SG Market (23 May 17)

The market could trade sideways as investors anticipate Fri's release of 1Q17 economic growth and industrial production data for fresh leads.

Regional bourses are seeing tepid early trading in Tokyo (-0.1%), Seoul (flat) and Sydney (+0.1%).Technically, the STI remains range-bound between its support at 3,190 and resistance at 3,275.

Stocks to watch:
*Noble: S&P cuts its credit rating by 3 notches to CCC+ with Negative outlook and warned that the embattled commodity trader could default within 12 months. This follows downgrades by Moody’s and Fitch in the past week and comes at a time when Noble is seeking a crucial US$2b credit facility before US$600m of bank loans mature next month. According to Reuters, China state-owned Sinochem is no longer pursuing an investment in Noble due to concerns over its finances and business outlook. Prices of its bonds have slumped by a third recently, while its share price hit a 15-year low.

*IHH Healthcare: Media reported that IHH has emerged as the front runner to purchase controlling stakes in both Fortis Healthcare, the second largest hospital chain in India with 55 facilities, and Fortis Malhar, in a deal valuing both entities at US$2.8b. Assuming a 51% stake, this will cost US$1.4b, or equivalent to 12.3% of IHH's current market cap. The acquisition will give IHH instant access to a much bigger market and is in line with its strategy to have control over its investments.

*Keppel T&T: 70% owned Keppel Data Centres and Huawei is setting up a cognitive computing data centre reference site at Keppel DC Singapore 4. The facility will feature technologies geared towards a virtualized and energy efficient data centre management system, which will help firms lower operating and maintenance costs, while enhancing operational efficiency.

*Boustead Projects: 4QFY17 net profit surged 165% to $14.3m, bringing FY17 earnings to $36.1m (+58%). For the quarter, revenue slumped 35% to $38.5m on declines across design-and-build (-39%) and leasing (-16%) segments, but gross margin expanded to 32.4% (+8.5ppts) from cost savings. Additionally, bottom line was shored up by a disposal gain ($8.9m) of its stake in TripleOne Somerset and compensation for early termination of the AusGroup lease ($9.4m). Declared maiden first and final DPS of 1.5¢ and a special DPS of 1¢. NAV/share at $0.717.

*TTJ: Clinched several new contracts, bringing its order book to $166m as at May 22. These include the supply, fabrication and installation of structural steel works for the methionine plant on Jurong Island, the East Coast Integrated Depot and the Mandai Depot.

*GLP: Signed 182,000 sqm of new leases in Japan and China over the past two months, mostly to third party logistics providers to cater for the growing demand in the e-commerce space.

*UnUsUaL: Co-organising a series of sold-out concerts in Zhongshan, China, for Jacky Cheung’s “A Classic Tour” over two nights in Jun.

*GCCP: Received a writ of claim for RM187,000, arising from alleged negligence in a work site accident, where the sudden fall of a huge rock caused injury and death to two respective workers.

*Ziwo: Entered placement agreement with Asia Haause Investments to place out 87.5m new shares at 10% discount, to raise a maximum $4m gross proceeds for general working capital.