SG Market (20 Sep 17)

MARKET OVERVIEW
- Investors will likely stay cautious as the Fed opened a 2-day policy meeting that might seek to taper its monetary stimulus.
- Technically, the bearish engulfing candlestick formed yesterday suggests the STI could lean towards its support at 3,190. Overhead resistance is at 3,275, near its 50-dma.

POSITIVE NEWS
*Keppel Corp
- Acquiring a prime 83,000 sf site along Jalan Jeneral Sudirman (next to International Financial Centre) in Jakarta's CBD for Rp586b ($59.5m).
- Plans to develop a high-rise tower of ~390,000 sf gfa that could yield 400 luxury apartments on the plot at estimated development cost of $170m.
- Last traded at 14.1x forward P/E.

*ASTI Holdings
- Signed non-binding term sheet with China Fortune-Tech Capital for the proposed disposal of its key subsidiaries, which designs, builds, and markets semiconductor manufacturing equipment.
- While negotiation is ongoing, management guided an indicative price range of $105-110m (1.67-1.8x P/B), surpassing group's market cap of $54.5m.
- The potential buyer is an investment platform, with a focus on the semiconductor industry, and has more than Rmb3b of funds under management.
- At $0.08/share, loss-making ASTI is valued at 0.88x P/B.

*ST Engineering
- New venture capital arm made it first investment, taking a US$5.8m minority stake in California-based cyber security provider Janus Technologies.
- This is part of the group's strategic push into cyber security, robotics, autonomous technology and data analytics.
- Trades at 21.9x forward P/E, near upper range of 13-24x historical range and offers 4.2% dividend yield.

*Sunpower
- Received regulatory approval for the expansion of its Shantou City cogeneration public-private-partnership plant project in Guangdong, China.
- Capacity of the current 25MW electricity generator with centralised steam boilers will be upgraded to 100MW.
- The Shantou project is expected to replace the existing 270 small coal-fired boilers that serve the electricity demands of 132 companies to be relocated in the region.

*JEP Holdings
- Entered 50:50 JV in China with Kun Shan Hang Fu Investment with both committing to a total initial capital of Rmb30m.
- The JVCo will provide precision machining and engineering services for the aerospace industry.

NEUTRAL NEWS
*Yanlord/Perennial/United Engineers
- The mandatory conditional takeover offer for United Engineers at $2.60/share by the Yanlord-led consortium has closed.
- Following the lapse of the offer, the consortium's stake in UE will remain at 33.44% and acceptances amounting to 1.36% will be returned as the 50% condition was not met.

*Rowsley
- Appointed Credit Suisse as its financial adviser for its proposed $1.9b acquisition of healthcare firm Sasteria from controlling shareholder Peter Lim.
- Sasteria owns and operates the 190-bed Thomson Medical Centre and has a 51.93% stake in KLSE-listed TMC Life Sciences, which it intends to raise to 70.4% prior to the deal completion.
- Separately, Rowsley appointed Tan Wee Tuck (nephew of Peter Lim) as its new CEO and interim CFO to lead the group's portfolio of real estate business.
- Tan previously held executive positions at CNBC Asia Pacific, NBC Universal and GE Healthcare.
- The loss-making group currently trades at 1.55x P/B.

*Spackman Entertainment
- Acquiring a 10% stake in NSY Group, which owns Nunsongyee, a Korean dessert cafe chain in Singapore, for $0.14m (5x P/B).
- The dessert chain has seven branches across Singapore, and is profitable in FY16/17.