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Stocks to watch: UOB, CapitaLand, Chip Eng Seng

STOCKS that could see some movements on Friday include banking stocks, which investors have a clearer handle on after the largest Singapore banks have all announced their results, as well as oil and gas (O&G) stocks.

All three banks reported lower earnings for the fourth quarter ended Dec 31, 2016, and higher provisions for loans to the O&G sector, signalling a continued challenging environment for the O&G industry.

UOB Group on Friday reported a net profit of S$739 million, 6.2 per cent below that a year ago, as stable loan growth was offset by a decline in net interest margin and lower gains from the sale of investment securities. It also raised its specific allowance on loans by S$313 million to S$428 million due to non-performing loans in the O&G and shipping industries.

Given banks' cautious outlook on the sector, O&G stocks may continue to see some selling pressures amid ensuing debt woes at Ezra Holdings.

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Meanwhile, there was some positive news on the property front.

CapitaLand's shopping mall arm CapitaLand Mall Asia will buy four office and retail properties in Japan for S$636.3 million, inclusive of transaction costs.

The acquisition, which will strengthen CapitaLand's foothold in Greater Tokyo, is expected to increase the group's total asset size in Japan to about S$2.5 billion. It is also expected to be immediately accretive, contributing a net operating income of about S$25 million per year, providing CapitaLand with a stable source of income.

Chip Eng Seng reported on Thursday a net profit of S$14.9 million for its fourth quarter ended Dec 31, 2016, 52.5 per cent higher than S$9.8 million a year ago.

The construction and property development group's higher profits were driven by a net fair value gain on investment properties and lower administrative expenses due to a lower impairment loss on a development property and the absence of a fair value loss on investment properties.

Meanwhile, Singapore Medical Group has, through a S$15 million share placement, ushered the entry of South Korea's CHA Healthcare Co as a major strategic shareholder.

The group will issue 30 million new ordinary shares to CHC at 50 Singapore cents per share via a private placement. This investment will see CHC emerge as the group's fourth largest shareholder with a 8.8 per cent stake of the enlarged shareholding base and its largest strategic equity partner.

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