SG Market (17 Mar 17)

The market is likely to pare some gains as the oil price rally fizzled out but the STI remains firmly within the uptrend channel bounded between by 3,140 and 3,200.

Regional markets opened mixed in Tokyo (-0.5%), Seoul (+0.1%) and Sydney (+0.3%).Currently, the index is sitting atop the 61.8% fibonacci retracement of the Apr '15 - Jan '16 decline at 3,160.

Stocks to watch:
*Economy: Singapore's non-oil domestic exports jumped 21.5% in Feb, beating the 12.5% estimate and surpassing growth in the preceding months (Jan '17: +8.6%, Dec '16: +9.1%, Nov '16: +15.6%), spurred by increases in both electronic (+17.2%) and non-electronic shipments (+23.3%).\

*Genting HK: Sank into FY16 net loss of US$502.3m from US$2.11b profit a year ago, mainly due to the absence of accounting gain from partial sale and reclassification of ex-associate Norwegian Cruise Lines. While revenue jumped 47.4% to US$1.02bm on full contribution of Crystal Cruises (acquired in May '15) and the launch of Dream Cruises' Genting Dream in Oct '16, expenses surged 57.8% on the consolidation of expenses from the new business and start-up costs arising from shipyard operations and newbuilding activities. Declared final DPS of US$0.01 (FY15: nil).

*CapitaLand: Reportedly in exclusive talks with BlackRock to acquire Asia Square Tower 2. Price tag for the 784,000 sf office building is said to be more than $2,700 psf, which is higher than the $2,704 psf that Qatar Investment Authority paid for Asia Square Tower 1 last year.

*Sembcorp Industries: Raised its stake in its India renewable energy business, Sembcorp Green Infra, from 68.7% to 70.4% after subscribing in a rights issue, including the 31.3% share not taken up by its partner IDFC PE Fund III. Gross proceeds of 1.25b rupees ($26.5m) will be used to fund its growth in the sector.

*Delfi: Divesting the entire 50% stake in PT Ceres Meiji Indotama to Meiji and Meiji Seika for US$8.3m. Estimated disposal gain of US$4.9m is intended to strengthen its financial position.

*Auric Pacific: Voluntary offer of $1.65/share has turned unconditional after the Riady group obtained valid acceptances of 90.15%. Note that there will not be a compulsory acquisition for the remaining shares not tendered, after the closing date on 7 Apr.

*IHC: Mandatory unconditional offer at $0.106/share from OUE has been extended to 13 Apr.

*Rex Int’l: An independent qualified person’s report unveiled that the Edvard Grieg South (Rolvsnes) discovery attributed to 87.84% owned Lime Petroleum Norway, has 3.1m stock tank barrels per bscf of 1C contingent resources of oil as well as natural gas.

*KS Energy: Awarded a US$4.8m contract for its 80.1% owned KS Discoverer 7 land drilling rig in Indonesia, with work commencing from 2Q17 onwards for nine months.

*Singapore eDevelopment: 53% owned dietary supplement network marketing platform, iGalen Int’l, achieved 1,500 sales orders worth $1m across its network of 4,400 distributors in the first 30 days of operations.

*Khong Guan: Turned around to 1HFY17 net profit of $0.1m (1HFY16: $0.5m loss) due to the absence of a $1.1m fair value loss. Revenue slipped 1.7% to $28.7m on weak contribution in wheat flour and trading in other consumer products (-6.5%), although partially mitigated by gains from its investing trading arm (+239.1%) on disposal of short-term investments. NAV/share at $2.36.