SG Market (06 Jun 13)

SG Market: S’pore shares are expected to face volatile trading conditions after the US market skidded last night on mixed economic signals leaving market participants caught between fears that the Fed will taper its monetary stimulus and worries that the economy remains sluggish. Private sector employers added 135,000 jobs in May, less than the 165,000 analysts were expecting, while separate data showed growth in service industries and factory orders. The Fed’s Biege Book report also pointed to the US economy expanding at a modest and moderate pace. Meanwhile, Fed Bank of Dallas President Richard Fisher, one of the most vocal critics of quantitative easing, called the central bank to cut back its bond buying while economists from Goldman Sachs Group and Deutsche Bank predicted the purchases could be curbed from September. Immediate support for the STI lies at the 3,230 level but should that be broken, then look for next line of defence at 3,155. Stocks to watch for: *Midas: Nanjing SR Puzhen Rail Transport Co (NPRT), its 32.5% JV together with consortium partner Alstrom has bagged a Rmb1.1b metro train contract from Nanjing Metro Group for the supply of 29 train sets (174 train cabins) for the Nanjing Metro Line 4 Phase 1 project. Delivery is slated from 2014 to 2016. This is NPRT’s fourth and largest contract win this year and brings year-to-date orders to over Rmb2.5b. *Ramba: In response to SGX’s query, the group disclosed that the Soeryadjaya family and concert parties, which own a controlling 33.1% stake, have been in discussion with a potential buyer for their entire stake. Family patriarch Edward Soeryadjaya has also received a conditional expression of interest for a possible acquisition of 51% of Ramba shares by way of a voluntary conditional cash partial offer at an indicative offer price of $0.60-0.70. Currently, Mr Soeryadjaya has not made a firm decision on whether to pursue the possible offer. *OUE: Receives the go-ahead from SGX for its proposed IPO and listing of a hospitality REIT. The initial portfolio will comprise two assets – Mandarin Orchard and Mandarin Gallery. The offering will be subject to prevailing market conditions and all other regulatory approvals. OUE did not reveal details about the size and timing of the IPO but the hotel REIT was reported to be seeking to raise up to US$800m with an expected listing in July. Meanwhile, it has appointed veteran Chong Kee Hiong, former CEO of The Ascott, the serviced apartment arm of CapitaLand to head the new unit. Credit Suisse, Goldman Sachs and StanChart are handling the deal. *UE E&C: Awarded a $21m sub-contract for electrical, sanitary, plumbing and gas installation at a proposed condominium development at Whampoa East. The contract period covers 30 months and the project is expected to be completed by Sep 2015. *TEE Land: Initial public offer of 115m shares was 2.6x subscribed with an additional over-allotment of 15m shares, bringing total invitation size to 130m shares. Among the placees allotted shares are Chairman & CEO of Fragrance Group Koh Wee Meng, (14m shares), stock investor Bobby Lim Chye Huat (6.5m), Haiyi Holdings (6.5m) and Tommie Goh (4m). Trading in the shares will commence at 0900 on 6 Jun. *Moya Asia: Secured project financing of Rp229b ($29m) from IFC for its build-own-transfer project in Tangerang City Area, Indonesia. An additional loan of Rp522b ($67m) will be provided by other lenders. At the same time, IFC will subscribe for new shares (12.5% stake) in PTMI, Moya Asia’s Indonesian subsidiary, for Rp30.9b Rp ($4m). This comes with a five-year put option exercisable by IFC upon certain credit events. *CCM: Placement of 44m new shares (25.7% of enlarged share base) at $0.092 each to nine individuals/entities (mostly high net worth investors) to raise $4.05m for general working capital purposes. The group recently completed another placement of 35m new shares at $0.086 to Hengfai Business Development, controlled by Chan Heng Fai of SGX-listed SingHaiyi. Currently, Chan is the second largest shareholder with 27.5% stake. CCM has also amended the terms of the previous subscription agreement to allow Hengfai to appoint five nominees to CCM’s board (from two originally).