SG Market (11 Apr 17)

Market sentiment could stay muted amid heightened geopolitical tensions as a US carrier strike force sails towards North Korea, anxiety over the upcoming French presidential election and ahead of the start of the 1Q17 results season.

Regional markets are seeing tepid early trading in Tokyo (-0.4%), Seoul (+0.1%) and Sydney (+0.1%).Technically, the STI is pegged against topside resistance at 3,200, with immediate support at 3,140.

Stocks to watch:
*SPH REIT: Flat 2QFY17 DPU of 1.4¢ met expectations on larger unit base as distributable income grew 2.4% to $37.3m. Revenue inched 1.7% higher to $54m on increased rental income at The Paragon and The Clementi Mall, while NPI jumped at a faster clip to $11.3m (+9.7%) on proactive management of utility contracts and absence of one-off provision for prior years’ property tax. Both malls enjoyed rental uplift and full occupancy. Aggregate leverage remained steady at 25.7%. NAV/share at $0.94.

*Keppel Corp: Inked a term sheet agreement for the proposed sale of its Rotterdam-based Keppel Verolme shipyard to Dutch builder Damen Shipyards for an undisclosed amount following a strategic review This is in line with the group's efforts to optimise operations and rationalise its global network of yards. MKE last had a Sell with TP of $4.57.

*SGX: Launched SGX Developed Asia ex Japan Quality Index, its first smart beta index that features a factor-selection method with a bottom-up approach to selecting its constituents. Separately, SGX appointed six and two new members to its Disciplinary and Appeal Committees, respectively, to replace retiring members.

*Super Group: Offeror Jacob Douwe Egberts does not intend to revise the offer price of $1.30 for the instant cereal manufacturer. Closing date of the offer is on 25 Apr.

*Midas: 32.5% owned associate Nanjing Puzhen Rail Transport secured a Rmb543m metro train car supply contract from Shanghai Rail Transit Line Two Development. Delivery is scheduled in 2018.

*Rotary Engineering: Secured two EPC projects worth US$120m in Dubai and Thailand, to build tank storage for the oil refineries of Emirates National Oil Company and Thai Oil Public Company.

*Civmec: 50% owned JV Amec Foster Wheeler Civmec has clinched a contract for the Gruyere Gold Project in Yamarna greenstone belt, Australia. Works include the design and installation of a process plant, admin office, workshop, warehouse, water pipelines and power lines, and are scheduled between Jul '17 and Dec '18. The group's 50% share of the contract will lift order book to $526m (Dec '16: $425m).

*Roxy-Pacific: Entered into heads of agreement with third parties for the proposed sale of a freehold property at 59 Goulburn Street in Sydney, Australia, for A$158m.

*Spackman: Issued positive profit alert for 1Q17, following losses incurred in 1Q16 and FY16. This is due to recognition of revenue from the film "Master", for which its costs were booked last year, production revenue from upcoming thriller "Golden Slumber" and lower opex following disposal of loss-making Opus Pictures in Aug '16. 1Q17 results will be released on 15 May.

*Citic Envirotech: Secured credit facilities of up to Rmb20b for five years from China Merchants Bank, to fund projects in the water and environmental sector.

*GCCP Resources: Auditor Ernest & Young has drawn attention to uncertainty related to the group's ability to continue as a going concern, in light of FY16 loss of RM10.3m and negative operating cash flow of RM1m. In addition, it has loans worth RM10.2m that will be due for repayment this year.

*Hoe Leong: Auditor KPMG has drawn attention to uncertainty related to its ability to continue as a going concern following its FY16 loss of $46.9m, as well as the net current liability position of $47.9m which has resulted in additional loans due in 2017. The group now needs to repay $80.7m in 2017, or 6.8x its current market cap.