Monday, July 16, 2018

SG Market (16 Jul 18)

MARKET OVERVIEW
- The market is likely to start the week with a slight positive bias as China appeared to back off from retaliatory tariff threats ahead of a slew of economic data, including GDP, industrial production and retail sales,
- Investors will also turn their attention to Fed's semi-annual testimony to Congress, which could lay the groundwork for further tightening, and the start of the 2Q18 earnings season.
- Technically, immediate resistance for STI is at 3,300, while crucial support level at 3,190-3,200 remains intact in the near-term.

POSITIVE NEWS
**Boardroom
- Acquiring Symphony Corporatehouse Sdn Bhd for RM164.14m ($55.64m) via combination of cash (75%) and shares (25%).
- The enlarged entity will command an industry-leading market share in the share registry, corporate secretarial, and outsourced corporate services sector in Malaysia, paving the way for more growth opportunities in the Asia-Pacific.
- Upon completion, Symphony House will become the second largest shareholder in Boardroom with a 7.63% stake.
- Trades at 9.1x trailing P/E

NEUTRAL NEWS
*SATS
- Setting up 60/40 JV with Wilmar to build a central kitchen in Langfang, Hebei, China that will engage in food manufacturing, processing and sale of food products.
- The JVCo will be incorporated with a registered capital of Rmb120m ($24.53m)
- Trades at 22.6x forward P/E.

*Mapletree Industrial Trust
- Obtained TOP for its build-to-suit (BTS) data centre development, Mapletree Sunview 1.
- The 6-storey purpose-built data centre with gfa of 242,000 sf will be fully leased to an established data centre operator for an initial lease term of >10 years with staggered rental escalations as well as renewal options.
- This will be its third BTS data centre after the successful completion of Tata Communications Exchange at Paya Lebar iPark in 2010 and 26A Ayer Rajah Crescent for Equinix Singapore at one-north in 2015.
- MIT's portfolio includes four data centres in Singapore and another 14 in US inder a 40:60 JV with its parent.
- Hi-tech buildings is its largest property segment, representing 37.7% of portfolio valuation.
- Trades at 6.0% yield and 1.3x P/B

*Rex Int'l
- Divesting its 25.72% stake in Steeldrum Oil in return for 23.9m new AIM-listed Columbus Energy Resources shares, (3.2% stake) valued at US$1.5m, with further deferred issue of additional shares if certain events materialise.
- This is part of the group's plans to rationalise its asset base to focus on its two key discovery assets: GA South #1 in Block 50 in Oman and Rolvsnes in PL338C in Norway.
- Subject to regulatory, JV partner and third-party approvals, the proposed sale is expected to complete in 4Q18 and will not have any material impact on the group's FY18 financials.
- Trades at 0.35x P/B

*Mercurius Capital Investment
- Signs licensing agreement to granted Clover Lifestyle the right to use its proprietary brands namely Friven, Allegoria, DS, and Relax at home for the sale of bedding, bed linen and bath products exclusively in Singapore and Malaysia for one year.
- Licence fee payable to the group is $0.05m and Clover aims to distribute its various brands of bedding and bed linen through online and media channels.

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