• US stocks rose after Yellen plays down a June-July rate hike 
• Singapore Office REITs - Paying for Quality 
• NOL offer at S$1.30 now live 
• No OPEC consensus on output limit 
• GLP buys into 2 Beijing investment firms for RMB448m 
• Vallianz ends potential deal with China CRRC

Market 

US stocks rose after Yellen plays down a June-July rate hike U.S. stocks rose and the USD fell after FED Chair Janet Yellen reiterated her intention to raise rates gradually once the economy improves. Commodities rallied into a bull market as crude closed at a 10-month high. Yellen acknowledged the weakest jobs growth in six years was "disappointing", but said that positive forces in the economy outweigh negative developments, warranting gradual rate increases without specifying their precise timing. She was silent on when another rate increase would be needed, playing down a June move and raising doubts about a July one.

News

NOL offer at S$1.30 now live CMA-CGM has officially launched its all-cash voluntary conditional general offer to acquire all the outstanding shares of NOL at the previously disclosed offer price of S$1.30 per share. This offer will not be revised. CMA CGM intends to delist NOL after the close of the offer and does not intend to take steps for any trading suspension of the company shares by the SGX-ST to be lifted. We released a note in December recommending that shareholders accept the offer given the attractive takeover multiples and the still-anaemic state of the container shipping market. That recommendation remains unchanged; at the offer price which is also the current share price of S$1.30, NOL trades at a P/BV ratio of 1.03x versus peer average of about 0.6x. Acceptances of the offer must be received not later than 5.30pm (Singapore time) on 4 July 2016.

No OPEC consensus on output limit
OPEC members failed to agree on setting a curb on production levels during their regular semi-annual meeting held in Vienna last Thursday. This is not surprising given Iran's refusal to participate in a production freeze, and the recovery of oil prices to US$50/bbl levels. During the meeting, Nigerian delegate Mohammed Barkindo was voted as OPEC's new secretary general, replacing Abdullah al-Badri of Libya. Our view is that the outcome of the meeting was widely anticipated and hence should be a non-event to the oil market. Any volatility as a result from this should be small and short-lived. OPEC is scheduled to meet next on 30 Nov in Vienna.

GLP buys into 2 Beijing investment firms for RMB448m
Global Logistic Properties has bought an 89% stake each in Beijing Youshan Hengrong Yanong Investment Management and Beijing Youshan Hengrong Shengyue Investment Management for RMB448m (S$92.5m) in cash. Separately, it also said that Kent Yang, president of GLP China, has decided to resign to pursue his own interests.

Vallianz ends potential deal with China CRRC
Vallianz has signed a termination deed with China's stateowned rail corporation CRRC to formally terminate a subscription agreement in which CRRC was supposed to pick up 13.9% interest in Vallianz through S$23.65m of equity injection. The deal was "terminated with mutual consent as the parties failed to reach an agreement with regard to the terms of the commercial cooperation agreement". Vallianz added that it will continue to explore other potential strategic cooperation, partnerships and joint-venture opportunities to enhance the group's operations.

Yongnam wins contract in Singapore and another in Hong Kong 
Yongnam Holdings has secured two contracts worth a combined S$29.6m in Singapore and Hong Kong. One contract, awarded by Vanguard Properties, will see Yongnam engaged in the design, engineering and project management of a new six-storey light industrial development in Kallang. The other contract, awarded by China Road and Bridge Corporation involves the design, supply, installation and dismantling of an underground excavation and lateral support system to support infrastructure works for the East-West express link between West Kowloon and Tseung Kwan O in Hong Kong.

Source: DBS Vickers - 7 June 2016