SG Market (05 Apr 17)

The market will likely continue to trade cautiously ahead of several risk events this week, including FOMC minutes to be released today, jobs report on Fri, and the crucial Trump-Xi summit that may impact global trade on Thu/Fri.

Regional bourses in Tokyo (+0.6%) and Sydney (+0.2%) opened firmer, although Seoul (0.1%) is weaker.Technically, immediate resistance for the STI is currently pegged at 3,200 with downside support at 3,140.

Stocks to watch:
*SingTel/StarHub/M1: Bid aggressively for Phase 1 of general spectrum auction, which led to huge price premiums of 297-560% vs MKE estimate of 50-100%. While Singtel (Hold, TP: $3.72) has sufficient cash to absorb the additional cost, Starhub (Sell, TP: $2.36) and M1 (Sell, TP: $1.75) may have to cut dividends to cope with spectrum payments and keep gearing levels within limits.

*SIA Engineering: Entered MOU with Nasdaq-listed Stratasys to establish a strategic partnership specialising in additive manufacturing to accelerate the adoption of 3D printed production parts for commercial aviation.

*SGX: 20 companies made total share buybacks of SGD29.1m (-57% y/y, -12% m/m) in Mar. This brought 1Q17 repurchases to SGD82m. The drop in number of companies and transaction value might be due to higher stock price levels.

*Ascott Residence Trust: Its 29:100 rights issue at $0.919 per unit to raise $442.7m was oversubsribed by 1.8 times. The rights units will start trading on 11 Apr '17.

*Oxley/KSH/Lian Beng/Heeton: Updated that their 27.5%/22.5%/7.5%/10% owned development project in Gaobeidian, China is likely to benefit from establishment of a new special economic zone (NSEZ) in Hebei's Xiongxian, Anxin and Rongcheng cities, to integrate with Beining and Tianjin and akin in importance to Shenzhen and Pudong. Gaobeidian is located 40km from NSEZ and is not subject to recent property transaction freeze there. The project has a land size of 5.3 sq km, of which 2 sq km has been approved for development.

*Q&M: Fulfilled the quotation requirements for listing of Aidite on China’s New Third Board. Separately, the group has also completed the restructuring of Aidite and agreed to sell a 2% stake in Adite to Qianhai Jianyuan Investment Consultancy (Shenzhen) Co for Rmb10m.

*Fischer Tech: Received a non-binding expression of interest from a third party, which may result in a transaction involving its shares. In connection with this, certain shareholders have entered into exclusive discussions with the third party.

*KS Energy: Awarded a US$11.1m contract for its 80.1%-owned jack-up drilling rig "KS Java Star 2" for work in Vietnam.

*Top Global: Appointed Stirling Coleman Capital as its independent financial adviser for the $0.33/share privatisation offer by its chairman, Oei Siu Hoa.

*RH Petrogas: Auditor Ernst & Young flagged doubts of the group's ability to continue as a going concern in light of its FY16 net loss of US$8.6m (FY15: US$170.8m loss), with its balance sheet in a net liability position of US$36.1m. The group has US$14.8m worth of net debt that is payable in 2017.

*Blumont: Auditor made a disclaimer of opinion as the company’s current liabilities have exceeded current assets by $2.9m. In return, Blumont said it will be able to raise enough funds for operational requirements over the next 12 months

.*Singhaiyi: Its conditional right of first refusal for the transfer of 500m shares in OKH Global at $0.10/share has lapsed. OKH is currently trading at 6.8¢/share.

*ARA Asset Management: The last day of trading of its shares will be on 5 Apr with trading suspended from 6 Apr, 9am onwards.