SG Market (29 Jun 17)

MARKET OVERVIEW
- Caution could reign as UK election results stream in; polls suggest the prospect of a hung parliament which would rekindle Brexit uncertainty.
- Stocks with GBP exposure such as GL, ComfortDelGro and Frasers Hospitality Trust could be impacted by the drop in the pound.
- STI expected to range trade between immediate support at at 3,218 and near term resistance at 3,250.

MACRO WATCH
*Myanmar
- Trade agency IE Singapore signed MOU with Myanmar Investment Commission to open doors for Singapore firms to explore collaboration in urban and housing solutions, utilities, transport and logistics, manufacturing, oil and gas, and professional services in fast emerging Myanmar.

*Property
- 50% unit of Malaysian property developer Selangor Dredging acquired a prime residential property, 1 Draycott Park, off Orchard Road, for $72m to be redeveloped into exclusive mid-rise apartments.
- Including development charge of $15.3m, the transaction works out to $1,787 psf ppr for the 17,442 sf site.
- Breakeven price for the new development is estimated at $2,700-2,800 psf with selling price of around $3,300 psf.
- MKE opines that the aggressive bid points to an imminent housing price rebound and is Positive on the sector. For exposure, City Dev (Buy, TP: $12.05) is the best proxy to the area.

POSITIVE NEWS
*GLP
- Shortlisted bidders have up to end Jun to put in firm offer for final evaluation.
- No binding proposal have been received to date and there is no certainty that any transaction will materialise.
- Bidders that have expressed interest include Blackstone, Warburg Pincus, a Chinese consortium comprising CIC, Hopu and Hillhouse as well as CEO Ming Z Mei and non-executive director Fang Fenglei.
- Trades at 1.14x P/B vs 2.04x for US industry giant Prologis.

*Pacific Radiance
- Granted $85m in loans by DBS and UOB, backed by two government-backed financing schemes.
- Government will take on 70% of the risk share for both the IE Singapore's IFS and Spring Singapore's BL loans.
- Funds will be used to for working capital needs over the medium term.

*Boustead Projects
- Secured a design-and-build contract for a hazardous chemical waste treatment facility in Tuas.
- The contract was awarded by Veolia ES Singapore Industrial with undisclosed project value.
- This raises the group's order book to $170m.

*SMJ International
- Clinched its first interior design and fit-out consultancy project for the Huangshan Lilang Holiday resort in China.
- The Rmb2m deal is part of the carpet company's diversification into property investment and management.

NEGATIVE NEWS
*QT Vascular
- 1Q17 net loss widened to US$8.8m (1Q16: US$6.8m) on revenue of US$3.2m (-8.3%).
- Revenue was affected by fewer catheter units sold (-16.7%), while bottom line was further hit by higher finance costs (+348%).
- NAV/share at -US$0.01.

NEUTRAL NEWS
*HRnetGroup
- Launched IPO of 193.4m new shares at $0.90 on SGX mainboard; translating to a listing market cap of $910.3m for the recruitment group.
- 103.9m shares will go to cornerstone investors, 85.7m for placement and 3.8m public tranche, including 0.44m reserved for directors and employees.
- Cornerstone investors include Aberdeen AM, FIL Investment, Meiji Yasuda AM and Heliconia Capital Management.
- Public offer closes on 14 Jun (noon) with trading to commence on 16 Jun.

*SPH
- Invested $0.98m for a 33.33% stake in RecomN Singapore.
- RecomN operates a services portal that matches customers with relevant service providers.

*CapitaLand Retail China Trust
- AIA ceased to be a substantial shareholder.
- Disposed 0.35m shares, shaving its stake to 4.9657%.