Monday, April 17, 2017

SG Market (17 Apr 17)

Jittery sentiment is likely to persist as pressure builds over the failed North Korean missile test in defiance of warnings and as investors eye the start of the 1Q corporate earnings season.

Regional markets opened mixed in Tokyo (-0.5%) and Seoul (+0.4%). Australia markets are closed for Public Holiday.Technically, immediate resistance for the STI is set at 3,210, with downside support at 3,160.

Stocks to watch:
*Ascott REIT: Divesting 18 rental housing properties in Tokyo, Japan, for ¥12b ($153.6m). According to the manager, the properties were mostly completed in 2006 and are due for asset enhancement, hence limiting rental upside. The REIT will book a net gain of ¥831m and intends to redeploy funds to other higher yielding assets.

*SATS: Unveiled a $21m automated e-commerce airhub spanning 6,000sqm, which will increase mailbag processing capacity by more than 3x, and lower mail processing time by 50%.

*Frasers Centrepoint: Acquiring an 86.56% stake in a listed European commercial real estate firm, Geneba Properties, for $471.6m. Following the purchase, the group will make an offer for the remaining stake in Geneba. Geneba manages a predominantly logistics and industrial property portfolio (98% occupied) in Germany and Netherlands, which has a weighted average lease expiry of 9.5 years.

*IHC: OUE has secured 86.16% control of the healthcare service provider after its unconditional cash offer at $0.106 each closed on 13 Apr and it intends to maintain the listing status of the company.

*OKH Global: Sued by Weston Global Realty and KTNC Real Estate Consultant, which are claiming a total of $4.5m commissions payable by the group for the sale and lease transactions for Ace@Buroh and Loyang Enterprise.

*DeClout: Disposing 40% owned AWS Distribution Phils to an existing employee, Poh Teck Boon, for $2m (1x P/B). The Philippines-based company engages in import and export of electronic and related equipment.

*Hi-P: Expects to be profitable in 1QFY17 instead of breakeven as previously guided, mainly due to improvement in operational efficiency and cost management.

*Marco Polo Marine: Intends to undertake a refinancing and debt restructuring exercise due to liquidity pressure. Separately, the group issued a profit warning for 2QFY17, dragged by the challenging market environment.

*GKE: Updated that a potential investor is still in discussions with substantial shareholders, and the group has not received any formal proposal regarding a potential acquisition.

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