DBS Equity Research: Wired Daily 29 Sep 2015

kiasutrader

Publish date: Wed, 30 Sep 2015, 02:52 PM

STI - Possible undershoot to 2660 by mid-October before a rebound to 2870, commodity stocks weak on Glencore PCL's tumble

SembCorp Industries - Making first foray into Bangladesh power market

Singapore stocks should start the session lower on the back of the overnight fall on Wall Street as sentiment turned cautious heading to the 3Q results season. Commodity/energy stocks led declines on continued concerns about a global slowdown. Global commodity stocks are falling after natural resources company Glencore PCL's share price tumbled 29% in London on concerns about its debt load as commodity prices tumbled.

Meanwhile, funds outflow in this region continued following weakness in South-East Asian currencies. For example, the USDSGD has risen to 1.4325 while the USDMYR is now up to 4.464. The STI has now fallen to the 2750 level that we were looking at earlier. But we think it's a little early to jump into the market right now as sentiment continues to stay cautious ahead of the MAS policy meeting and 3Q GDP release around mid-Oct. A technical 'undershoot' within this period towards 2660 is possible but should be followed by a rebound to 2870.

SembCorp Industries (SCI) announced that it will be developing a 426 MW power plant in the Sirajganj district of Bangladesh under a public-private partnership. This buildown-operate project, at a total project cost of approximately US$390m, was awarded by the Government of Bangladesh. The project marks a significant milestone for SCI, establishing the Group's first foothold in this fast growing emerging market. SCI is expected to fork out approximately US$68m cash for the project assuming 25% equity portion. The project could contribute up to US$10m or approx. S$14m from 2019 onwards. This represents around 2% of our FY16 forecasts for SCI. We reiterate our BUY call on SCI with unchanged TP of S$4.00.

Norway's biggest bank has paid S$24.8m for a 7.04% stake in offshore services firm Ezra Holdings, in an off-market deal that turned it into a substantial shareholder and one of Ezra's largest stakeholders. The purchase price works out to SS$0.12 per share.

Olam International plans to more than double coffee plantation acreage in Africa to improve quality control on the continent. It targets total African coffee farmland at 5,000 hectares from 2,200 hectares already planted in Zambia and Tanzania.

Weiye Holdings announced that the Company is proposing to undertake a spin-off of its business comprising the design, manufacture and distribution of clean room equipment, and heating ventilation and air-conditioning (HVAC) equipment to be listed on the Catalist board of the Singapore Exchange Securities Trading Limited.

Huationg Global has secured new civil engineering contracts from third parties worth a total of approximately S$81.3m, expected to be delivered over the next three years.

Ryobi Kiso Holdings announced that additional contracts worth S$32.4m contracts has been secured, bringing the total new contracts secured since January 2015 to S$88.3m. The Group's net order book as at 30 June 2015 stood at S$180m.

iX Biopharma has been granted a Japanese patent for its WaferiXTM drug delivery technology, its 5th patent granted for WaferiXTM technology to date. The patent will expire on 26 October 2030. This follows its announcement last week of the success of its Phase 2a and 2b clinical trials for its oral sublingual pain management product, WafermineTM.

Source: DBS

STI ETF (ES3)Sembcorp Ind (U96)Olam Intl (O32)Huationg Global (41B)Ryobi Kiso (BDN)IX Biopharma (42C)

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