STI set for flat open

Far from flat however is the ongoing APB and F&N story.

OCBC Investment Research said:

The modest gains on Wall Street overnight could provide the local bourse some optimism this morning, although the upside could be limited by the negative Nikkei start (down 0.4% now).

As a recap, the STI continued to hover below the 3090 key resistance yesterday; following a 0.1% higher opening, the index climbed to a 0.3% gain by the close.

With today's tone remain a tad more upside biased, we could see the index inching higher towards the immediate obstacle at the 3090 key peaks.

Beyond that, the subsequent obstacle is pegged at the 3160 support-turned-resistance. On the downside, 3040 is still the immediate resistance-turned-support, with the next base lying at the 3005 minor troughs.

IG Markets Singapore meanwhile noted:

In Singapore, as the dust settles on the ThaiBev and Heineken truce this morning, Charoen still has some potentially sleepless nights head of the September 28 EGM.

With Heineken no longer a contender for F&N and the conglomerate’s share price edging back down to $8.88 this could open the door for a rival bidder to make an offer for F&N.

The Thais have put F&N firmly on the radar screens and seen it splashed across world media for many weeks. This could easily have alerted another predator to the unlocked value within the property and soft drinks giant.

Even if no new takeover bid materialises, Charoen still has the thorn in the side of Kirin to deal with. Kirin would love to get its hands on the soft drink business of F&N and has made noises to that effect.

Will Kirin support the Thais takeover bid if it means saying goodbye to its soft drink aspirations?

Having given up on APB, will the Thais now give up on the soft drink business and offer it up to Kirin in return for its sizeable 15% shareholder approval? The Thais probably favour two options over this – holding onto the soft drink business or selling it off via a bidding war involving the likes of Coca Cola.

The final concern for Charoen is whether to honour the $4 billion capital reduction that F&N announced once the APB sale goes head.

Shareholders may demand this is agreed by any new owners, and of course ThaiBev will be one of the beneficiaries of this windfall as an APB shareholder.

But Charoen may be looking at ways of keeping this cash within the business which further down the line may fund the expansion of his expanding empire.

So while the Dutch-Thai truce has answered one question over the future of APB, there are still many questions surrounding the future of F&N.

The futures market is pointing to a flat open for the STI this morning.