SG Market (05 Jun 17)

The market could continue its upward climb, underpinned by the record highs on Wall Street after lacklustre nonfarm payrolls report raised expectations that the Fed could take a more gradual approach to increasing interest rates.However, oil plays may continue to come under pressure on worries that the US pullout from the Paris climate accord could spark more US drilling and worsen a global glut.

Regional bourses are trading lower in Tokyo (-0.3%), Seoul (-0.1%) and Sydney (-0.6%).Technically, momentum indicators are exhibiting bullish crossover signals for the near term. Immediate resistance for STI is at 3,250 followed by 3,275, while downside support is at 3,190.

Stocks to watch:
*CapitaLand: Acquired two Chinese companies that indirectly owns two service residences in Chongqing and Chengdu from 36.1% owned Ascott Serviced Residence China Fund for US$0.9m. The purchase consideration took into account aggregate value US$56.9m for the properties as well as bank loans owed by the target companies. MKE last had a Hold and TP of $3.75.

*Singtel: Received conditional approval from SGX to list NetLink Trust on the SGX Mainboard and divest its stake to less than 25% by Apr 2018. NetLink Trust designs, builds, owns and operates the infrastructure for Singapore’s next generation nationwide broadband network. MKE last had a Hold and TP of $3.70.

*Perennial Real Estate: Formed strategic partnership with Beijing Hospital of TCM to set up a treatment facility, Ming Yi Guan, in Singapore. The facility located at House of Tan Yeok Nee on Orchard Road will officially commence operations in end-Jun 2017.

*AEM: Received additional sales orders over the past six weeks, lifting outstanding order book from $152m on 18 Apr 2017 to $182m (as at 31 May). These will be delivered this year and represents 97% of the street's sole revenue forecast for FY17.

*Fischer Tech: Entered exclusive discussions with a third party on a possible share sale, which could potentially trigger a mandatory takeover offer.

*Mandarin Oriental: Undertaking a strategic review of its prime waterfront hotel, The Excelsior in Hong Kong, including a possible sale. The property has approval for the the development of a 63,500 gfa commercial building.

*GKE: Signed non-disclosure agreement with a potential investor for the latter to evaluate a possible acquisition of shares in the group.*Tritech: Proposed placement of 28.8m new shares (3.3% share capital) at 7¢ apiece to individual investor Wang Liang. Net proceeds of $2m will be used for working capital purposes.

*TA Corp: Signed an MOU with Kong Hwee Iron Works & Construction to set up an 80:20 JVCo in Johor, Malaysia to design, develop, manufacture and distribute prefabricated refinished volumetric construction modules (PPVC), which will significantly speed up construction works and increase productivity.