SG Market (02 Apr 13)

SG Market: S’pore shares are likely to see a weak start, tracking softer US stocks and extending a weak recent run. The negative lead from Wall Street overnight fuelled by poor manufacturing data is likely to weigh on sentiment with today's tone likely remaining more downside biased. Support for the STI seen at 3300 psychological level with overhead resistance at 3320. Stocks to watch out for: *F&N: SGX gives co until 18 Apr to state its listing intentions or it will convert F&N's 2-month old trading halt into a suspension beginning on 19 Apr. TCC Assets holds a 90.3% stake as at 18 Feb. Under SGX rules, companies must maintain a public float of 10% to remain listed. *Capitaland: Plans to restructure its 40%-owned Surbana Corp's residential development business and consultancy business into 2 separate entities to give the businesses greater focus to pursue growth. The residential development business will folded into CapitaLand China which will complement group's multi-sector business in China and bring economies of scale. Surbana's 5 development projects with GFA of 6.34m sqm will brings group's total GFA in China to 22m sqm, making it the largest foreign developer in China. The consultancy business will break away to pursue its own growth plans, which will include entering new sectors in S’pore and growing its presence in China, Mid-East, SE Asia, Africa and Latin America. *Hutchison Port: Its HK Int’l Terminals was hit by port workers’ strike demanding pay rises from stevedoring contractors. Co clarifies that these port workers are not employees and stressed that HIT was a 3rd party and an unrelated party with no role in the negotiations. Operations at the terminals are still ongoing but protests have caused slowdown and diversion in truck traffic. *Chip Eng Seng: Acquired 2,927 sqm site at Melbourne's CBD fringe for A$32m. The property, which includes a 2-storey heritage building shell, will be developed into a multi-storey mixed-use high-rise development of ~1,000 apartments and street-level retail space. *Loyz Energy: Group is focusing its resources on O&G exploration and production segment and plans to kick-start activity in early Apr, starting with drilling of its 1st well in North Dakota, USA, and activating gas production at the Baola field in Gujarat, India. The group expects these assets to contribute to revenue and cash flow starting from 4Q13. *World Precision: Wholly owned World Heavy Machine Tools (WHMT) accredited as high/new technology enterprise, which enjoys a 3-year preferential income tax rate instead of 25% wef FY13. WHMT manufactures high tonnage stamping machines for the auto parts, aerospace, locomotive and O&G industries. This is the group’s 3rd endorsement in a row since 2011. *Carriernet: Entered into distributor agreement with SingTel to carry out sales, marketing, promotional activities in S’pore for both telecoms and broadcasting services provided by the SingTel group of companies. The agreement is for an initial term of 2 years with an option to be renewed for a further 2 years by SingTel. *CAO: Its 26% owned US$500m oil storage terminal facility in Yeosu, South Korea commences operations. The 1.3m m3 facility is the largest commercial storage terminal in Korea comprising 36 tanks and is expected to enhance CAO’s network of oil storage facilities in Asia Pacific as well as support its jet fuel supply and trading business. *FDS Networks: Independent auditors drew attention to the losses incurred in 2012 and accumulated losses of US$4.4m in its books and warns that the ability of the company to continue as a going concern will rest on the sufficiency of funds to meet its obligations. *Europtronic: Independent auditors casts doubt on the ability to continue as a going concern, citing its net loss of US$20.8m incurred in 2012 and current borrowings of US$46.9m due within 12 months as against its cash balance of US$14m.