SG Market (08 Sep 17)

MARKET OVERVIEW
- Shares are likely to drift in directionless trading after the ECB left interest rates unchanged and pushed back the decision on winding down its bond-buying programme to next month.
- Technically, immediate support for the STI lies at 3,220, with overhead resistance at 3,275.

SECTOR WATCH
*Property
- 84-unit Changi Green is joining the red-hot enbloc scene with an offer price of $196m or $700 psf ppr.
- The 200,093 sf freehold site at the junction of Upper Changi Road and Jalan Mariam has a plot ratio of 1.4.
- Public tender closes on 16 Oct.
- Ytd, 7 residential collective sales and 6 private deals have been completed, totalling $3.56b with another 6 projects being put up for tender worth $2.7b. When redeveloped, these will yield some 10,300 new homes.

POSITIVE NEWS
*CWT
- China-based HNA Group has made a formal general offer at $2.33/share after fulfilling all pre-conditions.
- The controlling Loi family has given the offeror an irrevocable undertaking for 65.13% of the shares.
- The offer price will not be revised and values the logistics group at a 18x forward P/E and 1.4x P/B.

*SGX
- Securities turnover value jumped to $25.9b in Aug (+26% y/y, +2% m/m), with daily average of $1.2b (+26% y/y, -3% m/m).
- Total derivatives volume rose to 15.9m contracts (+15% y/y, +12% m/m), with FTSE China A50 index futures the largest volume contributor at 6.1m contracts (+2% y/y, +10% m/m).
- Trades at 21.6x forward P/E vs HKEx's 36.4x.

*Noble
- Further extended the repayment deadline for its US$2b revolving credit facility to by another 3 months 15 Jan '18.
- The credit line is crucial for its day-to-day operations and will facilitate the ongoing sale process of its global oil liquids business.
- Trades at 0.23x P/B.

*Boustead Projects
- Plans to divest land and buildings at 25 Changi North Rise for $10.5m, which is expected to result in disposal gain of $6m.
- The property has remaining 20 years' lease with JTC and was developed under a design-build-and-lease arrangement with anchor tenant, UMS.
- The proceeds will be redeployed for future growth of the group.
- Last traded at 7.6x forward P/E.

*Ho Bee Land
- Its 20:60:20 JV with Yanlord and Shanghai Youyou acquired a 41,800 sqm prime residential site at Tang Jia Wan, Zhuhai, China.
- The site was acquired by Yanlord, back in Jun '17 for Rmb836m.
- Ho Bee trades at 43% discount to RNAV of $4.23 and 0.54x P/B.

*Cogent
- Awarded a three-year lease by Singapore Land Authority to operate a student hostel at 362 Holland Road, with option to extend for another three years.
- The property comprises two blocks of one-storey buildings with an gfa of 583.4sqm, which is able to accommodate up to 60 students.
- Trades at 11.7x forward P/E.

*Tritech
- Awarded a $3.6m contract by the National Parks Board for civil and structural engineering consultancy services for three years till Sep '20.

NEGATIVE NEWS
*Anchor Resources
- Concession agreement at Bukit Panji will be terminated by the State Economic Development Corporation of Terengganu, Malaysia.
- The termination was due to a re-zoning of certain areas of the land at the gold mine to a palace security zone.
- The termination will not have a material financial impact as minimal capex was incurred at the mine.
- The gold miner is currently focusing on gold mining and production at the Lubuk Mandi Mine.
- Last traded at 2.2x P/B.

NEUTRAL NEWS
*mm2 Asia
- UnUsUaL founders Leslie Ong and Johnny Ong, each purchased $5m worth of shares from mm2' Chairman, Melvin Ang, at $0.485 apiece.
- The transaction will cut Ang's stake from 39.88% to 38.11%.
- Trades at 21.5x forward P/E.

*Spackman Entertainment
- Signed partnership agreement with Korean TV drama producer, Mongjakso to co-develop and co-produce two TV dramas.
- One of the two dramas with working title "The Game" will be starred by So Ji Sub, and is expected to debut in 2018.
- Trades at 8.4x forward P/E.

*Japfa
- Prices of Indonesian live broiler birds in Aug rose to Rp17,781 (+9% y/y, +6.7% m/m), while day-old chicks climbed to Rp4,574 (-8.5% y/y, +2% m/m).
- The relatively stronger pricing environment came on the back of improved supply dynamics after the government-mandated parent stock culling programme was completed in Jul.
- Trades at 9.1x forward P/E.

*Loyz Energy
- Proposed conditional JV with Arctos Investments, to conduct investment, trading, fund management and market making for commodities.
- The group will contribute $1m to the JV, while Arctos will provide its network, team of investment and trading professionals and risk management expertise.
- It will also issue new shares to Arctos amounting to $1m, at a price yet to be determined.
- Subsequently, the JV intends to apply for a fund management licence.

*Pacific Radiance
- Updated that group has commenced discussions with its lenders to restructure its borrowings.
- Last traded at 0.16x P/B.