May 15, 2017 8:30 pm JST

Singapore shares rise after mixed earnings, crude helps Malaysian stocks

SINGAPORE (Nikkei Markets) -- Singapore shares rose on Monday even as investors digested a slew of mixed quarterly earnings reports. Malaysian shares scaled new two-year highs, supported by a rise in crude prices.

Singapore's FTSE Straits Times Index rose 0.3% to 3,264.21. Genting Singapore surged 6.5% to S$1.15 for its best session in six-months, after net profit jumped 17 times in the first quarter. Its adjusted earnings before interest, tax, depreciation and amortization rose 47%.

"Genting Singapore's operating margins continue to benefit from the group's cost efficiency initiatives, a measured credit policy, and a focus on better margin business," OCBC analysts wrote in a note. "Looking ahead, we expect GS to continue to benefit from higher operating margins as well as steady revenues from both its gaming and non-gaming segments." The house has a "buy" rating on the stock and S$1.17 fair value.

ComfortDelGro Corp tumbled 5.2% to S$2.55 after reporting a 12.4% increase in first quarter net profit to S$82.5 million ($59 million). The rise in net profit was helped by special dividend from Cabcharge Australia.

"1Q17 core net profit was below our expectations, at 20% of our full-year forecast," said CIMB. "The miss was due mainly to the faster-than-expected decline in taxi profit, as the business continues to see stiff competition from Uber and Grab." It downgraded the stock to "hold" from "buy" and slashed the target price to S$2.78 from S$2.91.

DBS also downgraded ComfortDelGro to "hold" and cut its price target to S$2.78 from S$2.94, citing earnings quality and a drop in the company's taxi fleet in Singapore.

Singapore Post fell 3.6% after reporting a net loss of S$65.25 million in the first quarter. Revenues rose 2%.

Olam International rose 1.5% after its first-quarter profit after tax and minority interest rose 26.6% as better operational performance offset costs from strategic acquisitions and capital investments. Operational PATMI, which excludes exceptional items, rose 14.1% to S$143.9 million.

UOL Group advanced 0.3% after the property developer's first-quarter net profit rose 4.2% to S$80.28 million.

Singapore developers sold 1,555 new private homes in April, a decline of 12.6% from March when sales totaled 1,780 units, data from the Urban Redevelopment Authority on Monday showed. However, year-on-year, sales of new private homes more than doubled last month. In April last year, developers sold just 750 units.

The FTSE Bursa Malaysia KLCI edged 0.2% higher to 1,778.65, its highest since May 2015. Petronas Chemicals Group rose 0.6%. The integrated chemical major on Monday reported a more than two-fold increase in net profit for the first quarter, largely driven by higher sales volume and improved spreads.

Sapura Energy added 1.6% after Brent crude prices surged 2.8% on Monday to two-week highs.

For the KLCI, AmInvestment Bank kept its end-2017 and end-2018 target at 1,745 and 1,900. The market will likely take a breather ahead of the rebalancing of MSCI's Emerging Markets Index at the end of May, the bank said.

"Given the growing breadth and depth of China stocks, we expect the weighting of other emerging markets in the index including Malaysia to be tweaked down further in favor of China in the coming rebalancing exercise," AmInvestment Bank said. "We remain positive on the equity market outlook in Malaysia, although we do expect volatility over the immediate term as the market has moved a little further ahead of earnings than it ought to be."

Iskandar Waterfront City jumped 30%, the maximum permissible daily limit, after a media report raised hopes of return of the consortium of Iskandar Waterfront Holdings (IWH) and China Railway Engineering Corp (CREC) to the Bandar Malaysia project.

Chinese Prime Minister Li Keqiang told his Malaysian counterpart Najib Razak that China hopes the deal on Bandar Malaysia "stays unchanged," The Star reported, citing a government source in Beijing. The news comes more than a week after the cancellation of the Bandar Malaysia project by the Ministry of Finance.

AirAsia rose 2.3%. Asia's largest budget carrier by fleet late Sunday said it signed an agreement with China Everbright Group and Henan state government to set up a low-cost carrier.

The Nikkei Asia300 index added 0.5% on Monday, helped by gains in mainland companies. China on Sunday pledged hundreds of billions of yuan in investments related to its One Belt, One Road plan, a major economic diplomacy initiative by President Xi Jinping that is aimed at improving Asia's connectivity with Europe and Africa. Investors shrugged off disappointing China economic data, including industrial production numbers, retail sales and urban fixed-asset investment data.

--Nimesh Vora and Kevin Lim

--Nikkei Markets is a real-time financial news service for South East Asia's markets published by Nikkei NewsRise Asia Pte Ltd, a Nikkei and NewsRise joint venture company. Nikkei Markets provides wide companies coverage in the region, including the Nikkei's Asia300* companies.

Asia300

ComfortDelGro Corp. Ltd.

Singapore

Market(Ticker): SES(C52)
Sector:
Industry:
Transportation
Other Transportation
Market cap(USD): 3,594.76M
Shares: 2,162.83M
Asia300

Singapore Post Ltd.

Singapore

Market(Ticker): SES(S08)
Sector:
Industry:
Transportation
Air Freight/Couriers
Market cap(USD): 2,098.89M
Shares: 2,275.08M
Asia300

Olam International Ltd.

Singapore

Market(Ticker): SES(O32)
Sector:
Industry:
Consumer Non-Durables
Food: Major Diversified
Market cap(USD): 4,127.28M
Shares: 2,832.63M
Asia300

UOL Group Ltd.

Singapore

Market(Ticker): SES(U14)
Sector:
Industry:
Finance
Real Estate Development
Market cap(USD): 4,863.38M
Shares: 813.01M
Asia300

PETRONAS Chemicals Group Bhd.

Malaysia

Market(Ticker): KLS(5183)
Sector:
Industry:
Process Industries
Chemicals: Specialty
Market cap(USD): 13,314.68M
Shares: 8,000M
Asia300

Sapura Energy Bhd.

Malaysia

Market(Ticker): KLS(5218)
Sector:
Industry:
Industrial Services
Oilfield Services/Equipment
Market cap(USD): 2,036.43M
Shares: 5,992.15M

Iskandar Waterfront City Bhd.

Malaysia

Market(Ticker): KLS(1589)
Sector:
Industry:
Industrial Services
Engineering & Construction
Market cap(USD): 255.34M
Shares: 837.38M
Asia300

AirAsia Bhd.

Malaysia

Market(Ticker): KLS(5099)
Sector:
Industry:
Transportation
Airlines
Market cap(USD): 2,551.59M
Shares: 3,341.97M

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