD against SGD and MYR.

*Boustead Projects: Secured a development contract for a new R&D centre for automotive supplier Continental Corporation in Singapore. Construction for the new development, adjacent to two previous developments for the same client, will commence this month and be completed by 1Q18. Value for the new contract is undisclosed, but will lift order book to $149m.

*Nordic: Purchased US$3m of carbon allowances under China's National Emissions Trading Scheme, in relation to a previous agreement with a multinational corporation to purchase and sell-back pilot carbon allowances.

*YuuZoo: To launch an E-Sports League for Blizzard Entertainment's Warcraft III - The Frozen Throne, with Harbin Sports Bureau in China. The league will feature 1,000 internet cafes throughout 16 cities in China and shown live on several Chinese TV stations. Group expects to earn revenue from sponsorships, advertising and ticket sales.

*Natural Cool: Received special notice from two shareholders comprising over 10% of share capital, for an EGM to completely remove and replace the entire board, with the exception of CEO Tsng Joo Peng, due to the lack of honesty and good faith to raise capital..

*Samurai 2K Aerosol: Clarified that the number of aerosol spray paint it sold in Malaysia (14.3m cans) and Indonesia (58m cans), as reported by local media including Business Times, are the total market size in the respective markets. Instead, the group sold 3.8m and 5.5m cans in FY3/15 and FY3/16, respectively, across all regions.

*Adventus Holdings: Providing a $3.88m convertible loan to JVCo Regis Bay Vietnam Investment to invest in real estate projects in major Vietnamese cities with its partner Panthera. Its maiden project is for a 4-5 star hotel development in Da Nang with 300-500 rooms. The loan is convertible for a 75% stake in the JV.