Friday, March 3, 2017

SG Market (03 Mar 17)

The market could take a a much needed breather from its heady rally since the start of the year following the long overdue pullback on Wall Street and a potential US rate hike later this month.

Singapore manufacturing activity expanded for the sixth straight month in Feb, albeit at a slightly weaker pace . PMI came in at 50.9, down from Jan's reading of 51.0 due to slower rate of factory output, new orders, new exports and lower imports.Regional bourses slipped in early trading in Tokyo (-0.03%), Seoul (-0.7%) and Sydney (-0.1%).Technically, the STI remains within its uptrend channel between 3,100 and 3,155.

Stocks to watch:
*Dairy Farm: FY16 results beat expectations with underlying net profit of US$460m (+7%), underpinned by improved operating margin in the food division and at IKEA (HK, Taiwan, Indonesia). Despite soft consumer spending and pricing pressure in most markets, revenue inched up 1% to US$11.2b. Bottom line was further supported by strong associate contributions from restaurant division Maxim's and supermarket chain Yonghui. Raised final DPS to US$0.145 (4Q15: US$0.135), bringing full-year payout to US$0.21 (FY15: US$0.20).

*Hongkong Land: FY16 underlying net profit of US$847.8m (-6%) came in below expectations, despite chalking higher revenue of US$1.99b (+3.2%) from positive rental reversions in the HK commercial portfolio and increased occupancy in both HK and SG assets. However, net operating costs jumped 9.1%, while JV/associate income tumbled 16.7% due to lower development profits from Singapore residential properties. Expects stable performance in FY17, underpinned by the commercial property segment. Maintained final DPS US$0.13, bringing FY16 payout to US$0.19 (unch). NAV/share at US$13.30.

*Frasers Hospitality Trust: Master lessee of Kobe Retail Mall, TCC Group, plans to commit up to ¥4.25b for AEI at the mall. As a backdrop, an existing agreement provides TCC all economic benefits and losses, for yet-to-be stabilised malls owned by FHT. This arrangement will cease when the malls turn positive on net operating income, and FHT will make a lump sum payment to TCC for enhancement works upon termination.

*Vard: Secured construction project for a pelagic trawler for Research Fishing Company for NOK350m, with delivery scheduled in 3Q18.*AEM: Received purchase orders for delivery in FY17, lifting order book from $95.7m to $130m. The management is confident of fulfilling $70m of the orders in 1H17.

*Cosco Corp: 51% owned Cosco Shipyard Group secured a contract for three 1,750 TEU container vessels at an undisclosed price. The vessels are scheduled for delivery between 4Q19 and 2Q20.

*Courage Marine: Entered MOU to purchase a tea products exchange business, Fenghui, which is developing a block chain technology global trading platform.

*Spackman: Acquiring an additional 3.27% stake in Spackman Media Group for US$3m ($4.2m), lifting its stake to 27.8%. Funding will be via an issue of 26.2m new shares (6.56% share capital) at $0.161 each. Separately, Spackman proposed a placement of 38.1m (9.55% share capital) new shares to agent UOB Kay Hian at $0.161 apiece. Net proceeds of $5.95m are intended for working capital and new business investments and acquisitions.

1 comment:

  1. Hi Alan, what are your thoughts for spackman this coming Monday?