The cancellation of President Trump's healthcare bill last Fri could test the market this week as investors fret over the implications for his tax reforms and infrastructural agenda. Also on traders' radar would be the UK's formal trigger of Brexit on Wed and a meeting of OPEC and non-OPEC members to review instead of recommend the extension of output cuts by another six months, which could put a drag on oil prices.
Regional markets opened lower in Tokyo (-1.1%), Seoul (-0.3%) and Sydney (-0.5%).Technically, the STI is skirting the lower edge of its 3,140-3,200 uptrend channel.
Stocks to watch:
*Economy: Industrial production jumped 12.6% (Jan: +2.2%) in Feb and exceeded expectations for a 10.8% growth, led by the uptick in electronics output (+39.8%), following the surge in demand of tech products and shipments to China last month.
*Singtel: Launched a real-time mobile remittance service to Indonesia with 35% owned Telkomsel. Subscribers can now send money to PT Pos Indonesia's 4,500 cash-out points across Indonesia via remittance service Weselpos Instan. MKE last had a Hold with TP of $3.70.
*Singpost: Commencing trial for the prototype electric three-wheeler to boost mail delivery efficiency. Developed by research platform TUMCREATE, the customised vehicle will serve as a test bed for concepts which will guide Singpost's application of electric vehicle technology for postal operations and e-commerce logistics.
*StarHub: Key management changes last week show pressure in the industry, in reaction to the entry of the fourth telecom provider, TPG. Notably, former CEO of Integrated Health Information Systems, Chong Yoke Sin, is the new chief of the enterprise business group and will spearhead StarHub's push into healthcare enterprise business, while Chief Commercial Officer Kevin Lim is expected to retire by end 2017.
*Yangzijiang: Subscribed for 30% equity in Jiangsu Nantong Yanhai Emerging Industrial Investment Fund, which has a share capital of Rmb300m. The new associate primarily invests in the industrial sector, as well as venture and equity investment in private SMEs in emerging industries such as new materials, energy conservation and environmental protection, advanced manufacturing technology, health care and innovative consumption business. The fund has an operating term of seven years.
*Pan-United: 4Q16 net profit rose 28% to $4.5m, although revenue fell 10% to $176.8m, mainly from the drop of ready-mix-concrete prices in Singapore. Bottom line was aided by a 14% drop in finance cost and a 58% increase in associates’ contributions. Final DPS of 2.75¢ maintained, bringing full year payout to 3.75¢ (FY15: 3.8¢). NAV/share at $0.489.
*IEV: 49% associate IEV Malaysia was awarded a contract to provide corrosion inhibiting spray-on thermoplastic coating services for an established O&G operator. The contract is expected to contribute positively to current year earnings.
*Singapore O&G: Proposed 1-into-2 share split in a bid to increase market liquidity and broaden the shareholder base.
*Croesus Retail Trust: Entered loan facility with Sumitomo Mitsui Trust Bank for a 4-year term loan of ¥3b at a fixed rate of 1.65667%, intended to fund AEI works as well as for working capital.
*Secura: Substantial shareholder Wee Ee Chao disposed 1.3m shares at $0.17095 each via the open market, paring his stake down from 6.043% to 5.726%.
*Blackgold Natural Resources: Proposed placement of 35.9m new shares (4.6% share capital) to placement agent SAC Capital at $0.09 apiece. Net proceeds of $3.2m are intended for working capital (85%) and preliminary and ancillary expenses for the development of two 300MW mine-mouth power plant in Riau.
*Arion: Terminated the share purchase agreement of Dream T Entertainment, due to unforeseen circumstances in South Korea and difficulties in fulfilling some precedent conditions. Nevertheless, the group remains keen on the competitive media entertainment business in South Korea and will revisit the opportunity in future.