Thursday, September 7, 2017

SG Market (07 Sep 17)

MARKET OVERVIEW
- Risk aversion is expected to dog market sentiment even as President Trump struck a deal to extend the US debt ceiling, while traders await the ECB's decision today on whether to wind down asset purchases next year.
- Technically, immediate support for the STI lies at 3,220, with overhead resistance at 3,275.

MACRO WATCH
*Economy
- Private sector economists have maintained their 2017 GDP forecast at 2.5%, buoyed by a trade-driven manufacturing sector but the expansion is uneven across the economy as the outlook for the domestic construction, accommodation and food services sectors remain challenging.

POSITIVE NEWS
*mm2 Asia
- Signing a MOU with Shenzhen-listed Shanghai New Culture Media Group and 9i Film & Television Media to co-invest $25m and co-produce five films and multiple online films over the next three years.
- The milestone development will spearhead the group's movie pipeline for the China audiences in North Asia and Southeast Asia.
- Alibaba-backed Dongfang Jiaying Television Cinema Media Co and Taiwan-listed Bossdom Digiinnovation have expressed interest in participating in the collaboration.

*CITIC Envirotech
- Invested Rmb378m for a 60% stake in CITIC Environment (Qingyuan) Technology Development, which supplies industrial water, steam, and electricity, and provides wastewater treatment and recycling services to a textile industrial park in Qingyuan City, Guangdong, China.
- CITIC Qingyuan will undertake phase 2 of the project to expand its capacity to meet increasing demand from the industrial park.
- The acquisition is in line with the group's efforts to work with industrial parks.
- Last traded at 15.6x forward P/E.

*Hotel Properties
- Set up 70:30 JV with its managing director and substantial shareholder, Ong Beng Seng to acquire a plot of land in Republic of Palau for US$8.5m.
- The acquisition is intended for future development of a luxury hotel in the island country located in the western Pacific Ocean.

*Heeton/Ryobi Kiso/KSH/ Lian Beng
- Commenced work for the first phase of a new regeneration scheme at Bridge Street in Leeds, UK.
- This will create a sustainable urban destination on the 2.45-acre site.
- Core development for the first phase will be a new 192-room hotel to be operated by hotel chain, Hampton by Hilton, with an expected opening date in 2019.
- The second phase could involve the launch of new residential properties.

*Hong Leong Asia
- 40.2% owned diesel engine unit China Yuchai disclosed that 748 buses powered by its engines are being utilised for the 13th National Games in China, which is presently held in the city of Tianjin.
- Further, 100 new energy buses equipped with Yuchai's YC6J diesel-electric hybrid system have been delivered to Wuzhou Zhenbao Bus.
- Separately, the group will be selling its plastic container manufacturing arm, Rex Plastics Malaysia, for RM10.8m and expects to reap a gain of RM1.5m.

*Mermaid Maritime
- Awarded three subsea contracts in South-east Asia and Middle East for a combined value of US$12m.

NEGATIVE NEWS
*Triyards
- Disclosed that a liquidity crunch has resulted in a potential going concern issue for the rigbuilder as lenders demand overdue loan installments totalling $1.09m.
- If talks fail, the lenders could call for the entire outstanding loan of $6.9m, which might trigger a cross default on the rest of its loans by other financial institutions.
- Appointed a financial advisor to come up with a debt restructuring plan for its various stakeholders and has converted its trading halt to a suspension.

*Ipco
- Warned of 1QFY18 net loss due to negative FX translation effects.
- Results slated to be released on or before 14 Sep.

NEUTRAL NEWS
*MMP Resources
- Proposed issue of 1) $0.75m 12.5% convertible bonds due 2021 and 2) 59.9m new shares at 0.36¢ each to Maiora Asset Management.
- Bulk of the $0.8m raised will be used for investment (80%), while the remaining will be for working capital.
- Post-placement and post-conversion share capital will be enlarged by 4.9%.

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