The market is likely to open on a cautious note amid OPEC’s optimism that the oil market rebalancing is underway, while the harsh stance taken by US President Trump on China trade issues ahead of his meeting with President Xi later this week could spark worries of a trade war.
Regional markets opened mixed, with Tokyo (+0.1%) and Seoul (+0.1%) higher, and Sydney (-0.02%) weaker.Technically, immediate resistance for the STI is still pegged at 3,200 with downside support at 3,140.
Stocks to watch:
*Economy: Economists do not expect the MAS will not tighten the exchange rate policy in Apr or even this year despite the recent stronger growth data as the Singapore economy is still on a weak footing and private investment has yet to pick up.* Property. After regulators closed a tax loophole that allowed developers to offload properties in bulk to institutional investors or wealthy Singaporeans, developers now face the unpalatable choice of discounting luxury homes to dispose inventory, or pay stiff QC charges for missing stipulated sales deadlines. MKE prefers UOL (Buy, TP: $7.68) for sector exposure.
* Sembcorp Marine/ Keppel Corp. US District Court for Columbia has dismissed the claims filed by EIG Management against Petrobras, pertaining to EIG’s investments in Sete Brasil. SMM and Keppel Corp were among rigbuilders that were named as defendants in the suit. MKE has Sell ratings on SMM (TP: $1.00) and Keppel Corp (TP: $4.57).
*SGX: Colloborating with Tullett Prebon to launch a LNG spot index to offer a trusted reference price for LNG delivered to key ports in Dubai, Kuwait, and India. Separately, it has also inked agreements with equity crowdfunding platform Crowdo and PwC’s entrepreneurship consulting unit Venture Hub to help start-ups improve capital access.
*Yangzijiang: Won 13 shipbuilding contracts amounting US$318m in 1Q17. This comprises five 82,000 dwt bulk carriers, five 62,000 dwt woodchip carriers, two 1,800-TEU containerships and one 6,500 dwt conro vessel, with deliveries from 2018-2020.*Frasers Centrepoint: Entered a 19.9/80.1 JV agreement with TCC Assets to acquire and develop a leasehold site in central Bangkok into an integrated mixed-use development. The project, with total gfa of 1.83m sqm, will have a retail component, office towers, residences, hotels and serviced apartments.
*Raffles Medical: Acquired a 28,000 sqm land with building under construction in Liangjiang, Chongqing for the development of a 700-bed international tertiary general hospital. Construction is expected to be completed in 2Q18. The consideration payable for the land and construction costs incurred up to end Jan ’17 amounts Rmb188m..
*China Everbright Water: Won the Ji’nan Zhangqiu Urban-Rural Integration Water Supply project in Shandong, which commands a total investment of Rmb3.1b. CEW will hold an 80% equity stake in project, which has a 30 year concession period.
*Q&M: Expects to raise $9.1m net proceeds from the proposed-listing of its China dental equipment and supplies business Aoxin Q&M. Preliminary documents indicate that Aoxin intends to place out 57m new shares at $0.20/share.
*TEE Int’l: CEO Phua Chian Kin is offering to privatise the engineering firm via scheme of arrangement. Shareholders may elect a cash consideration of $0.215/share (12.6% premium over last traded price) or one new share in the Phua’s wholly-owned vehicle, Oscar Investment. The offer prices the group at 1.08x P/B.
*Ezion: Following recent acquisition of remaining stakes in several JVs with Swissco, the group is divesting its 50% stake in Teras Cargo Logistics, Strategic Offshore, and Strategic Excellence to Malaysian strategic partner Sea Explorer for US$70m. The transaction is expected to be completed by 2Q17.
*Low Keng Huat: 4Q16 net profit plunged 80% to $6.3m, bringing full year earnings to $55.7m (flat). Quarter revenue halved to $10.2m, largely weighed by the absence of construction revenue as the group is no longer tendering for third party construction contracts. The group also saw nil development sales in the quarter. Bottom line further dragged by $1.5m of other operating expenses, largely attributable to additional provisioning for impairment losses on the Balestier Tower project. NAV/share at $0.90.
*Olam: 75%-owned Nutrifoods Ghana has opened its newly expanded US$8.25m biscuit production facility in Ghana, doubling its capacity. Separately, the group is issuing ¥5.7b 0.47% fixed rate notes due 2022 under its US$5b euro medium term note programme. Proceeds will be used for working capital, capex, potential acquisition opportunities and other general corporate purposes.
*Saizen REIT: Terminated the proposed acquisition of 20 Australian freehold industrial properties from Sime Darby Property Singapore, which would have resulted in an RTO.
*FJ Benjamin: Divested loss-making NooTrees, a subsidiary that sells sustainable consumer products, to Lam Soon Singapore for $2.2m, and realising a gain of $1.79m.