Singapore Pre-Market Monday: SGX, CMT, Noble, Jinjiang Environment

Singapore one dollar bill

This article was originally published on Monday, April 23, 2018 at 8:32 A.M. SGT; it has since been updated.

Singapore stocks faced a middling lead on Monday morning, after Wall Street closed lower on Friday and Japan’s shares had a wishy washy opening.

“While geopolitical tensions remain bubbling under the surface, rising oil prices and higher U.S. yields suggest investors are likely to deal with increased volatility as a broad range of political, economic and financial events unfolds,” Stephen Innes, head of Asia Pacific trading at OANDA, said in a note on Monday.

The lead from Wall Street on Friday was negative, with the Dow Jones Industrial Average falling 0.82 percent, the S&P 500 losing 0.85 percent and Nasdaq shed 1.27 percent. Japan’s Nikkei 225 index was up 0.17 percent at 8:09 A.M. SGT after opening a tad lower.

Futures for Wall Street’s three major indexes were slightly positive.

But the political picture from the U.S. may have darkened sentiment over the weekend, with U.S. President Trump launching a series of angry, sometimes misspelled and occasionally inaccurate statements over Twitter.

Trump’s statements were targeting James Comey and Comey’s newly released memos documenting the former FBI director’s interactions with the president; the tweets also took aim at the continuing investigation into Russian interference in the U.S. election, members of his campaign’s contacts with Russian officials and potential obstruction of justice.

However, in news the market may take positively, U.S. Treasury Secretary Steven Mnuchin said on Saturday that he is considering a trip to China to negotiate on trade issues.

Fears of a U.S.-China trade war have weighed heavily on global markets recently. But any reassurance should be taken with a grain of salt as previous attempts to ease tensions have spurred Trump to instead up the ante by threatening to impose additional tariffs on Chinese goods.

And Chinese telecom-equipment maker ZTE’s anger of what it called the U.S.’s “extremely unfair” and “unacceptable” ban on its buying U.S.-made components suggests tensions will persist.

Singapore inflation data for March will be on tap on Monday, with Scotiabank saying the consensus was for 0.5 percent on-year. Industrial production data for March are due on Thursday, with Scotiabank saying the consensus was for 5.3 percent growth on-year, and on the same date the unemployment data are due, with the bank saying a steady 2.1 percent rate was expected.

SGX

SGX’s fiscal third-quarter net profit came in at S$100 million, up 21 percent on-year, and the highest in 10 years, the exchange operator said in a filing on Friday after the market close. Revenue rose 10 percent on-year in the quarter to S$222 million, the highest level since SGX listed in 2000, the statement said.

Equity and fixed income, which includes issuer service and securities trading and clearing, rose 5 percent on-year in the quarter to S$107.9 million, accounting for 49 percent of total revenue, the statement said. Derivatives revenue rose 20 percent on-year in the period to S$90.5 million, contributing 41 percent of total revenue, SGX said.

“Our marketing efforts, together with longer trading hours enabled by our new derivatives trading and clearing platform, added to an increase in global participation across products and trading sessions,” Loh Boon Chye, CEO of SGX, said in the statement. “Market activity is expected to improve as investors seek avenues to manage their portfolio risk.”

CapitaLand Mall Trust

CapitaLand Mall Trust (CMT) reported first-quarter net property income of S$125.7 million, up 4.7 percent on-year, the trust’s manager said in an SGX filing after the market close on Friday. the increase was mainly on higher occupancy at the IMM Building, Clarke Quay, The Atrium@Orchard and Plaza Singapura and higher car park income, the statement said.

The distribution per unit (DPU) was 2.78 Singapore cents for the quarter, up 1.8 percent on-year, the statement said, adding that as of Friday’s closing price, the distribution yield for the quarter was 5.37 percent.

That was above a forecast from Daiwa for DPU of 2.76 Singapore cents and net property income of S$120.6 million.

During the quarter, the Raffles City Singapore mall completed enhancement work, while Tampines Mall enhancement work began, the statement noted.

Noble

The Noble saga continued, with the troubled commodity trader on Monday saying that major shareholder Goldilocks failed to submit “legally effective” nominations for its alternate slate of five non-executive directors for the upcoming annual general meeting. Goldilocks also failed to submit a legally valid request for Noble to circulate a statement to shareholders, the filing said.

Noble said its board was advised by its Bermuda counsel that Goldilocks’ notice and request weren’t lodged in accordance with the company’s bye-laws or in accordance with Bermuda law. The board finds that “regrettable,” the filing said.

Goldilocks submitted its notice and request in its own name, but it isn’t a registered holder, the filing said; it noted that this was recently highlighted to Goldilocks when its proxy in January was declared invalid as it used Goldilocks’ name rather than its depository agent and it was highlighted again in March.

“Given the recent dialogue, the board is surprised that the notice and the request were issued and signed in Goldilocks’ name thereby rendering them invalid,” the filing said.

Goldilocks, which holds 8.1 percent of Noble, has been battling Noble’s planned restructuring, which will leave shareholders with just 15 percent of the new company; it has also sought to create an alternate restructuring plan.

The investor’s response to Noble invalidating its nominations was swift: “This act of utmost bad faith by Noble is calculated to intentionally damage Goldilocks and all other shareholders. It is unprecedented for an SGX-listed company to behave in such a manner and threaten shareholders this way,” it said in a press release on Monday.

Asian Healthcare Specialists and SLB Development

The two new listings on Friday, Asian Healthcare Specialists and SLB Development, may continue to see keen interest on Monday.

Shares of Catalist-listed SLB Development, a spin-off from Lian Beng, closed at S$0.25 a share on Friday, 8.7 percent above the S$0.23 issue price.

Asian Healthcare Specialists also listed on Catalist on Friday, with the share closing nearly 48 percent higher at S$0.34, compared with its placement price of S$0.23.

China Jinjiang Environment Holding

China Jinjiang Enviroment reported a mixed bag of earnings on Sunday.

The China-based waste-to-energy operator said in a filing to SGX that revenue rose 35.4 percent on-year in the first quarter to 755 million yuan, but its profit after tax and minority interests (PATMI) dropped 20.87 percent on-year to 100.85 million yuan.

Revenue from the WTE business, excluding BOT construction, fell 3.71 percent on-year to 451.9 million yuan, the statement said, with the company noting that it began a large-scale technical upgrading project for eight of its older WTE facilities, which affected revenue in the segment. It said it expected the upgrading works would continue to affect financial performance through the end of 2018.

In a separate filing early Monday, Jinjiang Environment said it the upgrading works by issuing 214 million new shares at S$0.50 each to a fund managed by Harvest Global Capital (Cayman) Investments, for gross proceeds of S$107.0 million. That would give the fund a 14.91 percent stake in the company, the filing said.

The Energy Management Contracting (EMC) segment saw a 34.75 percent on-year revenue drop in the quarter to 34.65 million yuan, with the company noting that the segment’s revenue is recognized on a profit-sharing percentage basis and the percentage typically decreases progressively over the contract period. It said the profit-sharing percentage for a major EMC project decreased in the first quarter, compared with the year-earlier period.

In a separate filing on Sunday, China Jinjiang Environment said it took a 51 percent stake in Brazil-based Foxx URE-BA, which will build and operate a WTE project in Barueri, Sao Paulo, Brazil, for 38.5 million reals, or around S$14.94 million. That will be Brazil’s first WTE project and first public-private partnership project, the statement said.

The remainder of the company will be held by Foxx Innova Ambiental S.A.

Jinjiang Environment said the consideration for the investment will be paid by a combination of the company’s internal resources and project finance of 62 million reals from the International Finance Corporation.

AsiaPhos

Catalist-listed AsiaPhos expected to report a loss for the first quarter, compared with a net profit in the year-earlier quarter, the company warned in an SGX filing after the market close on Friday. That was mainly due to lower revenue from decreased sales of P4 and lower margins on those sales, the statement said.

The company also pointed to lower profit from discontinued operations and a S$100,000 exchange loss in the quarter, compared with an exchange gain of S$200,000 in the year-earlier quarter.