Several global events could sway market sentiment this week, including the French election runoff (between centrist Macron and far-right leader Le Pen), North Korea’s increasing louder war drumbeat and announcement of Trump’s tax plan. Investors are also eyeing more 1Q results to gauge the current business climate.
Regional markets opened stronger in Tokyo (+1.5%), Seoul (+0.4%) and Sydney (+0.5%).Technically, STI is likely to trade within the 3,110-3,190 range, with six index stocks slated to go ex dividend this week.
Stocks to watch:
*Raffles Medical: Flat 1Q17 net profit of $15.5m (+0.1%) came in at the lower-end of estimates, buttressed by better cost control. Revenue slipped 1.7% to $114.9m on softer demand from foreign patients. MKE last had a Buy with TP of $1.70.
*CRCT: 1Q17 DPU of 2.74¢ (+1.1%) was in line despite growing at a slower pace than distributable income of $24.4m (+5%) due to an enlarged unit base. Revenue climbed 13.4% to Rmb290.9m on contribution from recently-acquired CapitaMall Xinnan in Sep ’16, while NPI jumped 15.1% to Rmb194.9m, thanks to cost savings. Occupancy improved slightly to 96.2% (+0.3ppt q/q), but aggregate leverage inched higher to 36.4% (+0.9ppt q/q). NAV/unit of $1.58.
*GL: 9MFY17 net profit tumbled 47% to US$29m, partially hurt by the absence of an one-off compensation from hotel management contract termination fees. Revenue fell 17% to US$252.9m on lower hotel contribution amid a softer GBP against USD, as well as weakness in gaming and property development segments. NAV/share at US$0.772.
*Frasers Centrepoint: Sales launch for 843-unit Seaside Residences in Siglap over the weekend saw a strong take-up of 392 units, or 70% of the 560 units released, reflecting continued recovery in the private residential market. Average selling price achieved was reportedly $1,700 psf.
*Nam Cheong: As part of on-going measures to restructure its business amid the protracted O&G sector downturn, the group is in discussions with its principal lenders on refinancing options, as well as possible cost cutting measures to help improve its tight liquidity position.
*Keong Hong: Acquiring a 60% stake in timber flooring supplier Hansin Timber Specialist and Trading for $4.5m, comprising $3m cash and 2.6m new shares at $0.585 each.
*Delfi: Formed 60:40 JV with Japan’s Yuraku Confectionary to produce, market and sell a range of chocolate snack products under the “Delfi” masterbrand in Indonesia. Total initial capital commitment is estimated at ~US$5-7m.
*United Foods: Entered into an MOU to acquire an 80% stake in food traders and distributor, The Really Time Trading, for Rmb16m. The potential acquisition will come with an annual profit guarantee of Rmb2m till 2020.
*KS Energy: Updated that its geothermal drilling contract for work in North Sumatra, Indonesia will conclude at end Apr, one month earlier than expected. Hence, the contract value will be reduced by US$1.2m from US$7m.
*Imperium Crown: Disclosed that Executive chairman and CEO Wan Jinn Woei is in discussions with third party financial and strategic investors on a private placement.
*Singtel: Granted aggregate credit facilities of ~$4.1b from 12 banks, to be used for general corporate purposes and refinancing of existing facilities.
*Profit warnings:
- Asia Fashion
- Grand Banks Yachts
- Lion Asiapac
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