SG Market (03 May 17)

The market could eke out further gains today as yesterday's bank-induced blue-chip rally spill over to the broader market. Sydney slipped 0.1% in early trading, while bourses in Japan and Korea are closed for a public holiday.Having broken above the 3,200 level, the STI has reached its highest level since Aug '15 and may attempt to bridge the 30-point gap at 3,250 set in Jul '15. Immediate support is now at 3,190.

Stocks to watch:
*Economy: Manufacturing PMI logged its 8th straight month of expansion in Apr, coming in at 51.1, a slight dip from Mar's 51.2 reading. The marginal pullback was attributed to some softening demand in domestic and export orders, which is in line with the trends across the region, including China and Taiwan. However, the declines were cushioned by stronger factory activity.

*SIA: According to Bloomberg, the carrier might swing into a net-debt position of >$550m, or a net gearing of 5%, as early as 2018 as its takes on more debt and issue bonds to finance its record purchase of 214 aircraft totalling US$53b.

*Nobel Design: Received an unconditional cash offer at $0.51/share after controlling shareholder Grand Slam RF18, raised its stake to 64.3% from 41% after acquiring a 23% block from a substantial shareholder via several married deals at $0.51 The offer is final and will not be revised and Grand Slam intends to exercise its right of compulsory acquisition and delist Nobel if it secures more than 90% acceptances.

*Hyflux: Proposed partial divestment of up to 70% for Tuaspring plant, announced in Feb, has reportedly attracted potential buyers from China, Japan, Asean and Middle-East. The $1b integrated water & power project has been operational since 2013 but is currently loss-making.

*Yoma: Substantial shareholder Aberdeen Asset Management raised its stake from 8.9469% to 9.0126% via open market purchase of 1.1m shares at $0.5831 apiece on 28 Apr.

*Sinostar Pec: 1Q17 net profit surged 131% to Rmb26.4m on improved operational leverage. Revenue jumped 43% to Rmb471.9m, boosted by improved performance in process LPG (+45.5%), propylene (+62.5%) and polypropylene (+44.2%) divisions, largely driven by higher ASP and sales volume. Consequently, gross margin expanded 2.8ppt to 7.2%. Management is confident of its outlook in next 12 months and the group is in advanced negotiations to acquire a stake in a newly built propylene processing plant. NAV/unit at Rmb1.00.

*Moya: Swung to 1Q17 net profit of $1.3m (1Q16: $1.7m net loss), as revenue soared 227% to $9.8m from higher percentage completion for the BOT project and contribution of water sales in Tangerang. Gross margin expanded a significant 6.3ppt to 8%, while the bottom line was lifted by higher interest income (+189%) and lower admin expenses (-37%). NAV/share at 4.36¢.

*Centurion: Its dormitory at Tuas Lodge 1 has been granted a short-term lease extension for nine months from 29 Apr '17 to 30 Jan '18.

*Advancer Global: Proposed placement of 12.5m new shares at $0.40 each, with a warrant attached for every two shares (3-year term with exercise price at $0.45), to MES Group. Post-allotment and full warrant exercise, share capital will be enlarged by 10.8%. Net proceeds of $4.8m will be used for business expansion (75%) and working capital (25%).

*Manufacturing Integration Tech: Adopted a dividend payout policy of at least 25% of net profit. As a gauge, group was loss-making in FY16.

*Oceanus: Independent auditor Foo Kon Tan flagged that financials for the group cast a significant doubt of its ability as a going concern.

*Profit warnings:
- United Food
- Luzhou Bio-Chem Tech