SG Market (14 Jun 17)

MARKET OVERVIEW
- Technology-related stocks could swing back into play following the rebound in US tech names.
- Market activity may be tentative as investors position ahead of a widely expected Fed rate hike despite weak inflation but more focus will be on whether there will be a third hike this year.
- Technically, the STI is capped at topside resistance of 3,275 in near term, with underlying support at 3,228.

POSITIVE NEWS
*SPH
Consortium with Kajima Development placed a top bid of $1.13b for a 99-year leasehold mixed-use site in Bidadari estate at Upper Serangoon Road.
- This works out to $1,181 psf ppr, which is significantly above market expectations of $800-900 psf ppr and 52% higher than the $775 psf ppr paid for nearby The Poiz Residences site in Aug 2014.
- The 25,440 sf site is expected to yield 825 homes and has a 15,000 sqm commercial component.
- The state tender attracted a total of 12 bids with 4 parties going above the $1b mark. This is the latest of a series of bullish land deals, which is harbinger of higher home prices.

*mm2 Asia
- Acquiring 50% stake in Dartina, which owns Golden Village cinemas in Singapore for $184.3m, or 17.5x FY15 earnings.
- Golden Village is Singapore's largest cinema chain, operating 11 multiplexes housing 92 screens.
- Acquisition intended to bolster downstream business, following previous cinema deals Cathay Cineplexes and Mega Cinemas Management, acquired at 16.2x and 11.7x earnings.
- Funding will be via debt, internal cash and future fund-raising exercises.

NEGATIVE NEWS
*A-Sonic Aerospace
- Questionable corporate action from proposed a 20-for-1 issue of bonus warrants.
- Exercisable within six months from issue, each warrant can be converted into 5,000 shares at subscription price of $1.00 (0.02¢ each).
- Maximum net proceeds of $0.2m will be used to fund the bonus warrant issue.

NEUTRAL NEWS
*Yanlord
- Secured Rmb12.9b syndication loan facilities of up to eight years.
- Loans will be used for resettlement and construction financing for an old district redevelopment project in Shanghai.
- Trading at fair P/B valuation of 0.87x.

*KSH/Lian Beng/KOP
- JVCo Epic Land terminated negotiations for the proposed disposal of eight strata-office units in Prudential Tower.

*Libra
- Withdrew arbitration proceedings for a $5.7m suit with a sub-contractor
- Costs incurred for the arbitration will be assessed subsequently.