SG Market (23 May 13)

SG Market: S’pore shares are expected to be put on the backburner following the tumble on Wall Street in a roller-coaster session after comments from the Fed chief and minutes from the FOMC latest meeting suggested the central bank may begin tapering its stimulus program as early as June. On the home front, 1Q corporate earnings have seen more misses than hits and valuations are no longer cheap. Having rallied 170 points or more than 5% over the past month, the STI is on an overextended run and appears ripe for a mini correction with technical indicators all flashing overbought signals. Overhead resistance for the benchmark index is capped at 3,480, while a break of the 3,424 support may bring about further downside to the 3,380 level. Stocks to watch for: *Cedar Strategic: Acquiring Hua Cheng Group (HCG) in $936.2m reverse takeover deal via issue of 46.8b new pre-consolidation shares at $0.02 each. HCG has completed over 12 developments to-date and is a major property player in Guizhou, China with over 4.9m sqm of gross floor area for development in its landbank. It booked revenue of Rmb103.5m and net profit of Rmb43.4m in FY12. Final consideration for the acquisition will be fixed at 0.7x of HCG’s realizable NAV as at end Jun 13 (Nov 13: Rmb6.7b). To comply with listing rules, Cedar will conduct a share consolidation to bring the final issue price paid for HCG to the requisite $0.20/share. *TEE International: The group’s property arm TEE Land has lodged its preliminary prospectus with MAS for a proposed listing on the main board of SGX. Tee Land's portfolio stood at $394.6m as at Nov 12. Over the years, it has completed six and launched 10 property development projects that are in various stages of completion and has another eight projects yet to be launched. Upon the successful spinoff of Tee Land, the group will be able to realize the value of its properties with the proceeds earmarked to fund its Myanmar cement business and a special dividend. *Artivision: 4Q13 net loss slid marginally to $1.2m, bringing FY13 net loss to $4.9m, flat from FY12. After so much hype over its high profile MOUs with Advision and Intel over its video advertising technology, the group barely had any revenue in 4Q13 with full year revenue weakening 26% to $0.24m. The appalling results were blamed on a loss in revenue from its media solutions business with the group in the midst of phasing in new server technologies. The group has cash of $5.6m and equity of $3.0m. *KS Energy: Signs contract extension with ORYX Petroleum for its land rig, KS Discoverer 1 to continue drilling in Kurdistan till 1Q14. The value of the contract is estimated to be US$5.4m. M1: CEO Karen Kooi sold 300,000 shares via the open market on 20 May, bringing down her holdings to 211,000 shares or 0.023% stake. *Straits Trading: Granted further extension till 1 Dec 13 to restore its public float to above 10% from current 9.1%.