SG Market (31 May 17)

Trading sentiment is expected to remain subdued amid the lack of clear direction and Wall Street’s retreat from record highs on soft inflation data and ebbing consumer confidence.

Regional bourses opened lower in Tokyo (-0.3%) but little changed in Seoul and Sydney.Technically, the STI may lose further ground after breaking beneath its 20-dma. Near term support is at 3,190, while immediate resistance lies at 3,250.

Stocks to watch:
*Ascott Residence Trust: Acquiring a hotel in New York, its third US hospitality asset, at market value of US$106m ($148.4m). The 224-room DoubleTree by Hilton Hotel New York – Times Square South will enhance ART's pro forma FY16 DPU by 0.8%. NAV/unit has fallen 6.8% to $1.24 following the recent rights issue.

*SGX: Inked MOI with IMDA to create a pathway for fast growing IMDA-accredited companies to leverage capital markets in Singapore more efficiently for expansion. Through this tie-up, both parties aim to lower the access barriers for technology companies into the capital markets, catalyse more high-tech IPOs and increase Singapore’s attractiveness as a venue for capital raising.

*Ascendas REIT: Divested vacant light industrial building, 10 Woodlands Link, for $19.3m. Post-disposal, pro forma FY3/17 DPU is expected to slip marginally by 0.01¢ to 15.733¢, while aggregate leverage will be reduced from 33.8% to 33.7%.

*Centurion: Launched an A$30m asset enhancement for RMIT Village to boost capacity by 35% to 616 beds. Separately, it broke ground on its second student hostel in Australia with 280 beds in Adelaide. The two initiatives will almost double its Australian student accommodation portfolio to 900 beds. MKE last had a Hold with TP of $0.41.

*Tat Hong: 4QFY17 net loss narrowed to $29.2m from $39.8m a year ago, bringing FY17 loss to $38m (FY16: $39.3m). But quarter revenue still fell 13% to $110.2m, undermined by weaker crane rental (-32%) and tower crane (-11%) turnover due to lower utilization rates in Australia and Singapore on completion of projects as well as closure of specialized transport business in Australia from Apr '16 . Gross margin compressed 2ppt to 24.3% owing to downward pressure on rental rates. NAV/share at $0.78.

*Sing Myanmar: FY17 net loss widened to US$7.1m from US$0.3m, weighed by loss from discontinued telecom towers business and absence of disposal gains. Otherwise, underlying loss would have narrowed to $4.3m (FY16: $6.8m), on the back of a 211.8% spike in revenue to US$23.3m, stemming from the commencement of Duty Free luxury and lifestyle retail business at Yangon Int'l Airport. While gross margin expanded to 20.7% (+4.9ppts), higher distribution (+22.3%) and administrative costs (+11.2%) led to an operating loss. Operations at Junction City has commenced since Apr '17. NAV/share at US$0.0954.

*Swing Media: FY17 net profit grew 6.9% to HK$74.3m on better operating margin of 7.6% (+1.1ppts). Revenue rose 2.2% to HK$1.14b as sales of DVD-Rs (+2.4%), trading (+1%) and leasing income (+11.5%) improved. Bottom line was partly dragged by higher finance costs (+2.4%). NAV/share at HK$29.20..

*Mermaid Maritime: Clinched several subsea contracts across SE Asia and Middle East in 1Q17, with contract value totalling US$26m.

*Rex Int'l: 88.9% owned Masirah Oil completed the drilling of an exploratory well in Oman (Karamah#1), which yielded positive results. The next phase will be to plan for possible early production from the specific block.

*Jasper Investments: Will be removed from the SGX Watch-List with effect from 31 Mar 2017. However, the group remains on the watch-list based on the minimum trading price criteria.

*Chasen: Secured two relocation projects for FY18 amounting to Rmb90m, with works scheduled between Jun 2017 and Mar 2018.

*Telechoice: Disclosed that its logistics agreement with StarHub will be expiring on 30 Jun, which could result in a single-digit percentage drop on FY17 earnings.

*Lafe Corp: Granted NHT Management an option to buy its freehold office building at 57 Cantonment Road for $7.03m. The proposed sale of the 292sqm commercial property is expected to result in a disposal loss of US$0.46m.

*BRC Asia: Disclosed that certain substantial shareholders have received an unsolicited approach for a potential offer, but discussions are in preliminary stage.