SG Market (20 May 13)

SG Market: S’pore shares are expected to tread water even as Wall Street pushed to new highs as investors hang onto a half-full glass risk appetite on better-than-expected US Leading indactors for Apr and consumer sentiment for May. The major risk event this week will be on Fed chairman Ben Bernanke’s testimony before the Joint Economic Committee on 22 May, which should give some clarity on when the central bank intends to scale back its bond purchases. Technical indicators for STI appear overstreched and a short term pullback may be imminent, before the index resumes its uptrend. Overhead resistance seen at 3,480 with support at 3,400. Stocks to watch for: *Tiger Airways: Net loss contracted by $1m to $15.4m in 4QFY13 as revenue jumped 49% y/y to $240.6m, buoyed by increased passenger traffic (+38.1%), stronger yield (+7.5%) and higher load factor (+4.6ppt). Reversing from a loss of $17.2m last year, the budget carrier turned in an operating profit of $12.7m for the second straight quarter. But overall performance was pulled down by associate losses from SEAir (-$7.3m) and Mandala (-$8.1m), loan impairment (-$7.1m) and loss from aircraft sales (-$1.1m). For FY13, the group reported a net loss of $45.4m, a 57% improvement from $104.3m recorded a year ago. *Cordlife: Acquiring the cord blood and cord tissue banking businesses and assets in India, the Philippines, Hong Kong and Indonesia from Cordlife Australia for A$5.5m. The acquisition will enable the group to expand its geographical footprint in Asia and expand its operations overseas. According to a 2013 Deloitte report, the storage units of private cord blood banks increased at a compounded annual growth rate of 38% in Indonesia and 35% in Philippines and India. *Biosensors: Received CE Mark Approval for BioMatric NeoFlex, the latest addition to the BioMatrix family of drug-eluting stents (DES). This latest product offers an improved stent delivery system and has a lower lesion entry profile than its predecessor, BioMatrix Flex. Management believes Neoflex will enable the group to retain its position in biodegradable polymer stent technology. NeoFlex will be rolled out in all CE Mark global markets over the coming months. #XMH: Credence Capital Fund II has agreed to invest $10m, via subscription of up to 36m new shares @ $0.2774. The private equity fund headed by angel investor Koh Boon Hwee has also been granted a 3-month call option by the XHM’s founding Tan family, to acquire another 47.6m vendor shares @ $0.315. Together, both new and vendor tranches will represent ~19.9% of the total enlarged share base. Net proceeds of $9.9m will be used to fund the development a new facility for assembly and production lines and increase warehousing capacity. *WE Holdings: Announced the proposed acquisition of 20% stake in cement producer Dragon Cement, from prominent Myanmar businessman and the Chairman of the Ruby Dragon Group, Nay Win Tun for US$20m. The group also has an option to purchase an additional 20% stake within 3-months after the completion of the deal. Production capacity of the cement plant is targeted to double from 400 to 800 tons/day. WE will lift its trading halt at 8.30am this morning. *SCI: Signed a 65/35 JV with Oman Oil to develop centralized utilities facilities for the Duqm Special Economic Zone (SEZ), a new major industrial and commercial hub in southern Oman. *Lasseters: Disposing its loss-making NZ casino business to SKYCITY Entertainment Group for NZ$4.5m. The sale proceeds will be used to reduce debt, settle creditors and for working capital purposes. Group will book a gross surplus of A$3.1m from the disposal. *Tung Lok: Issued a profit guidance warning of a loss in FY13 due to closure of a few key outlets for redevelopment, rising operating costs, including rental and wages and gestation for new outlets. *China Essence: Warns of a net loss in FY13, citing the challenging operating environment for the potato starch industry as having an adverse impact on profit margin as well as severe cold weather in Northeast China damaging its potato crop and yield. The group will be releasing its FY13 results on 28 May, after market close.