SG Market (06 Mar 18)

MARKET OVERVIEW
- Market jitters over a brewing global trade war could ease on bets that US President Trump's threat to impose hefty steel and aluminium tariffs was just a negotiating tactic to obtain concessions from its trading partners but sentiment is fragile, and investors are still nervous over rising interest rates and bond yields.
- Technically, the STI could rebound to 3,470 in near term with support at 3,420 level.

POSITIVE NEWS
*APAC Realty
- Its ERA Realty Network was appointed as the marketing agent for the collective sale of Nicon Gardens.
- Nicon Gardens is a 99-year leasehold landed development located in Choa Chu Kang and will be launched for tender on 8 Mar and close on 18 Apr.
- Owners are expecting at least $110m for the 47 townhouses, which has 62 years left on its lease and sits on a 164,470 sf site.
- Including development charge and lease top-up premium, the land rate is estimated to be between $760-800 psf ppr.
- Potential buyers can develop 50-69 landed units, subject to URA's planning approval.
- Last traded at 15x forward P/E.

*Yoma
- Acquiring a 34% stake in Digital Wave Money Myanmar for US$19.4m from First Myanmar Investment.
- Consideration is at the mid-range of independent valuation of US$37-73m.
- Acquisition is part of its strategy to focus on domestic consumption, which leverages on the country's GDP growth.
- Wave Money is a market leader in Myanmar mobile payment solutions and services.
- Last traded at 37.3x forward P/E.

NEUTRAL NEWS
*Sembcorp Industries
- Divesting its 35% stake in Omani utilities developer, Centralised Utilities Company (CUC) to Oman Oil's Facilities Development Company at book value of SGD3.4m.
- The sale will also end its JV with Takamul Investment Company.
- Completion of disposal is expected to take place within 30 days.
- Last traded at 13.4x forward P/E.

*Chip Eng Seng
- Proposing to diversify its business into the education sector in Asia Pacific region.
- The group has yet to disclose a specific education segment it plans to venture into.
- The diversification will provide the group with additional recurrent revenue stream, which is complementary to its existing business as the establishment of reputable schools within its property development will enhance property prices.
- In addition, the education sector is less capital intensive compared to construction and property sector.
- Last traded at 18.04x forward P/E.

*Asia-Pacific Strategic Investments
- Will no longer purchase Oei Hong Leong's 28.1m shares in IPC Corp following his withdrawal of acceptance.
- Intends to proceed with the acquisition of 11.9m shares from remaining vendors through the issue of 1.58b new shares.
- Upon completion, it will own a 13.95%-stake in IPC and will thus not be required to make a mandatory offer for remaining shares

Keong Hong/Hock Lian Seng
- Set up a 40:60 JVCo FSKH Development with Hock Lian Seng to engage in real estate and property development.

*Samurai 2K Aerosol
- Granted trademark for "Samurai" brand in the US till 20 Feb '28.
- Management does not foresee any difficulties in obtaining other intellectual property rights for other remaining brands.

*Lippo Malls
- Obtained a $40m unsecured uncommitted revolving credit facility from BNP Paribas.
- The funds will be used for general corporate funding such as acquisition, working capital and asset enhancement initiatives.
- Last traded at 8.3% indicative yield and 1.2x P/B.

NEGATIVE NEWS
*YuuZoo
- Slapped with both a notice of compliance and queries from SGX over its latest FY17 results.
- The notice of compliance was flagged on YuuZoo's "other income" amount of $8m in 4Q17 as well as an increase of assets available for sale to $54.2m.
- The group has to engage auditors to provide an opinion on these items by 19 Mar.
- It also has to clarify circumstances leading to the suspension of certain payment-related services in FY17, which contributed to a $51.4m fall in turnover. It has until 9 Mar to respond to queries.

*Alliance Mineral Assets
- Request for a trading suspension.
- This is much longer than a trading halt ans suggests that there could be a serious corporate development within the group.