Thursday, June 21, 2018

SG Market (21 Jun 18)

- Sentiment will continue to be weighed by US-China trade spat although some investors view the tariff threats are just a negotiating tactic.
- Tech stocks may get a reprieve after Nasdaq surged to a record high, while oil-related plays could come into focus as crude climbed ahead of an OPEC meeting this Fri.
- From a chart perspective, the oversold STI could extend its technical rebound but upside could be capped by former support-turned-resistance at 3,340, while immediate support lies at 3,280.

*Noble Group
- Reached agreement with dissident shareholder Goldilocks over its proposed US$3.5b financial restructuring plan.
- Under the revised deal, existing shareholders will be granted a 20% stake in New Noble, up from 15% previously,while senior creditors will get 70% and management 10%.
- Goldilocks currently holds a 8.1% stake and will be entitled to nominate a director to to the board.
- Both parties will drop all claims and legal proceedings against each other on a no-fault basis but Noble will have to pay Goldilocks up to US$5m for legal costs and expenses incurred.
- Separately, Pinpoint Asset Management and Value Partners, holders of irs perpetual securities, has withdrawn their lawsuits against the company.
- This will pave the way for its debt restructuring, which still requires approval from shareholders and senior creditors, of which 85% back the deal.
- Meanwhile, the group will form a strategic partnership with Goldilocks' parent Abu Dhabi Financial Group to explore opportunities in the Mid-East.

- Entered into a 60:40 consortium agreement with Global Maritime And Port Services to undertake operation of Pulau Punggol Aggregate Terminal (PPAT).
- The consortium has been awarded a 3-year license to operate the PPAT via letter of acceptance issued by the BCA.
- Trades at 0.52x P/B.

*Compact Metal
- Acquiring a majority interest in a partially completed cement plant with 5,000 tpd production capacity in Mozambique for US$30m.
- Construction of the cement plant began in 2012 but completion has been delayed due to lack of funds.
- Proposed acquisition will be funded via third party financing or borrowings.
- This will enable the group to expand its cement business and quickly establish a foothold in Africa.
- Trades at 1.2x P/B.

*Accordia Golf Trust
- Updated that there is no material damage to its assets or casualty reported at the golf courses in greater Osaka region and other areas in Japan following the recent earthquake.
- Trades at 7.3% DPS yield and 0.67x P/B.

*Interra Resources
- JV entity, Goldpetrol has completed development well CHK 1206 in the Chauk oil field in Myanmar.
- The group has a 60% interest in the improved petroleum Recovery contract of the Chauk field and also owns 60% of Goldpetrol which is the operator of the field.
- CHK 1206 was drilled using Goldpetrol's ZJ 450 rig, thus drilling costs were relatively low. Share of the cost of drilling was funded from existing funds on hand.
- The primary objective is to accelerate production from the targeted oil reservoirs in this block.
- Trades at 0.77x P/B.

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