Monday, February 19, 2018

SG Market (19 Feb 18)

- Likely to see muted trading action as major Asian markets in China, Korea and Vietnam are still on Lunar New Year holiday.
- Nonetheless, the positive close in the US last week is likely to provide some comfort for traders today.
- All eyes will be on Budget 2018 today, with expectations of new/higher taxes (GST, e-commerce, carbon, wealth), pro-business measures to help local companies innovate, go digital and venture abroad, labour upskilling and social spending at the top of the agenda.
- Technically, the STI could reverse from oversold levels to test immediate resistance at 3,470 with downside support at 3,340.

- Intends to list successor products to its SGX Nifty family of products before Aug '18 to provide market participants with the same ability to invest and maintain exposure to Indian capital markets.
- Working with the National Stock Exchange of India to develop a link that will allow trading on NSE's International Exchange in Gujarat International Finance Tech city.
- Details will be announced by Mar '18.
- MKE last had a Buy with TP of $8.73.

*Profit Warning:
- Design Studio
- AsiaMedic

*Noble Group
- Updated that senior creditors holding ~51% (prior: 36%) of its existing senior debt instruments have indicated their broad support for its proposed restructuring of its US$3.45b debt.
- It has also reached agreement with an ad hoc group of senior creditors and ING to provide a 3-year committed US$700m trade finance facility, to be made available upon the restructuring effective date.
- Separately, the group issued a profit warning that it expects to incur a 4Q17 net loss of US$1.73-US$1.93b due mainly to further write-offs of its derivatives portfolio amounting to US$1.45-1.55b. This will lead to a net loss of US$4.78-4.98b in FY17 (FY16: US$8.7m profit)
- The expected loss will result in a negative NAV of US$650-850m.
- The FY17 results will be released on 28 Feb.

*Sembcorp Industries
- Consolidating its thermal and renewable energy businesses under a single entity, Sembcorp Energy India.
- It will hold an effective 93.7% stake in the new entity, while Gayatri Energy Ventures will hold the remaining 6.3%.

*Indofood Agri
- Set up 50: 50 Brazilian JV Canapolis with JF Investimentos via an initial capital injection of BRL23.6m (US$7.2m).
- The JV has acquired a sugar mill in Minas Gerais in Brazil with annual cane crushing capacity of 1.8m tonnes and 6,048 ha of land through a court auction due to the bankruptcy of the previous owner.
- Acquisition price for the mill is BRL137.8m (US$42m), and will be paid in four installments, with the final payment being in Jun '19.
- Canapolis expects to commence operation at the mill in 2020 after completion of cane planting and rehabilitation of the mill.

- Its 30.4%-owned consumer business, HyfluxShop has received an unconditional cash offer of $0.1783/share from controlling shareholder owner, Olivia Lum.
- Lum intends to list HyfluxShop assuming growth performance remains on track and market conditions are favourable.

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