Friday, January 12, 2018

SG Market (12 Jan 18)

- Tech names and oil-related counters could resume their upward momentum following yet another record run on Wall Street as crude prices surge to 3-year highs.
- Any profit-taking would be cushioned by optimism over the global economic recovery.
- Technically, the STI is likely to enter a consolidation phase with near-term support at 3,470 and topside resistance at 3,550.

- BCA is projecting total value of construction contracts to pick up to $26b-31b this year after dipping to $24.5b in 2017, 13% short of forecast.
- 60% or $16b-19b will come from public projects (2017: $15.5b) and the rest will be from the private sector, fuelled by en bloc projects.
- Still, many construction firms expect the sector to remain lacklustre and would take time for job volume and demand to recover to sustainable levels.

*k1 Ventures
- Fell into a 2QFY18 net loss of $3.1m (2QFY17: $6.6m profit) following the disposal of Guggenheim in Nov '17.
- Revenue slumped 56.9% to $1.5m on reduced investment income.
- Bottom line was dragged by a negative $5.6m swing into FX loss of $0.5m, but partly shored by a FX translation gain of $1.6m arising from liquidation of subsidiaries.
- NAV/share shrank 51.3% to $0.37.

*Tat Hong
- Received a pre-conditional privatisation offer of $0.50/share from THSC Investments, jointly owned by Tat Hong's controlling Ng family (68.8%) and StanChart Private Equity (31.2%).
- THSC has obtained an irrevocable undertaking for 59.74% of the total shares.
- Cash offer values the loss-making crane supplier at 0.64x P/B.

- Buying 51% into REForce (Shanghai) Human Resources Management Consulting at a yet-to-be-disclosed sum.
- Additionally, HRnetGroup will extend a Rmb3m shareholders' loan to REForce for operation and expansion purposes.
- The acquisition will take place in tranches across FY17-19, with the consideration based on a tiered multiple on REForce's future net profit.

- A 50:50 JV with a private vehicle of controlling shareholder Gordon Tang was awarded the tender for residential property Park West for $840.9m.
- The JVCo intends to apply for a lease top-up for the site at a differential premium of $146m.
- Accordingly, the collective sale for the 99-year leasehold estate is priced at $850 psf ppr.

- Seeking feedback on whether to retain its quarterly reporting requirement for companies above $75m market cap.
- Currently, 70% of ListCos are above the market cap threshold, and the bourse is suggesting to lift the threshold to the $150m mark.

- Entered into a MOU with Myanmar-based construction company Myat Mi Ba (MMB) to incorporate an 80:20 JVCo to provide hot dip galvanising services in Myanmar.
- The agreement includes the option for MMB to acquire 25% stake of JVCo from the group after two years.
- Both parties will attempt to negotiate and execute the agreement by 31 Mar.

*Y Ventures
- Placing out 5m shares (2.4% of enlarged share capital) at $0.24 each to strategic investor R3 Asset Management.
- The placement price translates to a 14.3% discount from the last closing price.
- Net proceed of $1.2m will be used for working capital.
- Both parties also signed a non-binding MOU in which R3 will introduce new retail brand, strategic alliances and possible acquisition targets that synergise with the group's analytics and e-commerce distribution network.

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