SG Market (14 Dec 17)

MARKET OVERVIEW
- The 25bps interest rate hike by the Fed was in line with expectations, while the dovish statement by Fed chief Janet Yellen could encourage some risk-taking in hopes of a stronger Capricorn effect.
- Technically, the STI is approaching the upper end of its uptrend channel at 3,475, with underlying support at 3,390.

SECTOR WATCH
*Property
- Collective sales maintain its strong momentum with hotly-contested tenders at two private residential developments Derby Court and Parkway Mansion.
- Derby Court saw a top bid of $73.9m ($1,390 psf ppr) from Roxy-Pacific, amongst seven bidders, 19% above owners' reserve price.
- Parkway Mansions' sale price of $147m ($1,536 psf ppr) was 6.5% above the guide price, and was sold to a consortium led by privately-owned Sustained Land.
- MKE maintains positive on the property developers and reiterates UOL (TP: $9.80) as its top pick, along with City Dev (TP: $13.60), GuocoLand (TP: $2.90) and Bukit Sembawang (TP: $8.25).

POSITIVE NEWS
*Singtel
- 36.5% owned Bharti Airtel is divesting 20% stake in wholly-owned pay TV operator Bharti Telemedia for US$350m to global PE firm Warburg Pincus.
- Bharti Telemedia is one of the largest direct-to-home paid TV service providers in India, with 14m subscribers and ~US$550m in annual revenue.
- The move frees up capital to bolster its balance sheet.
- Singtel offers 4.6% indicative yield and trades at 27.7x forward P/E.

*Roxy-Pacific
- Top bidder for the collective sale tender of freehold residential development Derby Court in Novena, Singapore, for $73.9m.
- The site has a land area of 18,506 sf and gross plot ratio of 2.872, which translates to $1,390 psf ppr.
- Trades at 1.3x P/B.

*SIIC Environment
- 91.2% owned subsidiary was awarded the HuangQiao Industrial BOT wasterwater treatment project in Taixin City, Jiangsu Province in China.
- The plant has a design capacity of 20,000 tpd and a base tariff of Rmb5.83/ton, with a concessionary period of 30 years.
- Project also includes a reclaimed water facility with a design capacity of 6,000 tpd and tariff of Rmb2.5/ton.
- The project will have an initial guaranteed minimum treatment volume of 17,000 tpd and subsequently increased to 20,000 tpd in the fourth year onwards.

*GSS Energy
- Struck oil in its Trembul operating area in Central Java, Indonesia.
- At a depth of 1,255 metres, eight columns of hydrocarbon (2 gas and 6 oil zones) bearing sandstone reservoir with 37m of total net pay zone were confirmed.
- Indo state-owned energy firm Pertamina, which holds an 11% economic interest in the site, has agreed to commence commercialisation of the gas zones.
- Management hopes to produce ~200 barrels of oil per day by 3Q18.
- Trades at 12.8x trailing P/E.

*CWG International
- 95.8%-owned Bluesky Parramatta is disposing a land plot at 14-20 Parkes Street Harris Park, Australia, for A$40m.
- Total land area of the plot is 2,878 sqm, with a plot ratio of 8:1.
- The sale would result in an estimated gain of A$9m.
- Trades at 3.8x trailing P/E and 0.64x P/B.

NEUTRAL NEWS
*Asiaphos
- Ceased operations at Feng Tai mine after its exploration licence expired on 12 Dec.
- The group has submitted an application for the licence renewal.

*Far East Group
- To dispose a warehouse and land located at 13th Mile Sungai Besi Road in Selangor, Malaysia, for RM11.5m.
- Upon completion, disposal gain of $2.5m is expected, with FY16 pro forma NTA/share to rise 12% to $0.2115.

*Olam
- Issued 264,642 new shares in relation to a warrant exercise at US$1.09 each.
- 55.7m outstanding warrants remains, which expires on 29 Jan 2018.