SG Market (07 Jun 17)

Market Overview
- Cautious mood is expected to prevail as investors are on edge ahead of the British polls ECB meeting and congressional testimony from sacked FBI chief James Corney tomorrow
- STI remains in a holding pattern between 3,250/3275 resistance levels and 3,190 support.

Positive News
*CapitaLand
- Aims to double AUM in Japan to $5b, underpinned by portfolio of income-producing commercial assets.
- Currently on track to achieve $3b AUM by end-2017.
- MKE last had a Hold with TP of $3.75.

*Straits Trading
- Investing A$119m for a 26% stake in a ARA-managed consortium to acquire an office building at 320 Pitt Street in Sydney, Australia.
- The 29,159 sqm office is located in the CBD and has the potential to be repositioned as a core investment through AEI.
- Trades at 15.3x trailing P/E and 0.74x P/B.

*Silverlake Axis
- Won an integrated banking solution contract from a new Thai bank customer, making it its 11th customer in the kingdom.
- Software implementation and training will take 18 months, followed by four years of maintenance services.
- Contract is expected to contribute positively to its FY18 results and subsequent years.
- Trades at consensus forward P/E of 23.1x.

*Citic Envirotech
- Secured a ToT plus BoT wastewater treatment project with capacity of 20,000 m3/day, in Suzhou, China.
- Total investment value of Rmb100m; project expected to be completed by end-2018.
- Contract comes with a 30-year service concession and minimum offtake of 15,000 m3/day in 2019 and 20,000 m3/day from 2020 onwards.

*Geo Energy
- Received 93.3% approval from noteholders of its $100m 7% notes expiring in Jan '18 for early redemption.
- The move will save ~US$2m in interest cost for FY17, or 9% of FY16 net profit.

*Civmec
- Clinched several contracts in Australia worth an aggregate A$90m.
- Major contracts include an EPC project for Alcoa for 18 months and construction project of a new lithium plant for Altura Mining for an undisclosed period.

*Ryobi Kiso
- Secured $57.5m worth of contracts ytd.
- Order book as at 31 Mar '17 stood at $178.7m.

Neutral News
*Starburst
- Acquiring loss-making Swiss Securitas Asia's security engineering solutions business for $0.6m.
- As part of the strategic partnership, the Swiss Securitas Group will take a 5.1% stake in Starburst, comprising 10m vendor shares and 6m warrants from two controlling shareholders.
- The collaboration will enable the group to tap on its partner's technical expertise and expand its footing in Asia, Europe and beyond.