SG Market (21 May 13)

SG Market: S’pore shares are set for a cautious session following the modest retreat on Wall Street as investors turned wary after Chicago Fed President Charles Evans added weight to recent calls by several Fed hawks for the central bank to taper its US$85b monthly bond purchases amid an improving economy. All eyes and ears will be on Fed chairman Ben Bernanke’s testimony before Congress on Wed and the release of minutes from the latest FOMC policy meeting, which will give clues on the Fed’s thinking on monetary stimulus, which has been the key driving force behind the equity rally. With the winding down of the first quarter results season, focus may revert to the penny stocks with Hafary getting approval for promotion to mainboard and Plastoform exiting from SGX watchlist. Short term momentum indicators for STI are overbought and we anticipate a minor pullback to the 3,424 level, with overhead resistance remaining at 3,480. Stocks to watch for: *ComfortDelgro: Acquiring Australian transport company Driver Group for A$22m to expand its Australian bus operations. Driver Group operates 5 bus metropolitan routes in Melbourne with a fleet of 42 vehicles under a long term contract with the Victorian government. This latest acquisition brings CD’s Australian fleet to 420 buses. *DMX Technologies: Secures US$10.6m worth of contracts from Indonesian state-owned enterprise to build data centre and network infrastructure to interconnect 3,000 branches across Indonesia. This is in line with the group’s focus on IT security solutions and managed services, leveraging on new technologies such as cloud computing. *Technics O&G: Awarded first leasing contract (2-year + 1-year extension option) worth $3.6m for two reciprocating gas compressor engine driven packages from Malaysia. *Keppel Corp/Keppel Reit: Keppel Corp has appointed Goldman Sachs as placement agent and underwriter, for the sale of 180m Keppel Reit units @ $1.555 or 3.1% discount to its last closing price of $1.605. Completion of the sale is expected to take place 27 May. Subsequently, Keppel Corp’s interest in Keppel Reit will drop from 58.2% to 51.5%. *Sembcorp Marine: Assumed the rights to all interests in Equinox Offshore Brazil after the latter defaulted on its payment obligations to Sembawang Shipyard for the conversion of a ropax vessel to an accommodation and repair vessel ARV3. *Hafaray: Received in-principle approval from SGX in relation to its application for transfer of listing from Catalist to the Mainboard subject to shareholder approval at an EGM to be held on 12 Jun. *Rickmers: Receives strong support for its 1-for-1 rights issue @ $0.24, with valid acceptances and excess applications at approx 1.5x the total number of rights units available. The rights units are expected to be listed from 28 May. *Sinarmas Land: Subsidiary PT Bumi Serpong Damai (BSD) will be convening an EGM on 30 May, to seek shareholder approval to conduct non pre-emptive rights with maximum size of 10% of issued shares in BSD within 2 years. BSD has also published additional information in relation to the public offering for Phase 2 of its Rp3t 5-year bond program, to raise Rp1.75t with annual coupon of 8.375%. *Yoma: Aberdeen Asset management raises stake from 5.86% to 6.12% via market transaction. *Noble: Credit Suisse becomes new significant shareholder, raising its stake from 0.99% to 5.25%, via market trades. *SingTel: Commences share buyback programme with 1m shares purchased at $4.04– 4.08. SingTel is authorized to buy back up to 797.2m shares, or 5% of issued shares. *Plastoform: To be removed from the SGX Watch-list wef 21 May.