SG Market (04 Jun 12)

SG Market: S’pore shares are set for a sharp, broad-based selloff, following slumps in Europe and Wall Street following dismal US jobs data. This latest disappointment hammers home that the strong payroll numbers we saw in the 1Q could be a false dawn. Already Asian bourses are down more than 2% in early trading. With the STI already below the key 2760 support, the next floor at 2700 may be shaky. Usual risk-off victims, such as commodity plays and shippers, are likely to bear the brunt of falls. Banks may also be in the firing line, tracking regional counterparts, with UOB, which has the largest European exposure, likely the worst performer after ratings firm Egan-Jones downgraded Italy. Swiber and SembMarine are in the news after their JV landed a US$175m Indonesian contract, while both CapitaLand and A-Reit divested assets. Yoma has also completed the acquisition of a 70% stake in its Star City project in Yangon for $91m.