Thursday, January 12, 2017

SG Market (12 Jan 17)

The Singapore market could consolidate gains after its extended run since the start of the year as investors await fresh catalysts from the 4Q results season kicking off next week.

Regional bourses are mixed this morning in Tokyo (-0.8%), Seoul (+0.3%) and Sydney (+0.2%).The STI is hovering at the psychological 3,000 mark with upside resistance at 3,040 and underlying support at 2,968.

Stocks to watch:
*GLP: Media reports cited that US private equity firm, Warburg Pincus, is cobbling a consortium to bid for GLP. Separately, the group has extended 3.6m sf of leases (2.1% of US portfolio) with its key customer in the US, a leading global appliance company.

*Vard: Parent and offeror, Fincantieri, has lowered the acceptance condition for its voluntary cash offer of $0.24/share from >90% to >50%. Hence, with Fincantieri's latest control of 55.63%, the offer has turned unconditional and the closing date is extended to 2 Feb.

*SPH REIT: 1QFY17 DPU of 1.34¢ (+0.8% y/y) was in line with consensus estimates as revenue inched up 0.9% to $52.6m on rental uplift of 4.6% and full occupancy for its two malls. NPI rose by a quicker 3.3% to $41.4m, helped by reduced utility and maintenance expenses. Aggregate leverage remained at 25.7%. Manager predicts stable performance despite challenging retail environment ahead. NAV/unit at $0.94.

*Lian Beng: 2QFY17 net profit slumped 75% to $5.7m as revenue decline 62.1% to $49.2m from reduced construction and ready-mixed concrete sales. This was further dragged by a 75.6% plunge in associate/JV contributions due to the absence of completion for development projects. Interim DPS kept at 1¢. NAV/share at $1.11.

*TEE Land: 2QFY17 net profit sank 54.1% to $0.7m on a $3.1m swing in associate contributions to $0.7m loss. Revenue jumped 144.1% to $24m due to higher progressive revenue recognised for Malaysia’s Third Avenue and new project Hilbre 28. However, gross margin contracted to 27.5% (-9.8ppts) due to the change in revenue mix. Interim DPS shaved to 0.15¢ (2QFY16: 0.22¢). NAV/share at $0.355.

*Silverlake: Insurance processing unit Merimen Ventures has marked its foray into Hong Kong, with the establishment of an office, expected to be used as a launchpad into Greater China and Northeast Asian markets. It recently secured accounts with two insurance companies, bringing its HK client stable to four.

*Keppel Corp: Divested 80% stake in JVCo, PT Sentral Tunjungan Perkasa, for Rp529b (~$57m), which will yield a disposal gain of $32m.*Federal Int’l: Divested 12% stake in PT Gasuma Federal Indonesia for US$1.9m, and expects to record a divestment gain of $1.3m.

*Uni-Asia: Disclosed that bulk carrier, MV Inspiration Lake, was involved in a collision with a fishing boat near South Korea.

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