Market Snapshot

Singapore stocks opened lower on Friday. STI down 0.3%; Golden Agri-Res up 2%; OCBC down 2%; ST Engineering down 1%.

Stocks in Focus

China Aviation: Its parent China National Aviation Fuel (CNAF) will merge with Chinese state-owned oil and gas enterprise Sinopec, the group’s board said on Thursday. If the merger goes through, Sinopec is expected to absorb all of CNAF’s assets and operations, reported Bloomberg. Shares of CAO closed flat at S$1.65, before the announcement.

Geo Energy Res: The Indonesian coal producer announced its acquisition of majority stakes in two Indonesian shipping companies. This comes as resolutions related to its acquisition of 51 per cent stakes in Trans Maritim Pratam and Bahari Segara Maritim, for a US$127.5 million consideration, were passed at its November extraordinary general meeting. The counter closed flat on Thursday at S$0.41, before the news.

SG Local News

UI Boustead Is Said to Seek $700 Million Singapore IPO in March

UI Boustead REIT is gearing up for a listing in Singapore as early as March, targeting proceeds of at least S$900 million ($700 million), according to people familiar with the matter.

The real estate investment trust unit of Boustead Singapore Ltd. will begin taking investor orders as soon as next month, the people said, asking not to be identified discussing private information. Deliberations are ongoing, and the deal size and timing may still change, they added.

DBS Lays Groundwork for Significant Risk Transfers, Sources Say

DBS Group Holdings is weighing a foray into the market for significant risk transfers (SRTs) as lenders increasingly turn to such deals as a way to drive growth and absorb shocks.

South-east Asia’s largest bank held preliminary talks with funds investing in SRTs, according to people familiar with the matter. Preparations are at early stages and specific transactions have not been discussed. 

Banks use SRTs as a way to insure loans against default. The transactions, which are often structured as credit-linked notes, allow lenders to boost their solvency ratios and reduce their reliance on less shareholder-friendly options like issuing new equity or cutting dividends.